Luxury Institute News

August 30, 2016

Lamborghini Pivots to Target Women and Families

Bloomberg.com
By: Hannah Elliott
August 30, 2016

Forget what you know about raging bulls.

Lamborghini wants to show you a softer side of Italian supercars.

So says Chief Executive Officer Stefano Domenicali, who moved to the company’s top spot in March. Since then, he’s been calling for a change in tone at the Volkswagen Group-owned house. Where the sharp-edged V12 and V10 aggression of the Murcielago, Gallardo, and Aventador reigned supreme for years, Domenicali said, buyers can expect to see something different in the next few years.

“A bull is always aggressive, but I would like to give us a new philosophy toward the future: A bull can be gentle,” he said.

Urus Is Key

Domenicali’s image efforts hinge on the new Urus SUV, due out by late 2018. He said the vehicle will double the company’s annual global output but will remain on limited production at Lamborghini’s new Sant’Agata factory. The brand sold a purposefully few 3,245 units worldwide in 2015.

“The SUV will be a game changer,” he said. “It will make Lamborghini different.”

The goal will be to make Urus immediately identifiable as a Lamborghini, both in how it looks and in how it drives, and to make it immensely “personalizeable” for a young (30-45) target audience whose members view themselves as the “protagonists” of their own lives, Domenicali said. The engine is anticipated to be a 600-horsepower, turbocharged V8 engine, rather than Lamborghini’s signature V12.

What Women Want

Even more notable, Domenicali is hoping that a big share of the SUV’s buyers will be women. This will be no small feat, considering that only 5 percent of the company’s global buyers last year were female. That’s roughly the same percentage it held even a decade ago, according to a Lamborghini spokesman. What’s more, most of those vehicles were sold to women in the U.S. and Europe; the first woman to buy a Lamborghini in India did so just three months ago.

“I don’t think anybody has captured the heart and soul of the female luxury buyer” in the supercar arena, said Milton Pedraza, CEO of the Luxury Institute, a Manhattan-based research firm. “It’s not a question of money for women in that segment. The money is not going to be the issue. It’s going to be: ‘Show me you know me.’”

There is plenty of space for Lamborghini to claim. Nationwide, women buy 53 percent of all small SUVs and 48 percent of small premium SUVs, according to J.D. Power & Associates, compared to roughly 40 percent of all new cars.

The Power of Singles

Single women in particular are coveted potential buyers: From 2010 to 2015, premium small SUVs saw a 177-percent jump in sales to single women, according to MaritzCX, a customer-experience research company. More than two-thirds of female buyers reported their 2015 vehicle purchase decision as “entirely up to me,” according to the report. Additional storage and passenger space, a high ride height, and improved fuel economy in new premium SUVs have fed their growing appeal to women buyers.

“Lamborghini is going in the right direction here,” Pedraza said, noting the success of Porsche and its wildly popular Cayenne SUV. “Anybody can be convinced, as long as there is substance to the argument. If Lamborghini puts out a product that is female-friendly, women will definitely flock to it and will change their minds.”

The key to success in this new segment for Lamborghini, Pedraza said, will be to produce a product that women can use comfortably and often. (“If you are going to do an SUV, you better understand that there will likely be children in the back; women transport kids, whether they are working mothers or not.”) The brand will have to get women into the showroom and then communicate the quality of the product: “When women get to the showroom, the people who are ambassadors to the brand and the experience have to be impeccable,” he said. “It all has to be seamless and honest and relevant—and by the way, human. If it can do that, I believe Lamborghini has a great shot.”

Hiring and promoting more women to lead the drive will be essential. Representatives from Lamborghini said on Tuesday that they were unaware of how many, if any, women the company employs in top leadership positions; a quick survey of head executives on the company’s press website offered no female names apart from that of the new American public relations executive.

This will entail revolutionary thinking at the 53-year-old brand, which started out making tractors in an industrial center in rural Italy. Domenicali said he’s more than up to the challenge.

“We have a small company, but we know we can do a good job,” he said. “And we are humble—it’s a different customer, a different car, a different network. We are top with regard to the super sports car, but this will be a different business.”

Keep the Good Stuff

Lamborghini does have some non-negotiable stipulations, even with the new, softer-side efforts. It will always make its signature V12 engine, Domenicali said. And while it will eventually introduce a hybrid Urus, it will never move toward producing vehicles that run on diesel. A totally electric Urus is a “maybe,” Domeniali said, depending on how technology and regulations develop over the coming years.

After all, a bull is still a bull, even if it’s a gentle one.

“Our customers want to feel the car, they want to hear it, they want to feel the vibration of the engine,” Domenicali said. “They are expecting from us to be current with our cars and yes, to invest in technology, but at the right moment—not before and not after.”

Success at Lamborghini will have much to do with having the flexibility to change and grow, he added: “A bull can recognize people with a glimpse of the eye and be smart. He is not always aggressive in a negative way. He’s aggressive because he is very strong animal, but the Lamborghini of the future is an animal that can recognize the beauty of people, can recognize the fact that we are going to a family-oriented business with an SUV.”

Source: http://www.bloomberg.com/news/articles/2016-08-30/lamborghini-pivots-to-target-women-and-families?cmpid=yhoo.hosted

Parisian Luggage Maker for the Truly Rich Seduces Luxury Giants

Bloomberg.com
By: Angeline Benoit
August 29, 2016

Only the really wealthy know Goyard.

Unlike Gucci or Louis Vuitton, the more than 200-year-old Parisian maker of luxury luggage and bags — with one of its 19th-century-style trunks going for 52,380 euros ($59,315) — maintains a studied silence. It doesn’t advertise in glossy magazines, and is among the last of its kind not swallowed up by a larger peer. So far, that is.

Photropher: Edward Berthelot/Getty Images

Photropher: Edward Berthelot/Getty Images

Kering Chief Executive Officer Francois-Henri Pinault wouldn’t be averse to adding it to his company’s stable of brands, a person familiar with the matter said. While neither Kering nor its larger rival LVMH Moet Hennessy Louis Vuitton will officially comment on whether they’re interested in Goyard, industry observers say it’s unlikely they would pass up a chance to consider buying it.

“In the event that Goyard is for sale, LVMH and Kering will surely take a look,” said Mario Ortelli, London-based head of luxury at Sanford C. Bernstein. “The Goyard brand would be compatible with Kering’s portfolio, for example, or LVMH could seek to increase its market share in leather goods rather than let another company build up a competitor to its brands like Louis Vuitton, Fendi and Celine.”

Businessman Jean-Michel Signoles, who bought Goyard in 1998 from its founding family, won’t say if he wants to sell the company he turned around by expanding sales to the new, burgeoning wave of the world’s wealthy.

