Luxury Brand Strategy - Elements to Consider in a New Luxury Economy
Designing an effective luxury brand strategy can be a challenge; the idea of a luxury commodity is a double standard, in short, you are aiming to persuade people to invest in something they don’t really need, and that takes creativity, curation of identity, and apt communication to make it possible. With an effective luxury brand strategy you have the chance of making history, think of those exclusive names that paved the way for the elite market.
Rolex, Hermes, Louis Vuitton, Ferrari – these are a few of the brands that have emerged as leaders in luxury, and it was their luxury brand stories and strategies that helped to make them successful. Familiarizing yourself with the major components of a traditional luxury brand strategy can help you to start weaving your tale, to inspire you to plant your own seeds, and to tend to your garden so that it can flourish and grow.
brand personality
Personality is the hallmark of a strong luxury brand strategy because in the luxury niche you are gifting experiences rather than selling a product. Consumers aren’t inspired by the dull and emotionless exchange of paper for a product, it is tasteless, it is boring, and it is an everyday chore that leaves them listless. They want to be wooed, they want to hear stories, they want myths and magic to come alive, and they want to hold something in their hands that actually means something. You can paint a picture with words, history, art, and imagination, something that lingers like an echo in the mind of the consumer.
Think about La Prairie and you will see hear the whisper of stardust and see the spa nestled beneath the snowcapped Swiss Alps, think about Chanel and you hear the throaty feminine allure, you see the black and white purr of Paris and the flash of pearls against a little black dress. These are the elements of a great luxury brand personality; these are the stories that make you famous.
To learn more about luxury branding or to perfect your own brand personality, consider sign-up for our Luxury Branding & The Art of Luxury Storytelling online course.
influencer & celebrity endorsement
Remember when Nicole Kidman spritzed herself with Chanel Number 5, when Natalie Portman captured the red carpet essence of Dior and when David Beckham sported Armani. We are a culture of celebrity and influencers and for luxury brands to seek recognition and inspire awe sometimes it helps to cast a figure of well-known prestige to help boost your brand. People look up to celebrities and influencers as these can be the physical embodiment of individuals living the good life.
Those who have succeeded in their chosen field inspire others to follow in their footsteps, encourage ambition, and the want for emulation. Having a celebrity or influencer endorse your product can work wonders for brand recognition and bringing a trustworthy glow to your name, something that is indeed worth its weight in gold.
To learn more about the importance of celebrity and influencer endorsement in a luxury brand strategy, sign-up for our Luxury Touchpoints & The Experience of Luxury online course.
public relations
Perfect PR can be as smooth and beautiful as a glassy lake on a summer’s day, a stone can cast a ripple but in moments everything returns to a picture of pure class, tranquility, and seamless beauty. There is no place in the world where PR matters most than in the world of luxury. The whole deciding, purchasing and owning experience should be a ritual and one that makes the consumer feel as though they are the only person in the world.
Successful luxury brands will go beyond that extra mile; they will take their elite loyal customers to the moon and back. From something as simple as offering champagne and petit fours in store to calling your top clients personally to offer them a first look at the seasonal new range before it hits the shelves, these are things to keep consumers feeling drawn into the inner circle, a place that encourages belief and sales.
To learn more about the importance of public relations consider taking our Luxury Touchpoints & The Experience of Luxury online course.
premium pricing
The mantra behind luxury pricing is always a twofold discussion; there is the real price and there is a perceived price. An exceptional luxury brand strategy will be the driving force that glides the real price out of sight and replaces it with something that exudes a higher premium value. After all what is a Rolex other than cogs and springs? What is a Louis Vuitton other than leather and seams? These items are thousands of dollars all because of their name, history, and heritage.
If you want to turn heads when it comes to your luxury brand you need to first lay the foundations, then you build up the hype, then you lay out the price –a price that speaks volumes, that doesn’t bow down to the need to shift a product and make sales, a price that clings to its worth and doesn’t let go.
To learn more about the importance of premium pricing in a luxury brand strategy, take our New Luxury & The Values Redefining Luxury online course.
uniqueness & scarcity
An arctic fox tumbling in the blushing pink snow, a scrap of parchment paper said to be the dead sea scrolls, an antique diadem dull in gold but with rubies that glitter the darkest blood red – these are all things of mystery, things that arouse our curiosity and things of rarity. Premier luxury branding follows in the footsteps of rarity and tiptoes far from the beaten track.
Elite consumers’ desire things that are scarce in this world, things that make them feel unique, things that are one of a kind. If you want your product to be worth its weight in gold then you need to build a mystery around it, cloak it in rarity, and let the whispers build to create a buzz.
