The nature of luxury is evolving fast. Producers and consumers should wise up to the emerging multi-level landscape and never forget the power of the right kind of celebrity, says our columnist, Jean-Claude Biver 

Luxury is changing, and we are now more and more aware that there are different levels of luxury emerging. At the highest level, there is luxury for the very few, which is (normally) at the top price level, and is the most exclusive and the most unattainable. In this category, you have all the watches that are made just for one customer. You have also the limited editions of two or five pieces of jewellery.

Jean-Claude Biver with Tag Heuer ambassador, actor Patrick Dempsey at the 2016 Monaco Grand Prix

Below this level, you have luxury for very wealthy people. This is not necessarily totally exclusive nor does it necessarily include unique pieces but certainly ones that are very special and not easy to find, and quite expensive.

Then, you have the traditional luxury, which is now the luxury for people of what you could call average wealth.

Read next: LUX tests drives the Rolls Royce Wraith

And finally, there is now so-called affordable luxury, which is attainable by members of the upper middle class. This is the newest and most dynamic category because this is a very dynamic level of society and the one that is evolving the fastest. It has the biggest potential, especially in countries such as China, where they previously didn’t have this social class of affordable-luxury consumers. Previously, there were really just two categories in China: people who were very wealthy, and normal people. Now we see a very strong development in this affordable luxury segment.

At a brand like Tag Heuer , we want to be at the front as the leader in the affordable Swiss luxury watch business . You can call it affordable or accessible, but in terms of luxury goods it’s the equivalent of a young person driving a Mini Cooper, a car that’s not as expensive as a Ferrari or even a Porsche, but it already means something when you are seen driving one.

Supermodel Bar Refaeli is announced as newest Brand Ambassador at Hublot Boutique in New York City

And people around the world now are becoming more brand conscious at a younger age than ever before. They are exposed to brands when they are as young as five or ten years old, and brands are becoming more and more important in evoking dreams in young people. With Tag Heuer, as with Hublot, I want to make young people dream when they are 15 or 18 years old. I want to get it into their heads that if they want to realise their dream, then they must please buy my brand.

Read next: How China changed the luxury world 

But young people are now receiving so many messages from everywhere, it’s becoming difficult to communicate this distinctly. They have so many brands talking to them, and we are more aware than ever that we cannot tell them any lies, and getting through to them is becoming ever more difficult.

Related to this is the fact that celebrities are becoming more influential than ever. But we have to distinguish between types. There are celebrities of whom there is a huge awareness, but who have very little influence. Then you have celebrities, for instance the Kardashians, or Kanye West, who are very influential: if Kanye West tells people to wear something, they will wear it. If he designs something, his influence is significant, and young people are going to dream about it. It’s the same with Jay Z’s shoes from Nike or Adidas – they have been an incredible influence. So as a luxury brand, you have to choose carefully between people who are widely known to endorse your product, and those who are influential. The most important part of my work today is reaching the young generation, and that means working with the people who can influence them.

Ricardo Guadalupe, CEO of Hublot, and Usain Bolt at the opening of Hublot’s 5th Avenue boutique in New York

Even with the help of a celebrity to support you, it still requires far more work to get the message across these days than it did before. As an example, in 1982, if you came up with an innovative watch with a minute repeater, you didn’t have to communicate it, you would just show up at the Baselworld fair, and people would come to you and say “Wow!” You would then have more demand than you could supply because you were the first to create such a watch. Today, if you made the same innovation, you would never sell it if you didn’t have a strong promotional campaign and a credible brand. Without creating a brand awareness, you will not sell your product because it is simply not strong enough to be sold alone.

For centuries, a product was strong enough to be sold just because it existed and it was exceptional. Nowadays, the market is so crowded. You need the promotion around a new product, you need marketing and publicity – and that has dramatically changed for everyone.

