My View

Born Rich – A Documentary

Earlier today, I used my free trial of Netflix to watch “Born Rich”. The movie is directed by Jamie Johnson (heir to the J&J empire) and documents the nuances that come with living a privileged life. Below is Nexflix’s synopsis of the movie:

The heir to the Johnson & Johnson pharmaceutical empire, Jamie Johnson, points his documentary lens in the direction of some privileged children who stand to inherit millions in the not-so-distant future. Johnson manages to pry revelations from heirs with some famous last names — Trump, Bloomberg and Vanderbilt, to name a few. They speak frankly about money, family pressure and their often extravagant lifestyles.

After reading the above summary, I decided to watch the movie. I was hoping for some perspective on how the “currently-rich-and-soon-to-be-richer” might define luxury. It seemed to me that the answer was simple – freedom. Many of the individuals in the documentary saw wealth as a somewhat vulgar prison, lacking much in moral fabric, or social accountability. They so deeply wanted to fit in with common people, but found it hard to begin to try.

Let me know of any movies that you think expose unique perspectives on luxury. Check out “Born Rich”. It won’t cost you anything if you use the Netflix trial. Just don’t blame me if you forget to cancel before the trial is over.

“Lessons in Luxury” is Global – Country Views

My blog has posts going as far back as April, 2011, but I only started publishing in August, 2011. I didn’t have a huge following when I started. Hey let’s be real, I was probably my only reader – aside from my family.

Today, the unique page views of the blog run in the thousands. Here’s a look at where my readers come from. If my blog was a luxury goods company, we’d be very diversified.

Views from the top 20 countries expressed as rounded percentages (as of 3/21/12)

Are Luxury Brands Recession Proof?

Credit for this post goes to Chase Harps, one of my MBA classmates.

I often find myself having to evangelize for the luxury industry, especially to people that may be skeptical of its necessity or long-term viability. For those people, I am posting a link to a new 2012 brand ranking report from Brand Finance. Based on its findings, the company issued a viewpoint on luxury brands. Entitled “Recession Fails to Dent Consumer Lust for Luxury Brands“, the article lists the following main points. Continue reading →

SEcon 2012 at W&M

In my last post, I mentioned a conference coming up in April, 2012. Well there’s one that’s just came to an end at the Mason School of Business at The College of William and Mary. The inaugural session of SEcon (Social Entrepreneurship Conference) has just concluded. What an amazing two-day experience being among leaders, innovators, and change agents with a passion for doing great good for business and society.

The conference hosted participants from across the globe, including:

  • Sheikh Hamad Bin Ali Bin Jassim Al-Thani – Vice-Chairman of the Qatar National Food Security Program.
  • John Bridgeland – President & CEO of Civic Enterprises
  • Jonathan Greenblatt – Special Assistant to the President and Director of the Office of Social Innovation and Civic Participation at the Domestic Policy Council
  • Stanley S. Litow – IBM’s Vice President of Corporate Citizenship & Corporate Affairs and President of IBM’s Foundation
  • Mike Perlis – President and Chief Executive Officer of Forbes Media LLC
  • Ali Siddiqui – Principal shareholder of JS Group and board member of the Acumen Fund, a social enterprise fund
  • Wayne Silby – Founding Chair of Calvert Funds

There’s a complete list of participants here.

Social entrepreneurship is not a new idea that requires considerable thought or effort to understand. It occurs and develops in many different ways – with individuals, communities, companies, and even nations. After attending all the breakout sessions and listening to the various speakers, I think there’s a lot of opportunity for luxury brands that want to be more relevant to consumers.

The SEcon 2012 conference website will be up for a long time to come. I suggest you access the trove of videos and information generated by the event. I’m going to study all of the material to find those nuggets of wisdom that will help me in my luxe-focused career.

How Many Lives Does a Jaguar Have?

So Tata Motors is doing a lot to revamp the Jaguar brand. It purchased the Jaguar and Land Rover brands from Ford for $2.3B. Ford, which lost $800M on the sale, seems to have shed its heavy baggage, but can Tata bring this cat back to life?

There are mixed reactions from industry on the effectiveness of the luxe auto’s new advertising campaign, which is aimed at making an emotional connection with auto enthusiasts. Professors from the University of Michigan and MIT said it missed the mark, while a consulting firm out in LA stuck its neck out to say that the campaign is “avant-garde enough to definitely capture consumers’ attention and put Jaguar on the radar screen of more potential luxury customers”.

