New York Times

Luxury brands say “no” to online discounts

Isaac Mostovicz writes that luxury companies with new websites should be aware of how people experience their sites...

According to this article in the New York Times today, several large luxury brands (including Marc Jacobs, Jimmy Choo, Hugo Boss, Vince, Lancôme, St. John, Theory, Kiehl’s, Lilly Pulitzer, Donna Karan and La Perla) have recently started or are about to start selling their wares online directly to consumers. While online retailing is a tried and true channel for many retailers, these luxury companies hesitated because they felt that the web couldn’t provide a similar experience to their stores, but the recession has made them more willing to try new things. Operating a website can be significantly less expensive than operating a storefront, and it can also cut out the department store middlemen who collect the difference between a good’s invoice price and retail price.

The most interesting part of this article is the repeated emphasis of luxury goods companies like Lacoste saying that they will never, ever discount the goods they sell through their online stores. These companies certainly don’t want to devalue their brands, but at the same time, they should be aware that the recession has made many shoppers more price-conscious and only willing to buy when they find discounts. According to a recent article in USA Today:

For others, it’s about buying luxury goods only when they’re on sale — or at a steep discount. Nearly three in four wealthy women say they’ll only purchase luxuries if they can get a good deal, reports a recent survey by AgencySacks, a branding firm that consults for some of the nation’s top luxury brands.

If for many people part of consuming luxury becomes the hunt for the deal, companies that refuse to discount may have to change their strategy.

Photo by Bludgeoner86.

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How the downturn affects us, depends on what we value

Isaac Mostovicz writes...

Interesting story in the New York Times this week about working at Christie’s in New York. While the auction house has reduced employee perks and will have to lay off some staff due to the downturn, many of the (mostly) women who work there have felt almost vindicated as they keep the jobs they love while their friends lose much higher paying (but less satisfying) finance jobs.

How much money does it take to be happy? It’s a question that has been on the minds of many in recent weeks and months. Those bankers and financiers who have lost their jobs will almost certainly need to curtail spending and may find that their standard of living has dropped. But people used to a ‘normal’ or even ‘poor’ standard of living, who are happy with what they have, might not see much of a difference in how they’re living.

As I’ve said before, luxury depends on how one interprets what luxury is, and knowing what makes one happy is a true luxury. The things or experiences that give a Theta or Lambda pleasure may still be expensive, but if you know what it takes to make you happy, less time and energy need to be focused on other, less important things.

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The etiquette of jewels circa 1912

Isaac Mostovicz writes...

Recently I came across a fascinating article in the New York Times archive from 1912: “The Etiquette of Jewels: The Woman Who Takes Care Not to Wear Them for Mere Garish Display Can Add Much to Her Appearance.” It describes how diamonds and other jewels can enhance a woman’s “natural loveliness.”

It’s interesting to observe the rather ham-handed way that women are portrayed in the article by today’s standards. While the author makes a point that it’s important to pay attention to proportion and harmony when choosing jewels, he also notes how women should be acutely aware of their imperfections, rather than comfortable with their natural beauty “for where a woman fails to mentally admit her own shortcomings, she is more apt to emphasize them to others.” She instead needs “the calm calculation of a soldier planning a battle, thus intelligently facing the difficulties to be dealt with.”

Women need to wear not necessarily what they like and what gives them the most pleasure, but rather items that are the “most correct” for, and I quote, “her height, the contour of her face, her age, (or rather, to express it in the modern phrasing, her dignity,) the definite proportion of each feature, and her hands and arms.” The article goes on to describe which stones go best with which complexions and hair colors (because heaven forbid, you wouldn’t want to produce “an unpleasing, gypsy likeness.”

While this advice is questionable at best, there is one bit at the end that rings true to me:

The appeal of jewels, however much may be said to the contrary, is not a woman’s vanity, but to her love of the beautiful.

Women must choose diamonds and other jewelry that they interpret as truly beautiful, diamonds that makes them feel alive and truly unique. There is no automatic process to determine the “most correct” diamond for someone; beauty is in the eye of the beholder.

