A few years ago, IDEO was asked by a large global credit card company to help them design a new card for a demographic they described as “extreme high net-worth individuals,” the client’s theory at the time being that these people were on the rise as a target audience and were needing more high-touch services, experiences and offerings. We did what we always do at the start of a project and went out and talked to consumers, in this case, extremely wealthy, traveled and often time-constrained individuals, to ask them about their lives, their spending and what they felt was missing in terms of services. I remember one person’s story in particular as it stood out and eventually became one of the axes on which the design of the project orbited.
He was, to state this upfront, very, very wealthy. When asked the question “What does money mean to you?” he smiled gently and immediately recounted a story, in great detail, of how on a business trip to China, one of his high-powered business connections there had introduced him at a dinner party to one of the principals of Shanghai’s biggest zoo. His wife and small son had accompanied him on the trip, and as they talked at dinner, the man asked him if they had seen the pandas, a recent acquisition. He said he had not, and the man offered to let him come to the zoo an hour before opening the next day so that he and his son could have a private viewing and feed them. The next day they showed up and had a blissful time, laughing and playing with the pandas. We asked why he was telling us this story. “Because having money is not just about buying things,” he said, “It is also about gaining access to creating life-changing moments, stories and memories.”
I have often reflected on this, and pondered if the most precious thing that money can buy is memories. That currency is not purely a series of financial transactions, but a series of emotional connections.
There is much discussion in emerging markets and especially in China right now about the concept of “the new wealth,” and what that means for brands, many of whom have cashed-in on the desire from their consumers to be covered from head-to-toe in obvious luxury status symbols such as Chanel and Louis Vuitton, earning the wearer the nickname “potato dumplings” in Shanghai.
In stark contrast, I attended a conference in New York a couple of years ago, also on the theme of luxury. Every speaker stood up and proclaimed that “old, obvious luxury” was dead, that buying meaningless products with huge logos and obvious “bling” was over, and that we needed a return to a simpler, more “authentic” way of life, to atone for our collective sins and become more “real.” At the end, a man in the audience stood up and bravely said: “Ladies and gentlemen, I’d like to make a counterpoint to everything that I have heard today. You are all basically talking about how the world is being affected by greed. I am from India and my people are really excited about the idea of greed, as we have never had anything. Please don’t take that away from us.” Silence.
These two stories tell me something – that we are clearly sitting at a crossroads, and I wonder if the answer lies somewhere in the middle. Of course my Indian gentleman is right, who are we to deprive people of the right to express themselves, their place in the world, their newfound identity and status, but like the wealthy man at the Shanghai zoo, I wonder if that expression can go a little deeper, under the surface, and be less about what you wear and more about what you learn about yourself? Many smart luxury brands are starting to scale back the more obvious bling in their portfolios and return to the value of craftsmanship, storytelling and history that most of them were based on; the assets that give the buyer a unique and compelling story to tell other than the price of the product. Hermes, a brand that for generations has been about deep craft and legacy, refuses to compromise – when its iconic Kelly bag is out of stock, it steadfastly refuses to expand production, and creates even greater demand by putting people on a waiting list. It is one of the most successful luxury brands right now in Asia, where other, far more obvious brands are starting to falter.
Coco Chanel herself famously said: “Some people think luxury is the opposite of poverty. It is not. It is the opposite of vulgarity,” and to me this holds true: luxury has to be more than the obvious and start to become more about the intangible – less what we say to others and more what we say to ourselves: less bling, more panda.