Aristocrats’ Bags

Luggage maker of aristocrats in the 19th and 20th centuries, Goyard counted the Maharaja of Kapurthala, the Rockefellers, the Romanovs, the Duke and Duchess of Windsor and Karl Lagerfeld among its customers, it says on its website. The company, which boasts a “complete disregard for marketing or mass-production,” also says it doesn’t engage “in any form of e-commerce.” It declined to respond to Bloomberg’s questions.

A visit to Goyard’s flagship Paris store on rue Saint-Honore, across Louis Vuitton and Moynard outlets, is a journey into the past, with trunks hearkening back to a bygone era. The shop also features an array of cases and duffle bags ranging from less than 3,000 euros to close to 6,000 euros, as well as tote bags from 1,560 euros and a red crocodile-skin number for 37,000 euros. Beach bags, towels, pouches, wallets, hangers, belts, dog collars, slippers, umbrellas, pens and pen cases complete the collection.

On a recent day, customers had to wait outside the shop because it could only accommodate a limited number of clients. Assistants in white gloves attended to the shoppers fortunate enough to have entered.

“Goyard has evolved from a very functional brand, and while it remains very classic, it’s technically and aesthetically appealing to people, with its hand-painted initials, seals and images,” said Dana Telsey, founder of Telsey Advisory Group in New York.

Burgundy Touch

The company traces its history back to 1792 when it was founded in Paris by Pierre-Francois Martin as a maker of cases and boxes to transport fragile objects. Childless, Martin passed his company on to one of his workers, Louis-Henri Morel, who hired 17-year-old Francois Goyard in 1845. Goyard took over the company after Morel’s death.

In 1885, the business was taken over by Francois’s son Edmond, who came up with the company’s emblematic Goyardine canvass, a soft and waterproof mixture of linen and cotton inspired by the clothes worn by the family’s water log drivers and their community in the village of Clamecy in Burgundy. The business was then handed down from father to son until it was bought by Signoles, who brought his own sons Alex and Remi on board.

Raking in Profits

For all its claims to “timeless elegance, craftsmanship and exclusivity,” Goyard was accumulating losses when it was taken over by Signoles, the founder of children’s clothes brand Chipie. Signoles pumped in capital, refurbished the Saint-Honore store and opened outlets in Asia and North America as well as a couple in Europe and one in Sao Paulo.

“The fact that it’s no longer family-owned, that it’s gained a better-known name, expanded its leather goods assortment and opened new stores, like the one on Madison Avenue in New York, that already says that the brand is aiming for greater reach,” said Telsey.

The strategy has paid off, regulatory filings with Paris’s Commercial Court show. Revenue surged to 41.1 million euros in 2013, the latest available data on the company, from 1.14 million euros in 2000. Profit rose to 12.8 million euros from 18,000 euros as exports accounted for a third of sales from less than 4 percent.

Brilliant Job

“Signoles has done a brilliant job of maintaining the brand heritage while growing it slowly,” said Milton Pedraza, CEO of the Luxury Institute, in New York.

Still, to be all that it can be, Goyard may need some help, he said.

“To reach a critical mass where it can survive and thrive on a larger scale, while remaining unique and exclusive, it will need the larger capital and know-how that larger groups can provide, as happened for Bottega Veneta with Kering, or Vuitton with LVMH,” Pedraza said.

Source: http://www.bloomberg.com/news/articles/2016-08-30/parisian-luggage-maker-for-the-truly-rich-seduces-luxury-giants

August 29, 2016

Bijan property on Rodeo Drive sells for $19,000 a square foot

Los Angeles Times
August 26, 2016
By: Andrew Khouri

The demand for $5,000 handbags and $25,000 suits is slipping amid global turmoil.

But enthusiasm for real estate on Rodeo Drive, where such high-end goods are sold, isn’t hurting. Instead it’s setting records.

The parent company of Louis Vuitton recently paid $122 million, or $19,405 a square foot, for the yellow House of Bijan building at 420 N. Rodeo, long home to a boutique known as “the most expensive store in the world.” The deal, revealed in public records, was the second time in seven months that a record fell on Rodeo.

Late last year, Chanel paid $13,217 a square foot for a store it was leasing nearby at 400 N. Rodeo, the high-water mark for California retail until last month’s Bijan sale.

The eye-popping amounts reflect how few properties there are on the Beverly Hills street, as well as how infrequently they go on sale. And in a struggling market for luxury goods, the deals underscore that high-profile streets such as Rodeo or Manhattan’s upper Fifth Avenue are far more than a place to sell a $10,000 timepiece.

“They are billboards in some places for the brand,” said Milton Pedraza, chief executive of consulting firm Luxury Institute. “The companies can demonstrate power, and their staying power, by buying up these properties.”

Indeed, Marc Schillinger, a director with commercial real estate company HFF who represented the seller Bijan Properties, said “everyone came out of the woodwork when we announced the opportunity to buy this asset.”

“There are only 2½ blocks on Rodeo Drive,” said Schillinger, who declined to confirm the price or buyer. uEvery luxury retailer wants to anchor their brand on Rodeo.”

That’s proving true even as the luxury retail market takes a breather. Sales of luxury goods in the U.S. have fallen around 10% on average over the last year, while traffic in luxury stores is down 20%, Pedraza said.

The downbeat numbers are due to several reasons — similar to ones that have softened ultra-high-end residential real estate markets in places such as Los Angeles, New York and London.

Slowing global economies and a strong U.S. dollar have sapped the buying power of foreigners and dampened tourism. Meanwhile, uncertainty over the economy in the U.S., along with the upcoming presidential election, has caused some wealthy Americans to hit pause on big purchases.

On Friday, Italian retailer Prada said its retail sales in the Americas fell 15% in the first half of the year, explaining that the U.S. market “remains tough.”

“So many factors have converged — unfortunately in a negative way,” Pedraza said.

LVMH Moët Hennessy Louis Vuitton has done better than many retailers though. The Paris-based luxury goods conglomerate reported that U.S. sales climbed 7% during the first half of the year.

A high-profile store, however, isn’t just about selling goods. Even in the age of e-commerce, high-end digs have worth as a place to hold flashy events and market a brand’s cachet across the globe.

Fashion houses are willing to pay a premium to buy such an opportunity. They’d rather do so than rent and risk losing the location if their lease is not renewed, said Robert Cohen, vice chairman of real estate firm RKF.

That’s especially true as fast-fashion companies with far lower prices increasingly compete for such locations, including an H&M that opened on a pricey stretch of Fifth Avenue in Manhattan in 2014.

