Hold on to your flower crowns. While the Coachella Valley Music Festival is perceived by some as the new Hippie Woodstock, it’s anything but. This Indio, Ca based festival is an elite driven event that is a reflection of the increasing chasm between ‘haves and have nots’ in the U.S. If smart money is not paying attention to Coachella it should. While Coachella may be ‘feeling the Bern’ today it foreshadows a more aggressive tilt towards the upper quintile of income earners, their tastes, preferences and idiosyncratic behavior. Don’t worry investors. You may be’ feeling that Bern’ today but four or eight years from now the dancing fools at Coachella will be tapping their feet to the tune of your investment strategies.
The thing that is interesting to me from a fashion perspective, is that with all fringe and suede and JORTS (JEAN SHORTS—which should be outlawed, BTW) and crocheted halter tops and ankle boots and chokers—(they’re back also) the layman can’t tell Saint Laurent from H&M, Chloé from Calvin Klein. That’s simply disruptive to retail apparel which to date is taking it on the chin. Case in point: PRADA. Recently their CEO, Miuccia Prada essentially declared—after a less than stellar quarter that they are done with luxury. However, smart lux players are courting the Monied Millennial with pop-up shops at Coachella, and several lounge-y Palm Springs digs with pristine pools just ripe for the ‘Jennerficiation‘ of the festival. When a retailer comes to you, pay attention. Brett Easton Ellis is genius.
Prada is exiting the field at exactly the wrong time. Coachella is a living, breathing example of why luxury is not dead. Forward looking lux companies are using Coachella as a opportunity to shape tastes, behavior and expectations of the upper quintile of income earners who do not even note the dropping of several dimes just to get their fashion groove on. And that is before the costs for lodging, tickets and parking. And craft beer. In one sense they are just doing what the food product sector has been doing for the past five years. They are abandoning the middle class and providing products for the upper quintile of income earners who are the only segment of the population that has experienced an increase in disposable income that has nothing to do with falling gasoline prices. Call it the Anthony Bourdain effect: “I don’t know luxury, I SHOW luxury”, via Instagram. Millennials want to share what they are eating, where they are eating it, and who they are sleeping with after, “Eat, Pray, Insta” for lack of a better term. Master Card data shows that air travel had the highest airline spend in history last year. This begs the question of Experiential Luxury.
One notices USC, Stanford and MIT have taken the field on the West Coast without apology and intend to reshape everything: whether it be society, the economy, luxury, lodging and retail. It’s like the Reagan administration never left office. They all voted for POTUS , but when it comes time to choose careers, form households and raise children they are not” feeling the Bern.’ These millennials are in transition and those luxury firms that are correctly interpreting the massive change in their milieu are missing out on the biggest opportunity since the Baby Boomers came of age in the late 1960’s. Go ahead and feel the Bern, vote for Donald, or worship at the alter of Elizabeth Warren. But these kids are going their own way. Their travel schedule and their carbon footprint do not reflect Obama’s America. They want luxury and are willing to pay for it. Drops Mic. Walks Away.