October 29, 2020
60 min read
Systems In Flux: Class, Taste and the Modern Aspiration Economy
Welcome to Unseen Unknown. I’m Jasmine Bina. For the second episode in our series on Systems in Flux, we’re talking about systems of class and taste. In the past 10 years new brands have emerged specifically in luxury and premium categories that point to a divergence in our social systems around what class and taste actually are, and how they’re achieved.
Telfar Clemens, founder of the fashion brands TELFAR is part of a new group of brands that points to this divergence.
I was just super ambitious and always wanted to show my work. It wasn’t Fashion Week that was supporting me when I started. It was the art world that had spaces that they actually just give you because fashion is expensive and to actually be part of that system is expensive. There’s a monopoly on what gets in. It’s always been like kind of the support from New York and from my friends that actually did make things happen, and they didn’t have to be expensive, but they were memorable.
Brand strategist and sociologist Ana Andjelic places people like Clemens in the modern aspirational economy. This emerging economy trades in taste, aesthetic innovation, curation and environmentalism, and what’s remarkable about these brands, brands like TELFAR, Blenheim Forge, Fly By Jing, Brightland, brands that you see in your world is that they have all successfully decoupled class from money and decoupled taste from wealth. In her new book, “The Business of Aspiration”, Ana explores this decoupling and contrasts the modern aspirational economy to the traditional economy where consumers once signaled their status through collecting commodities, Instagram followers, airline miles and busy back to back schedules. Now, it’s about collecting knowledge belonging to micro communities and leveraging influence. As Ana points out, this new cultural and environmental capital changes the way business and entire markets operate. I talked to her about how brands can trade in this new capital and it all starts by understanding where this decoupling actually began in the first place.
The class decoupled from money at multiple points during the 20th century. I like the example of Ikea in the 1950s because it’s an excellent illustration of what happens when a company disrupts the value curve in its industry. And value curve refers to coupling between the price and whatever is deemed the most valuable that company is creating, it can be design, it can be quality, it can be luxury or it can be accessibility or whatever. So how IKEA basically did value innovation in its category and disrupted the value curve is by creating decent quality, well designed, trendy furniture at accessible price point. We’re talking about 1950s, that was where Scandinavian modern design was at its peak, or at least it was something that that was very coveted and it was also very expensive. And as such it was not available to large swaths of the population so well designed, trendy furniture was for the rich people. So IKEA came in and it was like, “Hey, we can offer the same thing. We can offer decent quality, we can offer great design for accessible price. And how are we going to do that? We’re going to do that by disrupting what is thought as the cores component of the value chain in the industry, which is the furniture arrives assembled already”.
So, IKEA said, “You’re not going to have assembled furniture, we’re going to put the cost of assembly to the customer and by doing that, we’re going to allow our furniture to be well designed and accessible”. So, that is one long winded example but it’s important to sort of realize how, even more recently, the budget airlines have done the same thing. Like you have, for example, Ryanair, which sort of decoupled the place from ability to fly and ability to fly around the world, as a matter of fact, even though the Ryanair doesn’t fly, Norwegian does, for example. So that opened up flying, flying used to be for the affluent.
It used to be for the very rich at the beginning, then it was for more classes of people but it was never for everyone. And now basically everyone can fly everywhere. How they’ve done that is basically through decoupling the price from the service, from the offering because they took all the amenities away. So, that’s sort of the mechanism. The reason that these examples are illustrative are basically because prices is not any more connected with the value that’s being provided, you can get value for lower price, so that’s a big economic decoupling.
I think the Ryanair example is especially poignant for me and probably is for a lot of people listening to this podcast because we’re all somewhere in the millennial generation and I think this decoupling that you talk about characterizes what we’ve grown up with. And I remember being in Europe with so many of my other peers, and suddenly you could just jet about different countries during your break and it costs almost next to nothing. And that was a very new experience. And so we developed the taste for that kind of luxury at a really formative time in our lives, I would say.
