Luxury Institute News

June 30, 2015

Online shopping? Wealthy still like going to store

Bloomberg News
Jun 29 2015

 

Luxury Institute surveyed 1,600 wealthy people about shopping habits. They earn at least $150,000 a year with an average net worth of $2.9 million.

NEW YORK — Even as shoppers flock to the Internet to get the skinny on everything they want to buy, many wealthy patrons still prefer the traditional method. They want to go to shops, peruse the racks, and have a salesperson help them pick out the perfect item, according to a new survey.

Research and advisory firm the Luxury Institute surveyed 1,600 wealthy people about their shopping habits. The men and women earn at least $150,000 a year and boast an average net worth of $2.9 million. The study found that very few affluent shoppers research exactly what they want to buy, then go out and make the purchase. Instead, they’d rather walk around a store and see things up close. Plus, many insist on guidance from living, breathing humans.

“Luxury experts and luxury executives have bought into the myth that, whether its millennials or men or women, they’ve done so much research on the Internet that they can no longer be influenced in the store,” says Milton Pedraza, chief executive of the Luxury Institute. “This demonstrates the tremendous opportunity to create relationships based on expertise, trust, and generosity in the store.”

For instance, when buying jewelry, nearly half of women don’t do any research whatsoever before heading to the store, preferring to gaze at all the shiny baubles in glass cases and make their decisions on the spot. This number’s even higher when it comes to fashion accessories, with 60 per cent of women opting to forego online research before snagging a pricey handbag.

The only exceptions are men who want to buy a watch, with 28 per cent selecting the item beforehand, and women who are purchasing beauty products, at 26 per cent. That’s because buyers of pricey watches are often aficionados wholly familiar with the world of fancy timepieces, while makeup purchases usually occur to replenish items that were used up.

Though visiting stores without help is the most popular method of researching what to buy, many affluent shoppers prefer the guided path, with aid from a salesperson. Men especially want help picking out watches and jewelry, while women are most likely to want an associate’s expertise on beauty products. Perhaps those workers behind the counter may stay relevant after all.

As for salespeople, the perpetual quest to “sell” the customer is a model that no longer works, says Pedraza. Shoppers go to them for knowledge and guidance, not having products shoved in their faces. For this, luxury retailers must train workers to build real, human relationships over time.

“If you earn their trust, you earn the right to contact them again,” he says.

Source: http://www.thestar.com/business/2015/06/29/online-shopping-wealthy-still-like-going-to-store.html

 

Wealthy People Still Love Shopping the Old-School Way

Bloomberg Business
By: Kim Bhasin
June 29, 2015

Even as shoppers flock to the the Internet to get the skinny on everything they want to buy, many wealthy patrons still prefer the traditional method. They want to go to shops, peruse the racks, and have a salesperson help them pick out the perfect item, according to a new survey.

Research and advisory firm the Luxury Institute surveyed 1,600 wealthy people about their shopping habits. The men and women earn at least $150,000 a year and boast an average net worth of $2.9 million. The study found that very few affluent shoppers research exactly what they want to buy, then go out and make the purchase. Instead, they’d rather walk around a store and see things up close. Plus, many insist on guidance from living, breathing humans.

“Luxury experts and luxury executives have bought into the myth that, whether its millennials or men or women, they’ve done so much research on the Internet that they can no longer be influenced in the store,” says Milton Pedraza, chief executive of the Luxury Institute. “This demonstrates the tremendous opportunity to create relationships based on expertise, trust, and generosity in the store.”

For instance, when buying jewelry, nearly half of women don’t do any research whatsoever before heading to the store, preferring to gaze at all the shiny baubles in glass cases and make their decisions on the spot. This number’s even higher when it comes to fashion accessories, with 60 percent of women opting to forgo online research before snagging a pricey handbag.

The only exceptions are men who want to buy a watch, with 28 percent selecting the specific item beforehand, and women who are purchasing beauty products, at 26 percent. That’s because buyers of expensive watches are often aficionados wholly familiar with the world of fancy timepieces, while makeup purchases usually occur to replenish items that were used up.