To learn more about the importance of uniqueness & scarcity, sign up for our New Luxury & The Values Redefining Luxury online course.
selective distribution
Selective distribution can save a brand, remember when Burberry nearly went down to the pan thanks to fake design items being passed out left, right and center? The brand was in a dire state, stumbling on broken hind legs, but it was the ability to reign back and make the scare and selective again that saved it from titanic disaster. The underscored truth is; that if everyone has your brand, then no one will want it.
In effect luxury branding goes against the grain, usual sales techniques is to make everyone hold your product in their hand; luxury branding is about making everyone want to hold your product in their hand, but only letting an elite few have the pleasure.
To learn more about the importance of selective distribution in a luxury brand strategy, sign up for our New Luxury & The Values Redefining Luxury online course.
pedigree & heritage
The sooner you understand the significance of heritage, the sooner your brand will succeed. Pedigree and heritage are the divine forces that will separate you from thousands of other companies competing on the modern day market. Use legends to inspire myth, fables to fascinate, and storytelling to build a history behind your name takes you out of the plastic consumer world and makes your product something that lives and breathes.
Many elite consumers would rather own a tea chest that traveled on a camel’s back along the silk route, or a broach that once belonged to their great-grandmother than a brand new designer piece without a story attached to its threads. Building brand heritage means tying the story of something with the exclusive appeal. Myths feed a brand, they are the pure spring water to a parched flower, something that will make it bloom in its beauty.
To learn more about the importance of pedigree & heritage, enroll in our New Luxury & The Values Redefining Luxury online course.
performance
The previous factors are all elements of building an innovative and inspiring strategy to help elevate your brand, but that doesn’t mean that performance should be overlooked. From the speed of a Ferrari to the silent gliding hand of a Rolex, the alluring feel of soft leather between your fingers, or the touch of cashmere. It’s not just the myth of these products, but it is the magic too.
If you build something beautiful, create something that shines, and deliver something that stands up true to its name and surpasses expectation, then that is already half the battle won. The rest is using the threads of storytelling, trust, awareness, market understanding, and public relations to weave a tapestry of sheer wonder.
To learn more about the importance of performance in a luxury brand strategy, sign up for our New Luxury & The Values Redefining Luxury online course.
Pricing Luxury Goods – What to Consider
Silk Italian suits, dusty bottles of vintage wines from estate cellars, moisturizers made from crushed pearls, pricing luxury goods is not for the inexperienced. Luxury goods feed desire and want and the more consumers long for them, and for the privilege of ownership we expect to pay top price. Some may argue that luxury can be an illusion, that the higher the hype, the tighter the exclusivity and the bigger the demand regardless of the real value of the good. Of course all products, luxury or not have two different value systems – the real value and the perceived value and there is an age-old saying that something is only worth as much as someone is prepared to pay.
pricing luxury goods - between art & science
When pricing Veblen goods it is therefore essential to up the stakes and hike the price tag so that the item already ticks the box when it comes to being perceived as part of the luxury market. The next consensus is to ensure that someone, somewhere is willing to pay the price and thus set the wheels in motion for better brand recognition and a name in the luxury bible. Of course there is a danger that comes with throwing the first price you think of at your good and hoping it will stick and this is where a little application of the art and science of pricing comes into play.
basic pricing structures still matter
Companies do need to take the basic structure of pricing into consideration covering aspects such as costs, competitors and consumer demand. The cost of making the product, the cost of overheads and how much you need to get back on something are always the springboard for starting with pricing. There needs to be analytical data collected and pens put to paper so the Intrinsic Value Dependency can be etched out. Pay fierce attention to what your competitors are doing with their price tags as it can help you to figure out where your goods will land on the spectrum. The more your own product moves up the ladder and away from the dull and dreary label of a commodity the more it will be sought after and the more value it will gain.
good analytics are worth their weight
Good analytics are worth their weight in gold when it comes to structuring a price for a product and this doesn’t mean you need to start from scratch. Your company, if you have done your marketing right, will already be sitting on a trove of information. You will be able to check what consumers are paying for other similar products, the current economic trends, and which external features have an impact on sales. Micromarketing and targeted exclusive offers can also be used to grab hold of data for which you can then go on to use for pattern finding analysis. Once you have all this data its best to set up an automated key analysis so all the information can be run through a program quickly and efficiently
elevating the right experience
Consumers will judge a products luxury merit on several factors which is why it’s essential to build the right environment around your brand. Luxury goods and luxury stores are often in wealthy or affluent areas of cities, have chic and opulent interiors and upmarket, expensive packaging that adds to the social status. The luxury buyer's experience needs to match their expectations for the product and deliver a feeling that they have effectively elevated their position in the world by making the purchase. The more you are able to give this, the easier it will be to secure the right price for your product.