You’ve also talked about something else, which is that the rise of the creative class of the knowledge economy kind of coincided with all of this and was another driver in this decoupling. Can you talk about that a little bit?
Yeah, of course. I think what you just described, that you and your friends were able at a very young age, as a youth… as a representative of a creative class. So, it’s going to expose yourself toe a lot of artistic knowledge, cultural knowledge, taste, food, museums, fashion design. So you acquire that knowledge of the world for a very low price. That was something that was not available before when the money was connected with the class and knowledge economy disrupted in two ways. The traditional economy, which had a very strong hierarchies and you have upper classes that were educated and they have taste, and they have access to all the finer things in life because they could buy them. And now, even when you don’t have a lot of money, you can still have access to those things. And one is through education and the other is through the Internet, because you don’t have to be the smartest, the most talented or anything. You just need to have Internet access and if you dedicate enough time and sort of interest, you can become an expert in a number of things.
And now, of course, that creates a new class distinction, because if someone has three jobs and two kids, they obviously can’t invest time to become a coffee connoisseur or furniture aficionado. But it’s that democratized access levels the playing field and in that sense, also knowledge economy created a new class of those who cares about where their clothes has been made, where the food has been made. They know what the latest sneaker is to wear, they know where to go when they’re in Abu Dhabi, they know which exhibition is a state modern. So in that sense, the knowledge economy created this also big decoupling between the economic value and the social, environmental and cultural values.
This always makes me think of this question that I have when I come up against this truth that you’ve just described. And that is that you said that really now, being able to consume this kind of luxury is about dedicating time and interest to the knowledge that’s required to have it. But I wonder, this information you’ve described it as wokeness in the book as well, being in the know. Isn’t this in some ways even more expensive than money because it costs our time and not just time, the fact is, you kind of can’t rest. I feel like in the old luxury context, if you were of a certain class, you just were of a certain class and you could enjoy the amenities that came with it but with this new kind of consumption, you can never rest. You always have to learn about the newest coffee brand or the newest hidden place to travel to or the newest cultural cause. Am I misunderstanding or do you feel that same kind of unspoken cost?
Actually, I see where you’re coming from, and I like yes, that is definitely true on one level. On the other level, we have a completely different economy that we’re dealing with and our markets are reshaping because actually there are curators now who are doing all of that for you. You just need to know… you can follow three Instagram accounts and you know what’s in. You can read two magazines and they’re doing the job for you. So in that sense, the new class, the new intermedia are being created between yourself and your time and your money and knowing what is in, what is new. You can just walk in Zara and know what’s trendy. So I think there are a lot of shortcuts that we have restructuring that is wider than just consumers’ relationship in brands.
Yeah, that’s a really good point.
Right? So I think yes definitely, if you really want to become like, vinyl aficionado, you will going to spend time and money and no, and not everyone can afford it. But look at Zara, people shop at Zara because they can’t afford anything else, among other things. But they’re also buying stuff that is trendy, and they’re like… I literally heard in H&M the other day in New York. They were like, “I’ll give you this after a week”, one person said to another after a week, “I just need to wear it with a couple of more outfits”.
Think about that. We have created a completely new set of problems. We’re having that wide accessibility of things that used to be accessible only to a limited number of people. But also there are good things because at the same time, if everyone can have access to what’s new and without any work to be done, then there’s a new and economic and social environment.
Okay, so this is what I want to talk about really, which is the crux of the book that you’ve written. Our systems of class and tastes are in flux right now and that’s as part of what you explore here, and you’ve described a split specifically in luxury that’s happened in the last 10 years and you said something to the effect of where aspiration has never meant more and yet has never meant less. What is the split that you’re talking about?