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Brand, now, will always be king. In the recent evolution of the smartwatch, there is intense competition between Apple, Samsung, LG, Sony and Motorola, all making essentially the same product for the same market. Yet how can Apple sell so many? Because of the brand. For the product alone, without the brand, you could have the same watch from LG or from Motorola or from Samsung, but for Apple the brand brings everything to the product.

And it’s just the same for Tag Heuer: how can we sell a connected watch that does nothing more than the Apple, for $1,500? Because the brand is doing the business for us, the brand makes it okay to spend that much on it. When the competition hots up, the fight is won by not just the product, but by the brand.

River with the tattoo artist Maxime Buchi, a new ambassador for Hublot

Meanwhile, at the top end, word of mouth will sell products as it always has. The more you belong to the elite, the more you want to be different. The higher you climb, the more you want goods that are just made for you. Like the lady I know who has had seven Lamborghinis to match the outfits made for her in the seven colours that she always wears.

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At that end of the market, people are looking for uniqueness, individualisation: for them it’s not enough to buy a Ferrari, it must be a Ferrari in camouflage paint with denim seats. And with this desire for exclusivity driving it, it’s not surprising that the world of luxury is subject to a perpetual escalation.

Jean-Claude Biver is president of LVMH Watch Brands and chairman of Hublot

Rolls Royce Wraith

In the third part of our car reviews series, LUX experiences the silent joy of driving a Rolls-Royce Wraith

Give a small child a toy car to play with and, to accompany the motions, they will inevitably make roaring noises to imitate the engine. So what would said small child do when handed a toy Rolls-Royce Wraith ? They would have to make no noise at all, because you drive this car in complete silence. As we wafted out from the centre of Edinburgh towards the hills, there was no noise, from inside or out. A few people outside stopped, pointed and gawped. Perhaps the small child would need to line up some dolls to point at the toy car as it drove past with its plutocratic inhabitants.

It’s worth pausing for a second to consider the type of gawping we are talking about here. The Rolls didn’t attract Lamborghini-style attention, where the whole street stops and smiles, small boys stare transfixed and larger boys (and girls) whip out their camera-phones.

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No, it was more like incredulity. Our Wraith was a huge car, in two-tone silver and black, with only two doors but the road presence of a truck. It demands attention, and the people who stopped to look at this road sculpture did so reactively, instinctively: this is the kind of car you have if you want to feel like senior royalty, or Beyoncé .

Rolls-Royces have traditionally been cars to be driven in. The Wraith is the exception. A coupé, it is aimed at the driver, his regal passenger, and their children, or Hermès bags, on the back seat.

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To this end, it is not only silently fast, like other Rolls-Royces, it is also a little more agile. Shoot along a wide Highland road with sweeping curves, and your lips may even curve into the flickerings of a smile. The car shoots forward, and remains reasonably flat (given its size) around corners; it feels both swift and manageable.

Spacious interiors

It swallowed up the distances between towns effortlessly, and there is an assumption that the owner will share the car’s regal hauteur and sense of detachment from the world. There is also plainly an assumption that, for his car-racing needs, the owner will have available in his garage several Ferraris, McLarens and Lamborghinis.

What the Wraith does is tell you, and those whom you pass, that you really are in a different class. You travel in sepulchral silence, surrounded by panels of hand-fitted wood whose burl fits together like the seams of a Birkin bag. You, and the watching crowds, are reassured: you have made it. There is no more opulent manifestation of the automotive dream. You’ll just need the Norland nanny to teach the children that some cars do actually make roaring noises.

LUX rating: 17.5/20

rolls-roycemotorcars.com

Adam Brett-Smith is managing director at one of the world’s most prestigious wine merchants, Corney & Barrow. The firm has unique and exclusive relationships with the world’s greatest wine producers including Chateau Petrus, Domaine de la Romanee Conti, and Salon champagne. As part of our Luxury Leaders series, he speaks to LUX about the evolving market, wine investors, and the world’s thriving wine culture.

