The Evolution of Luxury Consumerism

“Understanding the new luxury consumer means comprehending the new definition of status. Whereas it once was about physical possessions, now it’s all about intangibles.”

authors Leslie Hart
Kitchen & Bath Design News
 

Accumulate billions or give them away? Cruise to your private island or be the first to practice an ancient form of yoga previously known only in a remote Tibetan village? Which choices will luxury consumers opt for in the future?

Trendwatching, the company that helps businesses understand the new consumer via its network of 3,000 trend spotters and analysts around the world, has identified the ways in which it believes luxury consumerism will be changing in 2017 and beyond.

“Luxury is no longer simply about the supercar, the designer handbag and the expensive holiday (as desirable as they remain to many),” Trendwatching reports.

“We need to understand one fundamental truth: At its heart, luxury has always been about status.”

So understanding the new luxury consumer means comprehending the new definition of status. Whereas it once was about physical possessions, now it’s all about intangibles.

Here are four of those intangibles identified by Trendwatching that seem relevant to the kitchen and bath industry: 

1. The Quintessential Self or the quest for self-actualization.
2. Very Important Data or the need to safeguard personal data.
3. Premium Redeemed or luxury that makes the world a better place.
4. The Extravagance Economy or luxury on demand.

While these may seem a bit blue sky at the moment for our business, it’s important to recognize that these trends are already in motion around the world.  And big companies are already acting on them.

Look at what some major global players are doing in response to these trends and then brainstorm how you might integrate some of these new aspects of the luxury mindset into your kitchen and bath firm.

THE QUINTESSENTIAL SELF

“Status used to be about the possession of certain objects. Now, so many people have so much. The result? Status has become less about ‘what I have’ and much more about ‘who I am’: namely, more ethical, creative, connected and tasteful than the masses. That’s how consumers arrive at their Quintessential Self,” Trendwatching explains.

In other words, bragging rights come from being  “in the know” about experiences or products no one else has heard about yet. Luxury consumers want to be able to demonstrate “my self-actualization is faster, smarter and more exclusive than yours.” But this has nothing to do with putting on a hair shirt and renouncing the world.

“In 2017, then, high-end consumers will look to move – and be seen to have moved – to a higher plane. One way? Innovative products, services and experiences that combine supercharged self-actualization with true luxury indulgence. Because for those seeking the Quintessential Self, the quest for self-improvement should never mean compromising on self-indulgence,” Trendwatching notes.

All the better if these products, services and experiences can be tweeted or posted on social media, with the attitude “I’m doing this, you probably haven’t heard of it yet.”

One example of this trend: luxury cruises with spa and wellness programs like the one Seabourn launched recently with holistic health practitioner Dr. Andrew Weil. The program will integrate physical, social, environmental and spiritual wellbeing with seminars on happiness, healing, nutrition and introspection. Luxury cruise meets self-actualization.

“So luxury Quintessential Selfers will seek out rare and shareable experiences or exciting and storied products that supercharge their self-improvement and wellbeing. Start by asking: What aspect of the self will customers trust your brand to help them improve?” Trendwatching suggests.

Some possible takeaways for showrooms: Don’t be afraid to present stealth brands or products people haven’t yet heard of. Luxury consumers may be enticed and intrigued.

It’s more important than ever for them to feel they are on top of the newest developments. Luxury consumers pride themselves on being in the know, being the first to discover a new product, especially if it adds to their wellbeing. 

Are you up on sous vide cooking (see related story, New Cooking Appliances) or molecular cuisine? Can you bring in an expert? Can you invite the newest chef in town to give a preview of their unopened but soon-to-be-hot new restaurant?

Can you appeal to the luxury consumer’s desire to appear more sophisticated and creative by inviting them to share photos of parties… table settings and food…served from their new kitchen?

Can you bring in experts on wellness to talk about the latest products and techniques they are using?

VERY IMPORTANT DATA

High net worth individuals are especially worried today about the security of their personal data. So much so that luxury jeweler Bvlgari has partnered with a Swiss security company to safeguard not its customers’ jewelry but their data. The information is stored by an app in a high-security bunker in the Swiss Alps.

