Future Luxury

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    issue 6/March 2007David ReportYOUR PATHFINDER INTO THE FUTURE

    Future Luxury

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    Foreword

    Welcome to issue no 6 o the David Report Bulletin. What

    is luxury to you? What is it to others and what will it be inthe uture? Interesting questions and not easy to answer.In this issue we will bring orward a couple o importanttrends that according to us will be crucial or the denitiono uture luxury.

    The explanation

    According to a dictionary luxury is the state o greatcomort and extravagant living or an inessential, desira-ble item that is expensive or dicult to obtain. But most

    interesting is the antonym (the opposite) o luxury - ne-cessity. I you take this perspective, luxury is somethingthat appeals to and eeds our lust. Thorstein Veblensmaniest conspicuous consumption rom 1899 is still aworking description o traditional luxury. Serge Dive, CEOo Beyond Luxury describes the inner meaning o luxurylike this:Luxury is an urge, an absolute desire to sin withthe view to break our daily routine and give us the

    illusion o happiness i only or an instant.

    Yesterday

    Yesterdays luxury was or the ew. It was quite shal-low and was desired because it separated you rom themasses. The luxury o today is a growing part o society(at least in the developed countries) and more peopleadapt to it every day. But what happens to the concept oluxury i everyone can take part in it? Is it a contradiction?In a world where you with a mere mouseclick can buya Guerlain perume or a LV bag it is just not luxury anylonger. Just something expensive, which isnt necessarilythe same thing. Will luxury mean the same thing to ourkids as it did to our parents? Certainly not. People thatare born in the 80s and later will preer to control their lieand do what*s un. It is most unlikely that they will ac-cept an executive job: the hours too long, too little time tospend with amily and riends.

    Our keynote

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    Our interview

    Through your company Luxury Briefng you orga-

    nised a conerence called Responsible Luxury lastautumn. Please tell me about it.

    We have been doing these conerences once a year or8 years and we try and have a strong theme or eachevent. Those running the luxury brands really wanted toknow more about the whole question o Responsibility.In general, the luxury industry has been slow to respondto this issue, but it is clear to us that it is one o the mostimportant things or a luxury brand both right now andeven more so in the uture. Currently, luxury customersare responding to the issue in dierent ways, and not

    surprisingly, car brands, or example, are having to adaptmore quickly than the leather accessory brands.

    How did the luxury industry people react to your

    call?

    We suggested at the conerence that since at a personallevel we are all becoming increasingly green surely it isillogical to ignore this when it comes to running a luxurybrand?

    Is the luxury industry prepared or the change?

    Unortunately they dont appear very well prepared. Veryew brands have given much thought to the subject eveni they have a very good story. O course, plenty o luxurycompanies use sustainable materials like wood andleather, employ artisans to make the products and maybesupport smaller communities and places). We think thatin the uture, customers will want to know about what iscalled the back story ie everything that happens beorea product gets to the store. That includes things like ship-ping and not wasting packaging, energy consumption etc.Burberry, or example, are doing terric things - but theydo it quietly behind the scenes - it is not yet a part o their

    brand image.

    Will the luxury industry be able to take an active part

    o the BIG CHANGE?

    The luxury industry leads in a lot o dierent areas like

    design trends and customer services. There is a realopportunity to lead in this area as well. We discussed thepossibility o having some sort o symbol that would showa brand has looked careully at its whole process.

    Will the sex and glamour image o the luxury indus-

    try still be around in the responsible luxury?

    Nowadays it is quite a cool thing to combine the both- green doesnt have to be ugly any longer, people havediscovered that it can be part o great products. It wasinteresting that last spring Vanity Fair magazine did anissue called the green issue which was dedicated to thiswhole area and the response was so good that it is beingrepeated this year. It was important or the luxury industry,that Vanity Fair thought these issues were important.

    Is the Luxury industry araid o being labeled as

    green brands?

    I think they are probably more araid o the media whichcan be very judgmental and damaging. I you make aclaim that you are green the media will sadly take greatpleasure trying to nd ault with you or your company. Buteveryone has to begin the process sometime and even iyou are not perect at least you are trying.

    Does the luxury consumer really care about the new

    ethical and green trends?

