The classic rules of “exclusivity, rarity and scarcity” must be adaptable

Isaac Mostovicz writes that one size may not fit all when it comes to luxury marketing ...

A recent article in Marketing Week describes how the luxury goods sector, as one of the few within general retail that has endured the muted financial environment, is marketing itself to its customers. Brands such as LVMH continue to post excellent profits and consider their outlook for 2012 as “excellent” whilst ordinary high street retailers struggle.

Image courtesy of Stock.XCHNG

As a result, more and more brands are reaching upwards to try and appeal to these high net worth consumers. But some marketers claim that there’s no secret formula to attracting the attention of luxury purchasers – and that tried and tested is the best way forward.


Peter Cross, business partner of Mary Portas at the retail branding agency Yellow Door comments that while luxury purchasers are now more open to value purchases and more discerning of what they actually buy, traditional luxury marketing is still very much at the fore.


True luxury is still based on exclusivity, rarity and scarcity,” he says.


By making their most valuable customers feel special and singled out – for example, through special “gifts” that may not be available to other consumers – marketers are able to generate emotions of goodwill, rarity and exclusivity – as well as word of mouth from their customers.


Looking at this from the point of view of Janusian thinking, it could be argued that this classic “exclusivity, rarity and scarcity” tactic will affect one type of Janusian personality differently to another.


Lambdas, who seek achievement and uniqueness as an ultimate end goal, are likely to be very influenced by an individual, personalised gift or product as this will help them to stand out against the crowd – a key goal for Lambdas. Thetas, on the other hand, who generally seek acceptance into their social crowd, may find this technique attractive as it will help to establish themselves within their specific social class.


Within luxury marketing, one size does not fit all and marketers must remember that overarching “rules” may not suit every brand when considering a tailored strategy.

You say of this article...

Bookmark and Share

Luxury – Big Screen Style

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.

You say of this article...

Bookmark and Share

CSR and Luxury in an age of Transparency

Isaac Mostovicz writes that that the luxury industry is becoming more tuned in to Corporate Social Responsibility...

I have recently written on the link between luxury brands and Corporate Social Responsibility, or CSR, so it was with interest that I read the Financial Times blog post “Luxury conquers its CSR fear” which reported that the luxury industry is slowly beginning to talk about sustainability and CSR more openly.

The article gives the example of luxury jewellery brand Tiffany & co. who have recently launched a new website dedicated to CSR. This is interesting because a few years ago the author of the Financial Times piece ‘graded ‘some public luxury companies in CSR categories, and Tiffany did particularly badly, in part due to a lack of public information.

Tiffany & Co: CSR section of the website

Tiffany & Co: CSR section of the website

It looks as though, the article argued, luxury brands have realised that in an age of transparency it is better to have information out there for consumers to see, rather than hiding information behind closed doors in the fear that consumers will pick holes in it.

It is not just Tiffany that is doing well – LVMH also has a section on CSR on their corporate website, with an environmental charter.

This article illustrates that the luxury industry is beginning to change, and  I believe that sustainability and luxury are no longer mutually exclusive terms. This not only makes good sense for the long-term prospects of the brands in question, but can also be a positive attribute in luxury marketing – particularly if the brand aligns its CSR initiatives to core brand values and identity, and resonate with consumers.

You say of this article...

Bookmark and Share

Champagne industry left to rot

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


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.

You say of this article...

Bookmark and Share

eBay 1, Tiffany’s 0

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]

You say of this article...

Bookmark and Share

How is the luxury sector taking steps to be ethically sound?

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.”

[via AFP]

You say of this article...

Bookmark and Share

Vodka: the new handbag?

Isaac Mostovicz writes...


Two articles worth sharing from the Sunday Times of London this past weekend; they both concern the idea of “buying status” through the purchase of expensive spirits and handbags.

Ordering a spirit and mixer at a bar in posh places throughout the world is increasingly becoming an exercise in name-dropping: “I’ll have a [Grey Goose or Zubrowka or Stolichnaya or any number of “prestige” vodka brands] and Coke.” This is happening for two reasons–(1) in many places (in the US certainly) house spirits can be of a decidedly dubious quality, and (2) a nice spirit is one of those affordable, aspirational luxuries that people feel can enhance their status (without necessarily enhancing their status). This name-dropping is welcomed by spirits manufacturers, because while you can’t tell a vodka by looking at the glass (unlike the immediate recognition that a handbag commands), people tend to be very loyal to their chosen spirit (unlike how a handbag might be switched by season).

Speaking of vodka and handbags–in addition to owning brands like Louis Vuitton and Dior, LVMH also owns Belvedere vodka. The other article discusses how handbags are increasingly important to luxury companies–they can be purchased easily, without the need for sizing, and net profits up to 13 times their production costs. There’s a great quote from fashion designer Miuccia Prada:

With the bag . . . there are no left-overs because there are no sizes, unlike shoes or clothes. It’s easier to choose a bag than a dress because you don’t have to face the age, the weight, all the problems. And there is a kind of an obsession with bags. It’s so easy to make money. The bag is the miracle of the company.

You can read the whole spirits article here and the whole handbags article here.

Will handbags remain so popular? Probably. The question is whether luxury brands can maintain their high class image while they face a threefold attack: from smaller new brands that can seem more exclusive and hip, from counterfeit bags that celebrities are starting to not mind carrying, and from the ‘unwashed masses’ who carry their bags but don’t make good brand ambassadors.

You say of this article...

Bookmark and Share

LVMH profits spiral

Isaac Mostovicz writes...

For all the doom and gloom in the diamond industry at present, the problem is clearly not at the demand end.

LVMH profits leapt way above expectations in the first half of the year to 817m Euros–easily beating the analysts’ consensus estimate of 766m…

Watches and jewellery were strong performers, but perfumes and cosmetics were the star performers.

You say of this article...

Bookmark and Share