lambda

Pandora’s (thinking outside the) Box

Isaac Mostovicz writes that Pandora represents a great example of a luxury brand seeking to personalise and empathise ...

Previous posts on this blog have discussed the necessity of emotion in luxury marketing, and the jewellery retailer Pandora is the latest to demonstrate a good understanding of this.

Image courtesy of Stock.XCHNG

Unity Marketing’s fourth “Luxury Tracking” survey has ranked Pandora as the second most popular jewellery brand amongst 1,200 affluent consumers, just behind Tiffany & Co (which recently executed its own emotion-charged marketing campaign, What Makes Love True.)

 

More established brands like David Yurman and Bulgari were left behind as even other brands considered “mass” – e.g. L’Oreal Paris and Amazon.com are slowly making inroads with luxury consumers, the report found.

 

This is significant, if only because Pandora’s mainstay item is a silver charm, which consumers are able to add to a bracelet or necklace to create a personalised piece of jewellery.

 

This approach gives customers the ability to customise a one-off piece that others are unlikely to be wearing and something that is totally personalised.

 

From the point of view of Janusian thinking, where there are two opposing worldviews, Pandora’s approach appeals to the Lambda personality. Lambdas are more likely to make choices based on how a product will help them stand out, and be unique versus Thetas, who long to fit in and seek affiliation.

 

Pandora jewelry allows the personality of the wearer to shine through rather than be overtaken by the brand, showing that the company understands its target market.

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Richemont Luxury Group Fires up in the Chinese Year of the Dragon

Isaac Mostovicz writes that the Chinese Year of the Dragon may be significant for luxury retailers ...

A recent article in the Wall Street Journal wrote that Richemont, the Swiss luxury goods group, has reported third-quarter sales of €2.6 billion ($3.3 billion) – in no small part down to its Asian, and in particular Chinese customers.

 

Image courtesy of Luxos

The Asia-Pacific region cemented Richemont’s position as one of Europe’s most important luxury manufacturers, with results of €1.05 billion, 36% up from the previous year. However, it is not only the domestic Chinese market that is prompting such strong profits. Sales in Europe also rose 16% to €914 million as Chinese tourists are purchasing the group’s goods – with items such as Cartier jewellery and Jaeger-Le Coultre watches finding favour – whilst visiting European cities such as Paris, Rome and Geneva.

 

Bernard Fornas, chief executive of Richemont’s Cartier brand commented: “The number of Chinese tourists is growing… and will help to “cushion the landing” in case things get worse in Europe’s economy.” 

 

As previously discussed, South-East Asian demand for luxury looks set to continue. Sparkle Roll Trading Development, a distributor of luxury goods in China, has five boutiques in Beijing and Shanghai selling Richard Mille and Parmigiani watches – with the average Parmigiani watch costing around 68,000 Swiss francs ($71,882).

 

“Sales are really good at the moment. At one of our boutiques we sold 60 watches in one month,” commented Mr. Firth, Sparkle Roll’s Chinese Marketing Director. By comparison, their stores in Europe sell on average five or six watches a month.

 

The year 2012 – which in Chinese horoscopes is the Year of the Dragon – is also affecting luxury sales. Chinese New Year is on January 23, with the emblem of the dragon being symptomatic of wealth, royalty and nobility. To celebrate this, independent watchmaker Parmigiani has created a dragon clockwork automaton crafted of white gold, imperial green jade, rubies, sapphires and a diamond.

 

At Janus Thinking consumers are characterized into two different groups – or world views – of Lambda and Theta, which explain how different personality types influence our choice of luxury.

 

The Parmigiani automaton might appeal to Lambda consumers due to the level of its craftsmanship, its uniqueness, and the fact that it there is a meaningful story behind its creation – rather than because of its price.

 

Theta consumers, however, will be attracted to such an item as it is a one of a kind, high-end design, and its high price helps to establish them within their preferred social class. Thetas seek acceptance, and their purchases reflect that.

 

Priced at 3.5 million Swiss francs ($3.7 million,) regardless of whether Theta or Lambda, its purchaser will no doubt have a strong affinity with the symbolic dragon.

