Janus Thinking

Does connoisseurship matter? Can art only involve the artist’s choice and not necessarily his hand? Can you copyright an idea? These are some of the issues raised by this recent essay by Richard Feigen in the Art Newspaper. An artist launches an idea and then it can become difficult to seperate the idea from counterfeit ’similar’ but no less beautiful ideas.

Connoisseurship is the identification of the artist by his handwriting. But if his hand isn’t there, the handwriting isn’t, and connoisseurship becomes a dead old discipline. Who needs connoisseurs? Why train them? Why not train museum director-administrators-fundraisers-construction supervisors? Who needs museum directors who actually love objects? Why not fund academic chairs in the new language—“artspeak”—to explain it all? But alas, we’re stuck with the single word “art” to define it all.

I don’t think a proliferation of fakes or art being an idea makes connoisseurship any less valuable. Appreciating the real and identifying the fake, however sublime it is, is very important in today’s art market.

With New York, London, and Milan Fashion Weeks behind us, the final Fashion Week is taking place at present in Paris. Amid the weakening economy and spreading insecurity, the fashion world must wait and see if the luxury consumer is still out there to purchase £10,000 dresses and £500 shoes.

High street fashion stores are already beginning to feel the financial pinch, as witnessed by Marks & Spencer, who saw shares drop by 32.5% last Wednesday alone . Will the global economic slowdown have any effect on the luxury purchases made by the upper classes?

Some high-end brands have started to see a slow down in sales, as consumers become jittery. Milton Pedraza, CEO of the Luxury Institute noted:

The reality is that even at the highest levels of wealth, there is some pull back.

Even in areas where one would not expect money to be considered, changes are beginning to surface. Fashion bible Vogue, that specializes in luxury brands, has bannered “Value-Conscious Chic, When to Spend, Where to Save’ on the front cover of its US September issue and Araks Yeramayan, owner of Araks, reveals that many fashion companies have had to pay for alcohol, catering, makeup and hair styling for their runway shows, an expense that has previously been picked up by sponsors.

Despite these trends, Fashion Weeks do not seem to have been interrupted. USA Today notes that designers are still ‘spending up big’ on their fashion shows, with Patrick McCarthy, editorial director of W and Women’s Wear Daily speculating that “there will be at least as many shows this seasons as last year and maybe even a few more.”

Earlier this week a new unpolished 478-carat diamond was discovered in Lesotho. It’s reported to be the 20th largest rough diamond ever discovered, and it’s particularly special because of its great color (grade D, the highest for a white diamond) and clarity. It may even yield a 100-carat plus round stone. The last time an especially large diamond was discovered, it turned out to be a hoax. I’m not holding my breath this time, though this video suggests it’s the real thing:

Beijing’s luxury shopping market is now competing with Shanghai and Hong Kong as the world’s luxury brands flocked to newly opened stores, in time for the Olympics.

China has come a long way. A luxury consumer market that did not exist 20 years ago is now seemingly on an unstoppable path to dominate top-end retail. China is already the world’s third largest luxury goods market, behind only Japan and the U.S. It is predicted to become the world’s largest by 2015. Beijing’s high-end retail space has expanded by 89 percent in the last two years, according to the real estate service agent Jones Lang LaSalle. There has already been five new mid- to high-end retail projects opened in Beijing in the first half of this year, with a further 24 expected by the end of the year.

Before the Olympics Games, Beijing’s luxury retail market tended to be low-key, especially in contrast with its rival Shanghai. Luxury shoppers would even go as far as swapping the buttons on their designer suits for plain ones to avoid questions about the source of their money. Now we see Beijing leading the way with 3 million square feet of luxury commercial space being developed since 2007.

However, with such a wide variety of high-end shops in Beijing, retail observers have commented that brands are facing a growing challenge to stand out and create a niche for themselves. With the post-Olympic cool down some luxury brands may find it harder to succeed as China’s 300,000 millionaires  increasingly embrace the lifestyles and buying habits common to the world’s wealthier nations, attracting every luxury brand into Beijing and thus flooding the luxury goods market.

