With a billion people about to become luxury consumers over the next decade, real luxury will become more personal, more individual and more secretive. So predicts our columnist, Jean-Claude Biver, continuing our series on business philosophy and strategy 

Luxury will always will be here. Growth will always be here. When people do better, they want to differentiate themselves, so the growth of luxury will always track economic growth.

But in the future we will have two different levels of luxury: accessible luxury, items that have an incredible image but an affordable price, and inaccessible luxury. This is the extreme luxury of people wishing to have something made for themselves or being completely different, being unique, saying, “What I have, you will never have”.

Accessible luxury will be huge: the middle class in China will develop to 500 million people, in India maybe 300 million, in Latin America around 200 million, so you will have a billion new customers in the next 20 years. This middle class will definitely go for the accessible luxury, but maybe 10 million out of this billion will want real luxury. That will comprise exclusivity, incredible quality, and uniqueness. And these two types of luxury will develop together. Luxury will be like a building with two floors – only a few people will go up to the second floor, while most people will remain on the first floor.

Read next: Leading auctioneer, Simon de Pury on the eternity of art 

The upper tier of luxury will be defined through exclusivity and also through the fact that it will adapt to the facets of made-to-measure luxury. These people want individuality, something made just for themselves. They want something that other people’s money cannot buy, because that’s the ultimate. You get access to something that normally money cannot buy, but you can buy it because you have the relationship and the contacts. That will be the extreme level of luxury, only for you, and to enable you to stand out from the masses and their accessible luxury. The way this extreme luxury is communicated will also change. It will be word of mouth, very discreet and only for the few who know. Like a secret: “Ah, you know this brand, wow, you belong, because you wear this shirt or this special tie or these special socks made in Rome.” The ultimate individualization of your person.

People will still collect, will always collect, but the problem with today’s goods becoming collectible is linked to the concept of eternity. If I collect a Ferrari that is from the 1980s or 1970s, that is a car that will enter eternity because whatever the new industrial revolution brings us, this car will comfortably be repairable. But modern cars, because they are not mechanical any longer, will not be repairable in 100 years because the microchips that control everything from the gearbox to the windows will be useless. That is why a Ferrari Testarossa (from the 1980s ) or a 275 GTB (from the 1960s) will still be collectible. Why should people collect what is due to die when they can collect what is due to become eternal? That’s why you can have an old Lockheed Constellation plane (from the 1950s) and it still works – you can fly with it! An Airbus A380 will not still be capable of flying in 50 or 100 years.

Luxury should be marked by eternity. Great art is eternal and there is nothing else made by humans that doesn’t die, just art. So that means luxury is eternity and luxury is art; and if you can create the eternal, you have the business of the future in luxury.

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But accessible luxury is very different, a more competitive field where you have more marketing and illusions. But everywhere there is going to be a reaction to mass luxury. People will want more and more to be considered individuals. We all need to be treated like kings, to be treated differently, because we are surrounded by mass. Look at travel – that’s why people have a special area to check in when they fly first class, a special line for security, a special seat, special food and so on. People need to be treated differently because now everything is going mass.

In the area of accessible luxury, the same brands are adapting, they are comfortably innovating and comfortably renewing their offering and positioning so they stay current. They will adapt and survive. In accessible luxury, it will be more difficult for newcomers to enter the market. But in the area of higher quality luxury, we may have new artists and creators coming. Because it will be very personal.

Jean-Claude Biver is president of LVMH Watch Brands and chairman of Hublot. lvmh.com, hublot.com

 

The investment potential of the best art will just keep on increasing, says Simon de Pury, one of the world’s most renowned auctioneers, as art becomes ever more aligned with high luxury.

Art is the ultimate luxury. You don’t need it to live, which is a definition of a luxury. And in the past few years other similarities between the art market and the luxury market have emerged.

Ten years ago you would go to different – not luxurious – parts of town to see art. In New York you would go downtown; in London you would go east for certain exhibitions and galleries, for example. Now, though, in the art business you need to be very central for the same reasons as you do in the luxury market: it’s all about location, location, location. Thus the concentration of top galleries that are installing themselves in Mayfair in London, while in New York there is a return to the Upper East Side. There’s a lot of artistic activity focusing on these areas because when the international traveller comes to town, he stays in the heart of the city, goes to the top hotel and wants to have everything in an immediate circle, and wants to not have to waste too much time pursuing these passions. So all of that has had an impact, changing the market quite fundamentally. Galleries are now seeking real estate in the same locations as the top luxury brands.

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Art is also the ultimate luxury because you get emotionally involved, and if you go about it smartly it can be a very rewarding passion. Rewarding in every sense.

In concurrence with these developments, the art market is changing also. The market has become global, so for the first time you now have people from all parts of the world buying art from all parts of the world. Compare this to the Cold War, when some artists in the east had no idea what was happening in the west: you had artists working in total isolation. Today there is much easier access to knowledge and information about what is happening in different places through the digital revolution. And this has fuelled further internationalisation. You have biennials in Havana, Sydney, Shanghai, Venice and Istanbul. There is a now a great exchange of information and knowledge, and with knowledge comes a greater interest in acquiring.