All those opinions don’t matter. Let’s see what the sales numbers say in a year. It will surely be an improvement for Jaguar to get 18,000 to 20,000 people to test-drive its cars, as opposed to the the 300 to 400 who try them out annually in the United States. Wow only 300 to 400. Anything above that will be a remarkable improvement.

What Apple Can Teach You About Not Having To Compete On Price

I found this great article at www.fastcompany.com. The major take aways for businesses that do not want to compete on price are:

  1. Develop Powerful Branding – Effective and unique branding puts your product in a competitive space that has little to do with price, and more to do with being cool, trendy (or timeless), and of great quality.
  2. Strategic Marketing – This encompasses the four Ps of marketing and much more. In luxury marketing you need to be thinking about the four Es (exclusivity, emotion, engagement, and experience). While Apple won’t admit that they intentionally create product shortages in order to create a buzz, it is certainly part of the reason why customers are willing to pay huge premiums to have their products as soon as they are released.
  3. Excellent customer service – Customer service is something you can not afford to lack. From getting customer’s to try your products and services to keeping them loyal, customer service is the lynch pin that sets you appart from competitors.
  4. A product that doesn’t disappoint – All of the above won’t mean anything if you don’t have a stellar product. Take a page from companies like Apple and Patagonia who are committed first to making the best product possible.

If a product can’t live up to the expectations set by its marketing, it won’t be successful for the long term

Part 2 – This Thing Called Luxury

Building on the confusion of yesterday’s post, today’s entry focuses on the academic justification for a firm’s participation in the luxury segment. Though what appears below is very intellectual, it is very similar to the thoughts I had on the matter long before I ever knew I wanted to work in the luxury segment.

In his work covering business strategy, Michael Porter explains that there are two main categories, in which a firm’s competitive strengths fall: cost leadership and differentiation. Depending on the firm’s market focus (broad or niche), and the uniqueness of its products (custom or commodity) and services, Porter posits four generic strategies a firm can use to develop a competitive advantage. Continue reading →

Part 1 – This Thing Called Luxury

Yesterday, I got into an intense discussion with two of my classmates about the strategic justifications for my focus on the “luxury” segment. While my colleagues were making an argument for the limited market size demerits of luxury products, I tried to explain my thesis of luxury goods/services in a transactional framework. In the end, both sides came to similar conclusions. I’ll attempt to take you through the debate first from an abstract level.

If a customer asked me: “why do you consider your product/service a luxury?”, I’d say to them: Continue reading →

Commitment – Staying on Course

There is nothing more deliberate than having a goal. Goals if done the SMART way can really help you develop in every aspect of your life – personally and professionally. The last time I set a goal on this blog, it was the “30-day Challenge“, where I committed to publishing at least one post per day for 30 days. Seems like since then, I let the other aspects of my life (like the intense MBA program at W&M) take over my blogging responsibilities (yes, I do believe I have an obligation to the readers that spend a “click” to come to my part of the blogosphere).

Today, I am making another commitment – longer than 30 days, but less punishing in frequency. I am going to publish one post per week for the next three months. I call it the Post Per Week challenge (lets call it the PPW Challenge). Later today, I’ll publish the first PPW post. Here’s a peek at what I am thinking for the post. Continue reading →

Christian Louboutin vs. YSL: A Battle of Trademarks

Today in my class on Customer Experience Management (the name makes it sound contrived but it’s a great class) we had some discussion on this article about the trademark battles between Christian Louboutin and Yves Saint Laurent (owned by PPR). If you would rather watch a video than read the backstory, here is a video.