Following up this post: Amidst the financial chaos earlier this week, Damien Hirst managed to bring in £111 million for his latest collection at auction. He smashed Sotheby’s previous record for a collection of work by a single artist, held by a Piccasso collection that sold for $20 million in 1993.

I think the desire to own a Hirst piece can be understood through the lens of either a Lambda or Theta worldview. Lambdas seek achievement and uniqueness as their end goal. Hirst’s signature pieces, the animals in formaldehyde, are nothing if not unique, appealing to Lambda sensibilities.

However, it’s interesting to note that 5 of the 223 pieces in the auction did not sell. The reason? They weren’t immediately recognizable as pieces by Damien Hirst (one example: ‘Killing Time,’ a plastic box filled with a desk, office chair, pills and a watch). This suggests that the people buying these pieces were seeking this ‘obviously by Hirst’ quality; they’re using their purchase to fit in and enhance their status among their peers, which is typical Theta behavior.

Whether the purchasers were Lambdas or Thetas, I do wonder if they’ll still feel their purchases were worthwhile in a few months’ time as uncertainty in global financial markets continues.

Gone are the days when demographics were the primary marketing targeting resource. Information available through demographic analysis cannot solely be accounted for marketing strategy since it’s based on correlation, not causality. Demographics continue to be important within the marketing craft, but without the context of psychographics they have limited usefulness.

Psychographics refer to a set of characteristics shared by specific demographic markets that indicate lifestyle choices, buying habits, attitudes or opinions.

The Theta-Lambda worldviews that I’ve developed are an example of psychographic characterisation consisting of two personality types. The typical Theta (Θ) personality seeks affiliation and control whereas the Lambdas (Λ), seek achievement and uniqueness as an ultimate end goal.

As another example, SRI Consulting Business Intelligence classifies luxury consumers into three segments based on psychographics:

• Luxury as functional: This segment is composed of consumers who buy luxury products for their superior functionality and quality. They usually involve themselves in a longer decision making process in order to make rational and logical decisions, rather than emotional or impulsive ones.

• Luxury as reward: This segment purchases luxury goods in order to showcase their achievements. They are motivated by their desire to be successful and demonstrate this to others. They usually purchase ‘smart’ luxury that demonstrates importance while not leaving them open to criticism.

• Luxury as indulgence: This group’s purpose for luxury goods is to self-indulge. They are willing to pay a premium for goods that express their individuality. They enjoy luxury for the way it makes them feel, therefore have a more emotional approach to purchases.

The understanding of psychographics plays an important role within the luxury industry. Although there is no standard definition of luxury or classification of consumer psychological profiles, by understanding the importance of psychographic analysis, one can constantly redefine and refine the term ‘luxury’ in relation to individual customers’ views. By engaging in this analytical process, marketers are able to tailor a product and the marketing message in order to appeal to customers’ desires and motivations.

Luxury marketers should make note that the luxury consumer is always looking for newer ways to satisfy his/her continuously changing needs. Hence, the need to keep a close tab through insightful and concurrent psychographic research is of prime importance.

We’ve seen Damien Hirst challenge convention (and notions of connoisseurship) in the art world before with his diamond skull. For his newest project, he’s not just creating controversial art–he’s also challenging contemporary art’s business model.

It used to be that art dealers had a window of about five years to sell (and resell) a new piece of art, earning about a 50% commission on each sale, before auction houses would accept the pieces to sell. For his new collection, Damien Hirst is cutting out the middleman, selling all 223 pieces directly through Sotheby’s next week. The pieces are as bold as ever and include The Kingdom, an 8ft tiger shark suspended in formaldehyde, and The Golden Calf, a life-sized bull with gold-plated hooves and horns also suspended in formaldehyde.

This auction is a very interesting move by Hirst; he’s probably one of the few artists (perhaps only artist) who could pull it off. He’s well enough established that connoisseurs know what they’re getting when they purchase one of his pieces without it floating around on the market for a while. Hirst also wants to collect more for pieces up front rather than have them appreciate:

From an article in the Times of London:

“The first time you sell something is when it should cost the most,” he says. “I’ve definitely had the goal to make the primary market more expensive.” He compares a Prada outlet and an Oxfam shop. Why, in the world of shoes, do you pay more for a new pair from Prada, while in the world of art, the big money kicks in only when the shoes get to Oxfam?