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The information that used to be accessible to a small group of insiders is now much more easily and much more widely accessible. As a result, if you look at a list of the most affluent people in each country, 20 years ago there would have been a relatively small percentage of those who were collectors, whereas now if you look at the same lists, there’s a much bigger percentage collecting. And it’s also that which gives art the ultimate status. You can be a very successful businessman, yet it will never give you the same kind of kudos as you get when you are building a great collection. It’s your cultural achievements that leave your biggest mark and your imprint, and that is one reason why individual collectors in different parts of the world have become the main cultural movers and shakers – much more so than the main institutions.

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Nonetheless, there are factors any collector should be aware of. Your collection is your self-portrait. Collecting is an artistic, creative pursuit in itself. By collecting you show who you are and give yourself an identity. For that reason your collection cannot be put together by a committee: it has to be one person who takes the decision of what to buy and (just as important!) what not to buy. Equally, having a professional adviser who is very familiar with the market can help you avoid making mistakes and can help you to navigate the market, so it makes sense for people who have built substantial collections to have either in-house or external specialists that they consult. But even so, it is important that the person who is building the collection follows their own instincts. I often see people who start collecting becoming as knowledgeable as anyone else in the market.

There are questions of a market readjustment. Whenever the market becomes stronger and stronger there are always moments of readjustment. No market just goes vertically up without any fluctuations. And, of course, tastes evolve as well, so what is regarded today as the most desirable things may not be regarded as so in 50 years. Having said that, if you buy only the best quality you can only do well, because you can analyse it statistically from the 1850s onwards and see sufficient documentary evidence that the prices of major art transactions just keep going up. Still, there are some masters of the past – not just artists of our times – that we value much more highly today than 50 years ago. But be aware: there will always be artists who are like a fashion phenomenon – once the initial excitement dies down, so do the prices.

Simon de Pury is an art auctioneer and collector and the founder of de Pury de Pury. depurydepury.com

 

As artistic director and co-president of Chopard, Caroline Scheufele sees it as her duty not only to keep the famed jewellery house’s A-list clientele happy, but also to have a vision of the consumer of the future. She tells LUX why provenance will be everything

The ultimate luxury is when you really know how your product was produced. I met Livia Firth (Colin Firth’s wife) in Los Angeles, where she was representing Eco-Age, and she asked me, ‘Where do you get your gold from?’ I said, ‘from the bank’, but the minute I answered, I knew what she was really getting at and I admitted that we don’t really know where the banks get the gold from. It is obviously from mines, but the set-up is not at all transparent or regulated, and it made me think.

We started working with the Alliance for Responsible Mining (ARM), who certified the first mine in Colombia as fair-mined – not fair trade, there’s a big difference. From A to Z the process is transparent; there are no kids working; the workers have a fixed salary; they have insurance. The mine is secure, and although they are still using mercury, they are doing so in very small volumes, always following the guidance set out in the fair-mined standard, which ensures that they’re not putting it in rivers or the earth when separating the gold from the stones, which is the most important issue. As a result, the village where the mine is located is clean for people to live in. It’s a really beautiful project. Recently, a second mine has been certified in Bolivia and there will be another one in Colombia, so things are moving forward. For three years now Chopard has been engaged in what we call ‘the journey’ to reaching our ultimate aim of using only fair-mined gold, but it’s not something you can accomplish in one day.

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Clients like the story behind the gold. The first piece that we were able to produce was a cuff worn by Marion Cotillard on the red carpet in Cannes, and immediately it was a tremendous success with the media and clients. We sold it the next day. Of course, it is also a beautiful design – that has to come with it. We then made additional pieces, one of which was worn by Cate Blanchett when she won the Golden Globe for Blue Jasmine in 2014, and my brother has recently unveiled the first fair-mined gold mechanical watches. The whole company is behind the project and has to be because we cannot mix fair-mined gold with the other gold – I like to say it goes through the company like a VIP customer.

The younger generation, in particular, seems to be more sensitive to where their products come from. It’s the same as food – when you buy a piece of beef you want to know that it’s really a piece of beef and nothing else. You want to know the whole story. This is a huge problem in fashion, of course, because workers are dying just so that a T-shirt costs five cents less. Fortunately, being more alert and aware of the planet, nature and saving energy seems to be on trend now – or, as we say in French, du temps.

Jewellery in general has become more democratic in the way you wear it and the way you mix colours and stones. Even men are wearing more jewellery now. The influence of social media definitely has a part to play in this – fashion bloggers and faster ways to communicate make it more of a movement. We’ve brought a lot of colour, for example, into the boutique collections like Happy Hearts, and there are lots of different shades and semi-precious stones set together. I think a lot of women like to have something colourful and light. It is so much more liberated than it used to be.

That said, at the highest price level I think people are still looking for something purer. The diamond will always be at the core. The high-end jewellery market is less affected by social media trends in that way. It is more intimate, people want to go into the store and see the quality. Whereas at the lower level, lots of pieces are now getting sold through online boutiques. For real luxury, people still like to get a physical feeling of the brand and be consulted, but when you’re living in a city where you don’t have a boutique and you want to buy a present, for example, that’s when online shopping becomes really useful and practical. Take China: the cities are so huge and there’s so much traffic that online boutiques save a lot of time. Also, people often go to the internet to get information first, visiting different websites of different luxury brands before they choose where they really want to go in person. We’ve got an online boutique in the US now and have just started one in the UK.

We are moving forward as fast as we can. My aim is ultimately to produce all the high jewellery pieces with fair-mined gold, and my brother wants to do the same with all the Luke Chopard watches. The ultimate goal would be for everything to be fair-mined gold.

chopard.com