Luxury hubs
Future of Luxury also looks at global macroeconomics and their impact on spend and travel, deducing the world’s top 10 wealthiest cities to be London at the top with 4,364 UHNWIs, followed by Tokyo, Singapore, New York, Hong Kong, Frankfurt, Paris, Osaka, Beijing and Zurich.
The report highlights how the massive but gradual slog to get luxury brands online has dominated strategy thus far, but highlights how that can no longer be the only major focus.
“All luxury companies needed to be playing in the digital arena despite their worries about jeopardising their brand’s exclusivity by trying to be everywhere,” said Wagner. “Now, no brand can afford not to have an omnichannel strategy which parallels at every level through from their app, to online, to marketing, to the store.”
Luxury e-commerce is projected to triple to $75 billion by 2025, the report highlights, with online sales taking an 18% share of total luxury sales.
But the report also highlighted how luxury hotels had been just as slow to embrace technology, but were now catching up, with the likes of in-room tablets allowing customizable room environments, concierge apps from the likes of Conrad and Starwood’s app for the iWatch and pioneering keyless check-in by smartphone at its W Hotels.
“We wanted to look at where we, as Beverly Hills, were already embodying the trends and then form a blueprint for our future development to make us forward thinking and look at how we can bring in some of the elements consumers seem to be looking for, such as more on the wellbeing and mindfulness theme,” said Wagner.
But she said Beverly Hills’ overall brand itself would not be changing. “That logo includes the iconic Beverly Hills sign – and that’s not going anywhere,” she said.
“But what this report does do, is give us a target strategy of the kinds of people and companies we need to be working with to attract them to Beverly Hills and how we as the CVB can therefore continue to play our role in the economic development of the area.”
Wagner said it was also about making sure people knew Beverly Hills was about more than just Rodeo Drive.
“That is our billboard, if you like, but there are other areas of the city we need to be talking about more too,” she said, “such as Beverly Drive, which has some of the more independent, off the path designers and brands, and ones that are perhaps more in line with some of these trends, as well as being more affordable than the big international names.”
Brand innovation that “makes you scratch your head and think” is also key as brands look to differentiate and “working with the outsider” is one way of getting stand-out attention, said the report.
But Wagner added that no matter how luxury changed, privacy would still be a key factor for affluent consumers.
“Many of our hotels are designed to offer the highest level of privacy for Hollywood stars and all our guests – and that’s never going to change,” said Wagner.
Celebrity ready
Looking to the future in Beverly Hills, L’Ermitage’s ongoing lobby-to-rooftop transformation will offer guests “celebrity-ready” dressing rooms, with lighting that mimics that of the red carpet and mirrors so guests can see themselves from all angles.
“It may seem a bit much to some of us, but in this town, celebrities have to be ready for photographs at any time, so they want to be prepared,” said Wagner. “The hotels help them do that.”
Visitors to L’Ermitage get use of a chauffeured Mercedes, while hotel staff keep notes on every guest’s stay in order to serve them better the next time, notes the report.
This year’s big opening, the Waldorf Astoria in Beverly Hills, will feature private balconies and the largest rooftop pool in the area, she highlighted.
Going off grid
But as well as high-end glamour, the report added that luxury is “ultimately going full circle by servicing the desire to go off grid” as affluent consumers seek to “tune out the digital noise in pursuit of a tangible luxury experience”.
Highlighted is $60,000-a-week Chalet Le Grand Joux near Morzine. It offers an Alpine wilderness retreat with luxe touches, but is completely off-grid, with its own spring, wood-fired saunas and 49-panel solar farm.
“Perhaps the ultimate mindful treat for the cash-rich, time-poor, digital native, next generation UHNWIs is to go off-grid,” said the report. “Working at computers with smartphones constantly on, this generation is consuming far more information than it can mentally process, with sleep deprivation a growing problem. The desire for digital detox is thus an understandable response to rapid technological progress.”
Shifting geography
The report also looks at how the boundaries of luxury destinations can change as new areas emerge.
It suggests one example as being New York’s “previously unfancied NoMad” (north of Madison Park) area where The Ace Hotel brought with it Stumptown Coffee and the John Dory Oyster Bar, while Hotel NoMad opened nearby with a Maison Kitsune boutique next door.
“These hoteliers trade on the millennial generation’s love for art and the unique; and many of these sons and daughters of the super-rich will be future luxury consumers,” the report flags.
The “Bilbao effect,” measuring the relationship between the opening of a world-class institution and the socio-economic impact on a city, is now being witnessed on an international scale, said the report.
In Bilbao, taxes from visitor spending in the city rose by $110 million in the three years after the opening of Guggenheim Museum, more than offsetting its construction cost.
The opening of the new Whitney Museum of American Art in New York’s downtown Meatpacking district, a far cry from the institution’s previous Madison Avenue location, acts as confirmation of a definitive shift in the city’s social geography.
In Rome, the MAXXI Museum of XXI Arts designed by Zaha Hadid is revolutionizing the city’s Flaminio quarter, while in Milan, the Fondazione Prada has set up home on the site of an old distillery in an industrial neighborhood.
The report also highlights how in Los Angeles, the recently opened Broad Museum showcasing the private collection of Eli and Edythe Broad has - along with the Frank Gehry-designed Walt Disney Concert Hall - is helping to reinvigorate that city’s Downtown area.
In London, the opening of the Newport Street Gallery has shed light on an area previously overlooked by many visitors - Vauxhall. Housed in a trio of converted Victorian listed buildings in Vauxhall, the £25 million Newport Street Gallery will present exhibitions from the private collection of Damien Hirst.
The area has been dubbed “Voho,” and there are plans for five new residential towers, including Aykon Nine Elms, dubbed the Jenga Tower, which will boast apartments with interiors designed by Donatella Versace priced at up to £4 million. Even the US Embassy is also relocating there; to a $1 billion glass cube in nearby Nine Elms.
Sustainable future for luxury
Other conclusions the report draws about Luxury 3.0 include the drive towards “a sustainable future”.
“A love of luxury can coexist with one’s desire for preserving the Earth’s resources. Luxe purveyors’ reputation for using quality, lasting materials allows buyers to consume less. All industries can comply with sustainable principles, and in doing so, they will burnish their brand’s reputation,” said the report.
It adds that designers, chefs and food entrepreneurs are rediscovering old techniques to give an “extra layer of narrative to luxury goods” and feeding into customer’s desires for exclusivity.
“Localtarian” food customers are driving sustainability too, with “sustainability, sourcing and seasonality” the watchwords at the best luxury restaurants, while, raw food, juicing and vegan menus are also being given the luxury touch.
In short, the report said, Luxury 3.0 is “typified by providers who team old-school values of artisanship and bespoke service with an immersive experience and a meaningful narrative to share their passions, and create the kind of luxury that lives in the heart rather than on a balance sheet”.
The report will be available from the BHCVB website, from January 27.
