Old is the New New

It seems a bit odd to be living in a servants' quarter studio and be writing about luxury goods, however everyone at school is positively obsessed with them. Job opportunities with brands like Chanel, LVMH, Hermès, etcetera are mentioned in the most hushed and reverent tones. Luxury goods are taken very seriously here – in fact, during my first class session at ESSEC we discussed the role of luxury goods in ancient rituals.

France is fortunate the business has held up through the credit crisis. Luxury firms dodged a bullet as consumers in the United States, Europe and Latin America tightened purse-strings over the last 24 months. Lucky for these firms that the brand message of prestige and exclusivity that ceased to drive sales in western markets still resonates with the emerging upper-middle class in China and India. If you're unclear on what I mean, think about prominently logoed products (big polo pony shirts) that created instant recognition and the "it bag" phenomenon that drove luxury handbag sales in the US from 2004-2007.

For western markets, brands are shifting to a message that emphasizes heritage and craft. Luxury products, from leather goods to timepieces, are sold with the promise of becoming heirlooms – timelessly tasteful and durable enough to withstand generations of use. Brands are reaching for history, even Jimmy Choo is reviving a "greatest hits" line of footwear from its relatively young 14 year-old portfolio. Recent Louis Vuitton campaigns hit on travel themes and connect with the house's legacy as a luggage maker. Hermès reminds customers of its origins as a saddle maker by including horses in their imagery.  Ads for Patek Philippe feature multiple generations of beautiful and aristocratic-looking Europeans.

If this doesn't sound all that new, it's really not – the pendulum is just swinging back. The same game-plan was used during a pullback in demand in the early 1990s, brands have shifted gears into a battle-tested communications strategy. However, because luxury goods consumption was not near as high nor distribution as complicated as now, the stakes have never been higher.