To learn more about how to price luxury goods, consider enrolling in one of our online brand management courses.
The Luxury Fatigue - Everywhere for Everyone
A university student doing a dissertation asked me today a few questions about the luxury market. Before I could answer her, I needed to know what she, herself, defined as a luxury brand.
I have learned over time never to assume that someone else’s definition is the same as yours. And I was right. Like for most people, she referred to the fashion brands.
I think that the fashion conglomerates have done a great job over the last few decades to market themselves as luxury and overshadow the fact that they are no longer true luxury brands.
Let me explain my unconventional opinion on this niche market.
Luxury has always and will always be about experience.
True luxury is about experiencing something that few can.
When Louis Vuitton was alive and overseeing the daily operation of his store, he had, like everyone else, a limited supply of his most precious commodity – his time.
To be allowed the luxury of purchasing one of his creation was indeed the most luxurious gift of all. The experience made you feel privileged. Therefore, the products were a luxury.
Nowadays, the luxury experience put forward by Louis Vuitton and several other high-end fashion brand is slowly eroding. They have forgotten the true meaning of luxury; the executives have instead pursued the promise of a gold rush.
Let’s not fool ourselves, the fashion business is a good business to be in.
Although the quality of the products is still good, the fashion brands have forgotten to control one of the most important aspects of their distribution – the exclusivity.
When you can find a Vuitton bag everywhere as part of the wardrobe of anyone, how can you claim to offer luxurious products?
I travel a lot, more than the average person.
In fact, in the last 18 months, I have driven from Canada to Colombia, with a few European and North American side trips. Random places, where I have seen a Louis Vuitton handbag, cannot be counted.
I have seen hundreds, if not thousands, of the same patterned bags in the hands of tourists.
In fact, I have been to over 65 countries in the last 15 years, and I have never been in a country where I did not see their handbags.
Luxury is not about a price tag; it’s about an exclusive experience.
I have the Louis Vuitton fatigue, and I am convinced I am not the only one.
Luxury should not be for everywhere and for everyone.
Luxury Spotlight: Meredith Xavier from Ligné Magazine
Interior design can be dynamic and dramatic or it can be soft and supple but it should always be inspired. Meredith Xavier founder of the Ligne Agency and Ligné Magazine fell in love with beautiful things when working for Christies in Beverly Hills. After tiptoeing around the basement of the National Gallery and grabbing her Masters in Fine and Decorative Arts Connoisseurship she started the innovative Ligne Agency. Dealing exclusively with the creative world of interior design, the Ligne Agency offers a full public relations and business development service. Their highly selective client list boats the best artisans and designers in the business ensuring that high class vision is everything. We sit down with Meredith to find out how the ever tactile company of Ligne Agency is moving forward in the art of the digital age.
Every luxury expert has a different story on how they got started in the industry. What is yours?
I started at Christie’s Auction House in Beverly Hills. They hired me as an intern when I was a Junior at Pepperdine - and I became enamored with the culture. I was surrounded by incredible and significant works of art and decorative pieces. Soon I was cataloging sales and handling the business side of the art world.
I moved to London after I graduated and obtained my Masters in Fine and Decorative Arts Connoisseurship from Christie’s through the University of Glasgow. We spent our afternoons in the basement of the National Gallery viewing works of art the public has probably never seen. It was an incredible experience - and I knew working with the buyers and clients at this level was exactly where I wanted to be.
Tell us about Ligné Magazine. Who is your core audience and what marketing opportunities do you offer luxury brands?
Ligné Magazine started as an interior design focused publication and over the years has grown to encompass travel, fashion and culture. There is so much great design out there and sadly not as many places to get it published as there used to be in terms of print - so I decided to start my own magazine and tell the stories I wanted to tell. And I absolutely love to write, when I can find the time.
Our audience is consumers in the top 2% HHI and architects and designers that are working on multi-million dollar homes. Our print issue has controlled distribution, so our advertisers know exactly who it is going to. That is the biggest draw about working with Ligné Magazine. Our online readers vary greatly, but one thing they all have in common is a passion for interior design. That is the core of the magazine and always will be.
In what ways has your publication changed over the years? And how has your publication remained successful in light of competing digital magazines?
Like any magazine we have evolved dramatically each year. The design is better, the content is more international - and we are constantly striving to bring beautiful design to people who are perpetually on the lookout for ways to enhance their home, wardrobe and overall lifestyle. I don’t feel that we are competing with other digital publications - we live in a world that constantly bombards you with information. There is so much to see online that it is at times completely overwhelming. On the upside of that, digital publishing makes it easy to consume several magazines a day regardless of where you are. Ligné Magazine is meant to be something to escape with - a beautiful, clean design with great features that our readers can truly enjoy.