There are two splits. In the book, I’m talking about the split between this big luxury which is like Big Pharma or Big Media, which is something that’s operated by conglomerates, by holding companies that is globally present that has stores in Tbilisi, Georgia as much as in New York City or in London or Tokyo or Abu Dhabi. So the one that’s pervasive and that is very mass and that is accessible to anyone who has money to pay for it, which is that very old definitional aspiration as we just discussed about. The value curve is still like, “Oh, you pay for a logo or you pay for the brand name”. And then there is this other one that is very much like Hermes quote, which is like, “We’re not a luxury company, we are maker of high quality goods”. So that means they’re they’re focused on making, on craftsmanship on the work of human hands which is something that’s very much rapidly disappearing from the luxury industry, which is largely created in factories in China or in Turkey or in Bosnia or in Spain or in India. It’s not made in Italy. It’s not made in France.
So that’s that’s split where something… How can you grow? What I’m looking is overall global economic growth strategy for a brand is either you do that scale and that mass and you keep the relationship between the logo and what’s trendy, the street wear and collaborations and high price or you stay relatively small by creating artificial bottlenecks or real bottlenecks in creating products because you’re not resorting to mass production. Like Hermes has artificial bottleneck for their Birkin bags, but it’s also limitation off how many hours and artisan can spend on it.
All right, so you mentioned this is happening in other places, this is not unique to the US, this split that you’re talking about and the modern aspiration economy that’s kind of facilitating it? We see it here in the States, but is it something that is happening globally?
Absolutely, and what we’re seeing, I mean, look like look at the largest luxury market, China. That used to be logo, logo, logo, logo, logo and it’s still to a large degree is. But there is also like emergence of local brands all of a sudden, because once the sort of the playing field is established and people with money can show that they have money, then is the second phase, which is that invincible phase like, we don’t need to prove anything. Now we can actually like care about taste, care about, like the refined point of view, care about locally made things and so on. So in China we’ve seen the rapid happening towards that knowledge economy, towards that modern, aspirational economy.
And that brings me to my next question: With these systems changing luxury itself, splitting as you described, it’s obviously creating new kinds of brand opportunities to kind of play in this knowledge space. I’d love to know what are some of the more illustrative examples that really show how powerful you can be outside of the old luxury context, brands that have really understood what you’re describing and turn it into a phenomenon?
I think there is two layers of brands, one are old school brands like Hermes, or Loro Piana or those that are very wedded to their factories and to their artisans and they work the same people from decades. I mean, their turnover of employees is very small, so that’s one level. The other one are those more modern brands, the brands that are making artificial Japanese knives or they’re making like East Fork pottery. They’re vertically integrated, and they’re all focused on improving the quality of life for a very selected group of people. So in that sense, it’s still aspirational. I’m not talking about the economy that’s equal. I’m just talking about the economy that changed its formula. But the inequality is still there because on one layer, there’s entire sector of brands that we’re seeing that are just focused on improving how much we enjoy life.
People who can’t afford that, like all the Ubers around the world, the Seamless, the Kashmir’s, Fat Pants, those brands that they’re focusing or making one thing and that improve our lives, that make us sleep better, that allow us to track our body, what’s happening in there. So the entire wellness industry, the entire nutrition industry, all of that is an example of that sort of modern luxury because it’s very human oriented in one way but it’s not for all humans, which is the downside obviously.
And then they have very specific business model because again, what I talked about before with IKEA and Ryanair, they really decoupled the price from the products of services. So how they’re making money is through membership, through community, through collaborations, through contents. That’s the way they add value in their value chain. Through taste, so it’s all about, “Oh, this is very carefully curated selection of brands”. And you go and you buy there because you want a carefully curated selection of brands, which goes back what you said. You don’t need to do the legwork. You just go. And you’re like, “Oh, but I’m buying from this influencer”.
Okay, so I’m glad you brought the conversation here too because you talk about how they add value through membership, through communities and something that your work also centers on is how taste communities have evolved and how brands should shift their focus at times from targeting the individual to actually looking at the taste community that that individual is a part of to understand how to build their brands. I want to know… I feel like I understand what a taste community is but what makes it taste community different than a fan club or like a general branded community or even an unbranded community, what makes it a taste community specifically?
