Luxury Institute News

August 24, 2015

Affluent Millennials Setting Their Own Pace

U.S. News and World Report
By: Mallory Hughes
August 20, 2015

Chris Beauregard, 25, recently found himself at a chic rooftop pool party in Washington. With the Capitol dome in the background, young professionals watched an exclusive Dar Be Dar by Tala Raassi summer fashion show while sipping complimentary DeLeón Tequila cocktails.

“I brought seven other friends with me,” says Beauregard. “Everybody had a blast.”

It’s a setting that is becoming common for a subset of the Millennial generation known as the “affluent Millennials.”

The 6.2 million 18- to 34-year-olds who report annual household incomes of more than $100,000 are acting out the aspirational lifestyle of their cohort because they have the financial means to do so, said Leah Swartz, a content specialist at FutureCast, a marketing firm focused on Generation Y.

“It’s not that they’re so different from Millennials,” says Swartz. “It’s that they’re acting on these aspirational trends that we see take shape in the general population.”

Many among the 80 million Millennials say that they eat organically and travel frequently, but a majority still live on a limited budget, hitting up big retailers for bargain prices.

Rather than focusing solely on what they can buy, Millennials create experiences and “shareable moments with friends,” Swartz says.

It’s a generation that was the first to embrace trends like going digital and using social, but it is the affluent among it that have more impact because they’re the ones commenting on review sites and engaging with brands on social media.

“We’re seeing them take on the influential role among the Millennial population,” she says, adding that affluent Millennials are 10 percent more likely to participate in online rating sites than their non-affluent peers.

“It’s likely because they can do more and because their budgets allow for it,” Swartz said.

Business and finance are the most common career paths for these people, but affluent Millennials are shifting post-graduate educational trends.

The research found that 44 percent of the 6.2 million affluent Millennials did not graduate from college. Of those that completed college and went on to graduate school, nearly 4 percent didn’t complete that education. While these numbers are high, affluent Millennials still graduate from college and grad programs at higher rates than their non-affluent counterparts.

“When you think of Boomers or even a little bit Gen-X,” Swartz says, “money was very much linked to degrees and higher education.”

But these Millennials don’t necessarily see the connection. FutureCast researchers in Kansas City found that young adults in the affluent subset are more interested in quickly putting the knowledge gained in their undergraduate programs to use in the workforce.

“They’re seeing more value in entrepreneurialism rather than continuing education,” Swartz says.

Billy McFarland, a 23-year-old tech entrepreneur, began his undergraduate education at Bucknell University planning on studying computer engineering. He dropped out after a year.

“I never really focused on school the way I should,” McFarland said in a phone interview. “But I finally went to college, I was living alone, and realized I could start companies full-time and not worry about school. It was an easy decision.”

Most recently, McFarland founded two companies: Spling, a tech-driven advertising platform, and Magnises, a mobile concierge app geared toward Millennials.

Magnises, McFarland says, has nearly 7,000 members stemming from 25,000 applicants. Approximately 90 percent of members using the app are 21 to 35 years old, with self-reported annual incomes of $50,000 to $250,000.

The $250 per year membership comes with a black metal membership card, a community hangout out and the concierge app with recommendations on what to do with one’s free time and the ability to make a reservation at a suggested place.

This generation travels more and values events, services and experiences over goods, says Milton Pedraza, CEO of the Luxury Institute, a global research firm focusing on luxury goods.

One example is SoulCycle, the trendy New York City-based fitness company hosting 45-minute spin classes that feel more like being on a dance floor than in a cycling studio. Millennials aren’t buying the expensive bike so they can go cycle the hillsides outdoors; they’re buying the experience.

Pedraza says he thinks Millennials are drawn to events they can share with “people who are their peers, who share their values, who share their standards of living and who share their tastes.”

But if Millennials are trendsetters, don’t they want to find the best places to go — and be first ones on the scene? Isn’t an app, such as Magnises, that suggests the hottest hangouts in some of America’s biggest cities and sends 20-somethings flocking in that direction kind of, well, mainstream?

“I think there’s recognition that that’s going to inevitably happen,” Pedraza says. “If something’s really good it’s going to be swarmed—Millennials swarmed.”