The highest price per square foot for a U.S. retail space came two years ago when Chanel purchased a shop it was leasing in New York on Madison Avenue for $31,329 a square foot, according to Real Capital Analytics.

“They are protecting their position on the street and in the market,” Cohen said of such purchases.

It’s unclear what LVMH’s plans are for the Bijan building, where the iconic store has operated for 40 years.

The Paris retailer with 70 brands already has multiple stores on Rodeo including Louis Vuitton and Dior locations that it leases and a Celine store that it owns.

A spokesperson for LVMH declined to comment, as did a manager at Bijan.

Iranian American designer Bijan Pakzad opened his appointment-only boutique on Rodeo Drive in 1976. It became known for its ultra luxury goods such as $6,000 suits and $19,000 ostrich vests.

Through the years, House of Bijan counted many high-profile names among his clients, including Michael Eisner, King Juan Carlos of Spain and Presidents Carter, George H.W. Bush, Clinton, George W. Bush and Obama. Pakzad had success to match, with homes across the world he flew to on his own jet.

Pakzad died in 2011 but left a lasting imprint on Rodeo Drive, helping to make it a world-class destination. The store’s manager, who declined to give his name, said the store is now owned by Pakzad’s family.

“Long before Tom Ford and Karl Lagerfeld, Bijan had a keen understanding of the cult of personality in fashion, starring in his own ads and billboards, name-checking countless celebrities and parking exotic cars outside his store, all to stoke his fame,” former Times fashion critic Booth Moore said following Pakzad’s death.

But throughout the decades, as rents soared along with the cachet, Rodeo has lost many of its local boutiques, including Fred Hayman’s famed Giorgio Beverly Hills, with its distinctive white-and-yellow striped awning, which closed in 1998.

The Bijan store is operating under a lease; its expiration has not been disclosed.

Given the sky-high sale to LVMH, the pricey but small House of Bijan is likely to go as well, real estate broker Cohen said.

The French firm may want to bring in a deep-pocketed tenant who would pay more in rent, or give yet another of its brands a foothold on Rodeo.

“It’s one of the greatest luxury streets in the world,” he said. “It’s global branding and global domination.”

Source: http://www.latimes.com/business/la-fi-bijan-sale-20160825-snap-story.html

May 23, 2016

Aston Martin unveils latest chapter in 5-decade partnership

Luxury Daily
By: Staff Reports
May 20, 2016

British automaker Aston Martin is revealing a new concept car developed in collaboration with Italian coachbuilder and design house Zagato at Concorso d’Eleganza Villa d’Este.

The fifth edition in a partnership that spans 50 years, the Vanquish Zagato Concept will make its world premier at the show being held at Lake Como in Italy from May 21-22. This longstanding pairing has led to Aston Martin vehicles that combine its sporting capabilities with Zagato’s design sensibilities, leading to some of the automaker’s most creative designs.

Joint effort
For this concept car, Aston Martin’s design team under the direction of Marek Reichman worked closely with Andrea Zagato and his design team. The vehicle, featuring a carbon fiber body, was engineered and developed at Aston Martin’s headquarters.

Showing the blending between both brands, the car features tail lights that have round reflectors, reminiscent of classic Zagato designs, while they use the LED technology found only in Aston Martin’s racetrack exclusive Vulcan.

Aston Martin Vanquish Concept exterior
Aston Martin Vanquish Zagato concept

Further Aston Martin-inspired elements include wing mirrors that resemble those on its One-77 and DB11’s aerodynamic rear end shape.

Inside the vehicle, the collaboration is referenced in herringbone carbon fiber and Z quilting on the seats and door panels.

Aston Martin Vanquish concept interior
Aston Martin Vanquish Zagato Concept interior

Aston Martin’s Mr. Reichman, the executive vice president and chief creative officer, said, “Over the years, we have developed and refined our own design language and we have always gone that little bit further with our special series cars like CC-100, One-77 and Aston Martin Vulcan. The Vanquish Zagato Concept shows how our two companies can come together and push the definition of Aston Martin design.”

Collaborations can sometimes be risky for luxury brands, and half of affluent shoppers say that the biggest risk for a luxury partnership is the potential damage to the brand’s image or reputation, according to a survey from the Luxury Institute.

Overall the study found that most affluent shoppers enjoy brand partnerships, even with the risk. However, luxury marketers should pair up with brands that have the same goals and mindset when seeking partnerships (see story).

Source: https://www.luxurydaily.com/aston-martin-unveils-latest-chapter-in-5-decade-partnership/

May 6, 2016

Stella McCartney celebrates individuality to woo next-generation

Luxury Daily
By: Sarah Jones
May 6, 2016

Kering-owned fashion label Stella McCartney is communicating its brand values through a handful of millennial spokesmodels.

To launch its latest scent, Pop, the brand has brought together a posse of personalities who have similar feelings about issues such as sustainability and the treatment of animals, asking them to share their views in a social media campaign. Through this “celebration of individuality, authenticity and adventure,” Stella McCartney opens up its brand to a younger audience whose ideologies may align.

“This campaign feels like it’s taking away the filtered, glossy effect of other social media campaigns on Facebook and Instagram and focusing on providing a real connection with this ‘girl gang,’” said Lauren Klostermann, director of digital marketing at Blue Moon Digital, Denver, CO.

“It targets a younger audience that is interested in issues they share with Stella, including animal rights and sustainability,” she said. “It also emphasizes individuality and acceptance.”

Ms. Klostermann is not affiliated with Stella McCartney, but agreed to comment as an industry expert.

Stella McCartney was unable to comment directly before press deadline.

Personal appeal
Stella McCartney’s #PopNow campaign stars Lourdes “Lola” Leon, the daughter of pop star Madonna and a performing arts student; musician, writer and director Grimes, reach name Claire Boucher; actress and campaigner Amandla Stenberg and animal activist Kenya Kinski-Jones.

When first revealing the campaign faces, the brand’s eponymous founder took to social media, sharing why each of the women inspire her personally. This adds a layer of genuineness to the choice of spokesmodels.

Still campaign imagery shared on Instagram and across other social media channels depicts the young women in natural settings, whether playing an electric guitar sitting on a bed or palling around with each other.

Photographer Glen Luchford, who has previously worked with the brand and worked with Ms. McCartney’s mother Linda Eastman, shot the still campaign.

While the brand began teasing the campaign around the time that the perfume became available in late March, additional video elements of the campaign did not roll out until a month later.

The campaign features the women in separate short social videos, as they talk about their beliefs.

Grimes shares that sustainability is very important to her, saying that an ecological focus is what draws her to Stella McCartney as a brand. She also speaks about her friends, who are not afraid to tell her when her music is not good.

These statements are spoken in voiceover to vintage-tinged footage of the pink-haired Grimes on the California desert.