Though visiting stores without help is the most popular method of researching what to buy, many affluent shoppers prefer the guided path, with aid from a salesperson. Men especially want help picking out watches and jewelry, while women are most likely to want an associate’s expertise on beauty products. Perhaps those workers behind the counter may stay relevant after all.

For salespeople, the perpetual quest to “sell” the customer is a model that no longer works, says Pedraza. Shoppers go to them for knowledge and guidance, not having products shoved in their faces. For this, luxury retailers must train workers to build real, human relationships over time.

“If you earn their trust, you earn the right to contact them again,” he says.

Source: goo.gl/nwbDcz

June 25, 2015

The unique way women shop luxury cosmetics

Cosmetics Design
By: Deanna Utroske
June 25, 2015

Luxury Institute, a New-York-based global luxury research provider, looked into buying practices of wealthy consumers and discovered that how affluent women shop beauty is exceptional.

Interestingly enough the institute saw fit to ask only women about their personal care shopping habits. All survey participants were questioned about buying apparel, shoes, and accessories in general as well as particularly about jewelry and watches.  While , only “wealthy women were…asked about beauty products and handbags”, according to a media release from the institute announcing the study findings.

The study compiles survey replies from respondents earning, on average, $289,000 annually and with an average net worth of $2,9m.

Personal

Women in this consumer group tend to depend on the in-store experience to make purchasing decisions, notes the Luxury Institute.

The survey findings show, however, that a fair number of such women would rather not have the advice of sales staff. Only about “one-fifth (19%) of wealthy women prefer to learn about products in-store with a sales associate’s help. “For cosmetics shoppers this number jumps to 29%.

Thus, “For wealthy women, visiting stores and looking at displays without help is the best method of finding out about new products in all luxury categories.”

Personnel

Nonetheless, sales associates and the in-store creative and management team have a real relevance for luxury brands.

With multiple points of information, wealthy consumers have become very say shoppers, but our findings show that decisions,” says Milton Pedraza, Luxury Institute CEO.

Building rapport and trust with luxury shoppers can make a difference. Pedraza notes that, “with proper training in relationship building, along with incentives to produce, store personnel can provide a significant boost to sales across luxury categories.”

Digital

Online and mobile resources figure quit prominently in product discovery for affluent women. And fortunately for luxury cosmetic brands and beauty retailers, these shoppers are reliably visiting their sites for product information.

Browsing a store website is the second-most preferred method of shopping, with 32% of wealthy women reporting this is how they discover new products, while 23% say they do the same at manufacturer’s websites,” finds the Luxury Institute.

 

Source : http://www.cosmeticsdesign.com/Business-Financial/The-unique-way-women-shop-luxury-cosmetics?utm_source=copyright&utm_medium=OnSite&utm_campaign=copyright

 

June 16, 2015

Meticulous Attention to Detail Elevates Craftsmanship of next Lincoln MKX

Business Wire
June 16, 2015

Overall quality is the top purchase reason for the Lincoln MKX, matching a study that shows 74 percent of wealthy consumers believe superior quality is a luxury product’s most important attribute

The new Lincoln MKX medium crossover, on sale this summer, reflects increased focus on attention to detail and improved craftsmanship in subtle executions.

Advanced models along with a state-of-the-art virtual reality lab are complemented by Lincoln craftsmanship engineers who meticulously pore over vehicles.

Craftsmanship helps define the overall quality of any luxury product. Customers of the Lincoln MKX, for example, cite overall quality as their No. 1 purchase reason for the medium crossover.

“Part of the role of the craftsmanship team is to address the intangible elements of quality – how the space makes you feel, your reaction when you get in and experience the vehicle.”

This desire is seen beyond automotive as well. A study by the Luxury Institute and Epsilon finds that 74 percent of wealthy consumers believe that superior quality is the most important attribute of a luxury product, followed by superior craftsmanship.

The new Lincoln MKX, on sale this summer, elevates craftsmanship by subtly fusing form and function, sometimes in areas not immediately seen or felt by the customer.

