A recent report from Altiant shows how attitudes towards luxury goods is changing. Covering the US, UK and France, the research was conducted with individuals with Investible Assets (IA) median over US$700K and Household Income (HHI) median greater than US$200K. This research conducted by the luxury fieldwork specialist gives tangible insights into how this hard-to-reach population views Reuse, Rental and Subscription Models in Luxury
The concept of ownership, once at the centre-point of luxury consumption, has evolved from owning luxury to experiencing luxury ownership. Consignment stores, rental or subscription models are not completely new, but their sharp rise supported by technology is highlighting some key questions around this phenomenon once seen by luxury houses as weakening their brand value and fuelling the counterfeit market.
A changing mindset
- One in five wealthy consumers rented a luxury product within the past year.
- Only 16% say that there is a stigma in wearing pre-loved items.
- 34% think that luxury brands at lower prices (e.g. second hand/rentable) makes them less desirable. Rising to 41% for French affluent and High Net Worth consumers.
- 39% of luxury renters would rather rent than buy as they believe it reduces their environmental impact
The Business Opportunities
- Trying different luxury brands for short periods of time is the main enticement for this population to rent (57%), with cleanliness being the main deterrent (61%).
- 43% of luxury consumers are willing to pay more than 5% of the RRP to rent a luxury item for 4 days.
- 51% say their unused clothes remain in their closet, rising to 66% among French panellists
About Customer Experience
- Luxury brands’ own stores (64%) and websites (55%) are/would be the most attractive places for the wealthy to rent from, followed by resale specialist sites (36%).
- Luxury subscription models can offer better control of the CX via bespoke options and possibilities to appeal to new segments.
- 73% are interested in luxury holiday memberships and 67% in luxury car rental models.
MOST SURPRISING FACTS / QUOTES
- Despite the strong appeal and frequent utilization of these new models, it was surprising to see that wealthy Millennials were more likely than over-40s to view luxury good as good investment pieces 81% vs 68% and to actually like collecting luxury products 76% vs 57%.
- Interestingly ‘one wear & return’ also happens among the affluent – perhaps at a lower level than the general population – but 14% of our sample still reported to doing it – and one in five Americans (Figure 4). Rentals can be a great way to alleviate this and promote the ongoing use of luxury goods well beyond the first few occasions.
- ‘There is a strong pressure for a more sustainable fashion, the industry is often pointed at as responsible for overflowing landfills and serious considerations are given to Circular design and Circular Economy. Our research shows that the wealthy consumer is aligned with this global orientation with 39% of luxury renters preferring to rent rather than buy as they believe it reduces their footprint. Although rentals might not be the most planet friendly model if we consider the impact of dry-cleaning and shipping, but the associated positioning claims definitely make some wealthy consumers think it is‘
Download the full report here – reproduced with permission of Altiant/ LuxuryOpinions panel.
