Marrakech is a city of staggering diversity – it has the crudely commercial in abundance but it also harbours hidden gems of riads and artisan workshops. Its rich history as an African trade centre with a French colonial twist makes it an irresistible honey pot to sunburnt newlyweds everywhere. But it’s also a city that embodies modern Africa in all its entrepreneurial, hurly-burly glory.
It was fitting then, that the city played host to the Financial Times Business of Luxury Summit last week. This year’s theme, The Lifestyle Revolution, examined a growing trend for luxury brands to throw their core competency to the wind and embark on brave new lifestyle ventures – taking on everything from hospitality to travel.
Some call it the democratisation of luxury, others the commercialisation – but certainly Marrakech provides the perfect backdrop for a discussion of the distorting powers of the market.
The provocative theme was there to point the numerous examples of centuries-old luxury brands diversifying into lifestyle sectors to maximise their market share in the burgeoning economies of East Asia, South America and beyond. As mature luxury markets in Europe, North America and Japan flounder, the argument goes, luxury brands are developing new strategies to appeal to a younger, trend-driven consumer in developing economies.
It’s fair to say that delegates, speakers and the press struggled with the theme. “Luxury” and “lifestyle” are both incredibly slippery terms, overused to the point that they mean something to everyone, and one thing to no one. The idea of a new luxury-lifestyle movement was an often-infuriating proposition that collapsed two collapsing concepts.
What did come out of the two-day conference was something of a backlash against the idea that lifestyle strategies are an effective move for luxury brands. One man who has thought about this balance more than most is Manfredi Ricca, managing director of Interbrand Italy and author of Meta-Luxury, a new book that seeks to redefine the term. Talking to Ricca over lunch in a break at the conference, he explained that brands like Hermes embody a real sense of the house in everything they do – whether that’s fragrances or scarves. It delivers a more compelling long term proposition than other European brands enjoying double-figure growth in new markets through their adaptability, which may be seriously eroding their core proposition in the process.
The extraordinary growth figures for European luxury brands making their way in new markets has all but obscured what the cost of this growth might be. The discussion at this years FT Business of Luxury Summit hinted at the kind of Faustian pact that delivers untold riches, but may in fact leave the business on very shaky ground.