I think that’s more related to the intangibles. You can have a shared taste and like different things. So you and I may have same taste in movies or in travel and gravitate and purchase completely different things. When you have a fan club that’s still more of a mass, and that’s still more of a reaction to the mainly mainstream, and what I’m talking about is there is no more mainstream. I recently also wrote about the cultural icons and how, at the time of mass media, the way to achieve scale was to have one icon that everyone rallies around like the Air Jordans or Back to the Future or Britney Spears. They had one singular meaning in a society that kept society together and mass media also sort of allowed it. And there was mass retail, which was the same, the American Apparel, the J.Crew.
There was one big door into the brand, and brand stood for a specific set of values. And in order to appeal to the mass, they had to create the taste that is very generic, that appeals to the mass, and now we don’t have this one big door. We have a lot of small doors. It’s very hard to say we have one set of values as a culture or as a society, not just in North America, overall. And that’s when you think the good illustration is like moving from broadcasting to streaming and what I mean by that is like my Nike is not your Nike, my J.Crew is not your J.Crew, my Netflix is not your Netflix, and Netflix is one brand, one umbrella brand. But what I see there versus what you see there are very different things.
That is fascinating when you describe it like that.
So, that’s what I… Try to apply that to cultural consumption when you have on Spotify, my Spotify is not your Spotify. If you have Amazon, the same thing, it’s very different. So, that’s hard to say it’s a fan community. It’s not about that, it’s about almost more about our data footprint and what we like and what we buy and what is our psychographic profile. So I think that, it’s more looking at our profiles can be seen on such a granular level that there is no need anymore to have those big, sweeping mass brands.
You know what else I kind of… I feel like I’m kind of seeing here is that when you talk about those old mass brands like I think of Calvin Klein, let’s say, hen I was growing up. It feels like they were more in charge of setting the culture or setting the norms for a taste community or culture, whereas now it seems like the members of a taste community are setting the norms and it’s the brands job to amplify it or support it or kind of help explore the frontier of that. They’re not so much on the leading edge. They’re more trailing and I don’t know if you would agree with that or not but it reminds me of something else that you said in the past, which is that brands need to hack culture before they can hack growth or in order to have growth, they need to hack culture. Is that what you’re seeing or how would you describe that?
Absolutely. I mean, that goes back to what they said about one set of dominant values versus having a lot of different value combinations. And I mean, it sounds very abstract, but let’s go back to maybe the Netflix example. You have different genres, and those different genres go all the way to micro genres. So that means, maybe noir, that is also anime, that is also romance, and that is like science fiction at the same time and they’re all those micro texts. for content. Imagine if the T-shirt was described in such a granular way and then on the other side. You have me, I’m Serbian living in New York for 20 years, highly educated professional, these are my tags. Your tags are like entrepreneur with a company with a family in LA With two kids and match your tags with the content tags or with a T shirt tags, and you’re getting a combination that is very unique, it’s very personalized.
So what we’re dealing with now is that the Internet basically allows such a level of personalization that mass brands have a hard time addressing all off that it’s not that they can’t. They absolutely can. But in order to achieve that, they would need to become thousands of brands. They need to have collection of street wear, collection for mothers or collection for someone who likes to live in their sweatpants, which is basically all of us right now and then like division of all the communication, the packaging, the newsletter, the messages for each one of us. I think we’re moving towards very granular way because we can.
Do you see any fashion brand specifically that are moving that direction?
Oh yeah, I think a lot of like the DTC brands are very targeted towards… Even the platforms that you have now. This platform, called The Yes, is using stylist and artificial intelligence and you’re basically like scroll through your Instagram feed and you’re like, “Like this, Like that, like that”. And you get hyper personalized curation of stuff.
Right. But do you see any large luxury brands or fashion brands in general that are starting to create sub brands that let them speak to these different communities?