What do you think is the future for print publications, as compared to digital alternatives?
We print Ligné Magazine because the design industry is very tactile. They want to turn the pages, flag designs, bend a page corner - and even tear out images to put on an inspiration board. This is the beauty of print publications. What we are sharing and writing about is nothing like a newspaper. The magazines are meant to be kept and read over and over again - I will always prefer to read a magazine in print than online.
Digital brings accessibility. Articles are easy to share and everyone loves a good Pinterest board. We have a need for both, and I think we always will.
How has the world of social media affected print publications? And what is your strategy when it comes to social media?
Social media has allowed magazines to expand their audience by sharing original content and driving direct traffic directly back to their publication. It also helps build anticipation towards future issues - we love to preview articles or give sneak peeks to our social media followers so they have the inside track on our upcoming issues.
Many print magazines also manage a successful luxury blog. What is your take on this?
For us, we can’t put everything in print - so online is a venue to share stories and content that we think our audience would love, and just simply doesn’t work into an upcoming print issue. Having an online presence as a publication is vital to keeping readers engaged. It allows constant communication with readers that wouldn’t be available otherwise.
What do you think constitutes a successful marketing campaign? And what are some examples of successful campaigns that have featured in your publication?
A successful marketing campaign makes you stop and pay attention - whether through verbiage or imagery. It engages, and gives a relevant message to the audience for which it was created. Most of our advertisers are shelter industry focused, and the most successful campaigns are the simple ones. They exhibit great design with no fuss - they allow the quality of the product to come through and speak for itself.
Like most successful blogger/editor, you probably received hundreds of emails per month from luxury brands who want you to share their story. What makes you decide to work with a brand over the other?
I look for the unique - the one of a kind, and the true talent that isn’t just regurgitating what has been seen time and time again. I also publish products and projects that I personally feel stand for something. Sadly, that’s few and far between. And brands that send me a concise, to the point pitch that is tailored for our publication have a much better chance of getting coverage than the generic press release.
What is your take on press releases? Do you still enjoy receiving them or do you prefer a more personable one-on-one approach?
Definitely the one on one approach. We appreciate when a pitch is directed at our publication - knowing the individual who sent it has a knowledge and understanding of our audience and takes the time to send us edited and relevant content. Generic press releases that are sent to mass audiences are not of interest to us.
If you had to give advice to a new luxury startup on how to get featured in a prestigious luxury magazine, what would it be?
Get your brand out there - pick up the phone and call the editor you are pitching to. Let them know who you are - set a time to meet in person and show your work. Know your audience, your brand message and your PR goals. Editors appreciate hearing the story about the product and why it is significant, unique and worthy of valuable page space. Every pitch may not be a placement, but you are setting the foundation with that editor and building name recognition. That can only help the future success of your brand with that magazine.
Connect with Ligné Magazine on Facebook, Twitter, Instagram or LinkedIn. Or reach out to us for an introduction.
Why All Luxury Brands Should Sell Online
Exclusive, elite, rare and sublime, these are just a handful of words that many luxury companies hope will emulate in a consumers mind when they hear a certain brand name. Yet these companies also feel that should they unmask their brand image online that they are at risk of falling from the luxury pedestal. The fear is almost palatable and doesn’t come without deep understanding.
The online world of commerce has long been associated with lower prices, swift availability and an easy shopping system that goes against the luxury grain. Luxury brands work hard to build intricate heritage stories, rich buyer experiences and to soak their status with being selective as opposed to all-encompassing and it seems that translating this to the online marketplace is a tricky feat.
Hermes wants you to feel the slip of their scarves in your fingers, Chanel wants you to sip champagne in their opulent temples like stores and Baccarat wants you to breathe in the fragrance of myrrh in their crystal sculptured bottles before you buy.
Luxury companies are well aware that they are selling more than a product, that they are selling a luxury lifestyle and a visage that taps into our subconscious urge to be special. How can you carry that prestige to the online world where everything is up for grabs and the whole platform reeks of impersonal clinical cut style? This may be the very reason why Chanel, Hermes, and Dior have chosen to keep their wares strictly housed in brick and mortar.
Yet the reality is they could also be falling short when it comes to opening the door of opportunity.
Luxury brands that don’t sell online may be keeping the valuable retail experience alive, they may be placing themselves far from the maddening crowds and they may be retaining their exclusive playing hard to get appeal, but they are also alienating many of their own potential buyers.
