A perspective from CES 2016 through the lens of luxury

The luxury and technology sectors have traditionally viewed each other from afar. Luxury has gained its value from scarcity whereas technology generates more value when it is widely used. Over recent years, this distance has begun to shrink as technology has become ubiquitous. Just like every other sector, Luxury has been impacted by new technology and this year’s CES saw this trend continue. We at OMD have identified four mechanisms by which luxury and technology are becoming ever more intertwined.

Luxury – the new technology niche where style is a differentiator

Nokia spotted the niche of high-end luxury in consumer electronics with the introduction of the Vertu brand in 1998 while last year Apple accelerated this sector with the launch of the Apple Watch Edition, made from the highest quality materials.

HuaweiA wider range of brands joined this trend at CES, focusing on not just the technical function of their product but also the luxurious design. One example is Huawei which has launched a line of watches embedded with Swarovski crystals.  As technology becomes ever-present, growth will come from better servicing specific niches, some of which are happy to pay a significant premium for exclusivity.

 

To gain credibility in this space, technology brands are choosing to partner with luxury and fashion brands. Intel, for example, partnered with Chromat for a new engineered sports bra. We can expect to see many more partnerships between technology brands and brands from the fashion, style and luxury sectors at future CES events.

Luxury brands upgrading with technology

SwarovskiThe other side of the coin is embedding technology in luxury products. A number of fashion and luxury brands appeared at CES this year, building on a small but growing, presence. Swarovski returned to CES with Get Fit In Style fitness tracking jewellery, a simple sensor embedded in everyday jewellery that reports back to a smartphone app.

 

Wisewear from Apfel also integrates notifications into smart jewellery. A pre-defined touch will alert another device of problems, such as a fall or a dangerous situation on a night out.

Many connected services gain most value if they are persistent and worn every day. Embedding technology invisibly in products we wear on a regular basis rather than a specialist technology, which may make the wearer feel self-conscious, is a far more effective approach.

Technology as a new luxury

Technology is pushing into new boundaries as the previously impossible becomes achievable, if a little expensive.

LaundroidA number of very high-end technologies appeared at this year’s CES. Laundroid, a laundry folding system, is due to launch in 2017. This device takes clothing direct from the dryer and then folds and displays it neatly. Likewise, the LGStyler is a smart closet that automatically steams and cleans clothes.

 

ehangDrones were another big theme at CES 2016. At the high-end, ehang showcased the 184, an autonomous vehicle designed to carry people. Whilst there are still many technical and liability hurdles to cross, we may soon see the era of personal aerial transportation in and around cities.

 

 

One day some of these technologies will be mass labour- and time-saving devices, but for now they will only appeal to the most exclusive niches. They will drive new levels of expectation and new opportunities for integration and partnership.

Luxury tech experiences

High-end hardware is not the only way to differentiate with technology. Luxury brands are also investing in luxury technology-based experiences and content.

VRVirtual Reality was a huge theme at CES, confidently stepping into the mainstream – for example, Oculus Rift launched its first consumer product alongside devices from Sony, Samsung and Google.  Brands are now creating experiences to showcase products and content in a Virtual Reality environment.  Whirlpool illustrated a vision of a futuristic high end kitchen using VR, whilst Dior has already released a branded headset for VR brand experiences.

VR 2We are at the dawn of an entirely new medium with VR; the very best experiences will require sophisticated technology. Luxury brands have the opportunity to make a powerful statement in this space, especially to showcase luxury real estate, travel and lifestyle.

 

Key takeaways

Technology continues to pervade our lives and every sector must account for new opportunities and disruptions. Luxury brands are learning to understand how their products and propositions are impacted by the huge range of accelerating technologies displayed at CES. This is achieved not by jumping on the latest technology bandwagon, but instead by refocusing on core brand attributes and understanding how technology can empower those concepts.

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OMD EMEA

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