I don’t see that but what I do see is collaborations. So what they’re trying to do that… Right now, it’s very blunt instrument right now. It’s very like, “Oh, younger and older”. It’s very demographic, but it can be selected… I’ll give you an example. I think in CPG we see a lot of that. I didn’t invent this but for example, Nestle, they have Evian and they have Volvic. They have just other regular waters. And each of those waters they’re created with a different value proposition. One is for health and wellness, the other is for vitality, the third one is luxury the fourth one is just hydration. So, they created all those different needs states and we haven’t seen that yet in massive retail.
And yes, you’re absolutely right. When you brought up hacking culture, when you have those massive brands. They were setting the trends, but there was one trend, it was one. And now you have those niche communities going back to taste communities because we have Internet, because we can connect in micro communities with like-minded others, we can have absolutely specific taste. Maybe I love just Momotaro Japanese jeans and I’ll find those and that I’m going to know what the new trends in that super subarea are.
You know what else struck me about all of this conversation is that, as you’ve pointed out, all of this only happened in the last 10 years. It took 10 years for the last 100 years to be disrupted this way. You know, like you said, all these cultural things when it comes to our social systems changing, the Internet, all the things that you’ve described. So obviously it’s one thing when people say the change of or the pace of innovation isn’t going to slow down, it’s another thing to understand that it’s not even ramping up slowly. It’s like a switch flipped. Have you thought about like what the next 10 years might look like?
Oh, I mean, that’s your asking… Yeah. Okay, so let’s just go back for a second. I think in last 10 years it was like almost everything came to fruition. But I think, as I said, that’s why on purpose went back to 1950s and IKEA and a value curve. Back then, when was that big decoupling or think about automobiles, there was one person who can afford an automobile 100 years ago or maybe 120 years ago, and that was luxury.
And now, what is luxury is how can you customize your automobile or if you drive a Tesla, how does that reflect your environmental values that you wanna signal. The value curve completely changed. So what happened in the past 10 years, I believe, is simultaneously fragmentation off taste, all of a sudden, we’re like, “Hey, wait, why do I need to go on by J.Crew when I can buy like 35 other things”. Think about denim, for example, you used to buy denim from Levi’s or from Wrangler or from Diesel like 20 years ago. Now every single brand offers denim. So I think it’s the combination of factors but it’s also on-demand economy, it’s not about the supply. And when you have so much choice, it becomes how do you curate that choice?
This all comes to like, “Okay, what are brands supposed to do with this”? And that’s what the bulk of your book talks about and you discuss this readiness, as you say, to create, distribute and deliver social, cultural and environmental capital to your audience. A lot of this I can imagine is long term thinking that’s gonna butt up against short term goals and growth targets for a company. What does it really take for not just a founder but an entire company to embrace this new way forward? Because when I was reading this book, I was thinking, what kind of leadership does this require? I know that’s a big question, but what are some of the big things that you’ve seen leading the companies that you’ve worked at that are good signals that a company will be able to embrace what you’ve described her
Right, well when I mean… I think that… thank you for asking that because when I was finishing the book, it was end of March and then I realized I need to go back and I need to add a chapter about how changes that we’ve seen due to global pandemic and our own unpreparedness for it because science fiction writer Frederic Paul said, “It’s not innovation to create an automobile. It’s innovation to predict traffic jam”. So you’re very right.
I mean, we’re very unprepared for all sorts of externalities, of our actions, and we’re still unprepared for externalities of our actions when it comes to climate, and that’s gonna hit us very soon. So, the way I was thinking throughout the book about the brand is like the brands until recently, or even until this spring, they’re rewarding a bad behaviors of both their companies and individuals. They put forward imagery that is like Castle and “Just do it” and your an individual, you need to be better than others and if you buy our products, use our services, you’re distinguishing yourself from your peers or you’re better than your neighbors and so on.
And all of a sudden you’ve seen this narrative, that’s unbelievably communal now, that’s very empathetic, that is very human, that is very like, “No, no, there is no one hero. All of us are heroes”. So that, in a sense, needs to flip the script of the brands to say, “Hey, no, it’s more towards our communities and how we support each other and how we solve problems together”.
