Vitaly Malkin has regrets. He’s sitting in his Paris apartment, a seemingly endless space inside an Art Deco building that he has had fitted out entirely in original Art Deco furniture and fixtures. But, he says, if he had “thought about it more carefully a few years ago”, he wouldn’t have bought it — he doesn’t even actually stay in Paris all that much. Rather, he’d just rent a flat whenever he was in town. It’s saying something. With a net worth of over $1bn, Malkin is one of Russia’s richest men. He could have apartments all over the world.
That Malkin is seeking to spend less and better — despite the freedom to spend wantonly — makes him part of a wider movement. That word overstates matters, perhaps. There’s no collective action, more a new sensibility derived from chats in the lobbies of luxury hotels and over Michelin-starred luncheons: a momentum among the comfortably monied towards a smarter approach to consumerism.
Malkin is not alone in feeling weighed down by property ownership: Thirdhome is a “luxury property and travel club” and allows clients to exchange time in their second, third or fourth home for time in someone else’s second, third or fourth home. It’s essentially Airbnb for the well-heeled — the 10,000 properties currently on its books are valued at an average £1.7m.
Indeed, the idea of rental has in recent years been reborn as sensible rather than second rate compared with outright ownership. Want an outing with that it-bag, but know deep down that Instagram will ensure that its it-ness will be short-lived? It can now be rented much as a wear-once ballgown can be. Want a week with that Ferrari, but without the insurance issues? Hiring one now looks like a clever move, not some embarrassing cost-cutting measure. In fact, it’s telling that embarrassment isn’t a factor at all. The number of billionaires around the world may be escalating, but their flavour has shifted radically over the past two decades: old money has given way to new, largely self-made money. And when you’ve made it yourself, you’re considerably more careful about what it’s spent on. You want value — you probably understand business so want more product and less pizzazz.
You’re also — anecdotally at least — more likely to want to signal your wealth through your acquisitions. But that, too, is undergoing a shift. If the desire to sign-post your material success used to lean towards flashiness, now ostentation has given way to consideration. Oneupmanship comes less in the form of carat count, more in the form of expressing your connectivity to the postausterity zeitgeist — and that leans towards consumerism with an ethical bent, be that a mind on environmental impact, conditions for workers, transparency or fair trade.
Bragging rights are now found in the virtuous purchase. In large part, this is also a consequence not only of the very wealthy being self-made, but also being younger. There are more multi-millionaires, and even billionaires, now in their 30s and 40s; just a generation ago, they would typically be in their 50s and 60s. And while big business repeatedly makes the mistake of assuming members of a generation all think alike, it is a fact that millennials — and those that have followed them — have grown up having fully imbibed the kool-aid of righteousness. It means that they want to change society for the better and so have high expectations of the vendors they shop with.
In a sense, this makes for a window of opportunity for all to benefit from this step towards a kind of expenditure wellness — before this new money is inherited and, potentially, attitudes shift back again (unless Warren Buffett’s Giving Pledge takes hold, whereby the super-wealthy contribute a majority of their wealth to philanthropic causes). Hopefully — for the planet, for social balance, even for mental health — more progressive ideas of what and how to spend excess income will by then have become the norm, underscored by a growing readiness to judge and, via social media, call out those who are tardy in falling in line.
Social media has certainly played a part in helping these conscientious consumers apply pressure on those luxury brands that supplied the older money and could do so from within a bubble, in which they seemingly did not need to worry themselves with ethical matters. But not anymore. Much as many high-street brands have had to address the ethical problems of their supply chains, so top-flight brands have had to make changes. Gucci, Michael Kors and Versace, for example, are among those companies that have in the past year committed to going fur-free. Even whole cities, the likes of Los Angeles and San Francisco — home, tellingly, to Hollywood big swingers and the dot-commissariat — have brought in bans on fur sales.
It’s hard to know, of course, if these brands would have made such a move without enjoying such a brutal wake-up call: that which has rapidly become their most important consumer base is also the most disgruntled with dubious ethical practices. But such moves are happening and are to be welcomed, all the same. This shift is inspiring new approaches in start-up businesses, too. While it would be naive to say that the monied are rushing to abandon their Lambos in favour of Skodas, the market is now at least providing them with ethical alternatives and a social milieu that rewards them for taking them. Companies such as Acura, Dubuc and Elextra, for example, may not yet be widely known, but they’re all makers of electric super-cars, most typically in the news for breaking track lap and acceleration records.
But, as Elextra’s founder Robert Palm has noted, this market has also proved something of a test-case for evolving attitudes. A decade ago, the idea of an electric super-car was the stuff of ridicule — and not just because the technology had yet to catch up with expectations.
Now, as he puts it, the people who can afford these cars are less and less interested in what he calls the “old” technology — he says they even see it as a negative thing to be seen driving a conventionally-engined super-car. Small wonder then that the better-known manufacturers — the likes of Ferrari and McLaren — are now, having been given the right nudge, working on electric vehicles, too. And this year sees Aston Martin launch the Rapide E, its first all-electric car.
Even super-yacht makers are feeling the need to up their sustainability game — all the more remarkable given that the market accounts for a fraction of that for super-cars. Dutch builder Hessen recently launched the world’s first fast displacement hull form with hybrid propulsion, which makes this ultimate toy not only hugely more fuel efficient, but also means that it can run virtually silently, which is better for passengers and sea-life alike.