The reality is that not everyone with a six-figure income has the time, the patience and the drive to swing by the Champs-Elysees or Rodeo Drive in search of the latest trends. Wealthy people, like everyone else, are busy and also adore shopping from the comfort of their own home. Add into the mix the fact that many highbrow fashion boutiques have a bad rep for scrutinizing customers as soon as they step in the door and you start to see why the trends of luxury online shopping can seem attractive.
There’s little doubt that luxury brands not adapting e-commerce are losing out on sales and kicking their own revenue in the teeth. Of course, increasing sales isn’t always the aim of high-class brands who tout retaining their integrity and protecting their image above all else.
Luxury branding is a creative entity there’s no doubt about it, building a beautiful brand, telling a story that inspires, showcasing the best of your talents and keeping the desire alive in consumers is an art form and why can’t that art form be applied to the online world? Just because a company chooses to sell online doesn’t mean it needs to lose its integrity.
The very essence of an online luxury presence can be a remarkable challenge and can be controlled in the most exclusive fashion. Beautiful online stores can be created much in the same vein as a brick and mortar set up and high spending clients can gain access to otherwise limited wares. In short, there is a way for luxury brands to sell online without compromising their image and lowering the bar.
Building an incredible online presence through social media is also something that luxury brands cannot ignore as this is where you lay the foundations for future clients, interact with customers and deliver innovative selling techniques to drive your revenue and reputation up.
Of course, all the social media interactions will drive traffic to your site and without anything to sell you are leaving the table bare and essentially turning your own customers away.
It’s not even all about money and loss of sales when it comes to the benefits of building an online marketplace, it’s about the future. The internet is here to stay and future generations are being raised to barely need to set foot in an actual store as everything is so readily available online.
Luxury brands who continue to tread water rather than rising above the tides are sure to get left behind by not embracing the technological change.
If you want to know more about how to perfect your digital luxury experience, consider taking our "Luxury Touchpoints & the Experience of Luxury" online course.
Great Luxury Marketing Resources for Brands
The Luxury market, like any market, is constantly trending, changing and fluctuating with the economy and for those with a vested interest, it helps to stay abreast of these patterns.
With the number of luxury consumers tripling over the past twenty years it seems that every day you can catch glimpse of headlines boasting luxury consumers new style, the changing habits of affluent shoppers and the rise of online marketing for luxury brands.
Of course, many big-name luxury companies choose to stick solidly to their roots and ideals, believing in the richness of their heritage as opposed to cresting and falling on the wave of the times.
Yet all luxury businesses both big and small should be well aware of how the landscape around them is changing, who is emerging and who is lagging so that they are able to place themselves seamlessly in a way that effectively works for their business.
The luxury niche no longer comes with a stiff upper lip and limited choice; it is savvy, sharp, wild and fiercely competitive, melding many styles and contradictions together.
These luxury marketing resources for brands can be the perfect place to start in getting to grips with the world of luxury.
luxury daily
Leading the news in the world of luxury marketing, luxury daily is a divine place to peruse what’s hot, what’s not and what new launches and trends are currently making headlines.
This is without a doubt one of the most comprehensive places to swing by with champagne in hand and find out who Sotheby’s have just signed a deal with, when you can expect Chanel’s new fragrance to hit the shelves and what pocket of the world the Ritz is planning on dazzling next.
luxury society
The luxury society is the place to be and be seen, even if it does exist in the sassy world of cyberspace.
This virtual socialite party is a networking haven, throw on your pearls, grab your little black book and hurl yourself into an online world where you can have hearty debates, hash out new concepts, call on the expertise of other members and even strike up new business opportunities with other keen and able entrepreneurs.
Along with meeting and greeting there is news to devour, headlines to hum over and close to the bone topics to explore.
luxury institute
Get a closer look into the world of luxury with the luxury institute.
The blog is stuffed full of the latest luxury news whether it is letting you know that Kate Spade is closing stores or giving you a glimpse into the most recent celebrity endorsements. Along with the latest headline grabbers, there are many great articles pertaining to studies on luxury marketing and great advice from top affluent leaders on how to adapt your brand to boost your name and reputation.
luxgGuru
Lorre White AKA the luxury guru is no stranger to the world of the wealthy and with numerous press appearances under her belt, she is the go-to for all things fabulous.
Lorre has firm connections in the power industry and her blog is filled to the brim with interesting articles, insights, product launches and so much more.
For those who want to keep ahead of the current trends and who want to dabble in the world of inspiration and classy living, then the luxury guru can certainly point you in the right direction.
brand uniq
The power of marketing is arguably even more important when dealing with Veblen goods and this blog will give you plenty of pointers on how to place your brand in the limelight with strategic marketing skills.
