DESIGN

THE TRICK OF LUXURY CONSUMPTION

Or, Bang and Olufsen reads the market

By Heather Lee

Oh, so cool

Luxury consumption and Bang and OlufsenThe luxury products market is growing so much that despite the economic recession sales are still strong. However, there are voices of concern that consumption of luxury products encourages overspending. This leads to why people think so negatively about luxury products. Of course, each person has different reasons for consuming them. Some people buy luxury goods because of the value-conscious consumption, the parade of wealth, the demand for bling, and the bandwagon effect. To be wholly honest, I currently own Bang & Olufsen's H95 headphones and I adore them. Traveling to New York in March, I visited the Bang & Olufsen Store for the first time and I was excited.

I’m a design nerd and after experiencing the H95, this nerd was impressed. Excellent design, high quality of material, and a magnificent and rich sound that I've never experienced before. I couldn't realize that all this beauty and perfection was in my ears. I couldn’t afford to buy the headphones at the time, but I ended up buying them a month later as a birthday present to myself. This was the first luxury consumption in my life and it was great.

"True inspiration is impossible."

Christopher Nolan, film director

It is difficult to create new things on our own. Copying designs from luxury brands is a common and legal form of design theft; just step inside any Target. Even if the products people buy are not luxury products, they are affected by the mere presence of luxury products. Nevertheless, sometimes people have immediate and negative feelings about the luxury market. Let's change the perspective and think again. The most important aspect of luxury is its 'rareness'.

Pretty shops, pretty shops, pretty shops all in a row

People are always proud when they own things that you can’t. Ironically, however, because of expanding markets and increased production the idea of luxury is in flux. As we go through a late Capitalist metamorphosis, the meaning of luxury has changed as the market and production have increased. Once, they were considered a privilege only for the upper class, but in modern times, even the middle class can access luxury products. As a result, many people have negative opinions about the very things they used to dream about owning.

I'm uniquely Gucci

In the modern consumer market, consumers focus on ‘something that can reveal their individuality’ rather than just simple "rare things." Consumers' sentiment that they do not want to have the same product as others played a big role. In the meantime, luxury consumption has shifted to brands with strong brand identities. Unlike in the past, when the trend of purchasing luxury products was limited to some fashion brands, there is a wide range of lifestyle products these days. Due to these changes, in the past, the word "luxury" used to represent scarcity and splendor, but now it means "something that can reveal individuality well."

What we now understand is that, The invariability of luxury products is as important as scarcity. In fact, it has taken over from tradition and scarcity. So, it’s interesting to consider Bang and Olufsen’s 100 years history that includes 18 of its products housed at the Museum of Modern Arts in New York (MOMA). Given a history like that it is natural that Bang & Olufsen did not feel the need to change. But despite all these accolades and the envy of sound enthusiasts around the world for their innovative technology and design Bang & Olufsen’s sales began to decline in the late 2000’s. As everyone had a smartphone, consumers did not purchase MP3 or DVD recorders, and the luxury audio market became stagnant due to technological advances and the global recession.

What economic crises? I want these!

Bang & Olufsen's move in response to the economic crisis was faster than expected. For now, they have cleared up a large number of unprofitable businesses and completely redefined their main revenue base. They organized existing businesses, markets and production methods, and selected, pinpointed, and found new markets and customers. First, Bang & Olufsen broke the stereotype that they are an expensive audio design brand that only middle-aged or older people can afford. They created a sub-brand, B&O PLAY for younger generations and started producing portable speakers that they can listen to while traveling.

Bang & Olufsen, which used to design expensive home theater products, is now producing lunchbox-sized wireless speakers. B&O PLAY also captured new opportunities in the smartphone market in 2010. They introduced 'Beoplay A8', a speaker exclusively for iPhones and iPads, resulting in more than 60,000 sales in a year after its launch despite its relatively high price of $1149.

Now that's money well spent!

Cars became a new stage for Bang & Olufsen. In 2005, they began exploring the high-end vehicle sound system market and began pairing with luxury brand cars such as Mercedes-Benz and BMW. It’s important to understand that products shift along with changes in culture and technology. The company has found new places to stage luxury and new ways to exploit people’s experience of luxury.