Adam Brett-Smith

LUX: You represent the most prestigious domaines in the world, including DRC, Petrus and Salon . What is your secret?
Adam Brett-Smith: Belief. Belief in the producer and your ability to communicate that belief to the customer; truly, that is the heart of the matter.

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LUX: How do you choose who else to represent – where does the balance of power lie, with the merchant or the distributor?
Adam Brett-Smith: We try to take a Chateau or Domaine out of the big basket of other Chateaux or Domaines and put it on a pedestal so that customers can focus with an intensity and purity that general distribution cannot offer. Therefore, it is vital that you try and work with the finest examples of whatever country/region/area you are focussing on. We would prefer to be an inch wide and five miles deep than five miles wide and an inch deep.

As to where the balance of power lies, our best relationships – like the best deals – are equally good for all parties concerned, the customer, the Estate and Corney & Barrow. If that balance changes too radically, the relationship itself will be threatened.

Corney & Barrow head offices in London

LUX: Is London still a global wine hub?
Adam Brett-Smith: Unquestionably. The culture of trading, of restlessness, of expertise, of understanding is perhaps stronger now than ever before. Napoleon called us “une nation de boutiquiers,” (a nation of shopkeepers) I suspect he felt this was an insult, we took and still take it as a compliment.

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LUX: How has the fine wine trade changed over the past five years?
Adam Brett-Smith: A combination of small and or difficult vintages and a market that has been depressed through (largely) Bordeaux led pricing initiatives has meant that we are in a buyer’s market. I cannot see this lasting for much longer. It is about as good a time to buy as any I can remember.

LUX: How have consumers’ habits changed at the top end?
Adam Brett-Smith: I was asked by a highly respected guide to top private investors what my best investment advice would be to potential customers. My answer was brief. Start drinking.

There is a creeping malaise developing where customers are buying wine only if it increases in value. Drinking it is sometimes a secondary consideration or not even a consideration at all. Wine funds have sprouted like weeds as a result. I don’t think this is healthy and for this reason Corney & Barrow is one of the few companies to not have an investment vehicle. This, despite being lucky enough to list, a large number of them exclusively, some of the finest and most highly prized wines in the country. We do advise customers to buy a little more than they need to subsidise cellars. We call this justifying a pleasure on the grounds of practicality.

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LUX: How has your company had to adapt?
Adam Brett-Smith: By increasing the already large number of tutored tastings/masterclasses/dinners in which good and great wines are consumed for pleasure by keeping even closer to customers. It works.

Corney & Barrow wine cellars in Ayr, Scotland

LUX: Your business comprised selling £30,000 cases of wine to collectors and running City wine bars packed with young guys drinking cheap drinks. How did you do both?
Adam Brett-Smith: We have just sold our bars business in a deal (see above) which was great for both parties. 25% of our business is to hotels and restaurants and the heart of our business – the private customer – spends a lot of money with us on everyday wines.

“Everybody needs a house Claret” and it’s true. Even the super-rich are unlikely to share their Petrus’ and Montrachet’s with their teenage children on a regular basis at any rate so we sell a lot of our Corney & Barrow labels to customers who are sometimes a little defensive about their prized cellars. These are seriously good wines and great value.

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LUX: What is your greatest fear, for your business?
Adam Brett-Smith: Apart from War, Pestilence and Famine?

In 1789, nine years after Corney & Barrow was founded the French Revolution  began thus depriving this fledgling company of its biggest source of supply for a generation…

History has therefore taught us a lot about survival. So apart from war, pestilence and famine my greatest fear is that the world of good and great wine will be smeared by well-meaning anti-alcohol lobbies who will turn us into an outlawed peddler of drugs… I am only half joking.

LUX: How do you relax?
Adam Brett-Smith: I get bored easily so I have probably far too many interests. In no particular order, family, reading, motorcycles, opera, ballet, cars…most of which are followed by wine!

