A $5000 christmas globe with diamond snow and your family’s sculpt inside (VeryFirstTo.com).
Luxury has a new face. Previously, luxury implied elegance, expensive brands, dining in famous gourmet restaurants, enjoying opulent vacations and owning multiple homes around the globe. This image still applies to the apex of the luxury market, but there is a new trend on the rise that represents something else entirely – “new luxury.” Discerning consumers around the globe actively seeking new quality investments in themselves, through their lifestyles.
Reiko Nakamura, Managing Director of Schawk/Anthem Japan, points out that the “new luxury” market in Japan “strongly reflects the long-term economic downturn”. Originating within the yutori sedai (19-28 age bracket, ゆとり世代) of Japan—the generation raised during the period immediately after the collapse of Japan’s bubble economy of the late 1980’s. Their life experience is vastly different from their parents. Educated in an environment free from the misery of “cramming” for school exams, graduating into a tight employment market, and further experiencing a continuing downward spiral in salaries over the last 15 years, all combined with the realization that they can’t rely on pensions when they get old, has spurred a greater trend toward saving. When they do spend, they seek high-quality return for their investment. Whether tailored shirts, handcrafted shoes, gourmet foods, or an overseas vacation, value is placed expressly on the quality of materials, craftsmanship or experience derived. The label neither defines the value nor the wearer.
Another cause for the rise in the “new luxury” market in Japan can be found in the demographics of Japanese society. Increasing numbers of people in the younger generations are staying single because they wish to enjoy the fruits of their labor without burdens. By remaining unmarried, people are able to experience a greater freedom in choosing how, where, and when to spend their time and money. As communication is increasingly shifting online, one’s ability and choice to keep a “safe distance” increases, diminishing any chance of meeting “Mr. or Miss Right.” According to the 14th Japanese National Fertility Survey 2010, the proportions of people who never marry will continue to rise among both men and women. The reasons correlate with those spurring the rise of the “new luxury” market.
Quality has always been key to luxury and this still holds true today. The difference now being that digitalization presents consumers greater access to more information on product origins, processes and word of mouth reputation from other buyers. This has transformed the buying process and purchase points simultaneously giving the buyer greater power in determining the quality and value of goods pre-purchase. Alexis Horchelle, Sales and New Business Manager of S.T. Dupont Japan reflects that more than ever before, brands and service providers need to keep in mind that consumer experiences with brands need to be memorable and relevant. Consumers respond when their needs are anticipated. He also pointed to the need for the “human touch.” To provide that level of service, brands need to keep a finger on the pulse of their customers.
Consumers today are more sophisticated than ever before. Digital natives are less susceptible to media campaigns, they are more likely to make greater use of new travel options such as Airbnb for overseas travel accommodation or enjoy niche market experiences such as cycling through the Setouchi islands and staying in design-conscious hotels like Onomich U2, which cater to the needs of cycling enthusiasts with style and quality.
Women under the age of 35, and 55 and above, still enjoy spending money on luxury and premium brands inside branded shops and department stores, travelling overseas, choosing famous 5-star hotels and spas. Yet, they are also becoming more value conscious, beginning to focus on the idea of “my style” and shopping for things that express their individuality.
Another indicator of luxury is art. Although a long and well-respected passion in the West, Japanese people who collected art up to the collapse of the bubble economy of the 1980s tended to be men who would hide their collections from their peers and family, preferring to enjoy their collections in private. Recently, an increasing number of Japanese collectors, more openly display their collections and share them with family and friends. Those whose feel their collections are worthy, will open a museum to showcase the art. This is spurred in part by gallerists striving to break the invisible barriers that make it difficult for Japanese people to step into galleries to view art. With the goal of making art approachable, Galleries actively host viewings, receptions and artist talk events.
Japan’s marketplace is a place of constant change and upheaval. Brands can fall in and out of favor in one season. Over populated with an endless supply of new, upcoming names and products of every type in every industry, consumers can pick and choose, mixing high-end, well-known, and little-known but high quality products to create their own mix to form an individualized statement of who they are. This extends into their personal and business behavior too.
Although statistics indicate that Japan’s yutori sedai are leaning more toward the more traditional and less glamorous choice of stable employment with well-established companies, it should be noted, that there is a growth in international communities such as Impact Hub. Functioning as a shared work space. Impact Hub is a global business community that, through a variety of events and creation of a sense of global community, supports the emergence of entrepreneurs and new business models to shake up the way where things have traditionally been done. Communities like this are taking root in many parts of Japan, indicating that people are searching for and finding quality ways to enhance their living and working experiences. These lifestyle choices indicate a “new luxury” experience and investment in the self over the long-term.