I remember talking to you about this the first time we did our podcast and it was a totally different topic, but it brought me to the same question. I mean, is this permanent change? I feel like Americans have some really deep seeded capitalism based values. I mean, are we going to, I don’t want to say learn a lesson, it’s just the world is changing, but are our values permanently changing. Or do you think this is temporary?
Well, that is the second part of my answer is talking about case shape desperation. So people are saying, “Oh, what I just answered, people are going to pay attention. Brands are going to be more sustainable and to spend and people are going to buy more sustainable and they’re going to want a more socially responsible companies and so on”. And yes, that’s I’m sure that is going to be a group of people or a class of people who are definitely going to say, “Hey, I’m going to invest less but better”, but the large swath of population are going to buy what they can afford so when you talk about fast fashion or fly Ryanair and so on, people are buying at Zara and Poshmark because that’s only the only thing they can afford.
So we have this like this wide gap that has become unbelievably obvious, it was there and it before and it was there for some time, when you have that like class of people who are ordering Ubers and class of people who are driving Ubers. And I think that is actually shaping the aspirational economy. This is not something I talked about when I was writing a book as I came to the very end and I completely agree with you that that is this strong capitalistic spirit in the United States but it is unbelievable inequality that is now in the focus.
In terms of capturing the mood of a moment, how do brands actually do this? And it’s so crucial. A lot of times when brands do it, it almost looks it was… In hindsight, it seems like it was almost by accident. But how can a brand capture a moment, let’s say, even just this moment right now, and use it as a way to support the communities that are their consumers?
Well, the ways that I describe in the book is twofold. I do look with what the small group of people is doing that going back to same taste community of, say runners, for example, or cyclists or nutritionist or wellness aficionados and so on. They’re telling you where the future is going because these are those edge cases and they go very deep into specific area. For example, Panagonia fans and their passion for environmentalism, I would not even think that they are fans, they have more taste for outdoors because they’re not maybe like for me, fandom is very single minded and it’s very mass culture.
So you’re not a fan of this, so you’re a fan of that. But if you’re just a fan of… if you have a taste for something, I think it’s much softer relationship. So if you like outdoors, you’re probably going to preserve that outdoors and you’re going to want to probably care about the environment and you probably care about climate change so you’re probably going to care not only to buy Patagonia jacket because it allows you to spend 55 hours outdoors, but you’re also probably going to care about what you buy to eat or if you recycle and other behavioral and passion points. So that is one way of looking at it.
How are the people who are very passionate about certain thing or that have a taste for a certain thing, what are they doing or those who like food aficionados you have now, for example, on Instagram, a giant economy of direct to consumer food brands who are completely bypassing being a brand and bringing this back to the market economy when we were going and buying like the farmer’s market, people buying from people because thanks to the pandemic and stores being closed and so on, a lot of people like they don’t have jobs in their backyard they started growing vegetables or making teas or curing meats and so on. And they’re just going to Instagram to sell that.
And we’re buying from other people because thanks to Instagram, thanks to that visual sort of culture, we know about their lives. When you go to say, Haus or the Aperitif or East Fork, you know, about the family, you know about their kids, you know about their values, you know what they stand for, you know how they spend their time, you know how they treat their employees. That’s one micro way of sort of seeing that the future is going so I see a lot more personal relationships if I have to give any prediction. And that’s not like ground breaking but when you think about how big brands are communicating is a very, very, very far away from that. And that goes back to what we talked about.
It’s like all of overall micro overall personalization, if I get from J.Crew newsletter that knows me so intimately, I would have a completely different relationship with a brand that you have, for example. So that clarifies a bit the previous point about the mass brands and micro. And the second way is to how do you read the room, read the mood. And I always say Japanese have this expression “Kuuki wo yomu, which is how do you read the atmosphere? So right now, when you read an atmosphere is like everyone is on the edge. If you’re a brand, you’re not going to be, “La, la, la, la, la, nothing’s going on”. You probably want to show empathy for how people are feeling.