Given all of the publicity about security risks related to the internet of things, luxury consumers may well have similar concerns about the privacy of their personal data when using connected devices in their home. Can you partner with a tech firm to advise your customers about digital security and these devices? This way you are providing what Trendwatching calls “the luxury of peace of mind when it comes to their data and their privacy.”

PREMIUM REDEEMED

This trend is all about luxury that makes the world a better place.

“One sign of the epic shift in the nature of status…[is] the way we talk about billionaires,” Trendwatching observes.

“Sure, Mark Zuckerberg has changed the world. But today, his personal status story doesn’t just center on how he made his money, but how he’s giving almost all of it away. For the ultra-ultra-rich, philanthropy is the status story. And where their status trail goes, the rest of us follow.”

Fortune Magazine reported last year that 17 new billionaires had joined The Giving Pledge, a group started by Warren Buffett and Bill and Melinda Gates that requires its ultra-rich members to commit to give the majority of their wealth to good causes. The group includes Richard Branson, Ted Turner and Sheryl Sandberg, and now has 154 members from 16 countries.

“Millions of affluent consumers feel trapped in a guilt spiral when it comes to the negative impacts – on the environment, society and their health – of their consumption,” notes Trendwatching. “The real luxury for these consumers? Indulgence without the guilt.”

To “redeem” a luxury purchase, talk about the contributions your firm and your suppliers make to worthy causes. Where are your products made? In environmentally responsible facilities? With sustainable materials? Who are the factory workers? How are they treated? How well are they paid?

Consumers often judge a company by how it treats its employees. Do you feature them on your website and on social media? Do they have an opportunity to tell their stories and talk about causes that are important to them?

Take away the guilt of purchasing by donating and/or recycling materials from tear-outs. Make a contribution to a safe-water fund for each faucet, shower, tub or toilet sold. Donate to a soup kitchen for each range or refrigerator sold.

THE EXTRAVAGANCE ECONOMY

Forget Uber. True, it’s quick, on demand and for some it has removed the need for car ownership. But for real luxury, how about a private jet on demand?

“Consumers will push their on-demand mindset to new highs, and into entirely new domains of consumerism. Think a move beyond on-demand functionality (taxis, laundry, haircuts, etc.) and towards on-demand extravagance,” Trendwatching predicts.

“The very real benefits that on demand and access bring – freedom from the hassle of ownership, instant gratification and more – are universal,” notes Trendwatching.

In an era of on-demand luxury, our industry falls woefully short. Backorders, long lead times and months of waiting won’t cut it in the future. Why should a consumer have to settle for inexpensive but readily available faucets or cabinets if time is of the essence, when in their heart of hearts they want something much better? Seems like on-demand lower-end not on-demand luxury.

Our processes are arduously slow and out of touch with today’s consumer. Suppliers, designers and showrooms should begin to figure out how to streamline them in order to meet the anticipated rise of luxury-on-demand.

In the meantime, how can you bring freedom from the hassle of ownership of a kitchen or bath? A program of regular maintenance and tweaking? Guaranteed 24/7 service for plumbing and appliances? On-site training for housecleaning staff?

Getting inside the mindset of the new luxury consumer won’t be easy, but it’s well worth the effort to consider what intangibles your business can offer.

Five Stages of Remodelting Growth

Your Guide to the Five Stages of Remodeling Growth

Going from a one-man show to a thriving enterprise can be tough. Follow these tips to ease your company's growing pains.

