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.

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

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]

The Hermes Birkin is one of the world’s most coveted handbags, with a two year waiting list and the devotion of many celebrities (have a look at this Google image search to see a few). By having a well-crafted product and attentive customer service, Hermes has found a way to keep prospective buyers interested and willing to wait for the bag they want. But this carefully maintained demand is at risk of evaporating if enough luxury-minded consumers read Michael Tonello’s new book Bringing Home the Birkin: My Life in Hot Pursuit of the World’s Most Coveted Handbag, out later this month.

In an interview with Reuters, Tonello exposed Hermes’s big secret: the two year waiting list doesn’t apply to Hermes’s best customers. He said:

I would go into a store with a list in my Hermes Ulysse notebook and pile up scarves, shawls, bracelets, worth about $2,000. This made me seem a regular Hermes client. Once I had that pile ready to buy at the last moment I’d ask for a Birkin and they would usually produce one of the back room. In 2005 I bought 130 Birkins in a three-month period — and you tell me there is a waiting list?

If Tonello is telling the truth (and there’s little reason to believe he isn’t–he says he has receipts to back up his story), he’s revealing some interesting things about Hermes–that the two year waiting list is an illusion, maintained to keep an air of exclusivity (and it seems to be working) and that Hermes made it a priority to keep their absolute best customers satisfied by giving them Birkins if they asked for them. They can’t have it both ways–it makes business sense to keep those willing to spend the most happiest, but Hermes benefit most in the long term by not giving preferential treatment to some customers.

[photo by yri]