Isaac Mostovicz writes that that luxury brands are moving towards enhanced customer experiences to compete in the global luxury market...
With an increasingly competitive global luxury market, luxury brands are truly having to go the extra mile in order to impress and retain customers.
To this end, Louis Vuitton has announced that their new maison in Rome “will house a small cinema showcasing art films from contemporary artists“. This follows a trend that has seen cafes and restaurants in stores (Armani and Gucci), concert halls (Chanel), book stores (Marc Jacobs) and art galleries (Louis Vuitton). This announcement also follows Conde Nast’s announcement that they are starting a film and television devision to leverage their editorial products in a new medium.
As luxury blog Material World says on the matter:
“Luxury has moved beyond simply buying celebrities or dressing them, on or off screen, to thinking about how they can use their own celebrity to pull people in.”
As video content is set to make up 62 percent of internet traffic by 2015, this may well be another wise decision by LVMH.
Isaac Mostovicz writes that Louis Vuitton may benefit from the associations of setting its show in a building of historical significance...
AFP, Gou Yige
Louis Vuitton has taken over the halls of the national museum in Beijing to win over Chinese consumers. By nestling itself inside a building associated with history, pride and sophistication, the Louis Vuitton Voyages exhibition is benefitting from letting the museum do its marketing for it.
Louis Vuitton has been in China for twenty years, and is already the brand of choice for many wealthy middle class Chinese. Putting on this show will cement that relationship – probably quite necessary given the influx of other luxury brands eager for their own space in China.
Setting the show in a museum illustrates how Louis Vuitton understands their Chinese customers.
“It is quite a clever thing to do because it is a very premium and prestigious setting”, said Sam Mulligan, a marketing analyst in Shanghai, “It suggests history and longevity and being in the business for a long time – all of these things are important in this market.”
Long-term heritage is an important factor for Louis Vuitton consumers and for Chinese luxury consumers, and a museum could be a perfect platform for spreading that message.
However, in communist China, the mix of luxury retail and national heritage has received some criticism, with the People’s Daily newspaper saying it was “too commercial”.
Isaac Mostovicz writes that luxury is on the rise in China...
A recent survey found that half of China’s urban residents say they prefer buying luxury items online because prices are cheaper than franchised stores.
While this fact is very interesting, and suggests that more companies should make an effort to offer their wares online in China, interest in luxury in general in China is growing rapidly. The Chinese are buying more luxury cars and SUVs than ever before — 500,000 will be purchased this year, compared with 98,000 five years ago. Luxury companies are opening stores (Louis Vuitton opened two flagship stores on the same day in Shanghai earlier this year) or are thinking of opening stores (Harrod’s comes to mind), and luxury hotels (like the Waldorf Astoria Club Hotel) are popping up all over the place.
All this suggests that marketers from the west are beginning to understand how the Chinese interact with luxury, but a great deal more can be done to enhance sales and the experience of buyers. The key is understanding how individuals interpret luxury, and this often comes down to understanding culture.
Photo by gruntzooki
Isaac Mostovicz writes that Louis Vuitton does well by focusing on quality...
The new Louis Vuitton flagship store opened in London last week. Situated on Bond Street and designed by Peter Marino, the multi-million pound “boutique fantasque” seeks to be like a home to well-heeled “collectors,” which speaks to both Theta and Lambda personalities. There’s currently a special exhibition of the 24 collections Marc Jacobs has designed since he first arrived at LV. Akin to that of a fashionista’s walk down memory lane, the whole effect is ‘expensive, quirky, glamorous – and totally contemporary’, writes Hilary Alexander, Fashion Director at the Telegraph.
When asked by Alexander about possible issues concerning the economic recession on the store’s opening, Jacobs replies “I know for a fact that business is good.” He goes on to say:
Louis Vuitton is a unique organisation: the products never go on sale, nor are they sold at duty-free shops. We create what people desire. And I love that commitment to quality.
Perhaps it’s this uncompromising nature that continues to maintain the brand’s revenue, despite the state of today’s economy. However, this approach only works for truly innovative, unique and long standing brands like LV. Not all designers can be so uncompromising. As seen in a previous post of mine on designers’ optimism, fashion designer and entrepreneur Carolina Herrera talked about the difficulty of maintaining the brand and its customers with the need to cut costs. Slashing prices on luxury brands is always dangerous as you risk jeopardizing the brand’s integrity and exclusivity. There are ways around this, as proven by the likes of Tiffany and Co. who avoided slashing prices by decreasing inventory levels instead.
Describing himself as a ‘collaborator’ and not a director, Jacobs dismisses the thought of a couture collection or the possibility of designing costumes for films, stating that the “ready-to-wear [lines] is pretty much at couture level, anyway.” Clear on the direction he wishes to take the brand towards, Jacobs plans to launch the first ever Louis Vuitton fragrance.
By maintaining a high standard of quality, Louis Vuitton has managed to thrive, not just survive, during this global economic recession. As the economy improves, they’ll hopefully be able to keep it up.
Isaac Mostovicz writes...
Louis Vuitton is a quite a desirable luxury brand–so desirable, in fact, that its logo is often put on counterfeit goods trying to pass off as official Louis Vuitton goods. Interestingly, the logo also makes its way to goods that would never, ever be associated with the Louis Vuitton brand. The ‘Design You Trust’ blog collected several great examples; you can see the whole gallery here. Here are a few of my favorites:
It’s great to be a desirable brand, but having the LV logo on things like these could dilute its value. I wonder how Louis Vuitton balances the need to police the marketplace for counterfeit goods versus the need make real Louis Vuitton goods exceptional.