A second film released May 5 takes a closer look at Ms. Kinski-Jones’ feelings on animals.

As she twirls with pink balloons or hangs with her fellow campaign faces, she talks about how Pop as a fragrance represents the idea of being in the moment and unapologetic.

The animal activist also talks about how people should be thinking of all creatures and not just themselves. This is paired with a picture of a polar bear with the words “Not tested on animals” superimposed.

As a sustainably-focused business that does not use leather, having spokesmodels that reflect not just the brand image but also the ethos will help to reinforce its position. This campaign gives Stella McCartney the opportunity to reach out to younger, cause-minded consumers.

A yet-to-be-released campaign film by Melina Matsoukas follows the foursome on a road trip, a representation of their drive in their own lives. The concept centered on friendship is meant as a departure from the typical fragrance film.

“Pop is a spirit,” said Stella McCartney in a statement. “It is about capturing and celebrating that very special and exciting time when you are finding yourself and coming into your own.

“It is about freedom, and starting your life away from judgments or labels,” she said. “Together as one, these strong young women are a force to be reckoned with.”

Ms. McCartney believes that beauty should enhance natural beauty rather than covering it.

Pop Eau de Parfum, developed under the brand’s licensing deal with Procter & Gamble Prestige, combines tuberose and sandalwood to create a vibrant, contemporary scent. The fragrance is produced using biomimicry technology, extracting oil from a blooming flower rather than processed ones, helping to save a sandalwood tree per every 2,500 bottles.

Taking the concept of flipping tradition, the bottle is an inverted version of the brand’s Stella fragrance bottle, topped with the Stella McCartney coin in metallic hot pink.

Continuing its commitment to the environment, Pop’s packaging was made using technology that limits its ecological impact. The boxes come from sustainably managed forests and the bottles are 100 percent recycled plastic, allowing consumers to support a brand they can trust.

Ms. McCartney approaches her business with an innate sustainability mindset, which she explained to the audience at the 2014 FT Business of Luxury Summit.

From using wind power for a store to foregoing leather and PVC, Ms. McCartney considers environmental friendliness so automatically that she forgets she is doing it. This has become part of her namesake label’s story, even if it is one that it does not overtly promote.

Accompanying the Pop perfume is an accessories collection that includes a Pop Falabella handbag in punchy colors and vegan leather, keychains, scarves and shoes.

“Stella McCartney is looking to connect with a younger, edgier audience with these spokesmodels,” Ms. Klostermann said. “These girls are a down-to-earth version of other Instagram stars like Kylie Jenner.

“The Stella girl cares about specific issues and wants to use her disposable income to support causes that matter to her.”

Next generation
As millennials gain disposable income, marketers are appealing to them with focused campaigns.

Beauty marketer Estée Lauder is appealing to the next generation of consumers with a collection designed specifically for a social media-savvy clientele.

The Estée Edit is retailing exclusively through Sephora in the United States and Canada on March 15, with a coinciding launch campaign featuring influencers and models Kendall Jenner and Irene Kim. When developing the line, Estée Lauder envisioned what its eponymous founder would do to disrupt the beauty market today, keeping heritage at the heart of this new brand extension.

Consumers are split on their willingness to download luxury brand applications, but when dispersed into generations, 72 percent of millennials are inclined to download a branded app, according to a report from The Luxury Institute.

Digitization of the luxury world is slowly evolving as younger generations grow into being affluent consumers. Luxury clients differ across more than just generations, but understanding the prime and upcoming consumer can prepare marketing teams for the future.

“By using video & bios in a magazine-type layout, this will engage the younger audience to hear from spokesmodels that they relate to,” Ms. Klosterman said. “Via the use of Facebook advertising, they will also hit a younger demographic that appreciates the individualistic message.

“Finally, via the use of the #PopNow hashtag, their audience can feel engaged in the mission of the campaign outside of the perfume itself, creating a greater affinity with the overall brand.”

Source: https://www.luxurydaily.com/stella-mccartney-celebrates-individuality-to-woo-next-generation/

April 21, 2016

The Future of Luxury Is Now, as Heritage Brands Meet New Demands

Robb Report
By: Booth Moore
April 19, 2016

The world’s most exclusive brands—many of which cling to tradition—are reshaping their long-standing practices to provide smarter, more immediate, more sustainable, and healthier products and services. Yet technological advances and innovative new business models are not the only forces driving the rapid evolution of the luxury marketplace. At the heart of these changes are dramatic shifts in the values, attitudes, priorities, and expectations of you—the consumer.

It was one of the most exclusive fashion shows of all time. When Tom Ford debuted his comeback women’s collection in September 2010, he invited only 100 people to watch Lauren Hutton, Julianne Moore, Daphne Guinness, Beyoncé, and his other famous muses model sexy python-print gowns and fringed coats on the runway. The event took place months before the clothes would arrive in stores, and no photographs were allowed.

When Ford introduces his latest fall/winter collection this September, by contrast, anyone will be able to view the pieces online, and those with sufficient means will be able to purchase items as soon as they come down the runway. This is part of a new see-now-buy-now approach that Ford is testing. Burberry, Diane von Furstenberg, and several other fashion brands have launched similar programs.

“In a world that has become increasingly immediate, the current way of showing a collection four months before it is available to customers is an antiquated idea,” said Ford in a press release. “Our customers today want a collection that is immediately available.”

Ford’s about-face is telling. New technology, market trends, and changing social attitudes have brands and companies catering to customer demands in an unprecedented manner. Now you can acquire nearly any item (a new Zenith watch from Mr. Porter, for example) the same day or engage any service, even a private jet charter, immediately, with the swipe of a finger, and have practically anything customized to your preferences. Even so, we want more than that.

“People still buy luxury products,” says Claudia D’Arpizio, a partner at the management-consulting firm Bain & Company, which reports that the global luxury industry grew by 5 percent from 2014 to 2015 and surpassed $1 trillion in retail sales. “But they value the experience around them more than the products themselves, since the experience is more shareable.”

More of us, in other words, seek meaning from our means. “We have gone from ‘extra’ values to ‘intra’ values,” says Olivier Abtan, a partner and managing director at the Boston Consulting Group, another management-consulting firm. “That means spending good time, sustainability, health, and family.”

Thus, luxury could be a private meeting at the base of the Himalayas with an oracle ordained by the Dalai Lama, arranged by the travel company Cox & Kings; or waking up to sunrise yoga on the rooftop helipad of the Four Seasons Beverly Hills. It could be a Ralph Lauren necktie that warns you when your heart rate accelerates too rapidly, a Bentley whose interior is lined with a material made from non-animal protein leather, or your own mouse avatar, on which doctors can test cancer treatments to determine which would be most effective for you.

