Every Paris fashion week, Chanel's show takes place in the Grand Palais, and this year Karl Lagerfeld took inspiration from the space, the home of art and culture, turning the cavernous room into an art gallery.

The custom-made art works dotted around the space all referenced the codes of the fashion house. Exhibits included a quilted sumo wrestler, a robot made from bottles of Chanel No 5 and ladders made from the chain used on 2.55 bags. Artists referenced included Wassily Kandinsky, Jackson Pollock, Claes Oldenburg and Marcel Duchamp.

But there was also a cheeky undertone. A shower cubicle with chains falling from the ceiling was called 'Golden Shower', while a mannequin wearing only socks – a homage to British artist Allen Jones – had a strategically placed camellia flower.

This all added up to a playground for the Instagram generation currently on the front row – or those next up, anyway. Bloggers and editors, many dressed in Chanel tweed and carrying quilted bags, snapped each other in front of the exhibits. The race was on to see who could upload the pictures to the photosharing app first. Celebrities attending, including Katy Perry, Vanessa Paradis and Rita Ora, were almost a footnote.

The Chanel set is always eagerly anticipated. With past favourites including a merry-go-round, an iceberg and, last season, a giant globe, Lagerfeld – plugged into every flicker of the zeitgeist, of course – knows the buzz around the Chanel show begins even before the guests sit down.

When the show started his smarts became even more evident. Lagerfeld used the first look – an unmistakably Chanel suit in shredded pink tweed, albeit worn with monochrome court shoes with socks attached – as a palate cleanser for an audience still focusing on their touchscreens.

This was a cool collection, though, and all the better for it. As may have been predicted by the set, it was inspired by art and, over a lengthy show, the theme was developed. A grey leather dress came with painterly textures while a print that looked like paint swatches covered ribbons of silk on draped fluid dresses. The most overt reference was a male model carrying a canvas and paint brushes.

If this is all manna for the twentysomethings who probably, in reality, can only afford the lipstick, Lagerfeld knows his audiences. Pretty below-the-knee skirts with tiny bows and tweed dresses with lace panels will appeal to the woman who will actually buy the clothes.

Lagerfeld's genius when it comes to keeping Chanel relevant has been to weave the codes – tweed, chain, pearls and quilting included – into whatever theme he is currently playing with. The accessories are always talking points. Moving on from the hula hoop bag of last summer, some models wore two bags. This season it's about the backpack, complete with double-C graffiti and charms, and worn with a scowl by Cara Delevingne – as well as friendship bracelets, no doubt very expensive.

He's also happy to play with designs from the recent past. There was a reprise here of the popular chunky plastic Lego bags loved on social media and the visors seen in the 2009 couture collection.

Recently, Lagerfeld's Chanel has pushed the heritage of the brand. The globe-trotting Little Black Jacket exhibition put a classic centre stage while last season's global theme saw a more traditional collection. There were drop-waist dresses à la Coco and lots of tweed jackets among the Amelia Earhart hats. This felt fresher and worked with one of Lagerfeld's strengths: a hunger for the new.