LUX: What’s your Sunday evening casual tipple at home?
Adam Brett-Smith: A Dry Martini.

corneyandbarrow.com

Luxury is entering a new phase of uncharted territory as China matures, but at the heart of the consumer world, increasing income inequality will assume luxury brands still thrive, says our columnist Luca Solca

Luca Solca: head of luxury goods at Exane BNP Paribas

China is no longer a market of very rich early adopters. Now, the most interesting part of the market is middle-class consumers. Discretionary spend per head is smaller than it was 10 or 15 years ago, and these consumers will benefit from price transparency levels which were unimaginable just a few years ago, because of digital luxury becoming mainstream.

The other obvious factor for any luxury brand in China is that gifting has completely gone away ever since the new leadership came on board, and this has demanded a fundamental readjustment by brands. Meanwhile, the early adopters first moved on to products and brands that were perceived to be more exclusive, to differentiate themselves, and then moved on to different product categories altogether. If we look at what the rich Chinese have done in recent years, we can see that they have bought a lot of property abroad, have spent money to send their children to schools overseas and to have very expensive individual holidays and medical checkups abroad.

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For the luxury brands, the best customers are the ones that have lots of money and empty wardrobes; then, as they spend their money on luxury goods and fill their wardrobes, they get to the point where they only buy replacements when needed. There are only so many Italian suits, so many Swiss watches, and so many branded handbags that you need. The rich early adopter Chinese went through that accumulation phase, and now are in a replacement mode, like many rich consumers in the west. In replacement mode, your wardrobes are full and you buy with significantly lower spend per capita in comparison to the past. Five years ago, the rich Chinese spent five to ten times more per capita than corresponding consumers in the US or Japan. As we move forwards and as the accumulation phase is finished, we find that spend per capita tends to converge in all these markets.

The bar at the Rivea restaurant in the Bulgari hotel, Knightsbridge in London

There is an element of luxury spending now being more on experiences like travel and food. Also, there are different product categories: there are products that are more immediate and easier to buy, like a watch or a handbag, for example, and there are products that are more complex to buy because they require you to develop your own taste, like fashion. With clothing you need to mix and match different pieces, to develop some kind of personal taste. Then there are products that need you to own other significant products already: if you buy certain types of furniture and lighting, you will have a significant home already, so you will have already been down the learning curve. Taking Fendi in China as an example, they communicated that they were a relevant brand in furniture, and they are solidly among the top three brands in China, while in the West, they are nowhere near as relevant.

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And then at that stage, you shift your spend towards experiences which include travel, spending time with family and friends, good food and good wine.

Luxury typically develops via nationality. The 1980s was the decade of the Japanese, when they represented between 40 and 50 per cent of the global luxury market. The 1990s was the decade of the Russians. Twelve years ago, the Chinese were accounting for two or three per cent of the global luxury market, last year they accounted for close to a third. What is happening with China is not so different from what happened in the past, and for luxury brands, the growth formula of adding more stores in China and increasing prices because you have queues in front of your stores is no longer working.

The restaurant at the Armani Hotel in Dubai

There is another element at play in the luxury world, and that is the continuing increase in income inequality. If we go back 40 or 50 years or so to the 1960s and 1970s, we find what triggered the very significant development of the luxury industry in the United States was income inequality. This is the industry’s best friend, because you have a group of people in society significantly richer than the rest of the population. If you have the same level of wealth across a nation, luxury goods are not very relevant because there a very significant function these products play is conveying your status. First of all you need the money to seek satisfaction for relatively sophisticated needs: the need for beauty and refinement. But you also find these products attractive because of what they say about you, and who you are.

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When we look back in history, income inequality peaked in 1929, it then went down and reached the bottom of a trough in the early 1970s, and then rose and went roughly back to where it was in 1929, by 2008. And as long as we have interest rates at approximately zero worldwide, inequality will continue to increase because asset prices will go up. So while we may have reached the peak of the Chinese wave, I do not see a return to a situation where luxury brands are irrelevant as they were in the 1960s. If you strip out China, luxury growth over the last decade has been around two per cent, and now we have other nationalities in Asia coming on board, and the potential of India. At the moment, though, they are totally irrelevant: Indian luxury spend is worth less than one per cent of global luxury spend.