Technical Support

As Ford notes, you want immediate access to items, and digital platforms provide that. They also enable you to make informed purchases more easily and to engage conveniently with brands on a personal level. “Technology is a driver of shopping and customer experience,” says D’Arpizio.

According to Joshua Schulman, president of Bergdorf Goodman and NMG International at the Neiman Marcus Group, 75 percent of his company’s customers do research online before buying an item. Saks Fifth Avenue recently launched a service through which associates are available online around the clock, and they can curate personalized virtual boutiques for you on the company’s website.

E-commerce, once thought to be only for mass-market brands, is becoming critical to the luxury sector. “In the U.S., some fashion brands have 20 to 30 percent of their sales online,” says Abtan. He predicts that within the next year or two every luxury brand will be selling online, including such holdouts as Chanel and Harry Winston. Regardless of the nature of the purchase, it seems everyone enjoys the convenience of shopping online.

But as larger luxury brands proliferate on the web and open stores in every city, smaller boutique brands are filling a niche by providing individualized experiences and access. Human contact, when it’s on your terms, can be the height of luxury.

In February, just hours after his fall/winter-collection runway show in New York, the women’s-wear designer Joseph Altuzarra spent an entire afternoon at Bergdorf Goodman greeting clients as part of the store’s Right from the Runway initiative. He explained his inspiration for the collection (Jim Jarmusch’s vampire film Only Lovers Left Alive), described the work involved in the soutache braided embroidery on the back of a coat, and offered suggestions on how to style different looks. One woman, who was visiting from Europe, planned to buy a green ombré tie-dyed dress from the collection. After chatting with the designer, she purchased several additional pieces. “Women love having a relationship with the product they buy, and part of that is having a relationship with the designer,” says Altuzarra. “Some designers are able to do that through digital and Instagram, but usually that’s a relationship with a younger, more aspirational client. At the price point we’re selling at, with $5,000 dresses, our customers are digitally aware, but they are not influenced by it. They are not on Instagram 24/7 looking at runway shows.”

At his showroom in Manhattan, jeweler James de Givenchy works with each of his clients to create a one-of-a-kind piece. The average wait time for completion is eight weeks, and no one complains. “We have 12 manufacturers downstairs, and we serve a small market of people who want to have things made especially for them,” de Givenchy says. “It’s the experience of meeting and discussing what their needs are.”

Have It Your Way

The travel industry also recognizes the value of individual attention. Companies understand that you want to personalize trips and experience your passions. This could mean attending a sold-out baseball game in Osaka, Japan, or shopping for a Ferrari at the automaker’s headquarters in Maranello, Italy, according to Scott Wiseman, president for the Americas at Cox & Kings. “It used to be that luxury had to do with being first to a new property or destination,” he says. “Now people want to be part of something instead of watching it.” Wiseman says his clients can overnight in a Maasai mud hut, for example, and learn something of the local culture.

Neil Jacobs, CEO of Six Senses Hotels Resorts Spas, sees a demand for nontraditional travel experiences from his company’s clients. “We never talk about exclusivity,” he says, “we talk about inclusivity.” He cites the appeal of the organic free-range chicken farm at the brand’s Yao Noi property in Thailand, where you can collect your own eggs for breakfast. “It’s about experience and community engagement,” says Jacobs. “Customers who are spending north of $1,000 a night want more than just good service and a great bed.”

Community engagement can extend to guest rooms. Gone is cookie-cutter hotel design: “People are preoccupied with the personality of spaces,” says Ian Carr, co-CEO of the hospitality and residential design firm Hirsch Bedner Associates. “They don’t want generic or transient. They want curated, personal, locally connected.”

Hospitality companies also recognize guests’ desires for seamless service and freedom from awkward, time-consuming social interactions. Technology can help address those demands. “More and more, people don’t want to talk to anyone,” says Herve Humler, president and COO of the Ritz-Carlton Hotel Company, which has a GPS-enabled service in the works. It is expected to allow guests at the brand’s resorts to use their mobile devices to order lunch from the beach, for example, and have a server locate their chaise longue on the sand.

Sustainable Efforts

That lunch likely will not arrive in Styrofoam, and it could well include meat from animals that have been responsibly raised or produce that has been sustainably farmed. Cited in 2010 by the Harvard Business Review as a corporate mega-trend that would rival the impacts of mass production and electrification, sustainability is making its way into the luxury world. The luxury-industry conglomerate Kering’s first Environmental Profit and Loss report, published last year, set targets for reducing emissions and waste from its production and supply chain. Jewelry brands Chopard and Tiffany & Co. have begun using ethically mined gems and recycling gold, silver, and platinum, because an increasing number of customers demanded that they do so.

In the luxury-auto market, the SUV, with its relatively low mileage rating, has remained popular enough for Jaguar, Maserati, and Bentley to launch, or prepare to launch, their first models. However, according to a March report by Donatas Bimba of the market-research firm Euromonitor International, sales of plug-in electric vehicles are set to bounce back in 2016 and record solid growth from 2017 onward thanks to upgraded models and improved charging infrastructure. Bimba cited plug-in hybrid vehicles as “the most dynamic new car segment in the U.S.” and pointed to the BMW i8 and Mercedes-Benz S500e. He also noted the potential impact of the Model X all-electric SUV from Tesla, which is aiming to woo customers away from their Porsche Cayennes and Range Rovers.

“The electrification of the drivetrain is not a temporary phenomenon; it is the future of mobility,” says Gorden Wagener, the chief designer at Mercedes-Benz, which has plans to offer 10 plug-in hybrid models by 2017 and recently announced a new policy requiring top managers to drive electrified, as opposed to gas-powered, company cars.

In addition to offering more environmentally friendly models, luxury carmakers may begin adding sustainable materials to their vehicles’ cabins. “People on the top level of society—our customers—sooner or later won’t order a Bentley with 20 hides, because as a, say, vegan person, they will not accept it,” says Stefan Sielaff, director of design for Bentley Motors. “On the other side, they are not going to accept artificial leather, because it is oil based, so you really have to start experimenting with alternative, organic materials, such as textiles made of animal-free protein leather, silks, even stone.” Bentley is already offering stone veneers, made of rocks sourced from quarries in India, in its Mulsanne models.

The transition to autonomous-driving vehicles could have an even more profound effect on car design. “Maybe in the future, the car is a sitting room, a living room, a conference room, and you use the time in the car in a different way,” says Sielaff. “It becomes like sitting in first class of an aircraft.”

