Managing Longevity in Luxury Markets: A Perspective from Monaco

Abstract

The preservation of luxury offerings over time is not evident. Here, we consider the factors that may have contributed to their successful evolution in Monaco. To frame our theoretical discussion, we lean on observations, behavioural economics, and several models that may support insight. The conversion of Monaco into a luxury resort stemmed from a visionary nineteenth century greenfield project. The creation of enticing, exceptional, and elusive offerings attracted a new clientele. The principality was transformed into a haven of luxury. It remains one to this day. As luxury offerings mature, the need to continue to provide innovative products and services is amplified by the challenge to preserve, and at times remove, infrastructure, products, and services. Environmental, economic, and social sustainability must also be addressed. These factors can seem incompatible. Yet in Monaco, they are managed harmoniously. We explore this phenomenon through the lens of three forces that can impact luxury offerings over their life cycle: creation (creating new offerings), preservation (preserving existing infrastructure, products, and services), and removal (removing offerings). We conclude that complementary management of the forces of creation, preservation, and removal can foster the longevity of luxury offerings, when guided by principles of environmental, social, and economic sustainability. The overall objective of this article is to widen the debate relating to the long-term and sustainable evolution of luxury markets.