Now luxury ‘collectibles’ are investments, investment brands need to learn from luxury.

The hard-nosed, dog-eat-dog world of the City trader feels far removed from the cultured, rarefied world of classic cars, fine art and vintage wine. But these two worlds are coming together as luxury ‘collectibles’ increase in popularity as investments.

The investment case for collectibles lies in strong returns and insulation from stock market turmoil. But reinforcing this are the new attitudes of Millennial wealth and in particular the rise of ‘identity investing’. Research by Cult Wine Investment describes how 'the cool kids’ are prioritising investment choices that offer both a reliable return, and significant amounts of ‘cultural cache’. An approach that aligns their investments with ‘modern luxury’ values rejecting vulgar displays of wealth for understated signifiers of knowledge and taste.

The Identity Investor sees themself as a curator who earns, through the process of investing, an authentic and deeper connection with their interests. It’s a similar sentiment to that identified by Global Web Index research which shows 77% of luxury consumers would buy a product or service simply for the experience of being part of the community that built it.

So how do investment brands engage this new wealth mindset? Well, first of all by recognising they are in the luxury business. So, while it’s critical to make the rational case for investment, this is only half the story. Exemplary product quality is a given in the world of luxury; luxury’s true value lies in how it makes you feel. Identity investors are investing in their passion and investment brands need to create a brand experience that reflects this in line with ‘modern luxury’ values.

Luxury has moved on a long way from the ‘bling’ era of the noughties. This evolution is reflected in the new codes of luxury: from Product to Stories, from Ownership to Knowledge and Access and from Exclusivity to Community. Collectible investing is rich in these new currencies of luxury. The stories behind classic cars, fine art and vintage wine are why these are sought-after items. Investment gives the investor insider access to the world that creates the products. And having investment ‘skin in the game’ earns you an authentic place in the tight-knit community of producers, critics and collectors.

Luxury marketing expert Pam Danziger sums it up when she says, the new investment landscape is “about enabling people to become more of who they really are.” The investment brand that delivers on this promise will be the winner with the new generation of Millennial wealth.