    Research indicates that about 50% think it is very im-portant. Some are very concerned and some dont care.

    The more sophisticated any market becomes, so thecustomers develop a more intelligent approach to luxury.Russia and China are still heading up the curve whilst inEurope and the US we starting to come down the otherside. It is a challenge or the brands: or example LouisVuitton sells a dierent range o products in China com-pared with Europe to cater or the dierent tastes there,where it is still much more about conspicuous consump-tion and status.

    Do you see a need or dierent luxury in dierent

    cultures - or has our world turned totally global?

    What customers are asking or can be very dierent. Ithink we have global luxury brands but not necessarilyglobal luxury yproducts.

    Do you see dierent demands or luxury rom di-

    erent generations?

    This is a big challenge or the brands. I think it dividesinto two age problems. First is the new denition orMiddle Age: people around 60 dont think they are oldany longer. Luxury brands must be careul not to orgetthis group. And equally, at the other end, many young

    people dont want luxury brands at all they are almostanti-brand. Luxury brands mustnt orget them, as theseare the customers o the uture. It could o course helpthe luxury industry to be more concerned and responsibleconcerning sustainable and ethical issues as these are oprime concern to the younger generation.

    James Ogilvy launched Luxury Brie-ng in 1996. At the time, the growthin the luxury industry was gatheringmomentum and over the next ewyears the publication established itselas an independent resource at thecentre o the industry. In 1999 Luxury

    Brieng organised its rst conerenceor the industry and has since held 10o these events at which many o the

    industrys key gures have spoken. Each year, the LuxuryBrieng Awards o Excellence are also held in London;these are designed to recognise outstanding achievementby brands or individuals. Ater 10 years, Luxury Briengremains a unique resource in the global market that isluxury.

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    Today

    The concept o luxury is undergoing a huge trans-ormation as a response to the ever-changing worldaround us. Over the last ew years, as a result o theon-going economy boom and increased awareness,we have seen an explosion o luxury goods. The lux-ury segment has been divided into an uber premiumtrend and a more enlarged trend.The enlarged luxury trend is about products andservices that a lot o people at least in theory couldaord. Image climbing H&M will launch an upgradedcollection this spring called Collection o Style. Eveni it maybe doesnt reach all the way to the luxurysegment it is denitely a sign o our time!

    The uber premium luxury trend on the other handconsists o product and service oerings with superexpensive prices. Products like the worlds mostexpensive computer mouse rom Fabstu, Malma-sion fatware by Christofe with handles trimmed withdiamonds, Clive Christians Imperial Majesty perumeor a clock rom Zadora Timepiece are good exampleso the trend. Quite unnecessary products or very ewpeople at the very top o the Maslows pyramid. I weare talking about living an uber premium luxury liethen Palm Jumeirah and The World Islands (amonga lot o other island projects going on) in the Gul

    region is the place to be.I you are obsessed with luxury products you can tryout samples by entering exclusive communities likeFractional lie or Limited Edition. Through renting theyoer you to fy a private jet, drive a Rolls-Royce orswing around a limited edition bag rom Gadino. Thesame goes with services. Today people pay a lot omoney or door-to-door luggage delivery services likeFlylite. Flylite even packs your clothes and dry-cleanthem i necessary. Other people dream o a mem-bership in Quintessentially, worlds leading privatemembers club with an irresistible package o oers,privileges and bespoke services. Another privatemembers club called Casa Casuarina, situated inGianni Versaces ormer residence in Miami,

    has a membership price tag equal to a years salary or anaverage American.There are airs as well that concentrates on uber premiumluxury. Millionaire air sticks out as worlds leading luxuryair and it is a glamorous spectacle with branches in Mos-

    cow, Amsterdam, Shangai and Kortrijk.

    Tomorrow

    But people start to experience luxury as depthless andthe expression is denitely in process to be redened. We

    are spotting another more sophisticated pattern aroundthe corner in the traditional luxury markets. Overcon-sumption is no longer a signal o success, as Chris San-derson o Future Laboratory puts it. It doesnt eel ok tobuy unnecessary things when people are starving and theworld is about to get overheated. It just doesnt eel right.We see a new kind o responsible luxury that is evolvingrom the inside. It looks quite dierent rom luxury as weknow it today. I Thorstein Veblen still would be aroundit is not impossible that he would have described it asconscious consumption. But uture luxury will not be allabout consumption. It will probably be more about cultural

    experiences than material possession. More about sharingthan keeping. Unortunately it will still not be available toall and every one. Thats the built-in nature o luxury. Itmakes us eel special, kind o selected. Thats why it isso important or us. Already as a small kid you want to beseen and be acknowledged.

