Rolls-Royce has joined a growing set of luxury car manufacturers in admitting that its cars need to be greener – relying less on petrol, and more on alternative fuelling methods such as electricity – if their business is to be sustainable in the long term.

The luxury car brand has built a one-off electric car based on its flagship ‘Phantom’ model, which it is showcasing to consumers on a year-long tour.

Although many people may associate luxury with being inherently unsustainable, but this development shows that this dis not necessarily the case. It is not just car manufacturers taking this step – take the example of the couple in America who are aiming to built the most sustaibable luxury home in the world.

Rolls-Royce are not the only brand to develop high-end alternatives to petrol engines, with BMW, Jaguar, Audi and Porsche all developing rival cars. A few years from now, it seems as though hybrid high-end cars will be de rigueur as the different brands work to attract a slightly different type of luxury consumer.

After the Christmas break, many luxury brands, including Swiss luxury watch brand Richemont, and Rolls Royce, have announced record sales increases. In the US, the Telegraph reported a few weeks ago that while luxury brands are on the rise, discount stores are seeing a slower pace of growth, and in the UK, a similar trend was witnessed that saw consumers preferring to pay more for just one present rather than buying enormous quantities of presents. The pattern emerging in the UK shows a preference for trusted luxury brands over high street offerings.

In the age of “Austerity Britain”, retailers have seen consumers buying with a Victorian style of generosity – spending more on one main present. Items such as Apple iPads, iPods and the Amazon Kindle were along the Christmas bestsellers, with upmarket department stores like John Lewis and House of Frazer drawing in the cash.

In an interview, consumer behaviour specialist Henry Enos explained, “People are looking for value for their money. People have been made to realise that money issues are prevalent, so what people have gone to in times of uncertainty are tried and trusted brands.” With more of a limit of their spending, people plan their purchases more, and spend wisely on items that guarantee durability and value for money. For those brands that tick the boxes of traditional, tried and tested, their resilience and dependability is the main attraction to the consumer. Brand heritage is key.

For the Theta personality, the emphasis on the context of the product – it’s brand name, the connotations it has in society and the legacy it has achieved – are the points that persuade someone to purchase it. Yet also, the heritage of a tried and tested product is built up through performing well and showing its resilience and in this way, the quality and durability of the product appeals to the Lambda personality.

Whatever causes us to purchase a product, it is apparent that as conscious as people are of the need to curb their spending, they are setting their sights higher on the familiar, more expensive brands that have proven to stand the test of time. Plus, when money is tight, quality rather than quantity may help consumers feel upbeat when all anyone around them talks about is the slump.

Brioni, Rolls-Royce and Stella McCartney are among the luxury brands pondering or already operating stores in India, where spending on luxury goods is expected to grow from $4 billion this year to $30 billion by 2015. India now has 54 dollar billionaires, gaining 19 in the past year. Of course these and other luxury companies are seizing a growing opportunity, but should the major disparity of wealth in India (three quarters of Indians survive on 50 cents a day) give us pause? As we’ve seen before on Janus Thinking, acting in a socially responsible manner can help luxury companies grow their markets. Those companies going in to India would be wise to understand the full impact of their entry.

[Photo by Ooodit]

The Robb Report, the monthly magazine and website about luxury goods and experiences, has just announced its annual holiday gift guide. While I haven’t been able to find the full ‘Ultimate Gifts’ section online, the Wall Street Journal Wealth blog has had a look and noted a few highlights, including a $250 million yacht (with 13 suites and two helipads) and $16 Ferrari package (with a F1 Ferrari, 2 VIP passes to all 20 Formula One races next season, and lunch with Ferrari personalities).

These are not the only luxury items the Robb Report has recently promoted–earlier this month they began offering the Robb Report Limited Edition Series from their website’s Marketplace section. It’s an elite offering, including a car (a bespoke commissioned Rolls Royce Phantom for $493,272.00), wines (Ultimate Burgundy or Definitive Bordeaux from the Terroir Company, $1 million each), jewelry (Beaudry diamond and platinum bespoke ring, bracelet and earrings), and travel (golf, shopping and winter sports trips with a Sentient Jet membership $195,000-475,000) among other offerings.

Does the fact that the Robb Report is offering such luxury directly (in addition to highlighting items in guides) suggest that demand exists and that the economy isn’t doing as badly as we might think? Are they (cynically) in it for the high margins luxury products often offer, or do they really want to bring their readers the very best luxury they can find? The answer is probably somewhere in between.

