Hermes

Hermès to examine provenance through exhibition in London

Isaac Mostovicz writes that Hermes is choosing to focus on the quality of its products for its latest campaign ...

Luxury Daily reports that Hermès, the French fashion retailer, is to demonstrate the craftsmanship and history behind its brand through a new exhibition in London opening later this year.

Hermès official image for Leather Forever exhibit

The Hermès Leather Forever exhibit will demonstrate the antiquity and provenance of the brand, founded 175 years ago this year, and is the latest step in terms of demonstrating to affluent customers that its price points are reflective of the quality of its product.

 

Hermès has initiated several campaigns of late around its provenance. It has created a microsite called Hearts and Crafts that examines the detailed craftsmanship and quality of its products through biographies and interviews with the craftsmen, from the leather-cutters to the silk-drawers.

 

The site also hosts a documentary, which tells the story of the many people who contribute towards the creation and manufacture of Hermès products.

 

Of late, even high net worth customers who may not be directly affected by the economic downturn question the quality behind some of the prices charged for luxury goods – so this campaign aims to reassure and establish Hermès as one of the ultimate quality brands.

 

Chris Ramey, president of Affluent Insights, Miami commented: “Authenticity is one of the platforms for luxury. Hermès will continue to emphasize their craftsmanship, history and quality because it’s part of their DNA.”

 

Within Janusian thinking, this campaign will appeal to those of a Lambda mindset – who see an item’s value not in terms of price, but in terms of the time invested.

 

 

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India’s Love for Luxury

Isaac Mostovicz writes that that luxury retailers must better understand Indian consumers in order to succeed...

A recent article published on the National’s business website has shown that luxury brands are eager to target Indian consumers. With a large population and a number of increasingly middle-class households on disposable incomes, it seems set to be the next destination marketplace for high-end labels. Louis Vuitton, Chanel, and Hermès amongst others have already invested in their global infrastructure to take advantage of this opportunity with varying levels of success.

Some retailers are finding the market trickier than others when it comes to selling to Indian consumers, perhaps due to a lack of investment in researching their target market’s tastes and opinions. Indian shoppers have different interpretations to their  European counterparts when it comes to purchasing luxury goods – for example, retailers that have designed targeted products with niche “Indian” appeal have flourished, as some retailers have found out.

Hermès in particular has tapped into this trend and, having recently launched its third store in India in Mumbai, has launched a line of limited edition saris in traditional orange colours. Launched with success, it’s clear that local insight and research are key in this marketplace.

Another issue that luxury retailers have struggled with is that the Indian luxury marketplace is still relatively immature. Some shoppers, despite significant levels of disposable income, don’t differentiate between “luxury” and “non-luxury” brands. There is also the issue of infrastructure. Where traditionally luxury goods would have been purchased through and stocked by boutiques in five star hotels, retailers have found a lack of shopping centres and malls has posed a problem.

Lastly, local partners are key. India rules that only 51% foreign investment is permitted in single-brand retail, and none in multi-brand retail, meaning that retailers must partner with a local body in order to expand in that marketplace.

Given that luxury retailers must better understand Indian consumers in order to succeed, such local partnerships can perhaps also offer greater insight into this wholly worthwhile market.

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Exclusivity and the rise of “no-logo” luxury

Isaac Mostovicz writes that that luxury products without overt branding are the new mark of exclusivity...

I have written recently about the idea of luxury as exclusivity – not just an expensive product or experience, but also one that is unique and not obtainable by all.

This article by Jim Shi in the Financial Times makes a similar point, arguing that:

“Luxury products without overt branding are the new mark of exclusivity… brands as diverse as Victoria Beckham and Celine are whispering their exclusivity amid a growing consensus that “anonymity” is the key to being recognized.”

Luxury handbags by Victoria Beckham

This is a trend that high-end stores are noticing. The Barneys New York store’s executive vice-president Daniella Vitale said of its products:

“[It’s about] expression through details, exquisite materials and things that are not so identifiable.”

This emphasis on timelessness, elegance, quality and “private luxury” has seen luxury brands such as Hermès – who posted a 50 percent increase in profits earlier this year – thrive despite the economic downturn, or perhaps because of it.  As Ed Burstell, the managing director of luxury store Liberty of London, says”:

“If budgets are tighter, there is much greater value put on bags that will stand the test of time.”

These purchases are discreetly luxurious rather than ostentatious, fitting well with the perceived age of austerity in the US and Europe as governments face difficult financial decisions. These items still tap into a desire for admiration and style, but from “informed insiders” rather than the average person on the street. Add to this the often limited availability of these items, and there is a real exclusivity around the luxury logo-free product.

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The future of luxury, according to a Pierre-Alexis Dumas

Isaac Mostovicz writes that Pierre-Alexis Dumas' perspective on luxury encapsulates the thinking of today's Lambda personality...

This afternoon I read a fascinating interview in The Wall Street Journal with Pierre-Alexis Dumas, of the French luxury house Hermès.

The interview was meant to get Dumas’ predictions about where luxury is heading. I found many of his predictions to ring true with how a Lambda personality views the world. Given his position in the industry, this could be a preview of what’s to come in luxury marketing.