    The uture development o luxury will dier betweenmature and rising markets. As an example China and Indiaare in the upstart o wealth creation and the traditionaldemand or luxury goods rst has to be satised.

    Below we share our vision about what to come through

    eight dierent trends that in one way or another will beimportant in the denition o uture luxury.

    Zadora Timepiece Imperial Majesty Computer mouse rom Fabstu Malmasion fatware

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    1Timeless Quality

    Unortunately we buy more and more stu at lower andlower prices. The world gets even more crowded and weare emptying its resources. The mountains o trash growsand we are even shipping dangerous waste to the thirdworld. It is time to say no to the wear and tear societyand reject the growing trend where ethical values andsustainable issues are put aside or low prices and hugevolumes. Our over-consumption has to come to an end.The uture consumer will seek excellence both concer-

    ning behaviour and product. We will see a new type osustainability where quality is paramount both concerningmaterial and design. Today we want our products to berecyclable. It means that they will probably be used a re-latively short time beore they get recycled. Tomorrow wewant even better long-lived iconic products that also canbe inherited by our children. One o the biggest challen-ges in the uture is to nd a way to adapt timeless qualitythinking to technology gadgets. They are one o the worstexamples o the wear and tear mentality in society intoday.As an example - very ew people throw away or recycle

    an Omega Speedmaster or an Ant chair by Arne Jacob-sen. Why? Because they are timeless pieces with greataesthetics. They pushed the limit o production possibi-lities a little bit orward and refected its own time. Thiskind o products will always be modern. They are built onlasting values and will travel in time without inrmitieso old age. Better high quality products will also createnew trading sites. We will probably see a boom or luxurysecond hand and vintage stores, both o- and onlineUnortunately consumers o today have problems to seethe dierence between low price and priceworthiness.We have to start calculating the price o a product accor-

    ding to its total lietime. At rst sight a price at a price tago a product with timeless quality could seem high. Buti the product will hang around or a couple o genera-tions, suddenly it turns both priceworthy and ecologicallyhealthy.In the uture we will buy less but better products and theones we choose will probably speak with a lower andmore subtle voice. Fewer and more silent products willgive space to our dreams. Dreams about a bright andhappy atertime. To care about quality is to care about ourcommon uture.

    The Trends (that will dene Future Luxury)

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    2

    3

    Security and safety

    A place in the sun with clean air, less pollution and a goodinrastructure, close to an airport but ar away rom ter-rorism - thats a paragon o uture luxury. We will not beas comortable in big cities as we used to be.The cutting-edge o consumer culture will nd a new

    arena in these new urbanised country zones. Becauseeven i people will settle ar away rom the rumble o thetown we will still demand the perect espresso or a yogi-tea at the local bar. We would like to buy high quality oodand objects and in the evening we will hang out at thelocal gourmet restaurant. There will be completely newdemands or service in these ormer sleep-cities. We willbecome the cosmopolitans o the countryside where wewill nd the new good lie.The ongoing development o broadband technology willmake working out o the oce easier and help us com-municate with our riends around the world. And the day

    we eel an urge to hang out in Tokyo or Paris we haveonly a short and convenient trip to the airport.However, travelling will look and work rather dierent inthe uture compared to today. Pollution, high transporta-tion costs and terrorism will do its best to change our wayo lie. Saety will be the number one thing in our mindand our comortable homes will work as hubs towards thesurrounding world. They will be our base-camps wherethe inormation technology will be our premier tool to con-nect to and travel through the virtual world.

    Emotional branding

    For good reasons there are a lot o talk about the envi-ronmental pollution around the world. But there is anotherpollution going on as well, 24 hours a day, 7 days a week.It s the mental pollution caused by the never ending ad-vertising battle on TV and radio, in magazines and on thestreets. We are bombarded with unwanted commercialmessages by marketers wherever we go. It is not strangethat we dont believe in the branded messages any longer.They irritate us and we dont experience them as credible.