In BMW’s Vision Next 100 self-driving concept car, the steering wheel and center console retract so that the driver and front-seat passenger can turn toward each other. Another autonomous-driving vehicle, the Mercedes-Benz F 015 research car, is described as a “luxury lounge,” with chairs that can rotate to form a club-style seating arrangement.

The Balance Equation

Our own health is as important to many of us as the planet’s, and fashion and hospitality brands, along with hospitals and medical practices, are responding accordingly. Fashion labels are designing their own Fitbit devices (Tory Burch), activewear (Zegna), and connected clothing. Ralph Lauren’s PoloTech shirt works with an iPhone or Apple Watch to put real-time workout data in your hand. A smart suit or necktie that could advise the wearer on heart rate and body temperature may not be far off. “Living a luxury lifestyle isn’t just the dream of having a better life,” says David Lauren, executive vice president of global advertising, marketing, and communications at Ralph Lauren. “It’s also how technology can help you live a healthier, better life now.”

The country’s leading hospitals have long offered executive health programs that work with patients on preventive health care, nutrition, and stress management. The programs were initiated in the 1960s to protect C-level managers and board members considered valuable assets by corporations. “But now, the real growth segment has been in individuals motivated toward this kind of health-care surveillance,” says Dr. Benjamin Ansell, the director of UCLA’s Executive Health Program, which provides personalized, in-depth evaluations. Private practices offer similar programs.

Craig Venter, one of the first people to map the human genome, offers an executive physical at his latest venture, the La Jolla, Calif.–based Human Longevity. For $25,000, the company will sequence your DNA and run a full complement of tests to determine your risk for heart disease, melanoma, dementia, and other ailments. “Having the ability to control health and life outcomes is the ultimate luxury,” he says. (Some experts argue that genome sequencing alone may not be sufficient to detect health risks, and that further research is needed.)

Venter’s company is focused on advanced preventive care; others provide exclusive treatments. Champions Oncology is among the companies offering a mouse avatar to cancer patients. For a price starting at $10,000, Champions will remove a portion of the patient’s tumor, inject it into the mouse, and have the animal undergo different treatments to determine which will work best for the patient. (Doctors disagree on the efficacy of such practices when compared to human clinical trials.)

In the hospitality realm, hotels and resorts are providing health and wellness services that go far beyond facials and massages. The comforts of home on the road now include nutritious foods, fully equipped workout facilities, yoga, and spin classes. “It’s a luxury to have normalcy when you travel,” says Michael Newcombe, general manager for the Four Seasons Los Angeles at Beverly Hills. He oversees all 38 Four Seasons spas in the Americas and has partnered on services with local fitness professionals, dermatologists, and medical providers.

Health retreats offer increasingly sophisticated medical services, such as Alzheimer’s prevention through cognitive stimulation, sleep recovery programs, and couples counseling. “The old-fashioned notion of going to a health spa involves weight loss and plastic surgery,” says Alejandro Bataller, a vice president at the SHA Wellness Clinic near Alicante, Spain. “But now, it’s so much more.” The SHA experience includes classes at the clinic’s health academy, where visitors learn how to manage stress and cook healthy meals. And Bataller is working with a Spanish university to develop an app that will keep track of guests’ progress after they leave. “We are going to be able to support you through technology wherever you are,” he says.

But for all the ways luxury companies are employing new technologies to meet your demands and enhance your life—providing instant access to the latest fashions or seamless service at resorts and hotels or cutting-edge wellness programs—their ability to forge relationships with you and other clients may ultimately determine whether they succeed or fail, says Milton Pedraza, CEO of the Luxury Institute, a research organization in New York. “What wealthy people want is empathy, trustworthiness, the emotional elements of humanity,” he says. “It’s not a points program or Champagne when you walk in the store that matters. It’s doing little things that mean so much more.”

Accordingly, Pedraza says, the luxury industry is paying particular attention to women, and not just with marketing initiatives such as Bergdorf Goodman’s Right from the Runway. “[Women’s growing influence] is a big trend in luxury,” he says, citing Gucci’s Chime for Change charity campaign, supporting girls around the globe, and the LVMH-owned Champagne house Veuve Clicquot’s Business Woman Award as strategic outreach programs.

“Women have the say and the money,” he observes, “and we will see that grow as more millennial women get into higher levels of corporations. How will it manifest itself? Maybe a nicer world.”

Certainly that would be the most welcome change of all.

Source: http://robbreport.com/sports-leisure/future-luxury-now-heritage-brands-meet-new-demands#sthash.dNjDZXhF.dpuf

February 9, 2016

Using digital to connect luxury shoppers with luxury brands

Luxury Daily
By: James Green
February 9, 2016

Every industry has been disrupted by technology and pushed to evolve their marketing strategy. In some ways, luxury advertisers have embraced the digital revolution and found new methods of improving the customer and user experience. But a large number of luxury marketing spend is still happening offline, despite the brand opportunities that are now available online.

There seems to be a common understanding among luxury brands that high-priced items are not going to thrive online and that using an ecommerce platform may even devalue products. True or not, direct sales are not the only way to get value out of the digital world.

Net net
Most luxury brands have a very specific target audience, typically affluent individuals. Therefore, luxury brands have traditionally bought digital media within specific owners such as The New York Times, Bloomberg and The Wall Street Journal because they feel that it is the best way they can safely find their audience online.

But what about all the people signaling their intent to buy luxury items across the Greater Internet? How do brands effectively reach out them?

Research from Epsilon and The Luxury Institute shows that 98 percent of luxury shoppers use the Internet regularly.

In addition, more than 50 percent of the time they are online, they are researching products and comparing prices on their mobile devices.

Throughout the years, studies from Google and McKinsey have shown that people spend a good amount of time researching luxury or high cost goods online before making their purchase.

And most likely, the number of times people visit a store to browse and conduct research has diminished because of the availability of information online.

With all this data about people, including demographic and information about brand affinity, along with precise data related to what people are searching for or what items they have recently purchased, there is a tremendous opportunity to use digital to identify luxury shoppers, provide them with immersive experiences and forge stronger customer relationships.

Researching signals purchase intent
Data offers established brands the opportunity to get in front of in-market buyers, including new customers and previous buyers.

Consider the amount of research that takes place before making a luxury purchase, whether that is a new car, piece of jewelry, handbag or high-end vacation.

According to WBR Digital, 45 percent of luxury purchases are influenced by what consumers find online.

The benefit of digital is that you can depict who is actually looking for information about your product and use that trail of data to determine intent to purchase.

For the luxury category, these insights will help brands determine who is ready to make a purchase and allow you to predict which people to keep informed about brand updates, such as new products, sales and seasonal marketing promotions.

Intent-based targeting is a strong complement to more traditional brand-centric media buying and helps luxury brands zero in on the people who are more likely to buy their products. It is also a great way to help them move through the buying journey, either in-store or online.

