Globalisation and emerging markets are changing the way high net worth individuals spend. So what’s hot right now in the world of luxury? Bespoke travel and dining experiences, wellness breaks with mindfulness practice and smart global property portfolios
Words: Vicky Mayer
Globalisation has bought us many benefits, from the chance to conduct business online 24/7, to emerging markets like China and India creating new wealth opportunities for those in the luxury sector. But one of the downsides to this increasingly joined-up world is that it’s so easy now for anyone with wealth to buy the same items. So the days of lusting after designer handbags and branded luxury cars are fast diminishing.
In their wake the new breed of moneyed millennials, including poster boys Mark Zuckerberg and Jack Dorsey, are leading the way with the new trend of spending your hard-earned cash on experiences rather than mere objects. And while the consumption of luxury goods is still big business, increasingly big name brands like Chanel, Gucci and Rolls-Royce are offering consumers a myriad of ways to buy bespoke.
Julie Wagner is the CEO of the Beverly Hills Conference & Visitors Bureau. In LA, home to the world’s leading brands and a high concentration of HNWIs, she is seeing a big shift in luxury trends.
‘Here in LA, we are at the epicentre of a luxury environment and see a lot of trends coming and going,’ she says. ‘Right now we are seeing a lot of emphasis on quality and sustainability. It’s interesting to see that luxury living can be mindful and enrich people’s lives. Globalisation is a major factor in the trends that are coming through. In 2015 we discovered that 63% of our audience shopped globally.
‘One of the biggest trends is understated elegance,’ adds Wagner. ‘The globally rich are looking for products that last and have a provenance. For example, a fine Italian leather belt, or a bespoke pair of shoes made in the UK. A purchase like this is saying, “I don’t need to advertise how rich I am”. Flaunting your wealth by wearing big designer labels with logos is now seen as passé.’
In the Bureau’s latest report, ‘The Future of Luxury’ an interesting trend is highlighted – the amount of money spent globally on menswear is now outpacing that spent on women’s wear. Men, it seems, have increasingly become more conscious of how they want to look in a workplace environment and also in their leisure time. The heady rise of social media with fashion blogs and instagram feeds has fuelled this desire. The most remarkable growth is from the new wealthy class in China – 70% of luxury menswear worldwide is now sold to Chinese men – whilst the sort of sports luxe wear that’s popular with the Silicon Valley set and millennials around the world is growing fast.
‘Globally known brands have to ensure they are forward-thinking to keep their brands fresh,’ adds Wagner, ‘think how Burberry always amaze and delight their audience, constantly keeping things up-to-date and relevant.’
The Power of Experiences
As our lifespan continues to grow, and so many of us run our own businesses well into our 70s and 80s, there is a growing trend for people to spend money on unique life experiences, not just flashy consumer goods. For example, healthy mini breaks where we can take time off to recharge but also stay connected to the outside world and our customers, are growing in popularity.
‘We believe that luxury is no longer something associated with just material possessions, but rather extraordinary and exclusive experiences that can be shared and remembered,’ says Natasha Thomas, Director of Total Management – a leading global event, travel and lifestyle agency – designed to help customers plan unique experiences around the world. ‘Our customers regularly ask us to create itineraries for them that could include experiences such as playing tennis with a professional or a meet up with the designers from Paris fashion week.
‘Over the past five years there has been a complete shift in travel altogether as it’s no longer seen as just a luxury, but part of our lives. Therefore luxury travel trips have to offer the consumer something extra and this is where bespoke trips come in. Travellers are looking for authentically-local, immersive experiences they can share with their friends and family. They don’t just want to view the art at Musee d’Orsay in Paris, they want the opportunity to paint there too; equally, they want to stay on a working farm in Tuscany and help prepare and cook farm-to-table cuisine.’
Consumption with a conscience is the overwhelming message both in travel and lifestyle experiences and big brands are plugging into this to offer buyers what they want – with a transparent and attractive back story.
‘The new definition of luxury involves having a conscience and paying for quality and sustainability and understanding how the world at large works,’ explains Wagner. ‘It’s a way of giving back to those in the world that don’t have so much. A good example of this is how the world’s leading hotel chains are sourcing their food and drinks locally.’
Customers are also urging hotels to think of the planet and recycle and conserve water. Meanwhile the best spas are looking locally for indigenous remedies for their treatments. Mindfulness and meditation are becoming popular too, with many of the big names like the Beverly Hills hotel offering guests free drop in yoga and meditation sessions by the pool.
Cool brands like Hermes, Burberry, Nike and Whole Foods are also offering unique experiences to customers as a way of attracting them in store. ‘Smart brands understand that by offering unique experiences at store and making their shops more lifestyle led, they are giving customers a destination to go to,’ explains Wagner. ‘Many big stores are also turning their flagship stores into a showroom rather than stocking everything like in the past.’
Finally philanthropy – as the ultimate meaningful experience – is growing in popularity too with Bill and Melinda Gates’ Foundation leading the way. In Knight Frank’s Wealth Report 2016 their Attitudes Survey (taken in conjunction with wealth intelligence specialist, Wealth-X) discovered that 67% of their clients’ philanthropic activities have increased over the past 10 years.
The Property Factor
London has beaten New York for the second year in a row as the most important city for the ultra-wealthy, according to Knight Frank’s 2016 Wealth Report. Succession and inheritance issues, wealth taxes and the global economy have been identified as the key concerns of the world’s wealthy, according to the report so it’s no surprise that 117 billionaires have chosen London as their home. This isn’t just because of the wide range of luxury properties on sale but because London is such a great place to experience first class cuisine, art culture and education too.
‘The ultra wealthy are increasing their asset allocation to passion investments such as fine art and second homes overseas, enabling them to enjoy their wealth,’ explains Mark Cohen, regional managing director EMEA at Wealth-X.
With experience in mind, HNWIs are also increasingly choosing to buy property around the globe in cities like Vancouver (up 24.5% in 2015) and Sydney (14.8%) where they can live and experience some of the best lifestyles in the world. Travel is one thing it would seem, but having the money to buy a bespoke luxury property and fully experience the city of your dreams, is even better.