By Judith Miller

Over the past 30 years as a consultant to remodelers, I’ve noticed two rules that apply to pros. The first you’ve probably heard of: the 80-20 rule, in which 20% of what you put into a venture yields 80% of the results. The other one, which I first became aware of from a May 1983 Harvard Business Review essay, you likely haven’t. That rule, paraphrased, is that every company can go through up to five predictable stages of growth.
I call my adaption the Five Stages of Remodeling Growth, and just about every client I’ve encountered fits into one of those stages. Your ultimate success depends on your mastering at least stages 1 through 3, and stages 4 and 5 as well should you wish to expand dramatically and/or sell or pass on your company.
Every stage starts with discomfort, moves to a more comfortable state as you resolve challenges, and then evolves back to discomfort because you’ve outgrown your systems. Lots of remodelers confuse solving problems with creating systems­; a system not only solves a problem, it prevents future ones. You need systems to succeed.
Success at every stage requires your company to effectively manage seven functions: marketing, estimating, sales, production, finance/administration, resource management, and leadership. Sometimes the effective manager is you. As you grow, it’s necessary for that job to fall to someone else.
Often, this trajectory of moving up through the business stages mirrors your personal life stages. When you’re young and have a partner and don’t have kids, you can run a pretty good Stage 2 company. Then a baby arrives, and that changes absolutely everything. Your need for growth through the five steps mirrors your need to mature as a person.
And now to the five stages.

Stage 1: The Owner Does It All

This is the classic way a company begins. At this stage, the owner does all the work: markets the company (probably through word of mouth), writes estimates, sells jobs, does the remodeling work, invoices clients, pays bills and, oh yes, carries out the trash.
Characteristics:

• 60-hour workweeks are the norm.
• You start with zero revenue.
• Revenue usually follows a “just-in-time” business model, in which you’re lucky to pay current bills with revenue from your current project. More likely, you’re using the next job to pay bills from the last job.
• Income swings wildly, in part because you’re so busy working the current job(s) that you don’t have time to prospect for new work after your current jobs conclude.
• Accounting and financial management systems are primitive.

Take Note: Technically, it’s possible to stay at this level and be happy, but you need to be the kind of person who revels in 60-hour work weeks and works one long-term, high-paying mega-project at a time—think of a multimillion-dollar home that takes three years to build. And remember, you need to have another multimillion-dollar project lined up to start soon after that job ends.
But if your business model envisions you doing anything else—say, 500 jobs a year at $500 each—you’ll wear out long before you can build a fund big enough to retire on. Virtually every remodeler I’ve met strives to get out of Stage 1 as fast as they can.

Stage 2: The Owner Delegates

Remember that I said every stage oscillates from discomfort to comfort and then back to discomfort? For the typical do-it-all remodeler, the feeling of discomfort—and subsequent need to advance to Stage 2—flares when you take on a couple of jobs that each last six to eight weeks or more and take place simultaneously.
Going from one to two projects may be only a doubling of assignments, but it’s a quantum increase in complexity. You think, “I can spend some time over here or over there,” but you know how often things go awry in organized remodeling, let alone disorganized remodeling. It’s time to delegate.
Characteristics:

• First full-time hire typically is for field labor.
• Administrative help gets employed on a part-time basis.
• You as owner retain sales duties.
• You need more business knowledge, particularly how to define job costs and overhead, how to estimate better, and how to manage time—yours as well as that of employees.
• Better systems get put in place, particularly for lead tracking, job cost analysis, and basic company budgets.

Take Note: For many remodelers, the first delegating of work involves a family member, typically a spouse. This solves a problem, but it’s no long-term, systemic solution unless you pay that person the same wage you’d pay an outsider and unless that person is qualified to do the work.
Making a spouse or child your first employee also can set you up for trouble later because each family has its forms of internal communication—forms that can bewilder non-family members who join the company later. In addition, family dynamics don’t always transfer well to business, particularly if a father who doesn’t brook disagreements at the dinner table thinks those same family members will speak up when the family has to hash out business issues.
Ultimately, a whole bunch of tiny, imperceptible flaws in the creation of a successful company are inflated by hiring family members. There’s business, and there’s family, and they don’t easily mesh.

Stage 3: The Sweet Spot

This stage provides one of your two opportunities to enter cruising speed, a status in which the business is humming and you’re spinning off so much money so steadily that you can build a nest egg sufficient to shut down the business one day and retire comfortably. But if you have bigger ambitions or want to leave a thriving business after you retire, you’re not done yet. 

