Larissa Faw, Forbes reporter

Larissa Faw: It is great that millennials have moved beyond the materialistic nature of what has been considered luxury. Many traits that typically define luxury—like fawning treatment or rich, indulgent services—are no longer acceptable or cool. Can you imagine being served by someone wearing a uniform and white gloves? I shudder at the thought.

Previews Inside Out: Beyond that, how are millennials transforming the luxury industry?

Milton Pedraza: They tend to take the design, quality, and craftsmanship and service for granted. They want customized, personalized solutions “now, now.” As Four Seasons says, “Show me you know me.”

Mickey Alam Khan: Four words would reflect the transformation in the luxury business: high touch, high tech. Millennials want that kind of experience with their brand, and so do Gen Xers and, to some extent, digitally savvy baby boomers. Luxury brands are being shepherded along a digital path where online and mobile are the start of the research process that may or may not culminate in a store sale.

Larissa Faw: They are making everyone rethink what it means to be a luxury brand. Just because you charge $5,000 for a bag does not mean you are luxury. Just because you operate a nice hotel does not mean you appeal to affluent millennials. What was once considered top-flight treatment—like that white glove treatment—does not necessarily align with younger generations. This presents opportunity, but it is also challenging, because what once worked, no longer does. You don’t earn five stars by doing what you did for decades. That said, I also think millennials take for granted a lot of what is known as luxury. Like top-sourced leather goods. They expect all brands, even discount ones, to offer that. They expect great service, like immediately tending to their demands. Those services used to separate luxury brands from regular ones.

Mickey Alam Khan: Also, for many young people, it’s not simply about flashy identification with a lifestyle or a product, but a reflection of their values. Hence, the importance of storytelling and codes for luxury brand and luxury retailers to get their message across.

Previews Inside Out: Let’s talk more about this push toward authenticity in luxury, which is an important value for many millennials. In what areas of the marketplace have you seen authenticity play out most dramatically?

Milton Pedraza: They require authenticity across the board. But let’s face it—many product offerings are copycats and commodities, even in some luxury circles. So the authenticity is more about the founders, the brand purpose, the brand ambassadors and “how” they do what they do.

Mickey Alam Khan: I’d say authenticity continues to play a key role in leather goods and accessories. Look at Hermès. While other luxury brands such as Gucci are suffering from logo fatigue and endless line extensions, Hermès continues to post above-industry growth. What does Hermès do differently that attracts all generations to its brand? Attention to quality, to its codes, to its heritage, to its line of products. Its messaging is consistent. The equestrian and travel themes are embedded in most ads. And, most of all, the product standards have been maintained over the decades. Hermès is France at its best, and that’s what millennials and other consumers are buying. Pedigree continues to matter to millennials.

Larissa Faw: Fashion and watch brands are really overplaying their histories and design backstories in order to capture that authentic hook. Upscale alcohol brands are also trying too hard. I don’t need to see another old-timer posing with his dog on a farm to tell me a brand is authentic—and that this makes it okay to charge $300, since it has been aged in a barrel for 100 years. This authenticity does matter to millennials, but I see it becoming too commonplace.

Previews Inside Out: Can you identify any luxury brands you think are already starting to make this adjustment in their marketing? You know—moving away from exclusivity to authenticity.

Mickey Alam Khan: Well, let me just point out that exclusivity and authenticity can’t be mutually exclusive. You have to have both to survive long term as a luxury brand.

Milton Pedraza: Bottega Veneta is a prime example of expertise, trust and generosity with all constituents. And they have the numbers to prove it. Burberry is there, too. We see Van Cleef & Arpels moving in that direction. Sephora, too.

Previews Inside Out: Why are some of the top luxury brands a bit stalled today?

Milton Pedraza: Their products are too common, too logoed, and they have disengaged brand ambassadors. So the customers become disengaged, too. The brands have become passive transactors rather than humanistic relationship builders.