luxury trends

High End Concierge Services Cater to Luxury Customers

Isaac Mostovicz writes that luxury concierge services are accommodating every aspect of a customer’s needs…....

What if you could get whatever your wanted whenever you wanted it? Quintessentially is a private member’s club with a global concierge service that is available 24 hours a day, 365 days a year, to fulfill the needs of customers who crave that extra bit of luxury in their lives.

Quintessentially boasts a team rooted in the luxury lifestyle industry to provide any sort of service required, from tickets to top sporting events, VIP access to the most exclusive clubs and shows, or last minute table reservations at the hottest restaurants in town. They have 60 offices around the world and 40 sister businesses, covering every aspect of the luxury lifestyle market, from property, rare art, fine wine, fashion, luxury travel, adventure travel, philanthropy, film premieres, spas, theatre – the list is endless.

Instead of the usual chocolate and flowers for Valentine’s Day, Quintessentially offered members something they could cherish forever. With the help of some of the world’s top writers, customers could write something meaningful and then record that song using state of the art technology in an international recording studio, where top-notch producers and sound engineers collaborated to then record a personalized song.

Quintessentially is just one of many clubs around the world that mark a new trend in luxury, where if you can put up the money for membership, the world really is at your fingertips. High-end concierge services would be particularly appealing to Thetas who can boast membership to these sort of exclusive groups that are reserved for a minority of the world’s population. Lambdas will also enjoy these groups as they can provide access to events and experiences where they can connect with others.

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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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U.S. sees return of the ‘aspirational consumer’

Isaac Mostovicz writes that Thetas are regaining their confidence to spend more lavishly, however true recovery won't be felt until Lambda personalities get involved, too...

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This past weekend, the Financial Times published a report that gives some insight into the slow growth that is happening in the U.S. luxury and high-end retail industries:

Richard Hastings, retail strategist at Global Hunter Securities, said that roughly half of the 80 per cent of Americans fully employed were not affected by the depressed housing market and were now more ready to spend as they had become less concerned about their own jobs.

This could be seen as a a quickening of the pace of economic recovery in the U.S. I wrote previously that the trends happening in places such as Silicon Valley suggests that Americans with expendable income are regaining the confidence to spend it.

Tracey Travis, chief financial officer of Polo Ralph Lauren, said the change in climate has mean the company has “slowly begun to see the gradual return of our core luxury customer”.

Conclusions are being drawn from the release of January retail sales figures.

The monthly sales numbers offered further indications of returning demand for prestige and luxury goods, with Saks and Neiman Marcus, the luxury fashion department stores, reporting increases of 6.8 per cent and 7 per cent, respectively

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Neiman Marcus, which operates about 43 luxury fashion stores serving the most affluent US consumers, said that its strongest categories included women’s couture clothing and precious jewellery.

This isn’t a return to form for the Lambda personalities. Rather, the Thetas are opening their wallets for the high end items that they denied themselves in the last year, whether out of frugality or a desire not to be seen spending lavishly while others suffered.

However a small up-tick in sales won’t be enough to level out the market to pre-recession levels. Only after sustained growth over a number of quarters would be it be wise to begin thinking that the luxe industry has begun a full recovery.

For that to happen, Lambda personalities will need to get in on the action. Reports suggest that may be happening soon. But, given the number of false dawns we’ve seen during the recession, real recovery must be seen to be believed.

[…] Dr. Issac Mostovicz, a consulting academic with insights into drivers of human behavior in practical business situations, reports in the current issue of ‘Janus Thinking’ that he sees that the US is seeing the return of the ‘aspirational consumer.” “Trends happening in places such as Silicon Valley suggest that American’s with expendable income are regaining the confidence to spend it.” This conclusion is based on January 2010 retail sales figures. “The monthly sales numbers offered further indications of returning demand for prestige and luxury goods, with Saks and Neiman Marcus, the luxury fashion department stores, reporting increases of 6.8 per cent and 7 per cent, respectively.” […]

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Luxury’s Asia fascination continues

Isaac Mostovicz writes that forced portfolio diversity is painful now for luxe brands, but in the long run they could be better because of it....

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Appearing in Slate Magazine earlier this week was a feature about the luxury market’s continued move into Asia.

The article starts out by explaining what many already know, and indeed what I’ve written about previously: That the current markets — including Japan — have hit a wall. These rapidly receding markets have forced many luxury brands to diversify their market portfolios. Often, this means investing in uncommon Asian markets.

As more individuals in Asia accumulate enough money to satisfy their daily needs and begin to have confidence in their long-term prospects, they’re interested in demonstrating to themselves, their neighbors, and anyone they happen to meet that they, too, have joined the club. In a very real way, Asian buyers are getting both the best-made product they can finally afford and an aspirational brand at the same time. They’re making a leap from the 19th century to the 21st.