I think this is a fascinating comparison–however, one of the reasons that Prada shoes and other luxury goods sell for so much more new is that they do wear in ways that that artwork won’t–artwork can be appreciated in the same way whether it’s new or old, and generally time (or the passing of the artist) makes people appreciate the work even more. Though it’s funny that Hirst should make this comparison, as some of his formaldehyde works have actually worn in ways that traditional art wouldn’t and needed restoration.

If you’re in London, you can see the whole collection on show at Sotheby’s through September 15.

How far will one go for a bottle of bubbly? To the bottom of the ocean it seems for some, as 200 bottles of champagne have been recovered after nearly 100 years underwater. Not only will you be drinking one of the oldest champagnes in the world but you must be able to pay £156,000 a bottle for this luxury. The vintage 1907 Heidsieck champagne, that sunk on its way to the Russian Imperial family in 1916, was found near Finland and will go up for auction at the Ritz-Carlton in Moscow, date still unknown.

Earlier this year we saw the “community of the super-rich” offered up the chance to customize their own bottle of Perrier Jouet champagne, whereby, after lengthy discussion with the Cellar Master, you could personally add your chosen ‘liqueur’. At the time, this limited edition offer was the most expensive bottle of new champagne, going for a mere $6,485. it doesn’t compars to the starting price for this most recent discovery.

Has the time come when the elite are paying over the odds for a unique experience? Those with a Lambda worldview may disagree: for them, this once-in-a-lifetime, long lasting, perfectly preserved bubbly provides them with an unparalleled, unique experience, not to mention a great talking point over dinner. Thetas, on the other hand, would likely purchase one of the 200 bottles on offer for the chance it gives them to gain entry to this most elite “community of the super-rich”. To them, this bottle is yet another validation ticket into the inner circle for champagne connoisseurs.

Those lucky enough to be able to purchase one of the 200 bottles may be satisfying a collector’s impulse or simply indulging on a small piece of history.

A new book out by author Dana Thomas, called Deluxe: How Luxury Lost its Lustre, explores how the manufacture of luxury goods, and in particular luxury clothing, has been outsourced almost in its entirety to a handful of developing countries such as China and Turkey.

Thomas explains that despite the protestations of certain luxury house owners, the competitive landscape for luxury goods companies is one which makes this phenomenon hard to resist.

For the last sixty years, the actual production of luxury goods themselves has become much like any other type of product.  The big difference – something which I often explore in my academic thinking – is the way in which these luxury goods have been marketed to make you feel a particular way.

In my Theta-Lambda dichotomy of personality types, Lambdas purchase luxury goods which help them connect to their desire for challenge and individuality.  Thetas, on the other hand, purchase goods which help them affiliate themselves to a certain group of people or lifestyles.

Luxury goods brands understand this marketing principle so they mostly produce cheaply and market generously.  As Thomas notes in her book, the lion’s share of a product is made in China but then a small piece (a piece of stitching or pocket, for instance) is added in the West so that the ubiquitous ‘Made in China’ label can be avoided and the luxury illusion can be maintained.

The journey to Tibet, which has long filled the popular imagination of the Western adventurer, was made a bit easier in July 2006 when a 1956-kilometer rail line was successfully completed connecting its capital city Lhasa with neighbouring Xining, the capital of China’s Qinghai Province.

As part of this new rail link, the Qinghai-Tibet Railway Corporation (QTRC) announced a new luxury train service running all the way from Beijing to Lhasa.  The train service was to cost 20 times the price of an equivalent journey on a standard service.  It would only carry 96 passengers at a time with private suites, two dining cars, and a separate sightseeing car.

The excitement of a luxury trains service allows for adventure travel without sacrificing comfort, and it elicits all of the visions of Shangri-la yet at safe arm’s distance.  It could satisfy the demand for something unique and something experiential.

The fact that the train has been postponed seems more a sign of poor execution rather than flawed concept.  We’ll just have to wait for updates.