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.

A report in Time magazine suggests luxury brands have taken yet another blow in the financial crisis. It is quoting a recent report by Bain & Company saying that the luxury market is expected to shrink by 10 % in 2009, with apparel being hit the hardest. This is apparent in the worlds upscale department stores where you can find racks upon racks, and sometimes entire collections of designs by Marc Jacobs, Chanel, Dior and Armani- to name a few- market down by as much as 40%.

With this in mind, the French couturier Christian Lacroixs’ recent filing for court protection from creditors (similar to Chapter 11 bankruptcy in the United States) on May 28, comes as no surprise. But despite this significant setback, Lacroix’s chief executive, Nicolas Topiol, has indicated in a recent statement that the brand will continue, saying “Since the acquisition of Christian Lacroix SNC, we have been committed to the brand and to its high-end development. We will continue to do so, but the sharp downturn of the luxury market has significantly hurt our revenues”.

Even though clearly it is indicative of the state of luxury over all, the financial crisis might not be the only factor to blame for it. Lacroix launched his label in 1987 with the financial backing of Bernard Arnault, chief of LVMH Moet Hennesy Louis Vuitton, and has seen 20 years of creative success, with a great influence on fashion. Despite this, Lacroix could never turn a profit, with a continuing inability to translate his unique high-end fashion flair into more accessible products, like fragrance, lipstick and accessories. Because of this, Arnault sold the brand to the Falic Group in 2005- at a time when luxury consumption otherwise was in full bloom.

Companies might need to turn the ways in which they communicate the benefits of their products on its head. Long lasting quality resulting in low cost-by-wear, as well as great second hand value, are recession friendly qualities that could be pointed out in a media climate where focus on ‘recession chic’ may leave a lingering distaste for conspicuous consumption and parading luxury labels.

This might be further proof that luxury consumption in the financial crisis is shifting in a Theta direction, with Thetas looking for designer goods that hold their value over time, and can be passed on to the next generation. As Lambda types instead feel that luxury holds its meaning- rather than its value- over time, they are less likely to be pursuaded by these kinds of arguments. Therefore it is still important to remember that there will always be space in the market for both Thetas and Lambdas, and although recession times might create a need to motivate consumption in new ways, long-term effects should be remembered in order to avoid alienating important customer segments.

In our semiotic society, luxury brands deliver the ultimate sense of individuality and personal identity as emulated in products and services we choose.

Historically the luxury category survived by providing products which could not be had by everyone. These were distinguished by their scarcity, rarity, design excellence, classicism and cost. Luxury was the province of the rich, or a unique occasion for those who normally could not afford it. For years luxury was also the territory of those who could distinguish it. In times of recession, luxury brands pursued textbook strategies to survive: narrowing licensing, consolidating retail and messaging, reissuing heritage designs, limiting production, brand extensions.

Mass communications, marketing, media and the internet transformed the category. The earliest phenomenon was the segmentation of luxury into distinct levels spanning high-end house brands to premium luxury, with multiple gradations in between. Hijacked brands such as Hummer also entered the luxury marketplace, adopted by constituencies never imagined or solicited by their creators. More recently the category realized that consumers wanted affordable luxury, opening the market to new products like premium chocolates and coffee, that is, commodities with luxury attributes, but at the accessible price point.

Internet-based supply chain solutions enabled mass customization later in the supply side process – apparel and footwear retailers like Lands End, Converse and Brooks Brothers now offer affordable product tailored to customers unique specifications of measure and material, formerly the exclusive domain of luxury. With luxury so widely available to the mass market, demand has increased for low-tier luxury, evidenced by the $500 billion of counterfeit luxury goods trafficked yearly. The high end now demands what IHT Style Editor Suzy Menkes recently characterized as ‘extreme luxury’, aspirational products at the tipping point of price, production and quality.

A good deal of inventiveness has been observed in the creation of brand extensions in the category, which currently is experiencing a thriving market. A fine example is Bulgari, who have applied their mark to fragrance and eyewear (the first classic brand extensions of couture), a resort, a car, and a commissioned romance novel featuring a string of Bulgari pearls as the main character.

The luxury category exhibits hybrid behavior, in that their innate constraints – the expression of heritage values- cannot be easily surrendered without devaluing or transforming brand perception. Witness Gucci and Saint Laurent, once languishing, now revived, but not at the expense of their heritage. Luxury is Darwinian. The original attributes must remain, but in peaceful coexistence with all-important brand innovation.

Stanley Moss is the founder of Diganzi, the international brand consultancy. You may also be interested in reading Jack Yan’s thoughts about luxury.

Luxury brands command a premium because they infuse the act of buying with emotion. Shopping is turned into an experience. But what distinguishes a quality, luxury product from one at the mediocre end of the market range?

According to Haupt, a senior advisor at Steuben Glass in New York, the product has to ‘speak for itself’. A luxury item is not dependent on cost. ‘Throwing money around … just creates a lot of noise’ (David Birnbaum). Rather, the creation of a luxury product is dependent on quality.

Today, it seems that a whole range of products, including Costa Coffee, Lindt chocolate, and Haagen Dazs ice-cream, have been elevated to the pinnacle of connoisseurship. It is about creating an experience that enables the customer to develop a particularly personal relationship with the item. In February 2004, Louis Vuitton opened a four-storey boutique on Fifth Avenue, detailing flashing LED screens and a staircase made of bronze and chestnut. The idea was to produce a sensory journey through the store using light, colour and texture. Sensory experiences such as this, as opposed to discrimination are of primary importance.

And by discrimination, I mean class divisions. A tub of Ben & Jerry’s often costs 100% more than a store’s own brand ice-cream, but it is nevertheless accessible to the ordinary buyer. As Michael J Silverstein, SVP at the Boston Consulting Group has indicated, old luxury revolved around aristocracy and high prices. Today, luxury is tailored to the requirements of the vast middle income market. It is the result of higher incomes, rising home values and a self-permission that has given to the ordinary consumer a taste for fineness, distinction and sophistication. It is quality rather than price that identifies a luxury item. A palate for quality can only be a good thing.