 Characteristics:

• If you’re successful in this stage, you will be working about 35 hours a week, give or take depending on your personality.
• Selling (and maybe estimating) is the only major function that you’re responsible for.
• All other company functions have been delegated to the right employees, with the right training and skills.
• All employees are trained using company-developed, standardized systems.
• The owner manages customer and employee relations, with high levels of satisfaction in both.
• The owner and company enjoy consistent 60% markups and 35% profits. The firm produces a great product and generates lots of continuing sales through word-of-mouth and a professional marketing campaign.
• In general, every person you add will require tweaking your org chart and systems. By the time you get to six employees, the business has become far more complicated.
• The bigger you get, the more detailed each job’s skill sets become, and thus the more exacting you have to be about duties. The fact that your wonderful bookkeeper works in the office all day doesn’t mean you should count on that person to also serve as receptionist.

Take Note: I think you can hang for the rest of your life in Stage 3 if you get all the functions working properly; if the marketing and sales and production are working well; if you have low employee turnover and consistent jobs and the economy is stable; and if everything is calm and you don’t spend all your money on junk.
That said, and provided you work with a financial planner, you probably can put your kids through college and retire between 70 and 75. A well-run Stage 3 company is a very sustainable practice. It’s not easy to achieve, though. As a consultant, I tend to see the crème de la crème of remodeling firms, and even in that group, only 20% get to and successfully stay in that sweet spot.

Stage 4: Complexity Grows

Generally, there are two reasons why you’d want to go to Stage 4: You want to grow dramatically or you want the business to survive after you’ve gone. If you’re a replacement contractor with visions of your home improvement firm planting flags from Maine to Monterey, it’s clear you need advanced systems. But even if you don’t want to grow dramatically and rather want to leave your company to a child, your goal still is to build a firm in which you as owner only coach, train, and mentor.

Characteristics:

• You are no longer responsible for sales; if you continue to sell, you contribute no more than 20% of the company’s sales revenue.
• Your sales manager produces a steady flow of jobs, sold at the targeted gross profit to the right clients.
• The department heads you manage, hire, and train are responsible for hiring, training, and managing their reports.
• A board of directors manages company culture, expectations, and profits through department heads.

Take Note: Perhaps 100 full-service remodeling firms extant today are operating as Stage 4 firms. First, transitioning to a system in which you’re responsible for less than a fifth of the company’s revenue stream can be a monstrous task. And you have to adjust your personality, too, shifting from doer to teacher. 

Stage 5: The End Game

As in chess, your final moves are as crucial as the first—perhaps even more so, since your objective is victory and not just hanging on. And like chess, you won’t win unless you figure out your strategy long before you execute it. If you can, you’ll achieve what you foresaw, be it a handover to a new generation or a sale that sets you up for a golden retirement.
Characteristics:

• All of the company’s functions, including strategy, are now delegated.
• Planning begins back in Stage 3, when you’ve decided you want to move out of that stage’s cruising speed and go for expansion and/or succession.
• Your focus tends to revolve around three questions: whether the company will continue; how you’ll retire; and how you should measure ultimate success.
• It typically takes years to develop a Stage 5 company—and you can’t skip Stage 4, no matter how much money you throw at it.

Take Note: One of your key questions here is who will succeed you in running the business. If it’s one of your children, do they have what it takes? Keep in mind that if you were a Stage 3 success when they joined, they won't have the school of hard knocks experience you endured. They’ll be missing an organic understanding of why the company works. That isn’t necessarily a death knell, but it will require that you work extra hard to put systems in place. Those systems are the key to getting your company to this level.
No matter what innovations come to the remodeling industry, these five big-picture stages are timeless and predictable. Your company will follow these if you don’t realize it—but like most things in business, you’ll be most successful if you do so deliberately.
So how to get from Stage 1 to Stage 5? First, identify where you are, and where you want to be. Then, take a closer look at the seven functions mentioned at the beginning of the article: Where do you need to focus your attention first to move forward? This approach will help you minimize discomfort as you forge your path through the predictable stages of growth—and keep you moving forward with purpose.

 About the Author

Judith Miller Judith Miller  is a Seattle-based business consultant and trainer, and a facilitator for Remodelers Advantage. jfmiller@remodelservices.com. 