Right. It’s interesting that you mentioned farmer’s markets, too. We were doing research for a brand a while ago, maybe one or two years ago. And part of the demographic that they wanted… And I know demographics or maybe an antiquated way of looking at this but that’s where we started. And they wanted to, because of the cost of the product, really speak with super affluent people in regions but regions everywhere from California, straight through the Midwest to the East Coast. And we were trying to find insights about how people ate and see if we understood or could understand their value systems around the food that they bought.
And you’d think with such affluent people, with the other behaviors that we observed when I would talk to them about the food that they bought, I was expecting to hear like organic or grass fed or the kinds of diets they were on or the nootropic sacks that they were taking but the most common… I mean, it was remarkable. Everyone I spoke to brought up farmer’s markets and it forced us to realize, oh, people are not relating to food as a function. Food is part of their larger value system around how they relate to other people. And it totally changed the way we looked at the brands. And I think farmers markets… Just when you described that, it brought up that example for me, because I think another thing about capturing the mood or the zeitgeist is you really have to be open to what the information is going to tell you, because it’s not always what you’re expecting.
That’s exactly what to say, if you care about the environment, you are not a fan of Patagonia. You care about the environment, that is the primary relationship with the world that you have and then also buy organic and you also buy also… That is a great…
Exactly. The big question that this leaves me with then is and I see this with founders that we talk to all of the time, can you do what we’re describing here without being a part of that taste community? Can you sell to, let’s say, an audience of parents that have a certain taste community around, I don’t know, whatever and it relates to like values of childhood and things like that without being a parent yourself? Because I feel like we saw a wave of brands when I was coming up in brand strategy that were founded by people who did not look like their audiences and that was okay because they were creating value innovation like you’ve described. They were disrupting models, they were building brands that were very sticky. But now that consumers have changed how they relate to brands, as you’ve described, is there room for founders who don’t look like their users?
But that’s I think where the empathy comes in, that’s what was the big shift is from just having your own vision and then just being able to capture the mood in society and in culture and just having empathy for your users and their way of life and how they relate. So I think that is more of a shift from founder’s centric to customer centric organization or from the board centric, again, to customer centric organization. And I know it sounds like it’s been said a lot before, but it’s the hardest thing to do. The reason why omnichannel hasn’t happened yet, it’s not because of the lack of technology or data is just because organizations are siloed and they’re not organized around their customers.
Yeah, I think the empathy piece is really important. That’s a hard north star to kind of build a company around.
It’s very hard exactly, because it requires operational empathy and it requires operational and it requires empathy to be operationalized and it requires organizational empathy and I don’t think that’s something we talk about enough. You know, we hear people say, “Oh, empathy is important”. But is like how do you really operationalize that throughout your organization?
Yeah, that’s a great question.
Or through your value chain. So, I think that is going to be a great mandate for the next 10 years, back to your question.
So after all this is said and done, luxury is no longer connected to wealth and opulence. The ability to acquire our value systems have changed. Access means something different, taste has fragmented. Social classes are defined differently. After all of that, what’s left? If you had to define modern luxury in one sentence, what are we left with?
I think one thing that we are left… it’s not going to answer your question directly, but it’s that we have to work hard on our social cohesion, we have to work very hard to feel part of the same culture and the same society. And I don’t think that’s necessarily a bad thing. I think that we are forced to see and understand and listen to each other and recognize our differences and accept our differences. So that’s going to lead to a more diverse society. Having all those taste communities, because in a sense, mass media masked our diversity and our differences and our racial differences and our economic differences. But now we have to find a way to reconcile them if we are to to survive as a society. So I think that is one big takeaway.
That is an unpopular opinion!