    Instead we listen to our riends. They will tell us the truthabout their personal brand experiences. The kind o stuwe will never see in an ad or commercial.A lot o people have turned almost anti-brand. It will bea great challenge or companies to nd new methods toconverse, involve and interact with the consumers andoer them to experience the brand according to their ownwishes. In the uture building a relationship with your con-sumers and oer them relevant brand experiences will beparamount. It will be about engaging and understandingthe consumers needs and develop product and servicesaccording to it. To create passion and desire and improve

    their lives. The brands that will understand that they arejust a tool or the consumer to realize their personal dre-ams will survive and fourish. Act towards the consumersas you act towards your riends. Keep your promises andbe honest. I you are lucky your costumers would like tostart an aaire damour with you.

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    4Good Karma

    One o the most important uture trends will be aboutto make a dierence and to take responsibility. It con-cerns both private individuals, companies and organisa-tions. There are a couple o short phrases that describethis growing ethical trend in a good way; good karma,

    do-good, conscious consumption, dont be evil andconscious capitalism.I we look into the trend o conscious capitalism it is insome sense idealistic in the support o philanthropic orhumanitarian causes. Just a couple o years ago themanaging director o a company whos ocus was not tomaximise short-term prots was proclaimed as naive.In the uture it will be the other way round - i your onlyocus is maximising the prot, you will be lost. You haveto careully balance the opinions and wishes o all yourstakeholders including costumers, shareholders, employ-ees and society at large. We have to share the resources

    on earth and to act with good karma will be a genericeature or uture brands.Charity will reach much bigger proportions. The moreprominent gures (like Bill Gates, Warren Buet andBono) the longer the tail. The in-crowd will continue toline up at conscious conerences. Some recent examplesinclude Responsible Luxury, Karma Capitalism, TEDand Doors o Perception which all have had ethical andconscious themes lately.From the consumer point o view responsible purchasingis a growing trend. Piers Fawkes wrote recently in his pskblog; When you ask yoursel how Uniqlo can sell ashio-nable denim or $39 a pair (including tailoring) you start

    to wonder how many small children in Asia did it take tomake just one purchase. We will not accept that kind oproducts and behaviour any longer.The same goes or the abuse and cruelty against ani-mals. We will see the number o vegans and vegetariansexplode. It will be impossible to sell beauty products thatare tested on animals. Products out o skin, ur and non-ecological cotton and wool will consequently decreasedrastically. Stella McCartney and Katherine Hamnet arethe prominent gures and thousands o creative desig-ners will ollow in the making o stylish products out othe new postulations.

    We will demand transparency. Companies can achievesuccess by doing good and as a socially conscious con-sumer you have the power o change in your hand. AnnaLapp rom the Small Planet Institute puts it like this;Every time you spend money, youre casting a vote or thekind o world you want. Consuming doesnt have to be allbad.

    5Seize the Day

    Time has turned into luxury. True luxury. Time is moreor less one o the only things you can t buy with money.Thats why it is so desirable. Whatever we think about it,the biological clock is ticking or all and everyone.When you ask people what they want most in their lives,the most common answer is to have more qualitative time.

    The good thing about the story is that qualitative time isactually something most o us can achieve.According to us it is a luxurious thing to wake up in themorning and do exactly what you want. The kind o daywhen no one tells you what you have to do and you donthave any requirements that have to be ullled. The kindo eeling as when you are on vacation, but on an eve-ryday basis. Something the Italians reer to as dolce areniente - the beauty o doing nothing at all - except orrelaxing... We call it to seize the day - to have time or theone you love, your amily. To invite your riends to a nicedinner. To make every day extraordinary - enjoyment o

    the pleasures o the moment.Time allows place or dreams. Time allows you to nd har-mony...how many people live in total harmony? Time givesyour imagination and your creativity space. Time enablesyou to refect. The great luxury in the uture will be abouttaking control over your own time, because it will nevercome back.