Source: http://www.usnews.com/news/articles/2015/08/20/affluent-millennials-setting-their-own-pace 

August 10, 2015

The Death of the Swiss Fine Timepiece Has Been Greatly Exaggerated

The Lilian Raji Agency
By: Lilian Raji
August 10, 2015

Late last month, Edward Faber, co-owner of Aaron Faber Gallery and author of  American Wristwatches: Five Decades of Style and Design,  Gary Girdvainis, editor of WristWatch magazine and AboutTime magazineand Jeffrey Hess, CEO of Ball Watch USAMilton Pedraza, CEO and Founder of The Luxury Institute, and Jason Alan Snyder, Chief Technology Officer of Momentum Worldwide reconvened Aaron Faber Gallery’s annual Watch Collectors’ Roundtable to debate the question, “Will Smartwatches Disrupt the Swiss Watch Industry?” The Roundtable was moderated by Eleven James CEO, Randy Brandoff.

With the recent  release of a report by market research firm Slice Intelligence announcing that Apple watch sales have declined 90% since their initial launch, the unanimous predictions of the Roundtable panelists has been proven accurate:  no, smartwatches will not disrupt the Swiss watch industry.

What the panelists couldn’t agree on, however, was if smartwatches would impact the industry in any way.

  • Jeff Hess, who also owns Hess Fine Art, noted his customers have been coming in wearing a smartwatch on one wrist and a fine Swiss timepiece on the other.  In this, there seems to be the possibility of harmony between the two types of watches.
  • Edward Faber asserted that a smartwatch will never seem as prestigious as walking into a boardroom wearing a Rolex Presidential or other high status watch.  Smartwatches will only be a gadget.
  • Milton Pedraza agrees on the novelty factor of watches, but didn’t dismiss that smartwatches could ultimately be more a fashion statement than a power statement.
  • Gary Girdvainis predicted that smartwatches would ultimately become gateways for the millennials who gave up watches for their smartphones to now begin entertaining the idea of wearing a watch.  When these same millennials reach their 30s, after spending the last few years wearing a smartwatch, graduating to a Swiss timepiece will be their next step.
  • For tech industry expert, Jason Alan Snyder, smartwatches are about functionality and features.  They are about advancing technology to make our lives easier. The debate shouldn’t be about smartwatches vs timepieces, they should be about smartwatches and all the major advancements going on in technology.

As Randy Brandoff moderated the panel, addressing such issues as the future of the watch industry for collectors, what future technological functions make sense for wristwear and Swiss watch manufacturers pursuing their own smartwatches, panelists made predictions and gave insights that will make many watch, technology and luxury industry people “wait and see” over the next few months as smartwatches set the stage for the evolution of how people tell time.

Click the link to watch the video of the roundtable for quotes by Milton Pedraza, CEO of Luxury Institute: The Watch Collectors’ Roundtable – Will Smart Watches Disrupt the Swiss Watch Industry?

To learn more about the Roundtable at http://smartwatches.lmrpr.com or contact The Lilian Raji Agency at lilianraji@lmrpr.com or (646) 789-4427.

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

April 22, 2015

In $10 million home sales, Miami Beach a leader

Miami Today
By: Susan Danseyar
April 22, 2015

Miami Beach is in impressive company among the nation’s top cities for luxury home sales, third highest for sales of $10 million and over.

Miami and the Beach have high rankings in The Previews Luxury Market Report for 2015, released by Coldwell Banker on Tuesday, which lists the top 20 US cities’ property listings and sales in three price points: beginning at $1 million, $5 million and over and $10 million.

In 2014, Miami had 967 closed sales for properties $1 million and over, ninth on the list just behind San Diego (976 sales) and above cities including Santa Barbara (673 sales), Newport Beach (611 sales) and Honolulu (591 sales). Miami Beach, number 14 in this category, had 704 sales.

For properties $5 million and over, Miami Beach was fourth with 89 sales compared to New York City (182 sales) at the top of the list and and above San Francisco (64 sales) and Malibu (48 sales).

There were 26 sales in Miami Beach for properties $10 million and over, behind Beverly Hills (35 sales) and New York (56 sales). Miami Beach, third on the list, had more sales in this category than Los Angeles (26), Malibu (14) and San Francisco (7).

North Miami Beach, in zip code 33169, had the third highest number of active home listings for $1 million and over (460), behind New York’s zip code 10022 (465) and Park City’s zip code 84060 (611). Miami Beach’s zip code 33139 was fifth in this category with 355 listings.