From a business standpoint, it makes perfect sense for Louboutin to go after other manufacturers that could “cramp its style” – but does it honestly matter in the business of fashion where imitation is rampant and normal? Moreover, if Louboutin is successful, will it hinder the creative process that drives fashion? My answers are “no” and “yes” in that order, but I’d love to hear what some of our fashionista readers think. I’ll even give you the opportunity to write your own post on this topic if you have more than four lines of thoughts on the issue.  Continue reading →

Adding Value – Train Rides and iPads

Train rides are very enjoyable for me because I get the chance to remain terrestrial. I’m not driving myself, nor am I on a bus going pretty much the same way I would have driven myself. Since train tracks do not always follow “car routes”, I get to take a more scenic view, stumbling upon sights that don’t come into my view on a regular basis. I also like to take trains at times they are sparsely occupied, so that I have a lot of space to myself. The combination of those components makes the ride an enjoyable one. However the real luxury experience can be summed up in one picture from my last trip on Amtrak: Continue reading →

Haute Couture Meets Technology

A long time ago, someone once asked me a question on what kinds of business ideas interest me. I answered “anything that blends technological innovation with emerging lifestyles”. And here’s an example – Wearable Technology: Apple, Google, And The Whimsical World Of Fashion Accessories.

Luxonomics

Today’s post focuses on luxonomics (luxury economics). Since luxury goods embrace the concept of rarity, it would be an obvious deduction to assume that the more scarce a luxury product or service becomes, the more demand it enjoys. Consequently, prices can appreciate – to levels that can be absorbed by few.

Some of the factors affecting supply include:

  • Input Prices
  • Technology or Government Regulations
  • Number of Firms
  • Substitutes in Production
  • Taxes
  • Producer Expectations

Today I want to show you some “scarce” luxury products, whose supply has largely been affected  by government regulations. As the cited MSN Money slideshow states, all the products listed are affected by legal restrictions limiting their production, distribution, and sale in parts of the world. Much of the reasoning behind these bans is aimed at protecting the environment. Continue reading →

Luxury is About Freedom

So, we can obviously say that relativity plays an important part in the way we think about many things – including luxury. What’s that old adage: One man’s meat is another man’s poison? I read an article from WSJ that brought this idea well into focus for me, and I think it also has some adjacent relevance to the concepts of trends and cycles.

When the great fashion designer, Yves Saint-Laurent started his own couturier in 1958, there wasn’t much in the way of pattern machines or industrial cutters for him to achieve his goal of making womenswear more affordable for the masses. In those times, the best clothing cost too much for common folk because of the time, money, and people that were required to make the ravishing clothing he designed. Today’s more affordable technology could certainly have done much for “la mode”. Continue reading →

Real Estate is an Entrepreneurial Venture

I wrote another blog post about the real estate course at the Mason School of Business. It starts out like this:

As with the last 100 meters the 400-meter dash, the conclusion of the 2011 fall semester marks the beginning of the end of my time at Mason. As I race towards the finish line in May 2012, good thoughts come to mind, especially of the Real Estate CAM taught by Prof. Ben Bolger. The course exposed me to the nuances of an industry where success is not necessarily about reality, but your ability to create a perception, in which people want to participate. In the CAM, we covered cases analyzing the future of real estate at academic institutions using Harvard and W&M as examples; urban development in Brazil; and the redevelopment of the World Trade Center.

Click here to see the rest of it…

Pictures from NYC: Part 2

Yesterday, I forgot to mention that I have successfully completed the 30-day Challenge. I am really proud of the fact that, with exception of a few days where things were beyond my control, I was able to write a blog post every single day, for 30 days. Now that I am done, I’ll slow down just a tad to work on some other projects I have. Now on to more pictures from NYC. Continue reading →

Pictures from NYC: Part 1

30-day Challenge – Day 30

In the past two months, I have been to New York City twice. In fact, the first time I was in NYC was when I interviewed the CEO of Saks for this blog. The second time I went up to the “big apple”, I was with my classmates from the Real Estate CAM (Career Acceleration Module) at the Mason School of Business.

In a previous post, I had promised to talk to you about my experiences in NYC, and now I am “making good” on that promise. I’ll start with my October 2012 trip. Continue reading →

A Room With a View of Your Porsche, Ferrari, Benz, …

30-day Challenge – Day 29

In the second half of this past semester at business school, I took an immersion course in real estate – the best course I have ever taken. The course not only exposed me to the business of real estate, but also introduced me to the nuances of an industry where success is not necessarily about reality, but your ability to create a perception, in which people want to participate.

Real estate can give you a means to exercise your networking, negotiation and selling skills. At the same time, real estate allows you to be very creative in realizing your visions of developing mixed use, multi-family apartments, commercial, or industrial structures. You can literally do anything and the next lines will show that. Continue reading →

Some Stuff I Read Today

30-day Challenge – Day 28

It’s been a wonderful and exhausting day. Our LuxRe Club did some consulting work for a large VA winery today, and I’ve been busy doing some necessary follow up.