There’s an aesthetic subtlety coming in, too, perhaps inspired by growing concerns about income inequality — or rather by a discomfort at anything that reveals that one might be at the upper end of the spectrum. Talk of “understated luxury”, of “inconspicuous consumption”, is not new. But recent years have seen the acceleration of this ethos.
If it took, say, three decades for the west’s luxury goods market to reach a point where some brands have adopted the anti-tacky tactic of doing away with or vigorously reinterpreting their trademark logos, such as Celine, Saint Laurent and Burberry, in China — still the engine of the global luxury goods industry — it took maybe three years for shoppers to realise that such a overly branded life was, well, maybe just a little tasteless. The internet has proved to be a great educator — cultural mores are accelerated. These days, the newly wealthy bypass bling and go direct to a take on sophistication.
The powerhouse names of that world have also faced growing competition from a swathe of more niche designers and manufacturers — more easily discovered and bought thanks to the internet. Offering products of still impressive craftsmanship, but with the 21st-century cachet of being much less obvious, such goods are all wrapped up in the more holistic package of embodying such very now qualities as authenticity, community and purpose.
It’s not enough that a brand has decades or a century of history the likes of a Burberry or a Chanel, these days they need a story — Private White VC or Hiut Denim’s rescuing of dying local manufactory, for example — or a social purpose, whether that be Toms’ pioneering “buy one, give one” philosophy or Stella McCartney’s no-fur leadership.
Cachet, in fact, might not come into it at all: a 2018 Deloitte survey found that the leading reason for millennials to buy luxury items is to treat themselves, not to impress others or to follow the advice of celebrities or so-called influencers.
This perhaps explains why these modern makers are seeing growth in parallel to the statement brands seeing their sales struggle. A recent survey by Harris on behalf of Volvo concluded that while extravagance, brand name and price were once the key drivers in purchases, now a more de-cluttered, minimalistic model is the preference, with 82% of those earning over $100,000 saying they now buy better — with a view to longevity, durability and functionality — in order that they can buy less. Price, indeed, has lost its relevance as an indicator of anything more than what you’ll have to pay at the counter.
It’s little surprise then that, as has oft been reported, consumers with the financial freedom to buy what they want, whenever they want, are said to be moving away from the buying of things altogether. Sure, there is plenty of excellence in design and making to admire, but as the fashion entrepreneur Stefano Ricci has noted, there does come a point when these customers’ need for another suit or another pair of shoes, another watch or another car, has to taper away. In all but the very greedy, accumulation gives way to diminishing returns.
These less-than-happy shoppers are instead seeking life-enhancing experiences — ideally something that, as the saying goes, money can’t buy (even if it just actually has). The idea of space tourism has been widely popularised; so, too, trips to the Earth’s poles. Next year, those with £86,500 to spare can buy a seat in a submersible that will dive 13,123ft off the coast of Newfoundland to visit the site of the Titanic, the first to visit the remains of the ship in many years. There’s a booming market in red letter days for those with the greenbacks.
It’s a welcome reversal to the sense of stuffocation that grows in surrounding oneself with ever more acquisitions — such that, by one figure, the average American now has 8sq ft of off-site storage space. The rich, presumably, might need much more. Recessionary pressures have encouraged many to trim the fat — even billionaires have seen their net worth hit — but add in environmental awareness, time pressure and the sense of human disconnectivity that new technologies create, ironically intensified rather than alleviated, and it’s not surprising that physical things don’t have either the desirability or the emotional punch they once had.
If the past 70 or so years have seen eras focused on notions of service, self-expression, connection and, more recently, belonging, it seems that now we’re looking for what we do — including what we spend — to have meaning. Paring down might be fashionable, but there’s also a deep-seated desire to escape the arms race of consumerist proliferation. Money is best spent on time, rather than on trinkets.
Yet there is also another, equally over-arching mindset gaining traction, one that is changing attitudes to what should be done with money, if one is fortunate enough to have plenty of it. If the great families of 19th- and 20th-century trade and industry — the Vanderbilts, Gettys, Rockefellers and JP Morgans — used to be admired for their extravagance, their palatial mansions, museum-standard art collections and so on, the men and women of exceptional wealth today are more admired for the visionary social ends to which they put it. Richard Branson and Elon Musk may both be driven by the idea of getting off the planet — which might well be a little worrying — but they are taking up the reins of progress that government has dropped. Bill Gates and Jeff Bezos have recently invested heavily in the development of potentially game-changing nuclear fusion technologies to transform energy supply. Of course, Gates — together with his wife Melinda — has done much to help eradicate malaria. Were any of these individuals to go out of their way to show off some vast vintage car collection, it would be something of a let down.
The philosopher Peter Singer has argued that even average earners should be giving away a percentage of their income and with an unsentimental, laser-like focus on the utility of each pound given, too. His message — that the only morally defensible use of spare money is in helping those who live in poverty, not in rescuing Pandas, let alone buying another Porsche — can be hard to act on in a society that does inoculate comfortable social groups against the needs of others. Living in gated isolation, arguably that’s especially the case for the very well-off.
Equally, given that the very well-off have the power that money brings, it’s increasingly the view that with that comes responsibility. This isn’t to say no one should enjoy the trappings of their financial success, only, perhaps, that they should think longer and harder about what those trappings really are.