In effect, what we’ve got is a continent of newly-wealthy Lamda personalities who are keen to set themselves apart from their peers by displaying their new status with luxury buys.

There’s pain right now in being forced to diversify rather than doing it out of a larger strategy, but in the long-run these brands may be better off for it. Once the recession comes to a close, buyer confidence will return.

If enough time and resources are put into developing the Asian market, by the time the West comes back into the fold, luxe retailers will have greater market penetration and additional revenue streams in places they otherwise would not have had.

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Will China be the luxury industry’s saving grace?

Isaac Mostovicz writes that China's Lambda personalities could hold the key to jump-starting the global luxury industry...

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According to this recent Wall Street Journal blog post, Only China Can Save Luxury Sales, the answer to that is a resounding yes.

An updated forecast from Bain & Co. out this morning shows a stronger-than-expected rise in luxury sales for Asia–especially China. It said it expects luxury-goods sales in mainland China to jump 12% this year.

In the U.S. the luxury market is retracting as one-time big spenders are becoming more aware of how others perceive their spending in a time of a global recession. However, in China, that appears not to be the case.

Meanwhile, the Chinese are discovering their inner conspicuous consumer. Sales of everything from private jets to watches and jade-inlaid Ferraris are soaring.

I wrote previously about this phenomena in Asia. Attention is shifting to Asia – and China in particular – as a growing number of people are becoming more affluent. In a country with a population of more than 1.3 billion, a growth in the number of affluent people, even small, will have an impact. Especially so if some of them are Lambda personalities, whose interests are in the most unique and specialized product, at the highest price.

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Luxury taking the long route to recovery

Isaac Mostovicz writes that luxury consumers should beware of 'false dawns' in the industry ahead of economic recovery...

For the luxury industry, it will be a long, hard road out of recession, according to the Wall Street Journal:

The luxury-goods industry likely won’t fully recover from the downturn until 2011 or 2012, consulting firm Bain & Co. said in a forecast released Monday. This year’s decline in sales of luxury goods, including apparel, jewelry and fashion accessories, will be steep, off 8% to about $227 billion, Bain predicts.

Facing such a steep cliff, the industry has begun exploring alternative markets. I wrote previously that in Asia, luxury brands are making a play for unconventional luxury markets such as Mongolia.

The article in Wall Street Journal touches on the subject of shoppers restricting themselves from purchasing high-end items, which delivers a double-blow to the industry:

Many of America’s key high-end merchants have continued to suffer in recent months, as shoppers restrict themselves to practical purchases and forgo pricey designer clothing and accessories that may go out of fashion quickly. They have slashed the number of brands they sell in an effort to limit their inventory and avoid the deep discounting seen at this time last year.

What this means is, in essence, Lambda personalities have gone underground so to not give the appearance that they’re spending lavishly while those around them suffer. For Thetas there is less of an internal conflict because there are brands that offer a customized experience and toe the line between ‘masstige’ and luxury.

The Associate Press expounds on the trend of feeling ashamed of spending on luxury items:

The global economic crisis has generated a new phenomenon: luxury shame, or the shunning of ostentatious purchases of expensive jewelry, watches and fashion, which is largely blamed for the projected 8 percent drop in the luxury market this year.

I suspect that once a return to ‘ostentatious purchases’ by both Lambds and Thetas happens, the luxury market will officially begin its recovery. There’s talk of a 1 per cent uptick in the luxury market next year, but once should always beware of false dawns.

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Is the ‘masstige’ market recession-proof?

Isaac Mostovicz writes that the 'masstige' market's rebound could be helped by Theta personalities looking for long-lasting quality items...

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A major casualty of the global recession has been the luxury industry. Sales are down across the board and those who are buying luxury goods are buying far fewer goods than before.

Many companies are rethinking their business strategies, i.e. Gianni Versace SpA closing its Japanese stores, which I’ve previously written about.

But the doom-and-gloom of the luxury market seems not to have trickled down to the ‘masstige’ — mass-market luxury — market.

Though not officially a “masstige” brand — and the brand outright rejects it — Hermes has done well for itself in the recession. Its bags have reached mass-market, and against the backdrop of a global recession, the company has begun crafting expansion plans. Luxist reports:

The Financial Times recently talked with Patrick Thomas the CEO of the luxury brand who has said the brand has held off on expanding as fast as they could because they don’t want to squander the legacy of the company’s history. Thomas refers to it as a “capital sin” to use the image of the company to try and make short term money.