Today I’m posting a link to an article, entitled “Top 8 Luxury Travel & Marketing Trends for 2012”. I recommend it not only because I read it, but because I do not believe I could give you the gist of it without omitting some important information.

If you are thinking of starting a new business catering to affluent consumers, I recommend you take the 10 minutes necessary to increase your knowledge. The article may validate or refute some of your perspective, but I can assure you that it covers a lot of ground.

I also recommend you read “To Market or not to Market? The No-Marketing Approach“. I read the following lines and couldn’t stop because it’s one of the best luxe conceptualizations I have come across:

We can live without luxury, and we are consciously aware that when we buy it we are spending our money on something we don’t need. So why, in an age of financial instability and austerity measures, is luxury spending on the rise? The decision to purchase luxury good is closely tied to the importance of freedom – freedom of choice, or the freedom to spend our money as we wish.

– Dr. Isaac Mostovicz, consulting academic

Please Define “Rich”

30-day Challenge – Day 26

There are a lot of words and phrases to describe the typical luxury consumer. You could use: wealthy, affluent, moneyed, well off, well-to-do, prosperous, opulent, well-heeled, and a bunch of other colorful words. Though today’s luxe buyers can be segmented into different income and wealth categories, we have usually characterized luxury with the most affluent segments of society.

In my post entitled, The Pulse of Luxury, I discussed the definition of “affluent”: those earning incomes of $100,000 or more. For the longest time (or as long as I’ve been around – not too long), much of the literature has considered $100,000 as the “rich” threshold. Well, if you read that post, you will remember that I raised a question as to whether we need to keep using that description because it does not seem to take inflation into consideration or consumer sentiment. Continue reading →

Second St. American Bistro Homepage - Click the picture to see the website for yourself

Night and Day: Fine Dining in Williamsburg, VA

30-day Challenge – Day 25

There is a well known adage about business success in relation to a customer’s experience:

A happy customer tells one friend, but an unhappy one tells everybody

Today, I write as both a happy and unhappy customer with experiences in the same product category, from two different brands. More importantly this post is so realistic, it serves as a practical case study on how to deliver the best customer experience possible – whether you are in the luxury, mid, or low product/service segments. Today’s post is about restaurants, and based on the title of this blog, I’m talking about fine dining. I’ll talk about two specific fine dining experiences I had on Sunday (12/11/11), while taking my darling wife on a day of dedicated DSE (dining, shopping, and entertainment) in the Williamsburg, VA area. Continue reading →

Swatch: Creating a Shakeout in the Swiss Watch Industry

30-day Challenge – Day 24

A watchmaker at Edox, one of the Swiss companies challenging Swatch's decision to stop selling timepiece components.

For a company with revenues in excess of $6.5B, Swatch is considerably the worlds largest watchmaker. The Swiss company recently received approvals from the regulatory agencies to stop supplying competitors with the movements they use to make their timepieces. This is an ironic twist of events, because I am forced to ask myself, “why didn’t Swatch’s competitors invest in producing their own inner workings?”

Continue reading →

The Pulse of Luxury

30-day Challenge – Day 19

As long as time continues, tastes will change, new desires will emerge, and premium goods and services will be valued above their regular substitutes. However, the definition of luxury will be a moving target depending on cyclical economic patterns and societal mores on the exhibition on wealth.

I have been reading a couple of books to help my thought on luxury and they all say the same things differently. Most of those books were published in times when special circumstances were affecting the luxury market (think 2001 dot-com bust or the 2007 housing bubble).The intention of this post is to bring attention to one of those varied views on luxury, but this one is important because, unlike the books I’ve been reading, this perspective has its relevance in the now, and it is supported by empirical data.

Ipsos Mendelsohn is an international market research company ranked high in the global playing field. For the past 35 years, the company has put out its annual Affluent Survey, a study of affluent households (incomes of $100,000 or more) in the US. The survey has been a key reference for many luxury brands because it is considered a reliable measure of the pulse of the US luxury consumer.

As a side note, I will say that the definition of affluent doesn’t seem to have changed in the last 7 years. Most, if not all of the books I have been reading use the same income definition. I wonder if we should think about changing that number especially because of the effect of inflation, or the fact that some luxury items are no longer accesible by just the wealthy – but I digress.