It is very unpopular opinion because during this pandemic, we’ve seen the people who have money actually fared way better than people who don’t and when you’re on your yacht in the middle of Mediterranean or in your luxury bunker or in your giant house with the pool, that is what mattered all of a sudden, forget about this aspirational economy. Forget about this experience economy and travel and leisure and food and culture. When you don’t have access to any of that, what matters is hardcore cash and estate. And that’s what you’re seeing now, people are going back to stores, they’re buying things again, they may not want to sit on a plane, but they want to still feel good about themselves so they’re buying stuff.
That’s hard to argue with. And I know you’re saying it from a very nonjudgmental place. I think what I like about the way you think about things is that even though there’s a time and place to talk about whether any of this is good or bad, you can’t get there if you don’t look at all this objectively and just ask yourself the truth of what’s happening. And that means sometimes you arrive at an unpopular opinion. And I think that’s what’s so alluring about your writing. But to wrap this up, I want to ask you about what you’re seeing yourself as a consumer. So you’ve been in this business for a long time. You’ve led some amazing companies. You’ve had some of the most provocative thinking out there. You yourself are a luxury consumer, you’re part of the modern aspiration economy.
From both ends, you have access. But if we took that access away from you, you also have the knowledge and the wokeness. You walk both paths. So for you, what brands are really exciting and kind of playing in this primordial clay of these new aspirational systems or whatever systems are taking us back to what old luxury was like, what are some brands that kind of get it and excite you a consumer?
Well, I always like to see when brands are disrupting themselves before being disrupted. So for me IKEA is a great example. I don’t know why I’m so into it, but I guess when I was researching for… I wrote about five different business models in modern aspirational economy and I looked at the value disruption for IKEA and they’re doing it again because you know what they’re doing? They’re basically inventing the furniture to the small businesses and students. They are rebuying from people who are… who don’t need any more of their stuff. They’re also providing parts for their furniture because they don’t want they want to avoid that association with cheap with Zara basically. “Oh, I’m just going to have this sofa for a year and then I’m going to discard it then it’s going to end up on a landfill”. So they are very actively working on changing that perception and what really attracted me to that sort of thinking is that they’re making those to value changes part of their business model. So they’re not just doing this for PR purposes.
They actually want to make money out of rentals and they want to make money off rebuys, they want to make money on the repairs. And I think that’s a blueprint for it for many for fashion industry, above all, like there is a handful, if any, like Ganni for example, again another Scandinavian company who partnered with Levi’s for the recycled denim and I think is a good way to think about that is like which companies out there are basically moving their products from functional level, something you wear and discard or use and throw away to the next level of the ritual level with the taste comes in, “Maybe how do I make coffee or any grind my own coffee at home”, to the level of a collectible. “Do I have these Ganni jacket because it was made of recycled Levi’s denim”. And then to the sacred object, “Do I wear this jacket only once a year when there is Christmas sort or a family gathering”.
So I think that brands can operate in any of those layers, but it’s basically, we need to really rethink the relationship with objects as consumers.
And you as a consumer, do you feel like you’ve changed at all in just the last few months in any permanent ways?
I don’t think so and that may be disappointing to hear but I’m more cautious when I’m buying things but that’s just the situation, just because if you don’t go to the office, if you’re not socializing at the same pace is before, of course, you’re not going to be like, “Oh my God, I need this jacket” or something. I still have that but I’m not in that … it’s just situational so I don’t think that’s permanent at all. So it remains to be seen really, I don’t think I really changed that much. I mean, give me new habits, I want to replace my old habits. But right now, I don’t have anything to replace old habits with.
I think it’s also important to emphasize that change happens slowly and then all at once. So whatever change we’re not seeing right now, we may actually see next year or in two years. And we’re going to be like where did this come from.
And you’re you’re open to the fact that might happen to you as well.
Absolutely. Oh, absolutely. And, you know what? One thing that did change, we were in Mexico City and I’m so sensitive to inequality, economic inequality. I think maybe I’m seeing more of that, just having more empathy to how people live and the discrepancy between rich and poor.
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