The ‘masstige’ market is tailored to Theta personalities. Even in a recession, where resources are strained, they will seek out quality items. Though the focus on quality will be more to do with the comfort of knowing the item will last for a long time.

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New, old trend emerging on the diamond market

Isaac Mostovicz writes that imperfect stones are not always considered imperfect anymore...

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A new trend is emerging on the diamond market, where rough unpolished diamonds now are being sought after by diamond dealers and used by jewellery designers for their character, uniqueness and authenticity.

However, this trend isn’t actually new, but started nearly a decade ago with underground German stone-cutters creating innovative pieces that pushed boundaries, and have since been in vogue in avant-garde circles around the globe. But it is only now that this trend is reaching a wider audience and is being picked up by big brands such as Tiffany’s, Cartier and De Beers.

Stones with imperfections that previously would have destined them to be thrown on the scrapheap are now used and considered as a source of character.

Tiffany’s vice-president John King told the Financial Times that Architect Frank Gehry is creating rough diamond jewellery for the company. “He is attracted to raw nature which is not neatly faceted, to rough textures and, from his work with wood, to the warm browns and ambers of rough diamonds”

Some argue, however, that jewellers may use such gems as a way of squeezing extra value from stones that previously had little use; and now that they are in vogue, prices of rough or included stones has indeed rocketed.

In the end it comes down to supply and demand, and it is up to the customers to decide whether they are prepared to pay for these traditionally overlooked stones. My guess is that Lambda personalities, who generally seek originality and challenge, are the ones most attracted to the distinct and unique characters of these stones, whilst Theta personalities, who seeks truth and unity, may dismiss them as un-pure and lacking the brilliance of a perfectly cut and polished diamond.

LuxuryLab Daily Digest « says of this article...

[…] New, Old Trend Emerging on the Diamond District (Janus Thinking) new trend is emerging on the diamond market, where rough unpolished diamonds now are being sought after by diamond dealers and used by jewellery designers for their character, uniqueness and authenticity. Possibly related posts: (automatically generated)Baume & Mercier Watches Lose Their CEO […]

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Champagne industry left to rot

Isaac Mostovicz writes that champagne houses are urging drastic measures in a declining market...

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Champagne, certainly a drink of choice amongst luxury connoisseurs, has seen a large decline in demand, revealing perhaps how much the luxury industry continues to suffer.

Famous champagne houses such as Taittinger, LVMH, Moet & Chandon are now pushing for an historic reduction in yield as a way of ensuring that the drink remains an expensive luxury. “Everyone agrees that production has to be cut because no one here wants to see prices fall” an industry insider was quoted saying in The Times.

These merchants are now demanding drastic reductions in grape yield, leaving the possibility of 50 per cent of Champagne grapes to be left to rot on the ground. Although this will have a huge negative impact on grape producers in the short term, such cuts may be necessary for the long term positioning of the product. Stable prices are preferred to a price collapse, as the latter could damage Champagne’s image as the ultimate festive luxury drink for a long time to come.

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Lessons from the 1930s Great Depression

Isaac Mostovicz writes that remembering the 1930s may reveal a way out of the recession...

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While we’ve looked in many directions for the best ways for companies to respond to (and thrive in) the financial crisis, we have not yet looked to history for a potential solution. How did luxury companies survive the Great Depression of the 1930s? A very interesting piece in Slate’s The Big Money blog tells us that the response then, “the selling of utility over luxury, craftsmanship over status, quality over excess,” is something that luxury marketers today should take to heart.

Utility, craftsmanship and quality are characteristics that trend more towards Lambdas, who seek achievement and uniqueness, but that’s not to say that Thetas (who seek affiliation and control) will appreciate an item less because its flashiness and showiness have been scaled back. Thetas are of course free to use luxury in any way they like, but if it’s to show off in order to fit in, they may find the groups they’re trying to fit into shrinking or less willing to accept them, it being unseemly to be ostentationsly wealthy during the recession.

What kinds of ad campaigns can we expect to match this greater focus on product quality? The article’s author, Karl Taro Greenfeld, suggests a ‘playbook’:

Find your heritage, your traditional values, your long commitment to craft and quality—or make up those attributes if you have to—and then retire the marketing campaign of shirtless models sipping Cristal in the back of a G4, and replace that with an austere, calligraphy typeface of your brand logo and then, below that, something like, “Family Owned Since the Reign of Xerxes.” Or, expect more shots of the product, less of the luxury lifestyle. The goal becomes to communicate the workmanship and quality of that $5,000 handbag, rather than just the buy-in to a cooler class.

This is an interesting observation and I believe we’re already seeing it in the marketing materials of many famous luxury brands. Whether these brands will ‘change back’ to displaying more conspicuous luxury after the recession ends remains to be seen.

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