attributes of luxury brands

Counterfeits vs. Rental

Isaac Mostovicz writes...

The luxury world’s relationship with the counterfeit industry is puzzling. The counterfeit industry seems to cannibalize the luxury industry by offering products that presumably people would have bought from the luxury industry in the first place. However, as I commented in the past (I need to find the article) the luxury industry does not fight the counterfeit one wholeheartedly.

The luxury industry has very good reasons to allow the counterfeit industry to exist. Having counterfeits means that the original has increased status, as Prada’s CEO announced recently, “We don’t want to be a brand that nobody wants to copy.” The counterfeit industry allows the wider society to become fans of the brand while those who use the true product feel more elite and more respected. More significantly, a Sloan MIT business professor Renee Richardson Gosline found that people use counterfeit as an entry-point to luxury. Gosline discovered that within two years, 46% of buyers of counterfeit subsequently purchased the authentic version of the same product they had purchased the counterfeit of — even though other people could not necessarily tell the difference.

 

However, there are problems with buying counterfeits. James Lawson, director of Ledbury Research, points out that most of the time their quality is inferior and it is socially uncomfortable to admit to using a fake. Therefore Lawson suggested that renting luxury products could become a superior substitute for counterfeits, and provide an entry-point to the brand as well. Renting genuine luxury products seems to offset the problems of low-quality and social discomfort associated with fakes. One can experience the thrill of having true luxury products at a lower cost, and then return them later.

It is true that renting luxury may eliminate some of the problems with buying counterfeits. However, from the luxury marketer’s perspective, a major difference exists between them: the time span. People who buy counterfeits become accustomed to having the product in their lives. They identify with the brand that the counterfeit is imitating, and often seek to buy the real thing eventually. Renting luxury doesn’t give this experience at all. People have the great feeling of using luxury, but for a short time only. They don’t necessarily identify with the brand, and there is so far no evidence that they move on to buy the real product. While renting luxury may replace buying counterfeits in the short-term, it is clearly inferior from the perspective of being an entry-point to the brand.

I feel ambivalent about this increasingly popular phenomenon. I would argue that a major component of the luxury experience is purchasing a luxury item at a high price. Renting luxury does not provide a luxury experience just because it involves luxury products. Unlike counterfeits, it is also not an entry point to luxury. However, while it may not fit the definition of luxury, nor lead to a luxury experience, who does not want to be king, even if only for one day?

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What is luxury? “The no-need need”

Isaac Mostovicz writes...

Having analysed almost every model of luxury branding for my PhD thesis, I ultimately decided that Dubois and Paternault’s model was being the most complete and explanatory power. D&P propose 6 attributes of luxury brands:

They are:

extreme quality
expensiveness
scarcity
aesthetic appeal
superfluousness
and time incorporation

Despite being an excellent distillation of the nature of luxury brands, these criteria are clearly insufficient to explain the full range of luxury experiences.

Superfluousness is clearly a ‘qualifying criterion’ for luxury. That which is needed cannot, de facto, be luxury. But all the other criteria are open to challenge at some level.

Extreme quality, for example can be challenged by brands whose quality is utterly questionable – TVR sportscars, for example or more pertinently, Ferrari itself.

Expensiveness is less open to debate. Even allowing that expensiveness is a relative term, both in competitive terms, and from the perspective of the individual, some luxury brands are not differentiated on price.

Examples here would be brands that pull of the trick of becoming discretionary, while being functionally similar. These are brands that attract the attention of connoisseurs by branding heavily on the basis of being ‘an acquired, specialist taste’. In spirits, for example, limited release batches, or special finishes can be luxury brands, without necessarily being more expensive. From a marketing strategy the point is to sell greater volume to heavy users rather than increase margin on individual units.

Another example would be limited release handbags, or signed copies of books, which are luxury because they require effort and expertise on the part of the brand purchaser.

Scarcity is a very marginal criterion and has been widely challenged in branding literature. In the east social ubiquity does not undermine perceived brand cachet at all. In the west the growth of masstige brands like Molton Brown cosmetics has been dramatic.

The value of aesthetics is superficially the weakest criterion. We can all think of brands who have brutal aesthetics – Bristol, Hummer cars or Toughbook computers spring to mind, but they are still luxury on other measures. These sort of brands do at least have distinctive aesthetics, though, which appeal to connoisseurs, and lean on their brand heritage – but consider Lexus. Definitely a low-level luxury brand, but with zero aesthetic appeal.

The most intriguing category is ‘time incorporation’. When people talk about craftsmanship, or discuss a designer’s style, or talk about the quality of the purchase experience, this is what they are alluding to. Luxury brands compress and distill the process of design, manufacture and ownership of a product into their relationship.
When individuals buy a Ferrari, they buy 60 years of racing heritage. When they buy Chanel, they engage in nostalgia for a bygone age.

Based on Dubois & Co’s criteria, I wonder what the world’s most luxurious brand is…Rolex? or Patek Philippe? Linn Hi-Fi?

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