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    6and credible any longer. A lot o production in westernsociety has already moved or is about to be moved tolow price production countries. But we see trouble anda strong and dangerous backlash towards this mentality.There are three major issues as we see it. The frst isabout economy and environment. In the uture it will beimpossible to ship products around the world when theoil price rises to extreme levels. It is not smart out o anenvironmental perspective with the knowledge o theclimate change we have today. It is not an excuse to buycarbon emission osets in this case - better not to shiplong distance at all! Secondly we will also see a rise o

    production costs depending on higher salaries in thethird world. The third issue is about ethics and credibili-ty. It is difcult to guarantee and control air trade issueswith a production thousands o kilometers away. Wehave seen a lot o examples o this already.Will uture consumers see a Swedish designed but Chi-nese produced Orreors glass vase as Swedish? Dontyou think that some o the authenticy is getting lost in theChinese mass-production? Maybe some o the substan-ce and history as well? I we turn our ace to the urnitureindustry, clever British designer Jasper Morrison hasmade great pieces in a Scandinavian vein or the Italian

    brand Cappellini. How do we label his pieces? As Bri-tish, Scandinavian or Italian design?We live in a high-speed inormation society and wewould like to put it like this; when design has turnedglobal, production is still local. A great possibility todierentiate product oerings and create substance ismaterialising out i this act. We will see a new SupremeRegionalism grow as a reaction to the present standardi-sation. Inside this trend we will nd a new cultural luxury.Locally produced and controlled products with texturesand favours with a unique twist, made with great crats-manship. Supreme desirable products that will attract allour senses and stick out rom the noise as original and

    genuine.

    Supreme Regionalism

    There will be a great wish or authenticy in the society in

    the uture. The ongoing globalisation is erasing regionalspecialness with the speed o a bullet. The same look-a-like hotels and airports, giant shopping malls or super-brand luxury stores are popping up all over the world.At the same time smaller supreme specialist stores areorced into bankruptcy.Brand recognition will probably be as important in the u-ture as today. But i we hold or true that a brand is (only)a perception in a consumers mind, the physical delive-rance o great products will be even more important. Theproducts are the true messengers o a brand. I they areproduced in aceless actories in China in even growingnumbers they will not be experienced as authentic

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    7Food and health

    Health is turning into one o the biggest luxuries in ourtime when most ood has converted into mass-producedsemi-nished products. This ood is cheap, yes. But it isnot good or your health because it oten contains toomuch salt, sugar and other accessory ood actors. Briefy,it can in be described as rened waste (Jamie Oliversdescription o the British school lunches).As a result o all the bad ood atness has evolved intoa huge lower class problem in society today. Only tyyears ago it was the other way round. Then it was a signo wealth to be able to eat and consequently it was the

    upper class that was overweight.Just a couple o decades ago it was a luxury to eat oodrom the other side o our planet. In the uture it will be aluxury to be able to eat locally grown healthy organic oodrom around the corner o your house. And we are notonly talking about the rural areas. We will see a develop-ment o urban agriculture as well, which will allow you tond locally produced ood right in the middle o the cities.We will demand to know what we eat, how it is producedand by whom. Slow ood is an eco-gastronomic organisa-tion that are pushing or small scale and local productionto maintain human culture and biodiversity. They counte-

    ract ast ood and ast lie. Today, with high environmentalcosts, most ood travel around the world beore it endsup at our dining tables. Tastes edulcorates and pesticidesare used on regular basis. By choosing well tasting oodthat does not harm the environment and animal welareyou are choosing lie... and health.

    8

    Individual editions

    This trend is a spin-o rom both the Timeless Qualityand the Supreme Regionalism trends. We would like tobring it orward because it appeals to strong motive po-wers in modern society.It is about limited-editions. Why are we so attracted bythem? What kind o ascination make us want them sobadly? The globalisation orces us to buy the same pro-ducts rom the same brands all over the world. I we ge-neralise, it doesnt care i you live in Stockholm, New York,Moscow or Cape Town. You still nd the same brands inyour grocery store or at the local mall. The limited-editionseries oer something else; individuality. The ewer dist-ribution points the more desirable is the product. Just theknowledge o the existence o it makes us eel special.

    It doesnt need to be a product. Small residential develop-ment projects like 40 Bond in New York by Ian Schrageris another example o this trend. You will be able to ownsomething unique and be part o something exclusive,something you share with just a ew selected persons. Li-mited-editions are desirable because it attracts and firtswith your persona. We will see a reaction towards thestandardised global assortment and meanwhile the limi-ted-edition series will help us eel individual and special.