Enticing luxury buyers with digital creative
Luxury shoppers are very much part of the digital nation. They are using laptops, tablets and smartphones to follow trends, connect with brands, research products and make purchases.

Digital creative is critical to the luxury shopper – it needs to drive awareness without jeopardizing brand integrity and exclusivity.

Digital platforms have transformed their environments into creative canvasses for luxury brands. We have seen this through beautifully produced digital videos, immersive creative experiences and native advertising taking place across mobile devices and platforms such as Instagram and Facebook.

There is enough creative stability in digital for luxury buyers to bring their brand to life and to do so amongst the people who are most likely to buy. The dynamic characteristics of digital also allow brands to feature more products and change up creative more easily than television or print ads.

Forging lasting relationships online
People do not have to visit a store for you to know when and how interact to with them.

Online interactions between consumers and brands inform content, marketing frequency and promotions at the individual level, which can help increase customer loyalty and brand awareness.

Loyalty can be accelerated through social, email and digital display advertising at any point within the customer’s lifetime, and data can help predict these optimal moments.

This means that you need to be constantly learning and adapting to what people want so that your brand remains relevant and generates the engagement and desired response. There is simply way too much insight and value rooted in the digital medium for brands not to invest in it.

DIGITAL MARKETING may appear to be about data and targeting, but it is more about customer interaction, immersive experiences and interactive communication.

The luxury experience is more likely to stay very much in-store focused in the next few years. But this might be able to change once luxury advertisers find a way to prolong the experience that they are providing in-store across digital channels.

Data, adaptability and device versatility makes digital a strong brand vehicle for the luxury category.

 Source: https://www.luxurydaily.com/using-digital-to-connect-luxury-shoppers-with-luxury-brands/

January 22, 2016

Events crucial at defining brand community: Neuehouse founding partner

Luxury Daily
By: Sarah Jones
January 21, 2016

NEW YORK – Luxury brands can work relentlessly to develop a quality product, but without creating a controlled experience and consistent message around their merchandise and identity, there may be a disconnect between reality and public perception.

During the “Going Beyond the Product: Creating Physical Experiences for Luxury Consumers” session at Luxury FirstLook: Strategy 2016 Jan. 20, panelists agreed that finding one consistent brand personality and ideology and communicating that across all touch points, whether online or in-store, is the key for effective brand positioning. From there, letting consumers engage with a brand through product, entertainment or creative experiences can further help to build a community.

“The brand has to drive the interaction, whatever it is, and then I think you have to be aware of what consumers’ expectations are,” said Matt Powell, co-president of KBS. “So digital has made it so that whether it is a luxury brand or not, people have certain expectations in terms of understanding everything from what’s going on in the supply chain to price comparison, things that normally luxury could avoid.

“And you have to think about how do you take advantage of what consumer expectations are altered by the Web when you’re creating any experience—online, offline, in-store, out of store,” he said.

Leaving a message
When trying to communicate a brand message to many different generations, brands should not let age be the primary focus, since consumers do not like being defined by this demographic. Mr. Powell said instead brands should speak to characteristics that consumers prefer to be identified by.

James O’Reilly, founding partner at Neuehouse, agreed, explaining that the private work collective tries to find common threads among its multigenerational audience rather than point out differences. Additionally, Neuehouse offers programming at different levels, allowing consumers at varying points in their lives to use its spaces and join its private community.

When designing retail spaces, brands should work to create elements of surprise. For instance, Neuehouse’s bathroom doors feature images of a pump and a mustache, fashioned out of magnets, showing more ingenuity than a painting.

In-store digitization efforts should center on creating an experience that the consumer cannot have at home on her tablet or phone. For instance, Puma took the concept of the in-store iPad and made it more memorable by creating a wall of iPads eight across.

“Physical and digital should be seen as complimentary as opposed to standalone items,” Mr. O’Reilly said. “I typically reference how much better educated people, more informed people are prior to an in-store purchase.

“I think those should feed off each other, and what I’ve seen more is people in-store are referencing digital moments, which consumers have prior to purchase,” he said.

Another way to surprise is in sensory and hospitality touch points. For instance, Dover Street Market was one of the first to include an in-store eatery, and its stores use a museum-style layout.

Prada at Dover Street Market 1
Prada at Dover Street Market

Creating a consistent experience at point of sale can become more difficult when a brand does not handle its own retail outlets.

This is true of automotive brands, which typically have a network of dealerships, but no flagship stores. Geoff Cook, founding partner of Base New York, said that he finds this lack of brand-owned store presence “bizarre.”

One option to make up for this would be hosting experiential events where consumers would be able to test drive and see the cars in person.

Similarly, Mr. Powell is working with BMW to bring its fragmented online presence together, uniting dealer, regional and corporate sites into one. The automaker’s corporate team also set up a showroom in a mall, giving itself an opportunity to reach consumers directly.

BMW South Coast Plaza
BMW Gallery at South Coast Plaza

Mr. Cook believes that brands should be more focused on creating news than on designing ads. Neuehouse employs this strategy, identifying itself as a publisher and introducing itself to potential members through editorial placements in media such as Vulture and Vanity Fair.

Face time
Having a consistent brand identity extends to personnel across facets of the business.

Mr. Cook said that the human connection is important in all channels. Ecommerce should therefore be more than just a transaction and a faceless shopping cart, particularly at luxury price points.

This starts at hiring. Neuehouse looks for an “emotional IQ” in potential new hires, searching for employees who fit into its community. Mr. O’Reilly said that it is difficult to tell who is a member and who works at Neuehouse.

When training new team members, brands should communicate not only what is done, but why it is done. For instance, a genius at the Apple store in Shanghai told Mr. Powell that when he resolves an issue, he is not just repairing a device, but he is fixing a fractured relationship between the consumer and Apple.

While luxury brands typically know the best practices in client building, most are not practicing these strategies for their own customers, according to the CEO of the Luxury Institute at Luxury Interactive 2015 Oct. 14.

The traditional training program for sales associates is out of date, as the focus should be on education that can be applied in a creative way rather than a rote set of rules and checklists that take the human element out of interactions. Additionally, these important members of a brand’s team should be rewarded more for their actions than their results, putting the emphasis on client retention and engagement, which will lead to sales over time (see story).

“I think for me, the most powerful thing is clarity and purpose for a brand,” Mr. Powell said. “So lots of people know how they do, lots of people know what they do. The best brands know why they do what they do.

“And that kind of clarity affects a lot of the behavior of the people on that team that end up being some of the most important touchpoints that exist, because they really define the experience,” he said.

