Rolex, Louis Vuitton, and other heritage luxury brands had better be quaking in their boots at the news that Apple will likely be launching a smartwatch next week.
Apple has become their competitor, according to luxury marketing experts.
Young millennials are no longer eyeing brands for their superficial status. The affluent buyers out there are now beginning to look at products for what they do instead.
This is good for us in the tech industry, but not so fine if you're sitting in the Louis Vuitton boardroom right now.
Creative-class consumers want symbols that "proclaim a new style of status." Status is now based on who the individual is and what they value, not how much money they have to spend, says affluent consumer analyst Pam Danziger of Unity Marketing, in her blog.
Danziger says old-style luxury looks stodgy, too elitist, and over-the-top expensive for a younger generation, who are already affluent, or who are heading that way.
"Apple gets it and will profit greatly from it," she says. Traditional luxury brands "need to get it too."
And Apple already performs well in luxury rankings. Apple is ranked the No. 2 luxury brand after Louis Vuitton, according to NetBase, a social media analyst.
In NetBase's survey of luxury brand mentions, fashion company Chanel comes in lower than Apple at No. 3, and Burberry and Hermes round out the top five. The iPhone itself is at No. 7, and is the only phone model found in the top rankings.
In fact, auto-maker Mercedes was the only other non-fashion-category brand in the top 15.
Tech house Samsung was an ascender at position 58. It had a 168% increase in luxury mentions over the prior year.
And what of Android? Apple is already a luxury brand, NetBase's Hope Nguyen wrote in a recent company blog post. Android is "not quite luxury," she says.
"You can buy shoes at any shoe or department store, but they won't be Jimmy Choo shoes," she added.
Apple is smart to capitalize on the luxury label, she says.
For Millennials, true status comes from who you are, what you value, and what you have achieved, not simply having a lot of money, Danziger says.
And while those of us in the technology industry are probably more aware of this trend than those in other businesses, a secondary result might be less obvious: a rise of a practical, rather than pretentious life, overall, due to technology.
I can certainly remember during my scrappy, but charmed, youth, working at a record company, in the days of pre-time-hogging technology. One of the few activities my buddies and I had on days off was to peruse fashionable shopping districts. We bought huge amounts of expensive, shiny clothes, primarily of dubious merit.
Those arguably vapid days are over for me, and if these marketers are right, it looks like they might be for everyone else too—including the youngsters.
Danziger recounts the story of a young lawyer she spoke to recently who said the status symbol watch at his law firm was the Ironman Triathalon—not because it was expensive, but because it says he's a triathlete.
So, next time you're eyeing one of those $39,000 handbags, just like the Olsen twins have, pause for thought. You might do better with an Apple smartwatch instead.
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