“Craftsmanship sits between the worlds of engineering and design,” said Stacy Swank, Lincoln craftsmanship supervisor. “Our role is to bring those worlds together to enhance the experience for the customer. We like to think that if you don’t notice what’s been done, then we’ve done our job.”

Some “hidden” improvements to the 2016 Lincoln MKX include:

  • Foam was added to the wrapped console side panels, providing a softer area for the leg to rest, and also added to the door armrests and steering wheel
  • Extra strength was added to the dead-pedal area – where a driver rests his/her left foot – to make the area more firm
  • Scuff materials in the door and tailgate were upgraded to stainless steel, which is more resistant to scratches and helps maintain a beautiful appearance

The 2016 Lincoln MKX offers available Bridge of Weir® Deepsoft leather, created specifically for Lincoln seating surfaces. Bridge of Weir Deepsoft leather goes through a 16-hour softening process, which is a considerably longer process than most automotive leathers. A hand-sewn and -stitched Wollsdorf® leather-wrapped steering wheel is available on higher-series vehicles.

The center console was redesigned to improve functionality while elevating craftsmanship.

The armrest includes a two-button clamshell execution. This arrangement allows for one button to open only the flocked storage with the tray and the other to open the main bin, creating a versatile storage option.

To increase the crafted appearance, the gooseneck hinge arms that connect the armrest and clamshell tray to the hinge are hidden.

Throughout the interior, the smallest areas were upgraded to higher levels of craftsmanship. To create a cleaner appearance where the A-pillar meets the headliner, for example, a 2.5-mm indent (the thickness of a couple of dimes) was created on the inside of the joint. This allowed the materials to align better.

Lincoln craftsmanship engineers review data at computer-aided-design stations, experience the vehicle in a virtual lab and pore over prototypes to help ensure quality. In the interior of the new Lincoln MKX, for example, there are more than 1,200 interfaces.

Reducing margins and eliminating sharp edges, cut lines, parting lines and visible fasteners – while using genuine wood and metal – drives fit and finish.

“The data, the science and the math help ensure everything fits together correctly and address the tangible elements of quality,” said Swank. “Part of the role of the craftsmanship team is to address the intangible elements of quality – how the space makes you feel, your reaction when you get in and experience the vehicle.”

Source: http://www.businesswire.com/news/home/20150615006393/en/Meticulous-Attention-Detail-Elevates-Craftsmanship-Lincoln-MKX#.VYAfxc7uWXo

June 11, 2015

Hotels Offer Luxury Shopping Inside Your Rooms

The New York Times
By: Shivani Vora
June 10, 2015

Luxury hotels are increasingly partnering with high-end retailers to give guests insider shopping experiences and perks. Many of these collaborations are at properties in New York.

The Mark Hotel on Manhattan’s Upper East Side has teamed with Bergdorf Goodman: Guests are ferried to and from the Fifth Avenue store in pedicabs and have access to shop before and after hours with Bergdorf’s director of shopping. Those staying in a suite receive a $500 gift card and a facial in the store’s beauty department. Rooms from $725, suites from $1,200.

The Quin in Midtown is also working with Bergdorf’s. The phones in each of the hotel’s 208 rooms have a direct-dial button to the store’s personal shopping team, which can set up appointments for a store visit and can order items to be delivered to guests. Terrace suite guests also receive a $300 gift card. Rooms from $499, suites from $2,000.

Travelers who stay three or more nights in a suite at the WestHouse in Midtown receive a $500 gift card to the online fashion retailer Net-a-Porter and can talk with the company’s personal shoppers by pushing a button on in-room phones. Suites from $999.

The St. Regis Washington, D.C. offers guests an opportunity to stock their room closets ahead of time with items from Neiman Marcus. Those interested answer a questionnaire about their style preferences and arrive to a find a customized wardrobe. The service is free, and guests can try on the clothes. There is no obligation to buy them unless the clothes are worn. Rooms from $395.