Isaac Mostovicz writes...
Tiffany was in the news this week, not for a new line of diamond rings or earrings but because it lost the long-running lawsuit it’s had with eBay about the sale of counterfeit Tiffany goods on the site. Tiffany maintains that eBay knowingly encouraged sellers to dilute Tiffany’s value and trademarks by not putting a stop to counterfeit Tiffany listings on the site. Rather than resting with eBay, the burden for identifying counterfeit goods rests with Tiffany, who have to report counterfeit listings to eBay and have eBay remove them. EBay argues that like YouTube it’s up to the trademark holder to report false listings, and they already take enough action against counterfeit items because these are bad for their marketplace.
This American ruling is interesting because it diverges from recent findings in European courts. In Germany a ruling for Rolex found that eBay must make greater preventative measures against the sale of counterfeit Rolexes, and in France eBay was ordered to pay Louis Vuitton 40 million euros in damages for the sale of counterfeit goods.
Counterfeit goods damage brand value–if discovered, they’ll upset people who purchase them and receive them as gifts; they mock the effort that people make to show their love and appreciation for one another. The takeaway from this case is that one needs to be careful when make purchases from a source that hasn’t been completely vetted. When a deal sounds too good to be true, it probably is.
[Photo by minxlj]
Isaac Mostovicz writes...
Last month a discussion at the Paris Fashion Group heralded the continuing success and integration of Fair Trade and sustainable goods into luxury products. Comments from the panel suggested that luxury consumers are not necessarily interested in ethical considerations, but rather in finding a unique and “industrial” product. And this new type of demand seems to be increasing; some are even calling it a “meta-trend” for this generation of luxury shoppers.
Sylvie Benard, a spokesperson from LVMH, also noted that the brands her company represents–such as Moet-Hennessy and Louis Vuitton–do not publicise the great strides they are making in their production process. Nonetheless, they are reducing the amount of water being used to produce their champagnes, cutting the amount of electricity being used in their flagship Louis Vuitton store in Paris, and working with producers in the developing world to build their local economies. Although they don’t talk about this, Benard noted, “To be extravagant out front you need to be impeccable out the back.”
Isaac Mostovicz writes...
Following my post questioning whether we use luxury for the right purpose, today the Associated Press published a story about the booming luxury market and skyrocketing prices for unique luxury items.
Exclusivity is in–logos and brands are important, but not as important as the quality and uniqueness of an item. Items cited in the article include a $700,000 Montblanc pen (covered with rubies, diamonds and sapphires), a $40,000 Louis Vuitton handbag (a limited number were sold out in pre-orders) and a $10,000 Coach crocodile handbag.
Attaining the “highest” level of luxury appears to getting increasingly difficult. But should it be? It might be worthwhile for people to take a step back and remember that luxury is subjective. It doesn’t need to be a $1000 pair of shoes. And if $1000 shoes are the only or most prominent ideal of luxury, that’s “a terrible ideal for young people,” according to John Vogel, faculty director at the Allwin Initiative for Corporate Citizenship at Dartmouth.
We need luxury, but we also need to know what luxury is, for ourselves.
Isaac Mostovicz writes...
Earlier this month the Luxury Institute released a survey that found that when buying a handbag, men in the US are more concerned with the label than with the price compared to women. 73% of men looked first to the label when buying a handbag (compared to 50% of women), and men were three times as likely to choose Chanel.
It would have been interesting if the Luxury Institute had determined (or at least released) what the actually percentage of spending on handbags is for men versus women. I have a sneaking suspicion that women purchase the vast majority of handbags for themselves and men buy only a tiny percentage as gifts. US leather goods seller Coach was the most familiar brand of designer handbags, recognized by 52% of respondents. 24% recognized Gucci, 22% Louis Vuitton and 21% Prada.
This makes sense—Coach bags are relatively mid-range (costing several hundred dollars) compared to European labels whose bags can cost in the thousands. Men may choose the fancy bags on the basis of brand but women are buying more of the cheaper Coach bags as they’re less concerned with label compared to other factors like price and quality.
If it is true that women buy the vast majority of handbags, the marketing challenge is then to get men to buy more handbags for women. This completely opposes the status quo in the jewelry industry, in which the goal is for women to buy more jewelry for themselves.
Isaac Mostovicz writes...
Today I came across an interesting commentary item from Unbound Edition, a publication by marketing consulting firm Patrick Davis Partners. Last month Bulgari announced that they are overhauling their business starting with their flagship New York boutique. The reason? They’re being left behind as Gucci, Louis Vuitton and other luxury companies actively court a broader (i.e. less wealthy) range of buyers. Bulgari’s plan is to focus less on the fine art gems they’re known for and more on relatively affordable accessories such as watches and handbags.
We’ve discussed the dilemma of keeping the brand exclusive while also bringing in new buyers on Janus Thinking before. Patrick Davis frames it in an interesting way in the article:
Once one can afford anything – a jet, a six-figure watch, the walled spread on Anguilla – luxury transforms into something shaped by knowledge and access, not acquisitive binge. … Buying luxury is no longer about money; the currency of knowledge is more powerful. In other words, the driver of luxury markets is not price, ubiquity, inventory availability or distribution, yet that all seems to be part of Bulgari’s move.
Knowledge worth paying for is certainly a phenomenon that’s picking up steam—greater interest in things from online review sites to concierge services reveals this to be the case. Would Bulgari be smarter to keep their exclusivity and do a better job of getting the knowledge out rather than going down-market with accessories? We’ll find out after their revamp.