There are two questions from the interview, the answers to which struck me as being especially telling:

Do you have a favorite disposable object?

A pencil. If you throw your pencil away, it means you’ve used it. It means you’ve used your brain, your imagination, you’ve been writing and drawing.

This is classic Lambda personality perspective. The value is entirely personalised, drawn from a sense of personal accomplishment. This outlook doubtless informs Dumas’ views on luxury and indeed life.

But it also takes elements of Theta. The idea that an ‘old’ product (with a history) is more luxurious is a very Theta-centric aspect.

The second question is to do with Dumas’ interest in designing luxury yachts.

And now you want to build yachts?

That’s a very large-scale design.

What is the price tag on that?

Between €80 to €110 million ($109 million to $150 million). The industry standard is €1 million ($1.4 million) per meter. A super-yacht is about 100 meters long. Our boat, which we make with the Wally [yacht-building] company, is 56 meters. And this is why it’s very original: Our boat is extremely wide.

A few key take-aways: Dumas is very candid about the pricing for an object that is, in reality, very expensive. A Theta would be more likely to reply in non-exact terms. There is an attention to detail in his answer, of understanding that price points and standards in the yacht industry. He knows whom he is marketing to with this product

The other point: He stresses originality. This is a key element of any sell to another Lambda personality.

Later in the interview, he makes a prediction about what the ‘future of luxury’ will involve. It’s a very Lambda perspective:

We have this odd shape because we decided to [build a boat that would travel] slow….Speed is so passé. What is the luxury for tomorrow? One of them is time.

In this case, the mantra ‘takes one to know one’ is accurate. Dumas is a Lambda personality. He knows what other Lambda personalities will look for in a luxury product, whether it’s clothing or a luxury yacht.

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Real World Thetas and Lambdas’s Luxury Purchases

Isaac Mostovicz writes...

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As stories continue about how much the wealthy are suffering in this economic downturn, it’s interesting to note what people are still spending on. This article from the Wall Street Journal reports that many luxury firms have so far been resilient in more difficult economic times, finding consumers at the high and low end of the luxury market who are still willing to spend. The article includes examples from three individuals:

Jordan Shapiro, a 25-year-old Wall Street recruiter, says he isn’t sure what his income will be this year, so he put his plans for an African-safari honeymoon on hold. But he splurged a few weeks ago on a $3,000 Omega watch, which he considers an investment. “I hope it’s going to retain or gain value,” he says.

Stephanie Wickouski, a 55-year-old New York attorney, walked out of an Hermès store this week with a “heart-stoppingly expensive” $950 cashmere shawl. Despite the price, she says the shawl is a good value for the money, because it has “range and permanence,” meaning it can be worn over a dress, paired with a skirt or even worn on an airplane when it gets cold.

Margaret Schwartz, a 24-year-old assistant ad-sales representative in New York, shops for clothes at cheap-chic chain H&M. Yet she recently bought a $300 pair of Bulgari sunglasses — one of the Italian jewelry label’s least-expensive items — because she figured she could afford an “investment piece.” “Aviators are always in style,” she said, strolling past Tiffany’s Wall Street store.

This small amount of information about each individual is enough to categorize them as Lambda or Theta. I would consider Mr. Shapiro and Ms. Schwartz to be Thetas. In their mid-twenties, they consider their luxury purchases as investments. I would guess that they are also using their purchases as a way to stand out among their peers (Mr. Shapiro can be seen in his watch on Wall Street, and Ms. Schwartz’s sunglasses are “always in style.”). This desire to fit in is a typical Theta characteristic.

Ms. Wickouski, on the other hand, seems to be more of a Lambda. She recognizes how expensive her new Hermès shawl is, but the pleasure and utility she derives from it makes it completely worth it to her. She interprets “range and permanence” as something highly desired; the shawl makes her unique.

An awareness of what Thetas and Lambdas are looking for, and of what products represent to them, can help marketers reach these individuals more directly.

Photo by Doozle

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Keeping luxury a family business

Isaac Mostovicz writes...

Is it personal investment and independence (by the designer or the founding family) that makes a luxury brand special? Such is the suggestion of this article in Forbes last week. Recently Millward Brown, a market research company owned by WPP, put together a list of the world’s most powerful luxury brands using WPP’s Brandz database, which according to the article is the world’s largest repository of brand equity data, including over a million interviews with consumers about their attitude towards brands.

Louis Vuitton was on top, but there were several companies on the top end of the list (including Armani and Hermes) that are private or still have a family as a primary shareholder–by having a majority or entire stake in the company, these companies can focus on quality and design without having shareholders breathing down their necks about higher profits.

There’s also a nice quote about the longevity of luxury from Nikhil Gharekhan, senior vice president at Millward Brown:

Luxury brands do very well because they command high levels of emotional loyalty. They ensure that the loyal customers are going to come, and, therefore, revenue stream is assured. Even in times of recession these brands don’t cut costs; they continue to deliver top quality. It’s almost a justification to splurge on these brands.

Forbes also has a slideshow of some of the luxury brands on the list here.

Do private luxury brands have an advantage over their public peers?

[Photo by Donna Grayson]

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