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    When knowledge is the real luxury

    By Bjrn Jeery

    In a connected world, inormation is the currency. Luxury,thereore, is not about the excess o anything but ratherthe complete opposite. Knowledge that is concise, andon point. Its knowing how to nd it which is the admirableactor.Times are good. Money is faunted everywhere. 28 inchrims, chain pieces, designer outts - the whole thing. Butthese consequent overstatements o wealth have turnedthem into commodities. When the pices de rsistancecan be acquired by the masses, real or ake, it devaluatesits worth. The bling is ocially dead.Luxury is about desiring the best, and most exclusive, oanything. And while mainstream luxury up until now hasocused on material things, the new luxury is to be oundwithin the realms o experiences.Imagine looking or the best cappuccino when visiting anew city. Money can not buy this inormation, as there isno one to pay in order to get hold o it . You either know

    how to nd out, or you dont. Probably, the coee is to beound in a back alley with a barista that makes her ownperect blends. And a cup o it is probably not more ex-pensive then a tall latte at Starbucks. Luxury is no longera monetary matter.The shit in wealth - rom money to inormation - distortsthe way our society is built. The current class system allsapart when the participants o it no longer recognise whatis valued high and low. The new rulers are the ones withthe most knowledge, or the ability to obtain the necessaryinormation. The ones that are most connected.

    Our private eye - Malm

    Back to the cappuccino example. Imagine i everyoneknew that this was the best coee in town. The placewould be packed. The coee would taste just as good,but the complete experience wouldnt be. Partly becauseits crowded and you have to wait in line to get your co-ee, but also because its nothing special any more. Theexclusivity is gone.Because o the actor above, the incentives to share thisnew wealth outside your network, are very ew. This typeo networked knowledge is the complete opposite to theold saying the more the merrier. The ewer people inthe loop the better. Assuming that its the right people,obviously.Sharing this knowledge wouldnt necessarily be apprecia-ted anyway, as the experienced luxury will vary rom eachnetwork. There is no longer an it bag, or one urnituredesigner. Its all about story and context. There is luxuryor everyone to be ound, within the chosen ramework o

    taste or eeling.So i you want to experience luxury within the next ewyears, you better make sure that youre connected. Withthe right people.For you.

    Bjrn Jeery works as an internet strategist at GoodOld in Malm, Sweden. I you ound this piece interestinghe recommends that you read Netocracy by AlexanderBard and Jan Sderqvist. Or his own blog at http://www.goodold.se/blog/trend/

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    David Report Team

    Editor-in-chie:David Carlson

    Contributing Editor:Claes Foxerus

    Writers:Bjrn Jeery

    Photography:Carbon Photography, www.carbonphotography.com,[email protected]

    Address

    David ReportStrandbadsvgen 2SE-239 42 [email protected]

    DisclaimerEverything written in David Report is ree to use, butplease say who mentioned it rst. However, all and eve-rything is at your own risk. David Report has no respon-sibility or what, how, when etc. something in the report isused and/or actions surrounded.

    About David Report Bulletin

    The David Report bulletin covers the intersection o de-sign, culture and business lie with a creative and huma-nistic approach. By challenging conventional thinking weare always trying to make a dierence. Four issues a year.

    YOUR PATHFINDER INTO THE FUTURE

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    March 16-17 in Moscow, Russia

    World retail conference

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    April 2-4 in London, United Kingdom

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    April 18-23 in Milan, Italy

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    May 8 in Hamburg, Germany

    Front end of innovation

    May 9-11 in Boston, USA

    Our calendarOur windup

    Are the luxury savvy consumers willing to accept the newstandards? Yes they are! The uture luxury as we see itis not revolutionary, it is necessary and a sign o our time.As you have seen above there are dierent trends that inone way or another will dene uture luxury. It has die-

    rent aces, its up to you to nd your personal version o it.Luxury is about to change rom a commodity to anexperience. The 21-century humans are more and moreconcentrating on inner development o body and soul.The psychological insights and eects infuence moreand more: in a society were you can buy everything, youneed something else to ull the meaning o lie in a trueexistential spirit!