International hotels are also participating: Travelers staying a minimum of five nights in a suite at the Madinat Jumeirah in Dubai until the end of July receive a free pair of shoes from Harvey Nichols as well as a pedicure. Suites from $800.

These relationships are a way for stores to generate traffic and also appeal to travelers, according to Milton Pedraza, the founder of the New York-based luxury research and consulting firm the Luxury Institute. “Retailers and hotels assume that if you’re staying at a pricey property, you have the means and inclination to shop, and these partnerships give you an incentive to do that with a specific name,” he said.

Source: http://www.nytimes.com/2015/06/10/travel/hotels-offer-luxury-shopping-inside-your-rooms.html?_r=0

June 8, 2015

Cadillac to Sponsor First-Ever New York Fashion Week for Men ‘I Am Very Much Interested in Taking Cadillac Into the World of Fashion’

Advertising Age
June 5, 2015

While the New York womens’ collections have failed to land a car company to replace longtime title sponsor Mercedes-Benz, Cadillac has signed on to become the first-ever automotive backer of New York Fashion Week: Men’s.
The agreement, signed to last two seasons, includes producing a variety of related events and providing Cadillac vehicles as shuttles for attendees. Shinola, Amazon Fashion, and Dreamworks have also been confirmed as sponsors for the fashion week focusing on menswear.

“I am very much interested in taking Cadillac into the world of fashion,” Cadillac President Johan de Nysschen said. “The whole idea of beginning to strengthen Cadillac’s position as a lifestyle brand is very much central to our mission. This is a good start.”

“It should be interpreted as a clear statement of intent that we will walk with a heavy footstep in the fashion world,” he said.

In addition to the role during men’s fashion week, Cadillac will continue as a presenting sponsor of New York Men’s Day, a special day formerly set aside during the womenswear-heavy New York Fashion Week to highlight emerging menswear designers. This year, that day will move to July in order to align with NYFW: Men. This will be the second season that Cadillac participates.

The new deal is a telling move from a 113-year-old brand that was reportedly considering the title sponsorship of what was formerly Mercedes-Benz Fashion Week, which primarily showcases womenswear. Mercedes-Benz ended its title role there earlier this year; the twice-annual event has suffered a deficit of energy since moving from Bryant Park to Lincoln Center in 2010. Many fresh, new fashion brands started showing their wares at off-site locations — often involved with Made Fashion week.

Earlier this year, Cadillac hosted arguably the hottest ticket during New York Fashion Week, when it allowed Public School to show its Autumn/Winter 2015 menswear and womenswear collection in the automaker’s new offices, situated between Tribeca and the West Village.

“We evaluated New York Fashion Week, and we continue to think it’s a worthy property,” Mr. de Nysschen says. “But we weren’t ready to figure out how to fully integrate that into our overallmarketing strategy.”

Cadillac’s decision to sponsor men’s fashion week (which is backed by the Council of Fashion Designers of America), rather than New York Fashion Week, speaks to its desire to return to the cutting edge of culture. In recent years, the automaker has struggled to revitalize its fuddy-duddy image; last year the average buyer of a Cadillac was 59.5 years old, according to the global information company IHS Automotive — much older than the thirties to early forties age range most desirable to luxury brands.

The men’s week sponsorship is totally new — a first. It’s an essential first at that, industry insiders say.

“Cadillac needs that cool, fashionable, ‘gets it’ association to appeal to all consumers, especially Gen Xers and Millennials, who still have a perception of an older brand,” Milton Pedraza, chief executive officer of the New York City- based Luxury Institute, said via e-mail from Stockholm.

New York Fashion Week: Men’s runs July 13-16 at Skylight Clarkson Square in downtown Manhattan. A spokesman for Cadillac declined to disclose the amount of the new sponsorship.

Source: http://adage.com/article/cmo-strategy/cadillac-sponsor-york-fashion-week-men/298907/?utm_campaign=SocialFlow&utm_source=Twitter&utm_medium=Social

June 5, 2015

When is Luxury not Luxury?

PYMNTS
June 4th, 2015

When Lilly Pulitzer released an exclusive line for Target in April, the entire collection sold out at some physical locations within hours. Good for the designer, good for the store, good for the buyers. A resultant Target website crash aside, good for everybody…right?

