Janus Thinking

Counterfeit goods are a major problem for luxury brands. They remove the exclusivity that luxury brands carefully cultivate and in many cases take the place of goods that affluent people would otherwise purchase. It feels like a victimless crime to purchasers–they might think that with these these goods so in demand and these companies so rich, a single purchase won’t make a difference. But enough people around the world are thinking this way that it is affecting the bottom lines of luxury companies. Authenticity is changing from necessary to optional, and two items in the media this month highlighted this fact.

The first is an article in the UK’s Independent about the fakery related to luxury goods, enhanced physical appearance (via surgery, botox or Photoshop), and ‘reality’ television. For decades celebrities have had a symbiotic relationship with fashion houses–the houses provide clothing and jewelry to make celebrities look beautiful on the red carpet, and the celebrities in turn mention who made their dresses, earrings and other ephemera. But recently a few celebrities (Renee Zellwegger, Courtney Love and Britney Spears are named in the article) have been photographed with counterfeit handbags or dresses, sending the message to the public that it isn’t just legitimate to purchase counterfeit goods, it’s glamorous too. Read the article here.

Earlier this month the BBC Radio 4 consumer affairs program You and Yours ran a similar story, about how the Italian government is cracking down on counterfeit goods. The government believes such goods are costing the country nearly $10 million a year, so it’s taking action by putting tougher customs controls in place and going after wholesalers and importers (rather than the street vendors at the bottom of the chain). You can listen to the whole interview with Silvio Paschi from Indicam, an Italian industry group against counterfeiting, here.

What can turn the tide to make authenticity absolutely necessary again? It’s a similar proposition to keeping luxury brands exclusive as they expand their masstige lines–luxury companies need get the message across that the luxury they offer is incomparable and inexorable–people need to know that the experience and prestige that true luxury offers can’t be matched anywhere.

Today the UK’s Guardian reported that a new diamond has been found in South Africa that is believed to be twice the size of the Cullinan diamond, the second-largest cut diamond in the world.

The Cullinan diamond is 530.2 carats (polished from a rough stone weighing 3,106.75 carats).

The details of this new diamond are still scarce–we don’t know which mine or mining company found the diamond and while the size has been revealed other important characteristics (such as whether it’s colorless) are unknown. The rough diamond also still needs to be cut–this provides a fantastic opportunity (or dilemma) for the polisher, who needs to decide which features to highlight in the diamond to maximize its brilliance, scintillation, fire while also not shaving off carats unnecessarily. The full text of the article is here.

While many items or experiences considered luxurious are scarce or rare, a new class of ’sustainable luxury’ items and experiences aims to be as exclusive as traditional luxury while preserving and respecting the environment. We’ve already seen hybrid cars–now entire resorts are being designed in an eco-friendly way. Last week marked the launch of Revolution Places, a new sustainable luxury resort company that is currently developing an $800 million 650 acre resort in Costa Rica.

According to the Revolution Places vice chairman Philippe Bourguignon:

“We are creating an environment that departs from the gated and manicured environment of conventional developments. Cacique, Costa Rica preserves the essence of the local culture and natural beauty, while offering luxury and wellness. This is a place where people are not only guests, but participants in a uniquely authentic experience.”

The company has several noteworthy initiatives planned:

• The resort design uses wind and solar patterns for optimal ventilation, shade and daylight, reducing energy and water demand
• A comprehensive recycling and solid waste management strategy is being developed that incorporates the use of renewable energy and an on-site treatment facility to re-use wastewater.
• Planned donations to local charities include one million trees, hydro-geological studies of the Panama aquifer and watershed, and computer learning centers

These are certainly worthy and responsible initiatives. But do they provide Revolution Places with a competitive advantage? Or will luxury consumers believe that Revolution Places is compromising the luxury experience to be green? We’ll find out in 2010 after Revolution Places opens.

Two followups–

One: what goes perfectly with your diamond-encrusted Mercedes-Benz SL Roadster? Why, a diamond-studded gearshift knob of course! I’m not sure where this is from or who the target audience is, though I don’t think the producer/seller is trying to go extraordinarily upscale when he or she writes ‘For all you ballers out there… “What’s your braggin’ right???”‘ on the display placard. The shifter features 30 carats of ‘genuine’ diamonds and 10 ounces of 18-carat white gold. I’d be interested to see how high (or rather low) the quality of the diamonds is.

And two: following up on another luxury peculiarity we’ve been following: this week another luxury water was brought to my attention, perhaps the most expensive yet. Kona Nigari water, a desalinated water high in minerals from the deep seas off Hawaii, costs $16.75 per ounce. Granted, this is for a bottled water “concentrate” one is meant to add to regular water, so it costs a bit less in drinkable form–but $2144 for a gallon of concentrate seems a bit expensive to “make” a beverage that is available free nearly everywhere and isn’t supposed to have a strong flavor. The sea water in the concentrate is believed to be free from pollution and bring with it health benefits. Whether it’s worth it is of course up to those who choose to buy it, though recent news suggests that people are beginning to think more sensibly about the value of bottled water. Last month PepsiCo was forced (through pressure from environmental and political groups) to clearly state on each bottle of its Aquafina water that it’s only purified tap water. Does this mark the beginning of the end for luxury waters? Perhaps.

[via blogiseverything and Lussorian]