Simple, straightforward and free of fuss this blog is crammed with high caliber articles that will help you to place and position your brand, find the optimal pricing strategy, move your luxury presence into the online world and more.
bain company
Bain & Company have built their reputation on being the golden choice when it comes to consulting in the luxury niche and their articles have been published across the globe.
From features in Forbes to the business standard they are certainly up there in the world of knowledge and know how.
Covering a range of industries with far-flung expertise it’s always good to swing by and check out their publications section to see expanding brands in the market, check equity reports and browse their archives.
mckinsey
Take a sneak peek behind the curtain with Mckinsey and find out the latest insights into luxury and consumerism.
Those who want to know which markets are emerging, which digital consumer trends are growing and what’s happening differently in China than in Europe will adore the wealth of unbridled information available.
Not only can you top up your know-how on consumer trends but you can also get a ton of marketing strategy advice and tips on how to better engage your customers for growth.
wealth x
Those immersed in the billionaire boom will find the news at Wealth X interesting to say the least.
This financially indulgent blog not only shows you the money but also shows you where the money is changing hands, being kept, growing and falling.
Not only can you find out about China’s newest investment laws but you can also get inside the heads of luxury entrepreneurs, see what designer bag maker Moynat has up his sleeve and see what challenges could be hitting the luxury market for the coming year.
To growth your knowledge in luxury brand management, consider enrolling in one of our online courses.
Luxury Marketing – Focus Must be on Cities
Where would the luxury world be without the glittering glass-fronted stores on Paris’s Champs Elysees, the gold signs over New York’s prestigious Fifth Avenue and the Rolex and Christian Louboutin boutiques on Milan’s Via Monte Napoleone?
There seems to be no doubt that when it comes to making the luxury world work for your product the focus has to start in the cities.
The fast facts and figures are already scrawled across the internet telling us that no less than a staggering 85% of the luxury market growth will come from the world’s top 600 cities.
We all know the sprawling luxury metropolis names of London, New York, Paris, and Milan but some other major players will be emerging from the shadows and accounting for much of the growth before the calendar ticks over to 2025.
Unsurprisingly many of these cities can be found on the far eastern shores of China with Beijing, Hong Kong, Guangzhou, and Shenzhen leading the parade.
China is growing to become one of the leading consumers of luxury with a penchant for authentic brands and designer goods. According to Bain & Company, Chinese consumers spend over three times the amount abroad then they would spend at home.
China is set to drive half the growth in the luxury industry which is why it’s essential for brands to turn their eyes to the east.
The affluent Chinese market doesn’t only hold power over retail, sure elite Chinese travelers will love to swipe their platinum cards in the stores of Prada and Chanel but tastes are changing and they will want exclusive experiences outside of the shopping environment.
Wealthy Chinese households aren’t succumbing to our idea of a recession, in fact, they are only getting wealthier and the more they accumulate, the more they are looking to travel and the more they are looking to spend.
Yet even closer to western shores the dizzying height of spending seems to be led by countries like the USA, Italy, and France with tourist luxury spending adding its weight to the bulk of the figures.
One quick glimpse at the leading locations where tourists like to splurge takes us back to the cities.
From chic weekend shopping trips in New York to European jaunts to Paris, Milan, and London there’s no doubt that affluent visitors love to splash the cash in the major city hubs.
It’s also essential to note that many of the world’s billionaires are also entrepreneurs who globetrot for business.
The major financial haunts are often to be found in bustling cities and when these affluent city slickers step off their private jet they will be seeking high-end retail for spending within the city limits.
Different cities have different draws and this will impact a luxury brands choice when it comes to which city is the best to focus on.
The fashion capitals of New York, Paris and Milan clearly put their best foot forward when it comes to apparel yet skincare hits the top of the charts when it comes to Asia.
Investors should note that the mature cities of our present luxury scope aren’t slowing down, only there seem to be more emerging cities joining the trend.
Forbes has noted that there seems to be a stronger affiliation to keep strength and investment in more western cities from many luxury brands, yet the resources need to follow the growth.
Companies must be willing and ready to send the best of their best to the places where the growth patterns are emerging.
It also helps to have a firm footing with a good local partner or affiliate in the far-flung cities so that you don’t go charging in without understanding the hurdles of how to conduct business on foreign shores.
Megacities are the future of luxury and no longer is this limited to old-world Europe and the billion dollar mansions of the United States. China, the Middle East, Brazil, India all these places are on the rise and if luxury brands are successfully able to sweep their marketing towards these shores then we can all ride on the crest of this new world wave.