“No target shouldn’t collaborate with Lilly just no ew ew ew keep Lilly Pulitzer classy people” – Katherine (@kathhlambert)

“lilly pulitzer collaborating with target is probably the worst news I will get in all of 2015” – Marisa Lyn Friedman (@marisalynnnn)

“Lilly pulitzer for target?! Holy hell What’s next?! the apocalypse??! affordable clothing for the masses!? Disgusting” – Pamela Beesly (@trillprincess47)

Those tweets (the third of which, c’mon, has to at least be partially sarcastic) went out not after “Lilly Pulitzer for Target” was released, but actually when the line was first announced, back in January.

The perception among Lilly Pulitzer devotees outspoken in their disapproval of the Target collaboration, then and now, seems to be that the value of Lilly Pulitzer clothing (and other items) is directly related to their cost. And if the cost goes down (Lilly Pulitzer dresses, which often sell for $200, were available at Target for $40), the brand itself diminishes in value.

It wasn’t only semi-anonymous Twitter users who expressed their disdain for Lilly Pulitzer’s availability to bargain shoppers. In an op-ed for Bloomberg, columnist Megan McArdle – having expressed her belief that Lilly Pulitzer clothes are in fact quite ugly and worn only as a statement by people too rich to care – wrote that “actually wearing Target’s Lilly Pulitzer line…signals the exact opposite of what it is supposed to.” That is to say, if you had to make an effort to buy those clothes, you don’t really deserve to wear them.

Crossovers between high-end brands and mass-market retailers – and the potential image risk to the former – are by no means a new phenomenon. In 1983, the designer brand Halston released a collection exclusive to J.C. Penney, and lost some luxury partnerships as a result.

Halston’s experience aside, the particular backlash to the Lilly Pulitzer/Target collaboration seems a bit out of step with the norm, as Target’s own partnerships with brands like Isaac Mizrahi and, as recently as this year, Missoni, or the recently-announced deal between H&M and Balmain, did not raise such a volume of ire among self-appointed consumer protectors of the luxury ideal.

While there is a risk of brand dilution in partnerships, a study from the Luxury Institute (which, you have to figure, knows a thing or two about this topic) showed that affluent shoppers are not turned off by luxury brands partnering with mainstream brands.

With specific regard to the Lilly Pulitzer/Target hookup, the Harvard Business Review crunched the numbers and viewed the outcome as purely positive.

“Unlike the market saturation and brand extension strategies that have de-valued other luxury brands like Michael Kors and Coach,” states the HBR’s report, “the Target collaboration was a smart move for Lilly Pulitzer. The limited-item, limited time collection allowed the company to expand the brand while maintaining its exclusive appeal.”

Given the success of the arrangement on almost every count (save, again, that unfortunate website overload), it is more than likely that more collaborations between high-end brands and mainstream retailers are on the horizon. Will there be outcries from those who, holding luxury in high regard, look down their noses at mass-market consumers? It’s likely. But it’s just as likely that such complaints won’t have much an impact on the bottom line.

After all, haters gonna hate.

Or, as Lisa Birnbach put it more eloquently in New York Magazine, Lilly Pulitzer herself “would not have approved of her ‘defenders.’” Referencing the Alexander Theroux quote, “Hypocrisy is the essence of snobbery, but all snobbery is about the problem of belonging,” she concludes that “Pulitzer, despite her last name, was no snob.”

Source: http://www.pymnts.com/news/social-commerce/2015/when-is-luxury-not-luxury/#.VXGbUs9Viko

May 29, 2015

All this $500 million “house” needs is a buyer

CBSMoneyWatch
By: Jonathan Berr
May 28, 2015

Although media reports have called the $500 million property that real estate investor and film producer Nile Niami is developing a “home,” that doesn’t really do it justice.

