New luxury lifestyle features on-demand access, rather than ownership

In April, automaker General Motors unveiled the 2018 edition of its Buick Enclave, an update of its line of high-end SUVs.

Much like the automaker’s LaCrosse sedan, the latest edition of its Enclave SUV is billed as affordable as well as luxurious. The LaCrosse sports a relatively tame price tag of under US$40,000, only about US$6,000 more than what Kelley Blue Book cited recently as the average price of a US vehicle.

Last week, investors took fright from an unexpected drop in sales by Tiffany’s , as the upscale jeweller became the latest victim of soft demand in the luxury sector.

While seemingly unrelated, Buick’s fleet of luxury cars and Tiffany’s travails underscore how the idea of “luxury” — a term frequently associated with the “1 per cent” who can afford flashy rides, large houses and a private jet parked at the nearest airport — is being steadily redefined by evolving consumer tastes. As a result, existing luxury powerhouses are struggling to preserve the loyalty of consumers, while other brands are carving themselves a niche in this new reality.

As consumers decide what makes them comfortable — and how much they are willing to pay for the privilege — traditional hallmarks of wealth have also evolved. In this brave new world, luxury vehicles are sold on the relative cheap, expensive homes verge on the minimalistic, while a private jet is something to be hailed like an Uber or Lyft, rather than owned outright.

“Customer expectations of luxury are changing,” Rob Peterson, a marketing manager at Buick, explained to CNBC in a recent interview.

“What is really being defined as luxury is an aesthetic beauty that people appreciate, but your own personal kind of experience and luxury,” he said, adding that such goods and services needn’t be expensive at all. “Luxury has evolved to a point that it’s not just form and function, but form, function and fit into your lifestyle.”

That means consumers are free to drop US$82,000 on a Tesla Model X — or upward of US$400, 000 on a Lamborghini Aventador, for that matter— but can also opt for a Buick. Someone with the means can easily spend US$72 million for an estate in the wealthy enclave of the Hamptons, or they can opt for a US$29 million penthouse in New York City with less space and fewer lavish extras.

In other words, luxury has become subjective, value driven and almost entirely in the eye of the beholder.