If you are interested in more details, download the McKinsey & Company report at http://mckinseyonmarketingandsales.com/sites/default/files/pdf/LuxuryScope.pdf
When The Rich Rule The World
Global wealth is said to be increasingly concentrated in the hands of a small wealthy elite. According to a recent Oxfam study, the 80 wealthiest people in the world altogether own $1.9 trillion, almost as much as the amount shared by the 3.5 billion people who occupy the bottom half of the world's income scale. Last year, that number was at 85, and in 2010 it was at 388 billionaires.
Forbes has listed 1,645 billionaires out of which almost 30% of them reside in the USA. 20% of these billionaires seem to have an interest in finance or pharmaceutical/healthcare or are related to these sectors. An increase of 47% is seen in their collective net worth between March 2013 and March 2014.
Another alarming stat reveals that the richest 1% of the world controls nearly half of the world’s total wealth. And once again, that number is on the rise. There is an inequality, but according to Oxfam, this inequality is not inevitable. In October 2014 Oxfam launched its “Even It Up” Campaign by calling upon governments, institutions, corporations and even world leaders to tackle extreme inequality and debate on the factors that has led to this. This Campaign hopes to find ways to redistribute the money and power from a few to many by focusing their energy on:
- Making governments work for citizens and tackle extreme inequality
- Promoting women’s economic equality and women’s rights
- Paying workers a living wage and close the gap with skyrocketing executive reward
- Sharing the tax burden fairly to level the playing field
- Closing international tax loopholes and fill holes in tax governance
- Achieving universal free public services by 2020
- Changing the global system for research and development (R&D) and pricing of medicines so that everyone has access to appropriate and affordable medicines
- Implementing a universal social protection floor
- Targeting development finance at reducing inequality and poverty, and strengthening the compact between citizens and their government
The world's rich own a disproportionate share of its wealth, but what about you? Where do you actually stand in the rich list? If you haven’t made it on the Forbes Billionaires list, you might still be in for a shock. Check out your ranking on the world's rich list using the great tool provided by the Global Rich List. Use either your income calculation or wealth calculation to put your financial situation in perspectives.
To quickly see an example. lets look upon Mr. Mathew, an American with an annual net income of USD$500,000, and compare him to Mr. Alexander, a Russian with a comparable annual net income of RUB 34477500 (USD 500,000).
Mr. Mathew is in the top 0.02%, making him the 1,111,735th richest person in the world by income. A similar calculation shows that Mr. Alexander is in the top 0.005% making him the 317,723rd richest person by income. This proves once again that money has different values in different countries.
So where do you stand? See now at http://www.globalrichlist.com. My guess is that if you are reading this article, you are probably in the top o.01%.
Billionaire Lifestyle - A Style In Its Own
According to the latest Wealth-X and UBS Billionaire Census, the typical billionaire lifestyle is both global and demanding. This exciting but exhausting lifestyle can be attributed to the juggling of several business commitments, family responsibilities, and maintaining many friendships. On average, a billionaire is involved with about five professional entities. The ‘typical’ billionaire is also married, with two children, and has an extensive social network.
While working aboard superyachts, I was exposed to these ultra high net worth individuals on a regular basis and spent many days studying their lifestyle, habits and choices. What else is there to do when you cater to their every whim and desire. Although I respect the personal lives and secrets of those I have serviced, I am comfortable with sharing some general facts and stories. So here it goes.
Billionaires juggle life and business obligations in their special way. It wasn't uncommon for a charter guest to come on board a superyacht for a ten days charter with friends and family only to be interrupted after a day or so by a business call/email. At that point, they would hop on the tender, then the helicopter, then a private plane, go to a board meeting or two, then head back on the private jet, helicopter, and tender to spend the night back aboard the luxury yacht. Ouff! And you though your business trip was exhausting!
Other's, with more power and wealth, and who also considered family time as gold, would do the opposite. They would fly in their team to a local port town, have the business meeting aboard the superyacht's sundeck, then send off their business associates ashore that same day. Some would allow their guests to drive off on a jet ski for a ride or take a plunge in the Jacuzzi, but most wouldn't. They simply wanted business time to move along to family time as fast as possible.
In terms of social relationships, billionaires tend to develop friendships with people who share common interests and abilities. This means that billionaires generally have large social circles, often including other billionaires and other ultra high net worth (UHNW) individuals. On average, a billionaire has nine other UHNW individuals in his network, including three billionaires. The typical net worth of these associates in a billionaire’s network amounts to US$16 billion. If you think of it, this makes sense. A billionaire has the choice. Unless you have been friends with them since childhood or have created a strong bond under special circumstances, they rarely spend quality time with those who don't share a similar lifestyle. Usually, their circle of trust is very small, especially in comparison with the number of acquaintance they have from around the world.
