I came home this evening a very disappointed consumer. I had just seen “Man of Steel” and “The Wolverine“. I know it seems so off-message to start my post on luxury with talk of comic book heroes, but read on to see where this leads. Continue reading
exclusivity
Finally…. Luxury Car Brands are Taking Tips from the Kings of Customer Service
Key Takeaway from The Luxury Doctrine (a new resource in development):
If you want to be successful, especially in luxury, you have to think of, and act like the customer, at all steps in the value chain… you have to manage the customer’s experience
– Edmund Amoye, Lessons in Luxury
For those who have been following my posts on the different luxury segments, you’ll notice that the key catalyst for success in today’s environment is innovation in managing the customer experience. If you are new to this customer-centric theme, I have a list of related posts at the bottom, to get you up to speed.
In every business there are seasons and cycles – ups and downs. At their rollout to end-users, luxury goods and services are sometimes heralded as innovative novelties and “must haves”. However, as brands permeate, manufacturers innovate, and marketing teams penetrate (I had to use that rhyme… too easy to pass up), commoditization sets in. Luckily, the Ford Motor Co. is doing something about that with its Lincoln automotive brand.
– Top View of the 2013 Lincoln MKZ Continue reading
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:
- 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.
- 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.
- 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.
- 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 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
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
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
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
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
Diamonds are Getting Pricey
30-day Challenge – Day 21
If you are an affluent consumer earning more than $100,000 in annual income, then the recent report by Bain & Company on diamond prices should worry you. If you make upwards of $250,000 a year, then you shouldn’t be as perturbed because you will not be greatly affected by the forecasted jump in diamond prices.
The global consulting firm has put out a report estimating that diamond demand will grow at a 6% CAGR over the next decade. The company believes that as we approach 2020, diamond supply will not be able to keep up with demand due in part to the growing economies of China and India. Those markets alone are estimated to push diamond demand at a CAGR of 6.6% in diamond volume alone. While demand is estimated to grow, diamond supplies are only expected to grow by 3% (CAGR) in volume. Continue reading
Keeping to Your Mission with Counterintuitive Marketing Approaches
30-day Challenge – Day 20
A while back, our business school, the Mason School of Business, was visited by Tetsuya O’ Hara, the Director of Advanced R&D. It was a momentous visit especially for students who had never heard of this manufacturer of outdoor gear and apparel.
One thing Tetsuya told us about the company, was in regards to the new marketing campaign it was executing. Basically, Patagonia was asking its customers not to buy its products – for environmental reasons. As a professional in the luxury market, this certainly looks like a great way to market your product. However, there is some sincerity behind the company’s plea.
You should check out the ad here. Also look at the company’s blog post, explaining their rationale for the ad in more detail. Check out the comments as well.
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:
- Justluxe.com interview with Stephen Kraus, chief research and insights officer at Ipsos Mendelsohn
- Article entitled, “Affluency: New Definitions of Luxury“
Let me know if you see something unique or worthy of comment.
Remember the 4Ps of marketing? Well here are the 4Es.
30-day Challenge – Day 16
The fact that I’m currently traveling in NY is no excuse to miss out on making my 15th post in the 30-day challenge. However, as I type this post on my mobile phone, from a cab going down E 57th, I must say that I will be rather brief today.
From time to time I get emails from friends, faculty, and strangers about interesting articles on luxury products and services. A good friend of mine, Eric sent me an article by Duke Greenhill, founder and CEO of Greenhill+Partners, an agency for bespoke luxury brand marketing.
We have all learned about the 4Ps of marketing. In fact, I think some marketing nerds might have it tattooed on their foreheads. In his post on Mashable.com, Duke discusses the 4Es. I read it and believe it is worth the time it takes you to click the links above . At the least, you can add another marketing acronym to your bag of buzz terms.
You can now congratulate me on my first mobile post from a yellow cab (now on W 57th). See you tomorrow.
Lessons in Luxury 