For properties $5 million and over, Miami Beach’s zip code 33139 had 115 compared with 143 in Park City’s 84060, top of the list, and above Vail’s 81657 (69) and Beverly Hills’ 90210 (68).

In the highest category of $10 million and over, Miami Beach in zip code 33139 was ninth on the list (44 listings) compared with New York’s zip code 10023 at 84, top of the list, and Malibu’s zip code 90265 at 26, bottom of the list.

According to the report, the demographics are changing in the luxury housing market. “Many wealthy homebuyers have historically looked to leisure-rich spots like Hawaii, Florida and Arizona for second homes, or waited until they were finished working to make a move,” the report states.”That’s changing, with recent trends suggesting that younger homebuyers are not waiting until they retire to put down roots in places where they would love to live.”

Technology and ease of travel are rapidly transforming the workplace for wealthy professionals, the report states, creating flexibility in terms of work locations and the ability to choose where they want to live. “Millennials have come of age in this kind of environment and are accustomed to the idea of striking a work-life balance that meets their personal needs. As they achieve more wealth, their live-anywhere attitudes are likely to become more of a force in luxury real estate.”

According to the Previews Luxury Institute millionaire survey, 73% of those under 35 say that they expect to buy a home in the next 12 months, compared to 49% of 35- to 44-year-olds and 26% of 45- to 64-year-olds. Just 11% of millionaires 65 and over say that they’re planning a purchase.

The report cites homebuyer surveys and the accounts of local realtors, stating they confirm ultra high-net worth individuals are highly mobile and flocking in growing numbers to areas once pegged as resort or second-home markets, as advances in technology, transportation and communication enable a “live anywhere” working-age population.

Florida, the report states, has a favorable tax environment that’s attracting live-anywhere high net-worth homebuyers, particularly those coming from the Northeast.

“The taxes on inheritance and estates are very high in some states, like New Jersey,” said Clark Toole, president of Coldwell Banker Residential Real Estate in Florida. “Florida is one of the most attractive places to live from a tax perspective, so we get quite a few people who decide to live here for at least six months and a day each year. People are saying ‘I want this money to go to my kids instead of to pay taxes.’”

Source: http://www.miamitodaynews.com/2015/04/22/in-10-million-home-sales-miami-beach-a-leader/

November 5, 2014

Luxury training becomes fashionable MBA accessory

By: Deirdre Kelly
The Globe and Mail
November 5, 2014

When Christal Agostino was pursuing her MBA a few years ago, she had a deluxe classroom – a Hermès boutique in Paris.

In the rarefied edifice devoted to luxury shopping, the Montreal native had to learn the intricacies of the high-end marketplace. But the focus was not on the legendary brand’s crocodile handbags, some costing as much as a car, nor on its famous silk scarves, produced since 1937 and coveted worldwide.

It was on the sales staff, paragons of discretion, and how they interacted with customers of Hermès’ pricey goods.

“The way they handled the merchandise – the way they wrapped it and presented it to the customer, walking from behind the counter to hand it to them – was incredibly fascinating to me,” Ms. Agostino says. “They were creating a curated experience within the luxury experience. Nothing was done haphazardly.”

Lesson learned.

Ms. Agostino had completed her one-year, full-time MBA at Queen’s School of Business in Kingston and was in France at the time to expand her degree to include a specialization in international luxury brand management at École supérieure des sciences économiques et commerciales, better known as ESSEC.

The French business school, in collaboration with LVMH and L’Oréal Luxe, launched the specialization in 1995 to provide the high-end companies with a talent pool from which they could recruit, particularly in developing markets. Queen’s became an exchange partner with ESSEC in 2006. So far, about 180 students have gone back and forth between the schools.

“The ESSEC MBA in international luxury brand management was the first MBA program of its kind to exist worldwide,” ESSEC spokeswoman Anthea Davis says.

The program is 11 months long and is offered at two campuses in France and one in Singapore.

“It is today the reference worldwide in international luxury brand management education. We now work with all major luxury groups and independent houses worldwide,” Ms. Davis adds.

Milton Pedraza is the chief executive officer of the Luxury Institute, launched 11 years ago in New York, and he says there’s a growing need for specialized training in the luxury sector.

“Luxury is different from mainstream retail – the level of design, the level of quality, the level of relationship-building are all much higher than any other business segments,” Mr. Pedraza says.

