Isaac Mostovicz writes that that luxury consumers are putting their money into tangible goods...
With the rise in protests rebelling against supposedly growing inequality, and the palpable economic uncertainty in the West’s financial institutions, it might be assumed that luxury purchases would be seen as just that – a luxury that cannot be afforded given the current climate.
However, the luxury consumers disagree, as a recent Financial Times blog post highlights.
According to Bain & Co’s 10th annual Worldwide Luxury Goods Market study, 2011 is going to be a record-setting year for the luxury goods market, with sales increasing by 10% from their current value of €173bn.
Cartier gold bangle
Moreover, the demand is emanating from the very areas – Western Europe and the US – that have seen this recent economic uncertainty, not just the emerging markets of Shanghai and Mumbai. Bain predicts that sales in Europe will rise by 10% and those in America by 16%.
As unemployment continues to rise in these areas, it seems counter-intuitive that demand is so high, particularly in the very visible branded jewelry and watch markets. However, Bain claims that this actually makes sense, and that the wealthy are eschewing volatile banks and devaluing bonds and instead putting their money into tangible (and portable) goods.
“…the affluent have adopted luxury products as a form of alternative investment.” (Financial Times)
In the Financial Time’s Vanessa Friedman’s words, they are “sewing their gold and silver and diamonds into their garments” for security, with branded goods remaining the most popular, despite a growing demand for understated and logo-free luxury.
That Cartier gold bangle? It’s a serious business investment for the luxury consumer.
Isaac Mostovicz writes that imperfect stones are not always considered imperfect anymore...
A new trend is emerging on the diamond market, where rough unpolished diamonds now are being sought after by diamond dealers and used by jewellery designers for their character, uniqueness and authenticity.
However, this trend isn’t actually new, but started nearly a decade ago with underground German stone-cutters creating innovative pieces that pushed boundaries, and have since been in vogue in avant-garde circles around the globe. But it is only now that this trend is reaching a wider audience and is being picked up by big brands such as Tiffany’s, Cartier and De Beers.
Stones with imperfections that previously would have destined them to be thrown on the scrapheap are now used and considered as a source of character.
Tiffany’s vice-president John King told the Financial Times that Architect Frank Gehry is creating rough diamond jewellery for the company. “He is attracted to raw nature which is not neatly faceted, to rough textures and, from his work with wood, to the warm browns and ambers of rough diamonds”
Some argue, however, that jewellers may use such gems as a way of squeezing extra value from stones that previously had little use; and now that they are in vogue, prices of rough or included stones has indeed rocketed.
In the end it comes down to supply and demand, and it is up to the customers to decide whether they are prepared to pay for these traditionally overlooked stones. My guess is that Lambda personalities, who generally seek originality and challenge, are the ones most attracted to the distinct and unique characters of these stones, whilst Theta personalities, who seeks truth and unity, may dismiss them as un-pure and lacking the brilliance of a perfectly cut and polished diamond.
Isaac Mostovicz writes that student collaboration creates a win-win situation...
Luxury brands such as Cartier, Christian Dior, Hermes, Louis Vuitton and Lalique have all participated in a programme orchestrated by Colombia Business School and Parsons the School of Design. The programme, which is part of a joint interdisciplinary course in Design and Marketing of Luxury Goods, allows students to evaluate brands and present suggestions to top executives. Students also learn about the competitive landscape and customers’ experiences.
Cartier in particular has been keenly absorbing new suggestions from students. It’s paying attention to the future even as it celebrates its 100th birthday this year.
“We have to follow the client, and yes, the client is changing. We’re also trying to pick up future clients.” Frederic de Narp, president and CEO of Cartier North America said in the Washington Times. He added: “We always want to be part of the culture.”
There were indeed several interesting ideas surfacing from the project, and this type of collaboration offers good opportunities to everyone involved: companies access free ‘brain gain’ from fresh minds, whilst students get high-profile experience.
