LOS ANGELES, United States — On Thursday, Snap, Inc., the Venice Beach-based owner of visual messaging platform Snapchat, went public in the largest US stock market flotation since 2014, minting more than a few millionaires — and billionaires — along the way.
But how will they spend it?
Long before the IPO, there was already much talk of the good fortune this kind of new wealth would create for Los Angeles, particularly on the West Side of the city, which is already flush with affluent entertainment industry elites and tech executives who have been waiting for a major Silicon Valley-scale transaction like this to boost LA's glittery, but small technology hub Silicon Beach.
Along with an increase in already-steep real estate pricing, it’s expected that retail will continue to flourish, with more brands opening stores in gentrified Venice and nearby Culver City, where many artists, designers and filmmakers now live and work. It could be argued that Venice’s Abbot Kinney Boulevard, a dangerous zone in the 1980s, is today the hottest mall in the country — unconventional and yet a sign of the times.
On Saturdays, its blocks are filled with shoppers strolling from store to store, popping into multi-brand boutique Heist for pieces from Isabel Marant or direct-to-consumer mattress company Casper to try before they buy, with a final stop off at Gjelina, a critically lauded restaurant as famous for its wood-fired pizzas as it is for refusing to make the menu substitutions often requested by its demanding customers.
In many ways, this patch of West Los Angeles is an interesting reflection of how luxury consumption patterns are shifting amongst young, newly affluent professionals. Gone are the days of a Rodeo Drive haul. Instead, the new nouveau riche look down on traditional displays of wealth. But that doesn’t mean they’re not spending — and showing off their status. “The end of conspicuous consumption is a false thing,” says Richard Dobbs, senior partner at McKinsey & Company. “There’s a group of modest people and all of that, but there is also a group who isn’t.”
So, what does a status statement look like in 2017?
The end of conspicuous consumption is a false thing. There’s a group of modest people, but there is also a group who isn’t.
After the recession, consumers with significant discretionary spending power went into what seemed like permanent “stealth wealth” mode, with the intention of buying fewer, better things that signalled status to those in-the-know without broadcasting to the wider world. In fashion, that meant more discreet, minimalist pieces from brands like Céline, The Row and Bottega Veneta, whose wares made a statement without obvious branding.
At the same time, spending shifted towards “the experience economy,” a term coined by scholars B. Joseph Pine II and James H. Gilmore, especially what Pine calls personal transformations — think health and wellness, but also travel and food experiences — where what you are really buying is a better you.
But the experience economy has its own sort of status markers. Broadcast on Instagram and other social media platforms, images of everything from perfectly-composed coconut-chia pudding bowls served at beautifully branded health food restaurants to Runyon Canyon hikers wearing Memphis Group-inspired workout gear are now just as effective signifiers of having “made it” as traditional luxury goods.
While it’s unlikely that many of Snap’s newly minted millionaires will be posting photos of flashy six-figure car purchases — unless, of course, it’s a Tesla — it’s important to note that Snap co-founder Evan Spiegel proudly drives a red Ferrari, proving that traditional signifiers haven't all fallen to the wayside.
When former fashion editor Josh Peskowitz opened his menswear store Magasin in Culver City’s newly developed Platform shopping centre in March 2016, he was targeting the types who work at Snap and other nearby employers of young affluent professionals. “Within walking distance are the corporate campuses for Apple Music, Nike, Sony Pictures and many other smaller tech and film related companies,” he says. “We knew that there weren’t any stores catering to a younger, affluent male consumer who is still actively working on this side of town.”
Platform’s retail mix reflects changing mores. Instead of typical upscale mall fare like Cheesecake Factory and Ruth’s Chris Steakhouse, there’s an outpost of popular salad shop Sweetgreen, a Soul Cycle and a Blue Bottle coffee sitting next to Peskowitz’s Magasin, which sells The Lost Explorer and Engineered Garments alongside Harris Wharf London and Massimo Alba. In March 2017, retailer Jennifer Mankins will open the first location of her Brooklyn-based boutique chain Bird nearby.
“Nearly every creative agency and tech company in Los Angeles is located between Culver City and west to Marina Del Rey and Santa Monica, and I felt Bird could be a part of defining these new communities,” says Mankins, who stocks labels like Dries Van Noten, Rachel Comey and Lemaire. “We are finding that people want quality and craftsmanship more than ever, which I think is an antidote to fast fashion. Even — or maybe especially — our high-net-worth clients want to buy fewer, but nicer things.”
But luxury brands and retailers across the spectrum are no doubt watching the newly rich in this part of the world for what their behaviour says about shifting consumption patterns. As for Snap’s lucky contingent, let's see where they will actually spend their money.