Luxury within luxury is simply luxurious

According to an interview with Tue Mantoni, CEO of Bang & Olufsen, the secret to Bang & Olufsen's unique and sensuous design is its process. The company employs external designers and gives them the authority over the entire production cycle from the beginning to the end. As a profit-seeking organization, it would not have been easy to decide this. Moreover, by creating the design concept development department called "Idea Land," more than 300 external designers and Bang & Olufsen engineers meet to share ideas. In particular, Mantoni emphasized that it is impossible for a person who has been in one organization to come up with different ideas every day. So, he encourages the employees in collaboration with other companies to transform and stimulate Bang & Olufsen.

A luxury brand CEO

The target consumer market has shifted from the United States and Europe to developing countries such as BRICs. They also moved production bases. Breaking the principle of manual production in Denmark, a new factory was built in the Czech Republic. At the same time, the core strategies of technology, design, and brand value remained. As a result, Bang & Olufsen has changed from the past. B&O play, a sub-brand that aims to capture both digital trends and young generations, clearly shows Bang & Olufsen's change. Bang & Olufsen's sales have increased for the fourth consecutive year and succeeded in reviving thanks to the growth of B&O Play. However, as B&O Play's profitability increased significantly, the brand name was integrated into Bang & Olufsen in 2018, and B&O Play remains only as a product name.

Luxury consumption gives the upper class who own luxury products a sense of belonging and satisfaction that they are in a higher culture, and creates identity through superiority and differentiation of their class. However, these results are limited to the few in the group, and can be said to be positive results only for them. The social and economic deprivation that most people feel has led to a distorted perception of luxury products. In other words, one might not have political or social authority or value as a member of the upper class, but you can appropriate that authority through consumption. One of the easiest ways to do that is to enjoy luxury products, and to have vicarious satisfaction through the means of luxury.

Are we satisfied yet?

But it is now an outdated idea to criticize people who buy luxury products because it is only a matter for some people who have spent money that does not meet their economic standards and satisfy their desires through materialistic consumption in a capitalist society. Now, whether people buy luxury products or overspend them according to their economic level, it is a vitally personal matter. The criticism that the consumption of luxury products by the upper class encourages a sense of incompatibility between classes is a false criticism. Despite the obvious economic gap between classes, the argument that luxury consumption should be uniformly refrained from is wrong.

Luxury brands used to be faithful to their role as trademarks that distinguished themselves from other companies. But now they focus on new ways to increase their sales. It is the experience, beyond the object of expressing consumers' individuality and identity. Consumers become enchanted with the perceived value of luxury. Therefore, brands provide optimal experiences through interaction with consumers, not through one-sided communication.

Like Christmas every day

As a person who has experienced the luxury brand, Bang & Olufsen, I could feel that they allowed me to experience the best happiness and satisfaction. Bang & Olufsen is a brand that provides customers with the best experience in the consumption process. It provides consumers with the value of differentiated luxury products in the process of experiencing and provides satisfaction to the brand when using the products.

It would be nice to show off yourself through luxury products consumption, but blindly copying others and following the trend is nothing more than a chameleon-like desire to be the same. On the contrary, people who refrain from wanting to look good to others and consume reasonably by thinking about the things they need are called "PRAV (Proud Realizers of Added Value). In other words, they are the people who have realized the added value. I pray that soon they will evolve themselves becoming "Proud Realizers of Holy Trinity" by realizing not only the added value of products but also how they can reshape their lives.

Line up happy people

Luxury products are not just luxurious, fancy stuff. Hermes' Birkin Bag and Goyard's Shopper Bag are only part of the concept of luxury goods, and do not represent all of them. . The more we study luxury goods, the more we realize that luxury brands that succeed in the market succeed for a good reason. Selling expensive products and luxurious vanity does not make a brand into a luxury brand. A true luxury brand is not just a form of company to make money, but also a coexistence with customers.

©Heather Lee and the CCA Art Review