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The growth of meta-luxury

Rebecca Robins is Global Director at Interbrand and co-author of the globally acclaimed book Meta-luxury. She also writes the LuxuryWatch blog on brandchannel

Twitter: @robins_rebecca

Against the backdrop of a year that has seen extraordinary economic, political and social unrest, it is tempting to disregard ‚luxury‘. It is not essential to our lives, and where our relationship with luxury is concerned, it has always been problematic.‎ The world has been in desire and denial of luxury for centuries. Think back to Ancient Classical civilisation, where luxury was worshipped and celebrated to the excess by the Macedons, while Sparta rejected it outright.

 

However, it is what luxury represents that reminds us of why it matters. What has inspired so many of the leading luxury brands is the quest for excellence, the pursuit of perfection in a given field, the drive to innovate. These are brands in the business of knowledge, culture and unique achievement. And these are the brands that have long set the standard. Four years ago we published Meta-luxury: Brands and the Culture of Excellence. It seems an apposite point at which to reflect on a point of provocation so compelling that it inspired the commitment to a book and business model, and to what we have seen unfold in the market in the past four years.

 

Meta-luxury was inspired by a business reality of a space of offer and demand that was fundamentally at odds with the term ‘luxury’ and the dilution of its meaning over time. The name refers to Aristotle’s Metaphysics, and captures the idea of what lies “beyond luxury”. Meta-luxury distinguishes a business culture and economy based on excellence as a conviction versus luxury as a convention. How many brands actually represent a unique achievement? How many of them are based on distinctive knowledge of some kind? How many are interested in their place in history?

Hermès is a case in point, as a brand whose very ethos is rooted in an uncompromising commitment to excellence. As a meta-luxury brand, subscribing to sustainable growth, it is telling that Hermès asserted a double-digit increase in brand value in Interbrand’s 2015 Best Global Brands report. The brand increased in brand value by 22% last year with a total brand value of $10.9bn, also representing one of the highest risers in the study of 100 brands across all categories.

 

As Pierre-Alexis Dumas comments on the centrality of the Hermès brand and culture: “We want to share our culture. We are tenants of a culture that is age-old.”

 

At times when capital markets are showing the signs of valuing the delivery as much as the promise, and risk reduction as much as rapid growth, meta-luxury represents a crucial business model. These are businesses that create non-volatile streams of economic value across generations. As such, they tend to create a rather unique competitive status, which we call virtual monopolies. Ultimately, Craftsmanship, Focus, History and Rarity, the demand drivers of meta-luxury, become the strongest barriers to competition and powerful drivers of growth.