While it does have a 74,000-square-foot main residence, it also includes three smaller residences on the four-acre property in Los Angeles’ exclusive Bel Air neighborhood. The property features sweeping views of the Pacific Ocean along with 5,000-square foot master bedroom, a “Monaco-style casino” and four swimming pools. Bloomberg News, which first reported this story, calls it “one of the biggest homes in U.S. history.”

In an interview with CBSMoneyWatch, Niami argued that the asking price on a square-foot basis is competitive with smaller luxury homes in the area. He purchased the hilltop property two years ago and doesn’t have a buyer lined up yet, though “we do have a couple of people who have been circling,” he said.

He added that he thinks the Southern California real estate market is undervalued. “There is a demand,” he said, “These guys need the space for their staff.”

As Gawker noted, the property has almost twice the square footage of the White House and is 100 times the size of the average Brooklyn apartment. Jonathan Miller, president of appraiser Miller Samuel, told Bloomberg that he broke out laughing when he heard Niami’s asking price.

“I am skeptical,” he told the news service. “But we’re in this perpetual state of surprise as new thresholds are broken.”

 MCCLEAN DESIGN

It’s more than double the second-highest priced property on the market, the $195 million Beverly Hill estate being offered by billionaire real estate investor Jeff Greene.

Niami’s timing could be auspicious. The luxury real estate market is hot, with prices in 33 cities now about 33 percent higher than they were in 2009, more than doubling the 14 percent increase seen in the rest of the market.

Although a $500 million home may strike some as overly pricey, it might be a good investment for someone who lives outside the U.S. and is looking for a safe haven for their cash, according to Milton Pedraza, the head of the Luxury Institute, which analyzes the spending habits of the well-to-do. He figures about 1,000 people in the world can afford Niami’s property and probably 10 of them would be willing to write the big check needed to buy it.

“Stocks are overvalued by any measure. Bonds aren’t yielding much,” he told CBS MoneyWatch. “Real estate is an asset that may lose value, but the downside to it is limited.”

In a nod to California’s severe drought and other environmental problems, Niami noted that the lush green grass on the property will be artificial and that he’ll use energy-efficient LED lighting.

Source: http://www.cbsnews.com/news/all-this-500-million-house-needs-is-a-buyer/

May 12, 2015

Niche marketers target the 1% – at their peril

Crain’s New York Business
By: Anne Field
May 11, 2015

Last year, Steven Abt decided to overhaul the business model of Caskers, his five-employee craft-spirits company in Manhattan. He focused his marketing on two segments: the original customers who bought curated spirits on Caskers’ website, launched in 2012, and new, even more affluent buyers, who would receive one-on-one, concierge-style service.

A significant portion of his higher-end clientele was interested in such an approach. “It seemed like an opportunity to tap the luxury market, which is growing in general,” he said.

Five months later, the new offering generates about 2% of the firm’s annual revenue, which is just under $10 million, according to Mr. Abt. He expects that figure to increase to as much as 15%, with pretax margins of 20% to 30%, compared with 10% to 20% for the original service.

Mr. Abt is one of a growing number of small-business owners in New York City who are embarking on a two-tiered strategy in their marketing. That’s the result of a variety of factors: healthy demand for high-end goods and services, postrecession changes in the spending habits of affluent consumers, capabilities made possible by digital technology and the need to ramp up volume.

In some cases, it means branching out into a more upscale market, as Mr. Abt has done; in others, expanding from an affluent clientele to the mass market. Regardless, said Daniel Levine, a consumer-trends expert and director of the Manhattan-based Avant-Guide Institute, “these businesses are just following the money.”

Certainly, there’s a time-honored tradition in such sectors as fashion to bring a luxury brand to a mass audience. Take Lilly Pulitzer—known for its connection to Jacqueline Kennedy Onassis and the very rich—which recently began selling a line of clothing in Target stores.

But such a strategy can be a gamble. The premium brand that expands to a less-affluent market may dilute its cachet. Even trickier is going after a higher-end customer. Companies often are reluctant to admit to doing so, fearing they’ll alienate potential buyers in either market. And it can be difficult to convince more elite customers that their product or service is top of the line.

