Once upon a time, affordable luxury bridged the gap between the affluent and the aspirational. Mid-income earners couldn’t afford Chanel and Dom Perignon, but they could manage Tommy Hilfiger and a five-dollar latte every morning. Such people knew how the rich lived, and many hoped or expected to live that way themselves someday. Indulging-within-reason seemed appropriate for their lifestyles.
But the great middle is eroding. Pundits and marketers, such as P&G and Tiffany, talk about an “hourglass economy” in which consumers are segmented into Swarvoski or Spam. (Of course, “hourglass” is a misnomer, suggesting equal distribution at the top and bottom.) As fewer people dream of owning beach houses and more fear they’ll end up sleeping on the beach, routine gratification is a habit many have been forced to break. But they need not give up the good life entirely thanks to some startups that make real luxury available at low cost. The catch: Customers only enjoy their opulence for brief periods, after which they revert to rags and pumpkins. Call it Cinderellanomics.
One purveyor of temporary fabulousness is Rent the Runway, a New York City company founded by two Harvard Business School graduates. On this site, women can rent dresses from famous fashion designers for about one-tenth the cost of buying them at Net-a-Porter. Dry cleaning is included in the price, and damage insurance is only five dollars (if a dress comes back irreparably covered in cabernet, the customer pays full retail). Since customers can pick a different frock for every occasion, the desire to shop is satisfied even if the desire to own is not.
For someone anxious to impress a date, visiting relative, or potential client, nothing says success like a chauffeured car. Uber, founded by serial entrepreneur Travis Kalanick, promises to be “everyone’s personal driver.” The company’s sleek black cars roam high-end cities; customers send their locations via text or an app, and their rides pull up within minutes. Using GPS data, Uber charges by distance or time, depending on traffic conditions. In New York, for instance, a typical “Uber fare” is $7.00 plus $3.90 a mile and $0.95 per minute. With their information on file, customers don’t need to pay or tip their drivers, reinforcing the illusion that this is how they normally roll.
Even those who despair of ever bidding at Sotheby’s can still surround themselves with original art. Artsicle charges $50 a month to rent paintings, sculptures and photographs. Similar to the internet radio station Pandora, Artsicle is helping to showcase a wide array of terrific local artists. The company’s mission is to put original art on every wall in the world, and to get those dogs playing poker off yours.
Birchbox members keep the products for which they pay $10 a month. After all, high-end make-up, shampoo and lotions don’t lend themselves to rental. But customers receive only very tiny quantities: boxes of trial-sized samples customized for their beauty profiles. Former beauty editors Katie Beauchamp and Hayley Barna also offer discounted, full-sized, versions of the products on their site. Members can save more money through frequent purchases or new-member referrals.
According to our customer survey data in BrandAsset Valuator, 63 percent of people today want products and services that are both “good value” and “worth more.” Ultimately, this desire cannot be satiated by fast fashion or cheap chic. Having the best means borrowing it instead. Practitioners of Cinderellanomics transform what would once have been possessions into experiences. They understand that while the trappings of affluence remain visible, even struggling strivers won’t wholly relinquish the dream. When a life of affordable luxury is beyond one’s means, occasional luxury seems like a reasonable alternative.