The results of the latest Affluent Survey warrant a view not just from those currently in the industry, but also from people looking to get hired in the space. These results may not tell you what the next best innovation will be, but if you are truly passionate about serving this specific segment of consumers, it might be useful to draw upon these insights in your interviews and casual conversations with luxe professionals.

I wouldn’t recommend anything I haven’t tried, so be rest assured your reading time will be well spent on these publications. You can get the gist of the survey in two different ways:

Let me know if you see something unique or worthy of comment.

Differentiating Upscale Hospitality Series: Four Seasons Hotels and Resorts

30-day Challenge – Day 14

If you have been in touch with much of the happenings in hospitality, then you would have noticed a huge emphasis on rolling out more value-added services to complement the commoditized room revenue segment.  Over the past year, one of the hotel and travel components being actively pursued by hospitality groups, developers, and licensees alike, has been spa services.

I can’t remember where I heard or read it, but someone once said something very profound about luxury brands:

Luxury brands don’t discount, they add value.

Continue reading →

Differentiating Upscale Hospitality Series: Ritz-Carlton

30-day Challenge – Day 13

An image from the Ritz-Carlton "Let Us" video

Today, I am going to highlight an ingenious new brand platform put out by Ritz-Carlton. If you don’t want to read the post and just get to the core of an exciting and counterintuitive differentiation strategy, play the video below.

Continue reading →

Differentiating Upscale Hospitality Series: Orient Express

30-day Challenge – Day 12

Today, I am looking at emerging themes in luxury with a focus on the hospitality industry. With rooms becoming commoditized, hotels have but one option to capture the hearts of its customers – differentiate. How do you differentiate one luxury hotel brand from another? Well, for starters we are way past thread counts, serving sumptuous breakfasts, and delivering the morning newspaper. Upscale hotels are having to differente themselves on the experiences they can provide their guests. In the next posts, I’ll talk about how some hotel groups are doing just that. We’ll kick off the series with Orient Express.  Continue reading →

Sustainability – The New Dimension of Luxury

30-day Challenge – Day 11

Over the course of writing this blog, I have learned a lot by covering the evolving themes in the business landscape occupied by premium brands.

For any of my readers interested in working in the luxe space, these themes are what I believe will dictate and most possibly define their success. I have talked about luxe-related issues ranging from social media to responsible business. Today I want to talk about sustainability. If you have already got a dose of this in my earlier posts, then I am re-emphasizing it in light of recent news articles highlighting how some brands are introducing sustainability in their corporate strategies.

Who would have ever known that acclaimed jeweler, Tiffany, would build a dedicated web page to highlight its efforts in corporate social responsibility (CSR); or that the renowned Peninsula Hotels would make a bold (and maybe costly) decision to stop serving shark fin in its restaurants?

Well, its happening all around us today. Whether or not you believe in the sincerity of these varying corporate initiatives, sustainability is no longer a matter of lip-service. Brands are actually paying attention to many of the concerns of consumers. In his opinion piece on luxurysociety.com, Leslie Pascaud, Director of Added Value Paris, discusses why luxury brands should and will embrace sustainability in the near future. See the article here.

Focus, Focus, Focus – A Great Co-branding Strategy

30-day Challenge – Day 10



Yesterday, I wrote an entry about a questionable co-branding effort. Today, I want to write about what I believe is an absolutely ingenious co-branding initiative between Mercedez-Benz (MB) and American Express (AXP). Continue reading →

Questionable Co-branding

30-day Challenge – Day 9

One thing that I highly admire about companies in the luxury segment of any product or service category is the uncompromising passion with which they pursue their strategic goals. I have never been a fan of trying to be everything to every consumer because it is not always an efficient way to drive your business. However, I do believe in leveraging your brand in any way possible to reach your current and future customers. That brings us to today’s topic on co-branding. Continue reading →

The New Luxury – Custom/Bespoke

30-day Challenge – Day 8

The term “luxury” evokes a multitude of disparate meanings for different people. For some luxury is synonymous with “expensive”. For others it can be associated with “unique”, “exotic”, “rare”, “sophisticated”, or “exclusive”. However, I want to make you aware of two words that I feel are most synonymous with the definition of luxury today – “custom” and “bespoke”. Continue reading →