Luxury as a degrowth strategy

Four ways to create more value while producing less

De-commercialization is an increasingly relevant competitive advantage, brand equity builder, and revenue protector. In the modern economy, everything has become a commodity: art, content, luxury, experiences, heritage, places and people. True brand and business differentiation is in offering the opposite, and building a viable, feasible, and sustainable business model around it. De-comercialization as a business model is based on delivering superior brand value versus just product volume.

De-commercialization playbook revolves around four work streams:

Product de-commercialization

Create collectibles. The role of collectible items within a seasonal collection is to manage brand desirability and create a new revenue stream. They renew the brand aura. Collectibles can span categories, and include ready-to-wear, jewelry, accessories, books, stationary, board games, suitcases and haute couture. All collectibles are limited edition, rare and unique and priced higher than other product categories.They are made in small quantities and their distribution is limited. When featured in the store and on the website, they need to evoke the exclusive feel.

Create digital luxury assets and digital twins. Digital luxury assets are a potential testing ground for new designs and product ideas, which detects demand early and accordingly tailors supply, avoiding overproduction. Digital twins combine physical and digital benefits: for example, a Louis Vuitton jacket has both use value and exchange value thanks to being associated with a digital collectible.

Monetize IP. Archives can become a new revenue stream through direct monetization of a luxury brand’s intellectual property. Archival collections and pieces can be re-issued in the physical and/or in the digital format.

Service

Service de-commercializes products, by creating a product-service system. In addition to services like quick product authentication and proof of ownership, there is RFID and NFC tagging that powers traceability and circularity. Customer- centric services that come with product ownership include membership programs, hyper-personalization, and granular…