Luxury can no longer be defined along the same lines as we grew up with, or whatever we learned at business school. Before the Rolls-Royce motor car brand fell into BMW hands, annual sales had dwindled: Bentley, once the poor brother of Rolls-Royce, was much more PC and less ostentatious. Even today, HM the Queen’s official car is a hand-made Bentley, an unforeseeable event at the time of her Silver Jubilee.

But in the travel market, I have noticed an opening up at the very top end. To date I still have not heard of a six-star hotel, but I have heard of seven-star ones.

So is this just the changing of the guard?

It can’t be that simple. Recessionary environments do cause a rejection of some luxury brands, but others preserve their niche, comfortably. Yet others extend downward in order to keep sales up.

But at the other end, what were everyday brands have acquired an air of luxury themselves. Levi’s was made for gold prospecting, not posing, at least not initially. Volkswagen was the People’s Car of the Third Reich, not the archetypal “quality” European automobile by which everyone, even Toyota, judges its small hatchbacks.

We have Hennes & Mauritz selling clothes in collaboration with Stella McCartney, then Viktor and Rolf, and now Madonna, just to make the old segments irrelevant, or at best, muddled.

Other forces at work have included the democratization of experiences: the James Bond lifestyle, once the stuff of fantasy, is no longer out of reach. Jet travel itself, indulged by millionaires once upon a time, can cost as little as £1 through some of Britain’s cheapest airlines.

It was in this world that Lucire branched into print in 2004, after seven years, having secured by the end of 2003 the position of the world’s leading online-only fashion magazine. The first problem was: if segmentation as we knew it was dead, then where on earth would this magazine fit?

And the second problem: even if we figured it out, and even if the customer knew, would the channels understand?

One reason I always felt at home in Scandinavia is the whole idea that luxury, or at least design excellence, should be available to all. It is a familiar principle to anyone who had studied the history of the Bauhaus Design School in Weimar; fortunately for the Swedes, they managed to keep those principles going in a fairly uninterrupted fashion through World War II.

Lucire was born in 1997, at a time when the notion of democratization was stronger than that of snobbery. It did not matter if a web site was made by a one-man band or if it were created under the auspices of Condé Nast; anyone, with the smoke-and-mirrors knowledge provided by design and typography, could play the luxury game. And so we did, with one eye remaining on the way consumers were changing.

And they were, rapidly. Luxury was about accessibility, not exclusivity. Premium is the new mainstream. Those words remained with us as 2003 became 2004, and Lucire’s future as a multi-media (the hyphen is intentional) property unfolded.

I still believe this. Quality can be had for $9.95 or $99.50, and in the fashion business, these sorts of differences are not unrealistic. We decided that Lucire’s price had to undercut some of the existing magazines, even though we were printing on a larger format page, based on the idea that consumers were moving away from the old divisions. We had to bring some of the internet principles into print.

We priced Lucire above the popular Australian-owned competitor, Fashion Quarterly, not to be confused with the same magazine from Canada. We would tread the middle of the road, for our own readers had told us that that was where their incomes lay. But we would spoil them with premium products, which many would buy, if some sales’ improvement figures of some of our clients are to be believed.

When the United States’ richest man, William Gates III, drove a Lexus, this strategy did not seem to be foolhardy. Rich people could buy us because rich people, as Mr Gates showed, like good value, too. Everyday people could buy us because we weren’t ripping them off.

Yet some channels in New Zealand, our first market, were still stuck in the marketing school world of the 1950s. Rich and poor. Premium and poverty. Hardly reflective of a nation that prides itself on being nationally middle-class, where tipping is unheard of and considered the province of less civilized nations that still looked at the world through master-and-servant eyes.

Lucire found itself in the nicest suburbs like Merivale, Christchurch, where it sold out in its first week; but equally, it would sell out in the student bookstores nationally. But we were not finding ourselves in the middle among retailers, where our readers were, and we were failing to crack the sales’ figures of our major competitors. That much I admit, publicly. Those middle-of-the-road retailers who stuck with us find we sell reasonably well and we were all rewarded.

My idea of luxury is probably in line with the consumers’. It is about accessibility, design excellence, and quality, but it is not about exclusivity. Everyone deserves to be spoiled from time to time. A luxury brand, and I do count Lucire as one, need not be so narrowly focused that only the rich buy into its world. Nor does it need to have every channel member indulging at the top end of the income spectrum. Luxury, ultimately, is a state of being, and that can be done at a variety of prices.

But try telling that to retailers, who have not branched out from their bimodal reckoning of the market-place.

The ideas of accessible luxury is not totally foreign in other regions, otherwise H&M would not even dare try its M by Madonna line. However, they do own their own stores, which should perhaps be our next move…

Jack Yan’s website is here.