“It’s always harder to go upmarket,” said Milton Pedraza, CEO of the Luxury Institute, a consumer-trends research firm in Manhattan. He points to British-based Mulberry, a maker of high-end leather bags. It recently stumbled, with declines in profits, during an international expansion that included a flagship store in SoHo; it also increased prices to an ultraluxury level.

Many factors are contributing to the two-tier trend. For small businesses in New York pursuing wealthier customers, one of the most important is postrecession spending by upper-income households. From 2009 to 2012, the total growth in U.S. consumption, adjusted for inflation, happened mostly at the higher end, according to Steven Fazzari, an economist at Washington University in St. Louis.

Two ways to grow

Among those at the bottom 95% of income distribution, there was 2.8% growth during that time period, compared with a 16% increase among the top 5%. That trend has likely continued in recent years, according to Mr. Fazzari. “Growth in consumption has been exclusively driven by the top,” he said.

Companies have also been reacting to significant changes in the buying habits of affluent customers since the recession, according to Jim Taylor, a senior adviser at YouGov.com, a Waterbury, Conn., firm that conducts surveys aimed at better understanding public views about products and current affairs. He is the co-author of The New Elite: Inside the Minds of the Truly Wealthy.

He divides the affluent into two categories: those who seek “worth” and are willing to pay a premium for the things they buy, but go through a rigorous vetting and shopping process. Others are “discounters,” focused more on price. “They derive pride from squeezing their vendors,” he said.

Using technology platforms strategically has also helped some companies expand smoothly from a premium-only service to a larger market. Kofi Kankam co-founded Manhattan-based Admit Advantage seven years ago to provide advice to graduate-school and college applicants. He charges about $200 an hour, with packages running as high as $10,000.

About three months ago, the company launched Admit.me, an online platform that is more affordable to a wide audience. It allows applicants to interact with current students and alumni at schools where they are applying and for admissions offices to search for potential recruits. The basic service is free, but customers can pay about $10 a month for additional capabilities.

“We want to build a scalable business,” said Mr. Kankam, whose profitable, five-employee company has $2 million to $4 million in annual revenue.

The big benefit of expanding to a mass audience is increased volume—especially for small-business owners who have made their name providing time- and labor-intensive, hands-on service. Take Joey Healy, founder of a three-year-old company in Manhattan that bears his name. At Joey Healy Eyebrow Studio, which provides eyebrow-shaping services, Mr. Healy spends about an hour working with each client. He charges $135, up from $85 three years ago.

More recently, Mr. Healy formed a partnership with hair-removal specialist Spruce & Bond to train eight employees in his eyebrow-shaping techniques. They were placed at all four Spruce & Bond stores (three in Manhattan, one in Scarsdale). Called Browlab, the service at the stores costs clients $50; customers also can buy from Mr. Healy’s line of products. “It brings me a new audience,” he said.

Underwriting expansion

About 10% of Mr. Healy’s total revenue, which is “just under $1 million,” now comes from Browlab, but that should increase as Spruce & Bond expands to more locations in Manhattan. Also, in October, Mr. Healy plans to move from his 500-square-foot studio to a bigger space, which will serve as what he calls “more of a flagship” for the profitable company.

In some cases, small businesses regard their premium market as a way to underwrite expansion to a larger mass clientele. Four years ago, Kim Caspare, who has a doctorate degree in physical therapy, opened PHlex Health and Wellness Studio in Manhattan, where she treated patients who were able to pay out of pocket and were mostly referred by doctors.

Since then, she has added such services as acupuncture and meditation and expanded from 1,500 square feet to about 2,200, with plans to increase to 4,600. She recently started treating a new group of patients with insurance coverage, too. Her premium clients, who pay from $160 to $300 an hour for a variety of services, “subsidize everyone else,” said Ms. Caspare. Her profitable, nine-employee company has $1 million to $3 million in annual revenue.

For those adding a higher-end tier, the key is retooling the product or service to make it attractive—and worth the price—to a wealthier clientele. That generally means not moving too far upstream from the company’s original segment.

