Luxury as family: and why this next level of exclusivity is not the answer to the current "middelclassization of luxury".

LoL Essay 005. By Peter Seele
 
Right before Christmas in 2024 Katharine Zarella in an opinion piece for the New York Times presented a perspective, why the luxury industry is in crises. It boils down to “Obscene Prices, Declining Quality” explaining why “luxury is in a death spiral” (https://www.nytimes.com/2024/12/19/opinion/vuitton-chanel-burberry-lvmh-hermes.html ).
I could not agree more. Many of the very successful luxury brands have entered mass markets, which made them economically successful by a larger consumer bases, but they lost their essence of luxury by presenting average industrial quality and materials. I would call it the “middelclassization of luxury”. Now many have a small LV key bag, an Hermes belt, an iron Rolex, a Mercedes A-class, a Porsche Macan, or - what a name - a BMW 1 (that lowest level is probably why BWM has bought Alpina to make it the Maybach of BMW serving luxury clients next to sporty Tupperware AMG or M inhouse-tuning).
 
But after the sun comes rain. And the current low sales numbers in Switzerland (‘the rain’) of fine arts, vintage cars, fashion, watches and wines (https://www.blick.ch/wirtschaft/preise-fuer-luxusgueter-wie-kunstwerke-oldtimer-und-uhren-brechen-ein-reiche-schweizer-schauen-ploetzlich-aufs-geld-id20881850.html ) is not only a consequence of volatile markets, geopolitics, Panic Monday, and a more pessimistic consumer confidence, but homegrown by diluting quality and exclusivity of luxury products and brands while increasing prices leading to more revenue and profits for years for the industry (‘the sun’). So how do luxury brands increase (perceived) exclusivity if pricing strategies are already also in the luxury segment dominated by ‘trading down’ strategies and price perception, see “death circle” in the NYT, becomes a critical factor?
More narratives, story telling, customization, membership clubs? Really? I do not know.. Here is the thing: What sector has the highest profits (next to academic publishing due to careless and ignorant academics and taxpayers)? Right: drugs. Drugs from luxury brands: fine wines and spirits. How can you make it even more exclusive (synonym for expensive)? Making the top product (‘trading up’ strategy) something that money can’t buy: family. I remember from one of my academic teachers and friends, Rudolf Prinz Zur Lippe (https://www.usi.ch/en/feeds/6065 ), that he would offer a special cognac from his wider family network. A quality hard to find in the market. If at all. The price? No idea. Here the luxury is that the product does not even have a price tag. You cannot buy it. It’s family. It’s family only. A quality you would offer family, not to ordinary consumers.  Where the grapes were grown tells it all. The land. It’s family. That is enough. And sometimes is it offered on special occasions also to non-family members. Maybe this kind of traditional and exclusive ‘family’ branding was the inspiration for major brands to create a top level product branded as ‘familia’.
 
Here a few random examples:
 
Cognac:
Cognac Hine Family Reserve 603 CHF
Camus: Borderies XO Family Reserve Single Estate: 170 CHF
XO Family Cellar 130 Euro
Jean-Lux Pasquet: Trésors de famille cognac : 350 Euro
 
Rum :
Diplomatico Seleccion de Familgia 65 CHF
Aldea Familia Rum 55 CHF
Botucal Seleccin de Familia 62 CHF
Rum La Familia Especial 49 CHF
Arehucas 18 Años Añejo Selección Familiar
 
Tequila
Jose Cuervo Reserva de la Familia extra: 138 CHF
Mi Familia Flores Anejo Tequila 116 CHF
 
If you consider on top of this marketing sales story of being part of a family, that most of the brands are owned or distributed by a few majors like Diageo, Heineken, Brown -Forman, Pernod-Ricard or the well-known top-level inflators of luxury Richemont or LVMH owning Moet and Hennessy.
Family: Making ‘small groups’ a global product. Family is a concept in marketing that is not protected. As far as I know everyone can come up with a product and call it family. Like the word ‘natural’. It does not cost you anything but creates the impression of personal connectedness, belonging, home, identity, or: where you lay your head.
 
Wrapping up: The extension ‘family’ to a luxury product provides a new level of exclusivity playing with the social identity of the consumer being part of something, what money cannot buy. Here you can. And that is why brands confronted with the ‘death circle’ described by Katharine Zarella, try to escape the circle. But is this true? I doubt that. It is next level dilution. After the middelclassization of luxury ‘family’ is watering down an immaterial, I dare to say sacred level. Here not only of something very personal, but of the most personal context we have, that gave birth to us and shaped us like nothing else. Family.