It’s a little bit ‘religious-y’, but I recently came across this article on things we can learn about marketing from Christianity, and I found it rather interesting. The author’s tips (focus your effort where you’ll have the greatest returns, focus on your best customers and prospects, and focus on having an excellent product or service) resonate particularly when consumers are proving more difficult to reach as they cut back on their luxury spending.

How bad is the recession getting? Amid reports of declining luxury spending, we’re continuing to see reports about ‘luxury shame”–people feeling embarassed about their conspicuous consumption. Fortunately they are still spending money, but if things continue to decline, they may stop spending and decide that it doesn’t make sense to have luxury as their only religion.

I read this week’s Memo from Chaim Even-Zohar with great interest. I think that Chaim is finally willing to be a bit more honest and less diplomatic about the current state of diamond industry. Nevertheless, despite the data is in his article, the collapse of the industry did not suddenly happen–it was a long process.

Chaim sees the one side of the equation –the oversupply of rough, because his focus is, as always, on the rough market. I believe that the problem is the growing under-demand. One way or another, the financial result is the same. No money is left in the industry: there’s $45-50 Bn of unsold polished stock, which amounts to a three-year supply (as I previously estimated), and huge debt which is only partially covered by diamonds that nobody wants or can buy at any price. Now De Beers is planning to lose its last proper luxury marketing element – the exclusivity of the sightholder.

They do not understand the value of the asset they plan to dispose–once it’s gone, it’s gone for good. If we look at this cynically, sightholder exclusivity allowed De Beers to wash a good amount of unneeded goods at premium prices in the last ten years. They used their clout and influence; now there’s nothing left. The Emperor is Naked. Unfortunately, this time the onlookers do not laugh.

Kimberly Castro, who writes the US News and World Report’s Luxe Life blog, recently shared an interesting insight from one of her friends about luxury companies moving online:

Luxury brands have been having a hard time on the Internet because ‘luxury’ is an experience. It’s something that you need to feel, taste, and touch with your own eyes and hands. It’s difficult to sell luxury goods online, i.e., a Louis Vuitton bag, because with that one-touch point, you’re missing out on the other variables involved in the ‘luxury’ experience. A luxury product is there for you to dream. It’s difficult to convey this ‘feeling’ online.

I agree with this sentiment–luxury is an experience that different individuals interpret differently, and companies can manage that experience to a great extent in-store. Still, I don’t think the fact that it’s more difficult to convey a brand proposition online should be an excuse for luxury companies to drag their feet in getting online. It probably will take some trial and error to find the right mix of exclusivity, access and service for an online audience.

One example of a company trying something new is Chanel–they have created an iPhone application that displays videos, photos, and news related to Chanel’s latest collections (link to application here, blog post on the application here). The app updates itself when new collections come out, and also includes a store locator. It’s an interesting way to engage with a technologically savvy, relatively young audience who may have more disposable income than the average person. I bet we’ll see other companies finding similarly unique ways to engage with audiences in 2009.

Here’s an interesting video from last year about one man’s exploration of luxury:

Benjamin Wallace seems to be a Lambda personality–he sought out achievement and uniqueness by trying out some of the world’s most famous luxury items, including the 1947 Cheval Blanc–but in the end he was left somewhat unimpressed, and thought that many of the things he tried weren’t worth their extravagant cost.

Luxury is in the eye of the beholder–even though the things that Wallace tried are the ‘generally accepted’ to be the very best, his opinions perhaps differed from those of a ‘real’ connoisseur. It’s very important to figure out what’s important to you, what gives you the most pleasure–knowing and being able to seek that which gives you the most pleasure is the greatest luxury.