At Caskers, Mr. Abt had already sold pricey spirits, usually in the $40 to $60 per-bottle range, to affluent buyers. Although his concierge clients have paid as much as $27,000 for an order, “moving to the high end has been a natural extension of the business,” he said.

Another notable example is concierge medicine, through which doctors provide extra services to their patients, who pay an annual fee. About a year ago, Dr. Herbert Insel, a cardiologist and internist in Manhattan, introduced this option.

He charges a $2,500 annual fee to cover services, such as a lengthy physical exam not reimbursed by insurance, longer visits and a direct telephone number to the office. So far, 10% to 15% of patients have signed on. Many of them “are very busy executives in their 40s and 50s who are used to this type of approach,” said Dr. Insel. “They were champing at the bit.”

Source: http://www.crainsnewyork.com/article/20150511/SMALLBIZ/150509841/businesse

May 5, 2015

The latest fashion trend among millennial men? Luxury cologne

Fortune
By: Shivani Vora
May 1, 2015

These four luxe fragrances are part of a growing market for younger male shoppers.

Luxury men’s fragrances are no longer mass produced bottles priced in the high double-digits and available at every department store; the latest upscale scents for men are sold selectively at boutiques, usually cost several hundred dollars, and are often blended by hand in small batches with top quality ingredients sourced from around the world.

According to the Chicago-based market research company Euromonitor International, sales in the U.S. of men’s premium fragrances, classified as labels sold in department stores, grew from $1.28 billion in 2004 to $1.47 billion last year. Those numbers are still dwarfed by the $3.7 billion of sales last year for women’s fragrances in the same category, but the segment is growing as it increasingly appeals to younger consumers.

Milton Pedraza, the founder of the New York City-based luxury research and consulting firm The Luxury Institute, says that men, particularly those in the millennial generation, are becoming enamored with expensive colognes in the same way that they are with fashion. “There is a big movement today of men who have spare money to spend are using it to look good, and fragrance is part of that trend,” he said.

Here are four of the latest luxe colognes to try this spring.

Reckless by Roja Parfums

Courtesy of Roja Parfums

British perfumer Roja Dove, who is known for statement-making scents that often run into the four figures, wanted to create a blend for men who aren’t afraid to take risks, and this spicy and fresh rendition is it. Black pepper, musk, clove, and cedar wood are the most prominent notes, and in a nod to the luxury Dove is famous for, the plaque on the bottle is dipped in 18 carat gold while the cap is made of hand-cut Swarovski crystals. $480, bergdorfgoodman.com

Akkad by Lubin

Courtesy of Lubin

Parisian perfumery Lubin, which dates back to the 18th century and handcrafts fragrances today in its Left Bank atelier, introduces this heady scent, the sixth in its collection for men. It’s named for the ancient and powerful empire part of Mesopotamia and has prominent notes of spicy amber, citrusy mandarin and bergamot; woody and rich patchouli and sweet vanilla are also evident but more subtle. $180, luckyscent.com

New York Sandalwood by Bond No. 9

Courtesy of Bond No.9

The more than decade-old New York City-based brand has a cult following for its upscale women’s fragrances, but this new unisex version is sure to win some male fans too. Like the name suggests, warm and smooth sandalwood, derived from the fine-grained wood of tropical trees, is the main attraction while earthy carrot, spicy cardamom and ripe figs figure into the background. Whether you’re into the scent or not, the attractive gold bottle it’s in is a keeper. $330, bondno9.com

Charming California 215 by Krigler Perfumes

Courtesy of Krigler Perfumes

New stores call for new scents—at least according to the more than century-old New York City and Monte Carlo-based label that’s a favorite of royals around the world and introduced this fresh and light fragrance in celebration of the recent opening of its boutique at the Four Seasons in Beverly Hills. Inspired in part by the jacaranda, a blue flowering tree that flourishes in both Los Angeles and the French Riviera, the perfume is a pick-me-up combination of coriander, orange blossom, green tea and cedar wood. $315, krigler.com

Source: http://fortune.com/2015/05/01/luxury-mens-cologne/

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