Bag by Fendi from the AW16 women’s collection

There is a debate within luxury about broadening the scope of your brand to get more consumers closer to it: the Bulgari  diversification into hotels is an interesting one, the properties are very good and this is a positive for the brand. But this is not core: such diversification is more of a nice-to-have than really relevant. You can’t address the key issues at the heart of developing a brand via such diversification. Brands are most relevant and most desirable closest to their core, and the further you go from the core, the less relevant and less desirable they become.

Luca Solca is head of luxury goods at Exane BNP Paribas and one of the world’s most respected luxury analysts

For a few months every year, a new luxury brand takes up residence in Suite 321 at Hotel de Paris. Most recently, Maserati has been handed the keys. Millie Walton takes the room for a test drive

There’s a slight moment of panic at Monte-Carlo beach club. My name is not on the list. Brows are furrowed and there’s a rustling of papers at the desk. “Does this help?” I pull out the black shiny credit card that I was given at check in to Hotel de Paris. There’s a torrent of apologies and I’m whisked to a prime sun-bed in a private cabana. All guests of the major hotels in the city are given the Cercle Monte-Carlo  black card and apparently, it means everything in Monaco, namely: free entry to pretty much anywhere including the legendary casino and no bills. Well, there are bills, of course, but they come in one bulging envelope when you check out so you don’t have to carry round cash. That would be vulgar.

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I’m not actually here for the beach though, beaches aren’t what Monte Carlo’s about after all (there’s no actual sand at the beach club), but to experience the “true Maserati lifestyle”, which includes staying in the brand’s exclusive pop-up suite, driving round in a super slick Maserati GranCabrio (the keys come with the room) and waving around a black shiny credit card.

Guests are offered a helicopter transfer to Monte Carlo where they can pick up their GranCabrio

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The room itself, or rooms (there’s the bedroom, large open plan reception area and bathroom) are geared, as you’d expect, to petrol heads with a wall time line tracking Maserati’s glorifying moments, glass encased models of sports cars and “car-friendly” coloured interiors, leathery greys, tarmac blacks, and muted blues. It’s by no means pretty in the Hotel de Paris lavish, decadent way, but its contemporary cool almost like an art gallery space rather than a room. Its decked out with top notch amenities – it’s the kind of place you’d die to invite your friends back to after a rowdy spin round the roulette table – a sound system by Bang & Olufsen , Bulgari bath products, shelves stacked with design books, a wide screen TV and two tiny silver espresso cups. There are flowers on arrival, chocolates and a large bottle of Laurent Perrier Cuvée Rosé champagne that’s best served with a feast of exquisite canapés (concocted by Alain Ducasse especially for the Maserati suite) on the balcony. Admittedly the view’s not quite perfect yet as the neighbouring wing of the hotel is undergoing a serious revamp, which is worth remembering if you’re admiring the sea view first thing in the morning as you might catch eyes with a curious builder, but if you angle yourself to the left and turn up the music, you hardly notice.

Read next: Sailing the seas with Maserati 

Read next: Horses and heels align at Saut Hermes

Guests of the suite are also privilege to noticeably extra special treatment from the staff. The hotel’s Guest Relations Manager is on speed dial in case the mini bar runs dry and a housekeeper on stand by in case you feel faint half way through unpacking your suitcase.

When you venture outside room 321, the hotel’s 3 Michelin star, Le Louis XV by Alain Ducasse restaurant is completely worth the indulgence. I still dream about the melt-in-the-mouth tender lobster and intensely delicious chocolate soufflé (the waiter assures me the Grand Marnier is even better – it’s the house specialty). And if you hold back on the champagne, there’s no better time to drive round the twisting Grand Prix racetrack than at night. When you’re ready, your car’s waiting.

The suite is open until 30^th September. Reservations: T +377 98 06 41 58.