[...] giant the Richemont Group is approaching the Year of the Dragon in his post for Janus Thinking: READ POST HERE [...]

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Luxury marketing with QR codes

Isaac Mostovicz writes that QR codes can be an effective tool in luxury marketing...

QR, or Quick Response, codes – a type of code which can be read through a smartphone and redirects the user to a webpage, links to text or pre-composes an email – are becoming increasingly present in luxury marketing, both in magazines and newspapers, and on billboards and posters.

As this article on Luxury Daily notes, QR codes can be an effective tool to take a print advertisement to a multi-channel campaign. They enable consumers to engage with the brand in a new way, through real-time content and creating more of a personalised experience.

This style of marketing could work particularly well for consumers with Lambda style personalities, who are likely to judge products based on their individual responses to it. For those with Lambda traits, luxury marketing that goes the extra mile to ensure a personalised service that stands out from its competitors is likely to be effective.

However, the article reminds marketers to be wary of how these codes are used – if the website the code directs to is not properly optimised for mobile phone use, for instance, then this would be a negative experience rather than an enriching one, and potentially harmful for the brand.

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Chinese luxury brands on the rise

Isaac Mostovicz writes that Chinese consumers are driving a surge in home-grown luxury brands...

As I discussed in a previous post, Beijing recently banned advertising in the capital that promotes hedonism or used the word luxury. However, according to a report by Reuters yesterday, this doesn’t appear to have affected a surge in home-grown luxury brands, thought to be driven by a desire from Chinese consumers to seek out goods that emphasise their culture.

Western luxury brands have on the whole experienced strong sales from the Chinese market in recent years, with consumers buying into the perceived heritage and exclusivity that the brands represent. However, with China expected to be the world’s biggest luxury market within five years, Chinese culture and preference cannot be ignored. More than 100 second-tier cities have populations with more than 1 million people and consumers in these cities have both the buying power of their tier-one peers and an interest in luxury brands, according to a report by PricewaterhouseCoopers.

Hermes last year launched its China-focused label Shang Xia, and the trend is set to continue.

That’s not to say sales of Western luxury brands in China will decline, according to Reuters, Sunny Wong, managing director of Hong Kong-based Trinity Ltd, said: “Luxury means heritage and it takes generations to build heritage. The Chinese customers want heritage brands — they want the story, they want the history.” It seems Wong is referring to Lambda personality types, who are likely to make choices based on how it will help them stand out, and how a decision benchmarks them against others. Western luxury brands are still very much a status symbol in China.

While focus for Western brands has traditionally revolved around marketing, now it is turning to the products themselves, presenting a new challenge for Western luxury brands.

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India’s space challenge drives new trends in luxury shopping

Isaac Mostovicz writes that luxury brands in India are turning to home delivery options to reach their clients...

India is one of the four largest emerging economies (in addition to Brazil, China and Russia) and is expected to surpass China to be the world’s most populated country in the coming decade. With its count of High Net-Worth Individuals more than doubling in the past year (according to the World Wealth Report recently released by Capgemini and Merrill Lynch Wealth Management), there is certainly plenty of potential consumers for a variety of products and services.

Luxury brands are relatively well established in India; its first two luxury malls opened in 2008 – DLF Emporio in Delhi and UB City in Bangalore. Although welcomed by luxury retailers at the time, allowing them to expand out of the five-star hotels where they had traditionally confined themselves, in recent months the lack of appropriate retail space for luxury brands has become an issue. This is further compounded by soaring rental prices on what is available, meaning rents are far beyond what brands are willing to pay.

According to a report by international real estate consulting firm Cushman and Wakefield, rentals in the country’s high streets have gone up considerably – by as much as 15 per cent in some of the markets.

This appears to be driving a trend among luxury brands in India, with many switching to home delivery services for their high-end clients, in some cases even arranging personal fashion shows for their select few. Brands such as Gucci, Jean Paul Gaultier, Jimmy Choo are going out of their way to send a range of items for display at the client’s home.

Such a service may suit Lambda personality types who seek freedom in where and how they shop, but for Thetas who prefer context and consensus, the service may not be so appealing given it lacks engagement with like-minded shoppers and the all encompassing brand experience usually achieved through visiting a store.

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