“You are dealing with the affluent and the wealthy who have special needs and requirements and who are paying a very high premium for their goods and services. So the level of expertise required to deliver that value proposition must be taught and learned.”

Since ESSEC’s program launched 20 years ago, specialized MBAs in luxury brand management have grown in popularity. They are also now offered at the Bologna Business School, in the Italian city that’s home to brands such as Lamborghini and Maserati; the International University of Monaco; the NYU Stern Business School in New York; and the SDA Bocconi School of Management in Milan, Italy, to name some.

Most concentrate on a single facet of luxury, such as design and marketing. Others boost technological skills. Fashion in the digital age has become instant and a luxury goods education today includes video and social media training.

“Historically, luxury has seemingly been quite old fashioned and formulaic to its approach to business. However, with swift changes in technology, social media, e-commerce and expansion to emerging markets, we are seeing that luxury is now evolving and adapting rapidly,” says Nicole McBride, office manager at Lambert and Associates, a retail network company with offices in Paris, London, New York, Milan and Florence, Italy.

“With change comes a demand for a new talent pool that can provide a fresh approach.”

Canadian fashion entrepreneur Diane Robinson is the co-founder of the Huntress jewellery and luxury handbag, which made its debut recently at the Spring 2015 edition of World MasterCard Fashion Week in Toronto. In advance of launching her own business with partner Ron LeBlanc, she took the year-long luxury brand management MBA at the University of Monaco, graduating in 2011.

“You need both the language of business and luxury to compete in this field,” Ms. Robinson says. “Our aim was to have a fully vertically integrated business and I needed to know every part of the business, from the rough to the runway.”

The ESSEC MBA offers several specializations within its luxury brand program: fashion and accessories; fragrances and cosmetics; watches and technology; hotels and property.

Being broadly focused is what attracted Jessica Wang, another Canadian at ESSEC, currently enrolled.

“I have always had a passion for the luxury industry in general and when I found out about this program … , I was very intrigued,” Ms. Wang writes in an e-mail from Cergy-Pontoise, France, where she has lived since September.

“I did a lot of research on similar programs offered by many other schools and found the one offered by ESSEC to be the most comprehensive. It does not concentrate on just one area of the luxury industry such as fashion and accessories; instead it also explores in detail other areas: wine and spirits, watches and jewellery, and cosmetics,” she says.

Prior to becoming a student again, Ms. Wang worked for L’Oréal Group in Canada. When she graduates from ESSEC in 2015, she hopes to work in the fashion and accessories sector. She has a good chance of meeting her goal.

Since ESSEC’s founding in 1995, its 560 graduates have gone on to work for every major luxury group and independent luxury companies worldwide, including LVMH, Kering, Richemont, Estée Lauder, Tod’s Group, Zegna, Chanel and Hermès.

“We have a 95-per-cent success rate of students finding employment in the luxury goods industry upon graduation,” Ms. Davis at ESSEC says.

Ms. Agostino took courses in all aspects of a luxury brand, including retail design, licensing, wholesaling, and the psychology behind an expensive purchase.

Her teachers included the former managing director of Giorgio Armani France: “He brought a wealth of information, a lot of real-time stories,” says Ms. Agostino.

After she graduated from ESSEC in 2011, Ms. Agostino, 30, returned to Canada and landed a job in Toronto at the global office of Fairmont Hotels and Resorts, where she worked on creating luxury partnerships.

In the spring of this year, she moved to Spafax, an international media and marketing agency that works with major airlines such as Air Canada and British Airways as well as Mercedes-Benz and other luxury brands. She produces their videos and glossy magazines.

“The story-telling behind the brand is what I love,” says Ms. Agostino, crediting her specialized MBA program for giving her a heightened awareness of luxury as a layered category of consumer goods.

“A Hermès purse is very beautiful, a piece of art. But there’s also a story behind it, what it represents as a luxury good, and what it means to the person buying it. It’s a piece of their ego, a part of their personal brand.”

Source: http://www.theglobeandmail.com/report-on-business/careers/business-education/luxury-training-becomes-fashionable-mba-accessory/article21438951/

October 21, 2014

Luxury Institute Introduces Luxcelerate, an Empirically Proven Method to Drive High Performance in Building Client Relationships

Marketwired
October 21, 2014 80763_LuxcelerateLogo

NEW YORK, NY–(Marketwired – Oct 21, 2014) – Today, the New York-based Luxury Institute announced the launch of Luxcelerate, an enhanced version of its innovative successful 7-Step Customer Culture process. Luxcelerate is designed to accelerate sales performance via a proprietary methodology that focuses on empowering the customer-facing online and offline associates, helping brands to improve both client relationships and sales exponentially.