Enjoy A Clutter Free Home

The Joyful, Clutter-Free Home: Kitchen

Give yourself room to both cook and relax by assessing how you use your counters, cabinets and corners

Laura Gaskill February 19, 2017

Houzz Contributor. I cover topics ranging from decorating ideas, product picks, Houzz tours, and interviews with designers and architects, to the monthly home maintenance checklist. My favorite pieces to write center around the emotional aspects of home and savoring life's simple pleasures. Mindful Clutter Clearing e-course now enrolling! Learn more at https://www.lauragaskill.com/mindful-clutter-clearing

From quick weekday breakfasts grabbed on the way out the door to special-occasion dinners planned and prepared with care, the kitchen is nearly always a hub of household activity — which also means it’s a common place for clutter to accumulate. In this series, we’re approaching each room in the house from the perspective of identifying what sparks joy. So far, we’ve tackled the bedroom and the bath. Now we look at ways of clearing the clutter and creating a beautiful, useful space in the kitchen.

Studio McGee

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Create calm, clear surfaces. Kitchen counters can quickly become cluttered with mail, shopping bags, small appliances, and kitchen tools and gadgets. Once these surfaces are full, preparing meals becomes much more challenging. Plus, just the sight of a cluttered counter can add to your daily stress. Reclaim clean, clear space on your kitchen surfaces to make room for cooking.

Libby Winberg Interiors

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Take action: Start by completely clearing off and cleaning your kitchen counters, one at a time. Before putting anything back, consider what you honestly need to access on a daily basis. These are the items worthy of prime counter space — for example, your coffeepot, a jar of wooden spoons and a favorite cutting board or fruit bowl. Aim to find a different home for everything else, inside a cupboard or on a shelf.

If your kitchen also happens to function as your home’s entry, dedicate a specific spot to store keys and mail (for example, a dish for keys and a tray for mail) so that these items don’t spread over your freshly cleared counter.

Brittany Stiles Design

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Choose your essentials. Instead of focusing on what to get rid of, choose to look at clearing clutter in a positive light, and ask yourself this: What do I love and use in my kitchen?

Focus on clearing prime space (top drawers and easy-to-reach cabinets) for the pots, pans, tools and dishes you use daily. Highly specialized cooking gadgets have their place (and if there’s one you love and use, by all means keep it!), but allowing these items to take up space front and center will only make it harder to work in your kitchen.

Joy Street Design

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Take action: Without looking in your kitchen cupboards, think through a typical day of preparing meals at home, and make a list of the pots, pans, cooking tools and dishes you use to make that happen. Make sure these items are stored in the drawers, cabinets and shelves that are easiest to reach.

Look at what’s left in the other areas, and see if you can let go of some cooking tools, small appliances or excess food storage containers that you rarely (or never) use.

Alvhem Mäkleri & Interiör

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Rethink nooks and corners. If your kitchen is compact and galley-style, this may not apply — but if you have a bit more space to play with, take a moment to consider how you are using that space. It’s clear how the main work area of the kitchen should be used (for cooking, chopping and washing up), but when it comes to the nooks and corners, it’s really up to you.

Think about what you want from this space: a nook to read, a tidy desk to pay bills, an art corner for your child? Let yourself daydream a bit, and note down what you come up with.

Lasley Brahaney Architecture + Construction

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Take action: Once you’ve decided how you want to use your kitchen nook or corner, gather the items you want to have in this space. If items are collecting here that do not serve the purpose of this area, move them out.

For example, if your goal is to create a quiet corner to read while a pot of soup simmers on the stove, pull in a comfy chair and a few favorite books — and take out the unnecessary and distracting stuff, like piles of bills and old shopping bags.

Paglialonga Studio

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Make space for simple pleasures. The kitchen is a hardworking space, but it can also be where we gather and relax. Whether you’re enjoying a glass of wine at the end of the day or listening to a favorite podcast while washing the dishes, consider which simple pleasures you can incorporate into your space and your routine.

Black and Milk | Interior Design | London

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Take action: Thinking through each part of the day, consider what small item or routine you could add to make your time in the kitchen a bit more pleasurable. Here are a few ideas:

• A radio or dock for listening to music or podcasts
• Fresh flowers in a vase
• A pot of fresh herbs on the windowsill
• A candle to light beside you while you wash dishes
• A pair of stools so that friends can chat while you cook