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Modernist Luxury in the Housing Market

Isaac Mostovicz writes...

image

A mid-century modernist house in the desert of southern California, outside Palm Springs, will go on auction next spring as part of an art auction through Christie’s on postwar and contemporary art.  It has a listing estimate of $15 to $25 million.

As prices in the art market have surged over the last few years, the idea that classic architecture (in this case, a design by Richard Neutra) is a form of high art is creating new opportunities in the luxury art market.

The home was bought about 15 years ago and had been advertised as a tear-down, according to a recent article in the New York Times.  After an exhaustive restoration, the home now has been restored to its original condition.

The huge range in the pre-sale estimate indicates that certain buyers might be willing to pay much more for a home with such a pedigree and shows the way that luxury retailing is making its way through every sector of the economy.  It also indicates that the preservation of classic architecture might be served well not only by public interest bodies but by private enthusiasts with the money to spend.

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Cool luxury or hot air?

Isaac Mostovicz writes...

tomford

Yesterday the New York Times published a revealing review of Tom Ford’s much ballyhooed new men’s store in New York City.

The reviewer, Horacio Silva, walked in to the store one day expecting massive amounts of attention to match the massive amounts of money that Ford wants for his designs (day shirts from $350 to $795, off-the-rack suits starting at $3,000, silk pajamas $1,900, monogram not included). The store offers a ridiculous amounts of choice, so much that shoppers almost require a steward or guide to help them find things in “unwelcoming,” “border[ing] on claustrophobic” areas of the store.

But Silva was offered no assistance, and gruffly informed by a security guard that he couldn’t go upstairs to the “appointments only” part of the store. When he made an appointment for the next day (and the staff found out that he was a Times reporter), the store and staff were welcoming and pleasant—”Champagne and smiles all around.”

Tom Ford has spoken a great deal about wanting to redefine luxury and create a truly sumptuous store. But the exclusivity he’s trying to cultivate depends upon treating everyone like a VIP. The store may drip luxury, but “Brand Ford” will suffer it doesn’t back up the luxury idea of the brand that Tom Ford has worked hard to create.

Patrick Davis says of this article...

I’m glad to see our friends at Janus Thinking commenting on this story as well. If you are interested in our take on Mr. Ford’s efforts from a brand strategy perspective, please view this article on Unbound Edition… “Faking It: Brand Tom Ford”
http://www.unboundedition.com/content/view/394/50/

Best,
Patrick

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Feelings for Tiffany

Isaac Mostovicz writes...

As we’ve mentioned before on Janus Thinking, Tiffany is a company that seems to be doing it right. There’s a fine line between courting young consumers with lower prices (to make buying Tiffany a lifelong habit) and devaluing the brand (putting off older customers or making younger customers think Tiffany is something they grow out of), but Tiffany has thus far been able to toe the line successfully. We mentioned Tiffany’s marketing strategy of raising prices to reduce demand earlier this month; last week the New York Times ran a story about Tiffany with a similar theme:

I credit the store for its gentle displays here: the most inexpensive rings — prices start at $1,090 for a ring with a round .18 carat diamond — seem to be presented in the clearest, brightest lights. This is not intended to make these rings seem bigger; rather, it makes them appear to be just as important as the icebergs down the counter — say, the round 10.5 carat diamond ring that sells for $1.12 million.

Indeed, the Tiffany ethos of making customers feel special is part of the reason why people think so highly of Tiffany and the blue box. That “fuzzy feeling” people get when they buy Tiffany is extraordinarily valuable:

While Tiffany has sold millions of diamond engagement rings, many of its customers would pay a surcharge for the blue box because it represents trust and quality. What most people want when they celebrate their marriage is the manufacture of perfect memories, and for them the blue box is as essential a part of the wedding tradition as a white veil. In the marriages I’ve observed that began with a blue box, there is a kind of assurance that buying your ring at Tiffany inures you from bad marital juju, as if the union were protected by the Good Housekeeping seal of approval.

This type of emotional connection certainly gives Tiffany a leg up against the competition.

This Valentine’s Day, did you think ‘Tiffany’ for your special someone?

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A New Bulgari

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 flagsh…

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