Presently, top brands are struggling to both expand and retain their client base. Top brands have a conversion rate of 10-15%, a data collection rate of 30-40% (approximately 25% of this data is unusable) and a first time buyer retention rate of 10%.

Luxcelerate encourages the individual sales associate to learn and execute the best practices in client relationship building. The process is designed to improve sales performance via an exclusive methodology that focuses on relationship building, while improving a brand’s conversion, data collection and retention rates.

Luxcelerate’s proprietary methodology is based on shared relationship values and standards that are designed by a brand’s front-line teams, and is therefore customized to fit the unique DNA and culture of each brand. Custom education programs use empirically proven learning principles to drive retention of critical knowledge. Measurement and reinforcement methodologies are then deployed individually to guarantee consistent daily execution. The outcome is humanistic, effective client relationship building that leads to sharp increases in sales.

Luxury Institute’s CEO Milton Pedraza developed Luxcelerate’s 7-step methodology. Mr. Pedraza established this innovative methodology after being inspired by best practices from education, medicine and aviation. Using this process, a number of top-tier luxury brands have doubled, or tripled, the accurate collection of critical client data, and have significantly increased client conversion and retention rates. Luxury Institute has worked with the top brands of major luxury groups, well-known brands owned by private equity firms, and small boutique brands, to drive sales at rates of 15-30% per annum.

“The Luxury Institute was invaluable in helping Malia Mills define and implement our clienteling process. The first quarter that we implemented our program we increased sales by a significant amount.” — Carol Mills, Co-Founder, Malia Mills

“Since embarking on this project, we have seen double digit increases in data collection, conversion and a significant acceleration in retail momentum.” — Claudia Poccia, President and CEO of Gurwitch, Owner of the Laura Mercier brand

References are available upon request. For more information please email luxinfo@luxuryinstitute.com or fill out a contact form at www.luxuryinstitute.com

Source: http://www.marketwired.com/press-release/luxury-institute-introduces-luxcelerate-empirically-proven-method-drive-high-performance-1959706.htm

October 18, 2014

The Neiman Marcus catalogue

Hold the myrrh
Gold and frankincense are so two millennia ago

The Economist
October 18, 2014

NOT everyone finds Christmas easy. Some people have so much money that they cannot think what to spend it on. Every year Neiman Marcus, a posh department store, takes pity on these unfortunate souls by offering them its Christmas catalogue, stuffed with ideas to empty even the fattest wallet.

20141018_USP003_0

For example, sporty couples can buy “His and Hers” Quadskis for $50,000 each. These are jet skis that convert into quad bikes in about five seconds (pictured). And they come in a turtle print. Shoppers who wish to relax can buy an elaborate cocktail shaker for $35,000. It comes with a year’s supply of gin and a class for 20 guests with a “mixology” expert.

Many luxury brands are now ubiquitous, which robs them of their snob value. What the truly rich want is “unique experiences”, says Milton Pedraza of the Luxury Institute, a consultancy. Neiman Marcus offers plenty of those. For $125,000 you can ride a Mardi Gras float in New Orleans. For $425,000 you can attend the Vanity Fair Oscar party, having first been glammed up by a style expert so that the other revellers won’t think you are a gatecrasher.

The costliest item in this year’s book is the “House of Creed Bespoke Fragrance Journey”. For $475,000 you can fly to Paris and have a master perfumier create a scent that perfectly suits you. You also get “white-glove car service, private tours and other experiences befitting the royally amazing you”. Your correspondent tried to expense such a trip, for research purposes, but her Scrooge-like editor said no.

Ginger Reeder, who handpicks all the “fantasy items” for the catalogue, does not expect to sell everything. Selling is not the point. “They are chosen for their uniqueness and their publicity value,” she says. In 1997, for instance, Neiman Marcus was unable to offload first editions of 90 of America’s greatest novels, from “The Great Gatsby” to “Catch-22”, but Ms Reeder found some comfort when she received 600 requests for the book-list.

