The antiques industry has traditionally been driven by demographics. As people reach middle age and older they often became interested in purchasing items they fondly remembered from their youth. This is a way for them to recapture special moments or warm feelings from their childhood. In short, nostalgia has always been a major factor determining demand and price trends in the antiques market.
The only problem is that this long-standing antique market rule-of-thumb is beginning to erode. While there are still quite a few Generation-X collectors out there chasing vintage Teenage Mutant Ninja Turtles or Michael Jackson paraphernalia, their numbers and impact on the antiques industry are far smaller than that of their predecessors.
This has been bad news for many antiques dealers, who have been slow to adapt to this transition. As one would expect, many professionals in the antique industry are notoriously reluctant to embrace change. Instead, most antique dealers have hunkered down and continued to do things the way they always have.
This mostly means buying collectibles from the 1970s, 1980s and 1990s and then patiently waiting for hoards of middle-aged nostalgia seekers to mob their shops with fist-fulls of money. Unfortunately, this expected outcome has failed to materialize. The situation has deteriorated so badly that many old-fashioned antique dealers have simply given up and gone out of business, leading to the widespread decline of the physical antique store.
Despite the challenges that the antiques industry has faced over the last decade, I don’t believe it is in terminal decline. To the contrary, I believe that certain segments of the antiques market will boom. However, in order for antique dealers and collectors to properly position themselves, they will need to understand why and what kind of antiques people will desire in the future.
In my opinion, the future of the antiques industry lies in the concept of functional luxury. Functional luxury is the idea that high quality antiques can be used as chic, cost-effective substitutes for modern luxury goods. For example, rather than spending $10,000 to $12,000 on a new Rolex wristwatch, a person might be delighted to find that he can acquire a beautiful vintage Omega, IWC or Patek Philippe wristwatch for a fraction of the cost.
Functional luxury can apply across a wide swath of the antiques industry. For instance, vintage clothing, handbags, jewelry, shoes and other accessories easily provide great value for your money and look great doing it. Antique walnut or mahogany furniture is immeasurably better in both looks and durability than the junk in an IKEA flat-pack, but hardly costs any more.
In decades past, people demanded quality goods. As a result, antiques were often crafted to a very high standard. Even though these vintage items may have been made 50 or even 100 years ago, many of them are still perfectly usable today, provided they have been reasonably well-cared for. Functional luxury exploits this attribute, allowing you and I to own items built to a standard that would be cost-prohibitive today – a situation only possible because of the exceedingly high quality of many antiques.
Another aspect of functional luxury that is vitally important is the notion of authenticity. In the modern age, we are constantly bombarded by advertising trying to convince us that this brand or that brand is “authentic” in some way. Yet, most of these brands are owned by faceless mega corporations that farm out production to overseas sweat shops with poorly paid workers. This is the antithesis of authenticity, and a growing number of people are becoming aware of that fact.
I also believe that there is a burgeoning disgust with the idea of collecting stuff just for the sake of having it. Many Millennials grew up in households with Boomer parents who were borderline hoarders. These Boomer households were filled with an abundance of junk, much of which was made in China. It is my belief that Millennials have had their fill of this quantity over quality lifestyle. They will undoubtedly gravitate towards luxury minimalism and its philosophical twin, functional luxury.
Even investing can benefit from the trend toward functional luxury. How many people dutifully (and mindlessly) dump 5% of their paycheck into boring equity index funds twice a month? This is all well and good until the next stock market crash decimates retirement accounts all over the world.
These unfortunate, naïve investors will belatedly discover that they could have been putting their hard-earned money to work in gorgeous investment grade antiques instead, like this vintage British gold sovereign proof set from 1985. Money invested in tangible assets such as high quality antiques and fine art is money that will not vanish in a market panic or corporate bankruptcy.
There is even a green angle to functional luxury. The motto “reduce, reuse, recycle” is a rallying cry of the modern environmental movement. And antiques are perfectly positioned for reuse, regardless of whether they are employed for their originally intended purpose or adapted through upcycling.
Functional luxury lets us pursue quality and authenticity at prices that won’t break the bank. Functional luxury allows average people – people just like you and me – to live better lives through antiques. And, honestly, that is a pretty good future.
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