Billionaires and those in their social circles tend to have patterns when it comes to their social activity. Some prestigious events are regarded as vitally important to attend by many in this elite club. However, many events are attended by a smaller group of these individuals, based on their interests, hobbies, and passions. 68.3% of billionaires will attend sports events, particularly golf, skiing, football, tennis and equestrian events. 51.9% will attend philanthropic events. 23.4% will participate in outdoor events such as hunting and fishing. 23.1% of all billionaires will attend at least one elite art show annually.
These facts and figures present an important picture of billionaires and their lifestyle, particularly those elements pertaining to their networks, social activities and interests. One thing that is often forgotten by census, but that I know for a fact as true is this - billionaires are people, and sometimes they only want a baloney sandwich with a pickle on the side.
Future of Luxury - Trends to Follows
Recently, I was approached by Brady Dale, contributor at Fortune Magazine, for my opinion on the future of luxury. Although Dale presented my opinion in a very smart way (thank you Dale!), I wanted to take a little more time to put together additional thoughts on the future of luxury in 2015 to share with those who might need a few extra tips. So here you go, a few tips from someone who has held many luxury hats. Here are a few trends to follow if you want to keep up with the future of luxury.
The Shift From “Me” to “We”
In this new digital era, it’s no secret that luxury brands must embrace their community if they want to stand a chance against the test of time. New luxury consumers, especially Millenniums, need a little more interaction than a great advertising campaign plastered in print magazines and on TV. They want luxury brands to engage them through social media on a regular basis, not just by pushing products and branded facts, but by being real. To achieve this, brands must educate and entertain with interesting content and offer customer service through social media instead of setting up an offshore call center with no real value.
I recently spent a week analyzing the social media channels of dozens of luxury brands as part of a study for a patron and noticed that most are still stuck in the “Me” era. Most talk about them, themselves and … once again themselves. They rarely acknowledge the fans they are speaking to, and they barely interact with influencers or other industry leaders unless it is for self-promotion. Although some luxury brand managers might think they have embraced the community, I suggest they take time to educate themselves on what it means to have a community mindset in 2015.
These “stuck-in-another-era” luxury brands will need to adapt quickly to the new realities of the “we” environment if they want to stay in the game. Select luxury brands are already paving the way and establishing a new luxury brand/fan relationship standard. A brand can still be exclusive and luxurious while being a member of the community; they simply need to be real.
The Rise of the Luxury Curator
We all know “Time is of the essence” but when it comes to the affluent audience, “Time is the ultimate luxury”. When I worked as a personal assistant for a High Net Worth Individual, roaming the world, planning luxury experiences or buying luxury goods, I was told “unless the cost is more than $10,000, please don’t come to me for an opinion. Just make the purchase yourself according to my taste and needs.” Obviously, when you start out as a personal assistant, that statement is a little scary, but with time, you realize that for HNWI, their time is more precious than their money. They have plenty of money, but little time to enjoy it. Once I gained the full trust of my employer, that $10,000 price point was gradually raised to $50,000.
Therefore, expert curators are luxury influencers, whether they are luxury bloggers, personal assistant, personal shoppers, art curators, and luxury travel agents. They will become even more precious to those who hold the real cash in upcoming years.
For luxury brands, this means that they will need to cater to these influencers and treat them with the same respect as HNWI since they often hold keys to the wallet. I will always remember the day when I entered a car dealership in Montreal and bought two new SUVS in 30 minutes. I didn’t want to drive them; I just needed a charcoal and black one that would be comfortable enough for a Golden Retriever. Now that is purchasing power in the luxury industry.
Luxury Experience Trumps Luxury Good
All good luxury marketing expert understands that in this highly competitive industry, it’s rarely about selling the characteristics of the product, but about promoting the brand experience surrounding the goods. This is why luxury brands spend large sums of money to bring forth their brand story through all available marketing channels.
Once again, it’s no longer enough to tell the story; luxury brands must allow their patrons to “live” this story through exclusive events, private shopping experiences, one-on-one interactions and more. For example, Shawn Boyer, head designer and co-founder of Anatomie, a luxury travel fashion brand, will often fly out to meet his patrons in their private homes to crank up their personal style. He will obviously coordinate Anatomie outfits, but also assist these influential women with heaps of fashion advice. His patrons have become his friends, and you can be sure that these ladies give him a lot back in return for his time and generosity. Shawn makes luxury human once more. He reminds me of Coco Chanel and other great luxury designers when they all started their career. You have to admit that it is a shame that you no longer get the same level of service with luxury brands such as Louis Vuitton and Yves Saint-Laurent.
Although, we have seen many trends in the last year to convince us that the future of luxury is changing, I feel that these are the most important and often the most disregarded by luxury brands. What do you think? Find me on social media, and share your opinion.