The shop’s most expensive gift ever was a Boeing jet for $35m in 1999. The most memorable have included a submarine ($20m), a mean-spirited camel who spat a lot (Neiman Marcus no longer includes animals in the catalogue) and “His and Hers” mummy cases for $6,000 in 1971 ($35,000 in modern money). A mummy was unexpectedly discovered in one sarcophagus, which caused a spot of bother. A death certificate had to be issued before it could be delivered. Gift wrapping was optional.

Source: http://www.economist.com/news/united-states/21625817-gold-and-frankincense-are-so-two-millennia-ago-hold-myrrh

October 14, 2014

WEALTHY AMERICANS RANK PREMIUM WINES, DIVULGE SPENDING AND DRINKING HABITS IN NEW LUXURY INSTITUTE SURVEY

Market Wired

NEW YORK, NY — (Marketwired) — 10/14/14 — More than two-thirds (70%) of wealthy U.S. consumers, under the age of 50, drink wine at least once a month, and they’re willing to pay premium prices for preferred vintages — an average of $48 per bottle at retail and $64 at a restaurant. These are among findings of the New York-based Luxury Institute’s just released Luxury Brand Status Index (LBSI) premium wines survey.

Consumers 21 and older from households with income of at least $150,000 a year evaluated 20 premium domestic wine brands on the degree to which each embodies the four “pillars” of brand value: superior quality, exclusivity, enhanced social status and an overall superior consumption experience. Respondents also reveal which wines are worth paying premium prices, which they would recommend to people close to them, and which brand they will buy next.

Based on overall 1-10 LBSI scores, Ghost Pines (7.65) earns top honors, and it ranks the highest on all four pillars of value. Known for California winemaker Michael Eddy’s multi-appellation blends of grapes from Napa, Sonoma, Monterey and San Joaquin counties, Ghost Pines is also the brand consumers deem most worthy of a price premium, even though many of its bottles sell for less than $20.

Other highly ranked premium domestic brands include Mount Veeder (7.39), Meiomi (7.30), Bridlewood (7.16) and Edna Valley (6.90).

“Winemaking is the quintessential luxury business in many ways,” says Luxury Institute CEO Milton Pedraza. “Brand value begins with the best-quality raw materials and grows with fine craftsmanship and a relentless focus on execution and consistently delighting customers.”

Contact the Luxury Institute for more details and complete survey data.

Visit us at www.LuxuryInstitute.com and contact us with any questions or for more information.

The Luxury Institute, LLC
luxinfo@luxuryinstitute.com

Source:

http://www.einnews.com/pr_news/229093149/wealthy-americans-rank-premium-wines-divulge-spending-and-drinking-habits-in-new-luxury-institute-survey

October 6, 2014

La Jolla among tops in US for luxury home sales

San Diego Source
Daily Transcript Staff Report
October 6, 2014

San Diego is among the top 10 cities with the highest number of luxury home sales, according to a report by Coldwell Banker, with La Jolla high on the list.

San Diego saw the sale of 927 homes valued at $1 million-plus from July 1, 2013, to June 30, 2014. The Luxury Market Report was prepared by the Coldwell Banker Previews International marketing program.

Topping the list was San Francisco with 2,485 luxury homes sold — up nearly 57 percent from the previous year — followed by Los Angeles with 2,170 and New York with 2,145.

The report included three price points: $1 million, $5 million and $10 million.

Two of San Diego’s ZIP codes saw high sales of luxury homes.

La Jolla’s 92037 ZIP code had closings on 348 homes valued at $1 million or more, the third highest of all ZIP codes in the country at that price tier; 269 homes sold in Carmel Valley and Torrey Pines in the 92130 ZIP code.

Four homes valued over $10 million closed in La Jolla, which ranked 16th, the report said. The most $10 million homes, 58, sold in New York.

The U.S. high-end residential real estate market remains strong, with 48 percent of all wealthy consumers indicating they plan to buy a luxury home within the next 12 months, according to the companion survey of wealthy U.S. consumers with a net worth of at least $5 million, conducted by the Coldwell Banker Previews International program and the Luxury Institute.

Younger buyers are the most motivated to buy; an overwhelming 81 percent of affluent people younger than 35 plan to buy a luxury home in the next year.

Source: http://www.sddt.com/News/article.cfm?SourceCode=20141006cze&_t=La+Jolla+among+tops+in+US+for+luxury+home+sales#.VDQEJSldXDQ

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