Courtnay Thomas, who participated in the programme, recommended that Cartier create a bridal experience as a way of solidifying its relationship with younger customers. This would involve devoting a specific area in stores to wedding-related jewelry, hosting brunches for couples and even supporting concierge services. All this could encourage customer retention and loyalty. Perhaps not surprising in the current climate, ‘loyalty’ was the general buzzword amongst students.
Student Eloise Kordaris looked at Cartier’s flagship store, suggesting it needs some modernization. Her solution was a spa-like, Zen environment featuring a ‘watch bar’ in the style of a sushi bar. Kordaris found that customers often do research on the internet before coming in to the shop, and therefore often already know what they want to buy – therefore they do not want to spend an afternoon browsing jewelry cases. The watch bar is therefore designed to give customers a more streamlined experience, where they can walk up to the bar and order.
I think it’s interesting that customers want to spend less time in store – in the past, many took great pleasure in the meandering and discovery surrounding a purchase. Stores can control customers’ experiences with the brand when they are in a store in ways that are difficult to do online.
Isaac Mostovicz writes...
TIME Style & Design has just come out with an in-depth report on affluent consumer tastes from around the world. The print edition (unfortunately not available online) delves into the appetites of European shoppers—the Spaniards, Italians, French, British, and Germans—who now are considered some of the wealthiest consumers in the world thanks to a strong euro.
Did you know that Italians own more brands than any of their counterparts and outspend them on watches and jewellery? Or that Spain has the highest percentage of “uber lux” consumers, those with high incomes and luxury-market activity?
It is fascinating to juxtapose the tastes and psychologies of EU neighbours, but TIME adds some more food for thought in its online exploration of luxury in the top emerging economies of China, India, and Russia. What does luxury mean to these three countries who for the first time in decades are finding the economic freedom to afford such indulgences?
For China, who accounts for 12% of global luxury sales, luxury is in demand. Designer watches (66% of affluent consumers bought a watch of an average $2,253 in the last 6 months) are high status symbols, as well as skin-care products. The Chinese consumer will spend up to $280 on a skin-care product, which is almost 3 times as popular as make-up.
In India, the luxury market could grow as much as 25% in the next 3 years. Menswear brands top the most well-known luxury list, which is no surprise as many women still wear saris. Interestingly, local brands, such as Park Avenue, Allen Solly, and Reid & Taylor, also rank high, but considering previous high import taxes, it’s no surprise foreign brands aren’t more prominent yet.
And for Russians, with a heightened sense of brand awareness, flaunting one’s economic status is what luxury is all about. While Russians crave luxury fragrances, it’s jewellery that really whets the appetite: Bulgari, Cartier and Tiffany & Co. top the list of most widely owned brands.
It appears as if there are ripe markets to break into and hungry consumers to feed—something luxury retails are well-ready to capitalize on.
Isaac Mostovicz writes...
What purpose do charms in jewelry serve? Should they be a staple of a woman’s daily living or are they chintzy, cheap, and better left for teenagers and the lower end of the luxury market?
The Financial Times’ most recent Watches and Jewellery section has a very interesting article about these trinkets, noting their recent rise in popularity (they’ve been Cartier’s best selling jewelry range for the past 12 months) and how charms can mean more to buyers (and those who receive them as gifts) than regular jewelry pieces. Designer Theo Fennell says:
I have always believed that working jewellery [that does something, such as a locket, opening ring, or scent bottle for the neck] holds a great fascination for people, a sense of mystery or private magic. … These pieces are charms in in the proper sense of the word–talismanic and magical.
They can also be ‘very practical,’ according to Victoire de Castellaine, creative director of Dior Fine Jewellery. He believes charms are good for ‘men who don’t want to find a new idea every Christmas.’
This statement sounds a bit disingenuous coming after Fennell’s quote; de Castellaine seems to imply that charms are perfect lazy men trying to find something suitable for their wives, rather than finding something truly meaningful. I believe that it doesn’t matter what the piece is, if it’s a gift it needs to be a pure and true representation of the love between the giver and recipient. Jewelry, especially diamonds, can be the perfect gift for loved ones, but the gift has to be carefully and lovingly considered.