The Future Laboratory has recently released its report titled “The Paralysis Paradox,” which examines the macro trends of 2022. One of the key trends explored in the report is the concept of “Guilded Luxury.” In an interview with Lavina Fasano, a Foresight Analyst at the consulting firm, we delve into the definition and pillars of Guilded Luxury.
Guilded Luxury has a dual meaning, arising from an examination of the luxury industry’s prevailing themes. First, it signifies a departure from the notion of “discreet wealth” that has dominated luxury for the past decade. After enduring challenging times, consumers are now engaging in “revenge spending,” prompting luxury brands to become more audacious, vibrant, and notably more expensive. The term “guilded” captures the emergence of extravagant opulence witnessed in the industry.
Furthermore, Guilded Luxury portrays how luxury brands are evolving into networks. While many luxury brands are raising their prices, establishing exclusive boutiques, and making it more difficult for the average consumer to access their products, they are also adept at cultivating connections with various consumer groups through digital activations, games, and collectibles. While an average consumer may not be able to afford a Balenciaga bag, they could potentially purchase a digital outfit on gaming platforms like Fortnite. As the consumption landscape evolves, luxury brands are becoming spaces that foster a sense of belonging, going beyond merely offering high-quality products. “Guilded” then refers to the notion of an organization that brings together individuals with shared interests.
The pillars of Guilded Luxury are Opulent, Exceptional, Intimate, and Loyal. These pillars signify the key aspects that luxury brands emphasize to court wealthy customers, particularly during prolonged economic slowdowns. The “Opulent” pillar reflects how brands embrace indulgence and extravagance to entice Very Important Customers (VICs). Brands curate “exceptional” experiences that redefine exclusivity, transforming into orchestrators of moments that cannot be purchased. Private invitation-only getaways now represent the epitome of exclusivity, sometimes surpassing the desirability of tangible products themselves.
Luxury brands are no longer solely perceived as guardians of style but are increasingly becoming social organizers, facilitating genuine connections among people. They accomplish this by organizing trips abroad and establishing a presence in digital platforms such as Fortnite and Roblox. Additionally, luxury brands can forge more “intimate” bonds through digital collectibles like NFTs, fostering continuous channels of communication with VICs. By cultivating reciprocal and attentive relationships with their consumers, luxury brands benefit from increased “loyalty,” while consumers feel a sense of belonging and connection.
Although the Guilded Luxury report mainly focuses on the wealthy, it is not limited to the super-rich. Instead, it explores the idea of membership and how luxury brands are redefining what it means to be an “insider.” Luxury companies are utilizing emerging technologies like virtual reality, augmented reality, and NFTs to translate their heritage into new domains. The rise of these technologies enables luxury brands to strengthen their roles as community organizers and connect with consumers in the digital world. Inclusion and exclusivity need not be mutually exclusive. Leveraging these technologies ensures that every consumer, regardless of their ambitions, can have a tailored luxury experience.
The principles of Guilded Luxury can also be applied to the beauty sector. The beauty industry, like other sectors, can benefit from incorporating lasting and enriching relationships with customers. By embracing the concepts of exclusivity and community, beauty brands can further engage with their customers on a deeper level.
In order for luxury brands to convert consumers into community members, they must offer exclusive incentives. For instance, customers who purchase a limited edition virtual skin could be given the opportunity to acquire the real-life garment. Brands could also identify highly active customers on social media and assign them official roles within the company, granting them access to exclusive products as a reward.
To thrive in the era of Guilded Luxury, luxury companies must prioritize community. They should not be afraid to dismantle traditional hierarchies and allow consumers to shape the future direction of their products. Firms must redefine the concept of retail, considering additional services such as childcare, pet-sitting, or travel advice that luxury consumers may expect from their boutiques in the future.
For more information on Guilded Luxury and the macro trends of 2022, you can refer to The Future Laboratory’s report “The Paralysis Paradox” [insert link to the report here]. Additionally, for insights into the evolving luxury landscape and innovative strategies employed by luxury brands, you can explore this article from Luxury Society [insert link to the article here].
Please note that the links provided above are only applicable if there are relevant articles available.