Source: https://www.luxurydaily.com/events-crucial-at-defining-brand-community-neuehouse-partner/

December 18, 2015

Luxury travellers have dim view of Trump brand: survey

Marketing experts weigh in on how to do a hotel rebranding properly
Business Vancover
By: Glen Korstrom
December 17, 2015

The Trump brand is weak among luxury travellers, according to a new survey – a finding likely to fuel more controversy over whether Vancouver’s Holborn Group made a wise decision by contracting with Trump International to put the Trump brand on its under-construction hotel.

Trump ranked 40th out of 40 luxury hotel brands when wealthy travellers who were familiar with the brand were asked whether they would recommend the brand to family or friends, according to the 2016 Global Hotels Luxury Brand Status Index, which the Luxury Institute released December 17.

Strict privacy laws in Canada meant none of the survey respondents were Canadian, CEO Milton Pedraza told Business in Vancouver in an interview.

Instead, the New York-based Luxury Institute found its 3,900 respondents by buying lists from reputable companies that were able to determine income for those who live in the U.S., U.K., Japan, China, France, Germany and Italy.

Luxury brand Maybourne Hotels ranked No. 1 in each of four metrics, for which respondents were asked to grade hotels on a scale of 0 to 10:

•delivering consistent superior quality;

•being unique and exclusive;

•being visited by people who are admired and respected; and

•making guests feel special.

Trump ranked No. 34 for quality, No. 30 for exclusivity, No. 31 for having admired and respected guests, and No. 37 for making guests feel special.

“The survey was in the late summer,” Pedraza said. “This was before [company owner and Republican presidential candidate Donald Trump] started making all of the super-vile statements.”

In fairness, the sample size for those who graded Trump hotels was lower than those who graded much larger brands, such as Ritz-Carlton, Four Seasons and JW Marriott, because participants were only allowed to grade brands that they were familiar with or had experienced.

This was the first year that the Luxury Institute included the Trump brand because, in previous years, the nine-hotel brand was considered too small. Trump representatives then lobbied the Luxury Institute to be included, Pedraza said.

Trump is expected to open hotels in Baku, Azerbaijan in early 2016 and then one in Rio de Janeiro before Vancouver opens in July to make the chain a complete dozen.

Trump International Hotel & Tower Vancouver general manager Philipp Posch told BIV that he would not comment on the survey because he was not familiar with it.

Marketing for his hotel has not yet started.

“We’ll wait out the holidays and probably by January or so, we’ll reach out to clients and start the marketing process and machine,” Posch said December 17.

Click here to read a profile of Phillip Posch

How to do a rebranding properly

Branding experts say Holborn likely wishes that it never hitched its horse to the Trump cavalcade and that the situation underscores the need to have an escape clause in contracts.

“People who do these masthead deals for hotels might want to look at sports sponsorships,” said Brandever principal and branding expert Bernie Hadley Beauregard.

Those deals often end the day after a sponsored, star athlete does something objectionable.

A recent spate of hotel rebrandings in B.C. has experts pointing out both how to do a rebranding properly and what to avoid.

(Victoria’s Hotel Zed has won awards for its rebranding of what was previously known as the Blueridge Inn | Crazyintherain.com)

Branding experts’ biggest lessons are to keep the name short and catchy while making sure that the brand is consistent across the chain so guests will know what to expect.

Keeping a brand consistent across properties is a lesson regardless of the sector.

“The art form of branding is to bring the name down to be something that is usable and memorable to the consumer,” Hadley Beauregard said.

He pointed to Portland, Oregon-based Ace Hotels, which has seven hotels around the world in cities as varied as London, Panama City and Seattle.

“Always artistic, eclectic and hip, Ace Hotels often redefine their host city’s magnetic centre,” he said. “Their brand aura is such that you want to make a pilgrimage to see their properties, even if you aren’t staying there.”

Victoria-based Accent Inns’ rebranding of its secondary, economy hotel to Hotel Zed from Blueridge Inn, in 2014, similarly aimed for a hipper image and a short succinct name.

Rooms at Hotel Zed in Victoria have modern elements such as flat-screen TVs, which have media hubs to project iPhone screens onto the TV monitor.

Basically, however, the hotel’s shtick is that it is made to look retro – complete with rotary-dial telephones and furniture and lamps that appear to be out of the 1970s. A multicoloured 1967 Volkswagen van is parked outside and typewriters in the lobby are for guests to use.

“Because Accent Inns starts with an ‘A,’ we can also say that we’ve got brands that go from A to Zed,” Accent Inns marketing director John Espley told BIV.

The rebranding was such a success that Accent Inns plans to open a second Hotel Zed, in Kelowna, next summer. Accent Inns won recognition for the rebranding at the Victoria Real Estate Board Commercial Building Awards in the hotel category. Destination British Columbia then highlighted the hotel when it unveiled its new $2.6M marketing strategy late last year.

Beauregard, however, is less enthusiastic about Vancouver-based Pinnacle International’s rebranding of its longtime Renaissance Vancouver Harbourside Hotel as the Pinnacle Hotel Vancouver Harbourfront.

“Too many words,” Hadley Beauregard said. “My head hurts.”

Making the rebranding more puzzling, he said, is that the new Pinnacle Hotel Vancouver Harbourfront is virtually across the street from a second hotel that also has “Pinnacle” in an even wordier name: the Vancouver Mariott Pinnacle Downtown Hotel.

(Kyle Matheson is director of hospitality marketing at Pinnacle Hotel Vancouver Harbourfront | Rob Kruyt)

What’s worse than simply having two hotels extremely close together, with both carrying the distinctive word “Pinnacle” somewhere in the brand, is the fact that the two hotels are managed by two different companies – Marriott International and Pinnacle International – even though they are both owned by Pinnacle International.

The two hotels therefore have different offerings for guests.

The Marriott Pinnacle, for example, requires guests to join a loyalty program to get free Wi-Fi whereas the Pinnacle Harbourfront provides guests free Wi-Fi with no need to join any program.

“This creates confusion in consumers’ minds,” Hadley Beauregard said.

“Brand consistency is key.”

Rationale for recent Pinnacle’s rebranding

Pinnacle International has contracted Marriott to manage the Marriott Pinnacle for the past decade.

Paying a management company a fee up to about 5% of revenue to be able to use a global brand such as Marriott is called “flagging” a property.

The common practice is exactly what happened when Holborn Group agreed to pay Trump International to be able to use the Trump brand on Holborn’s hotel.

The point of this strategy is to coast on the brand recognition of a well-known manager such as Marriott or Trump.

Pinnacle International, which is best known as a real estate developer, ended its management contract with Marriott’s Renaissance Hotels earlier this year. That meant that it had to come up with a new name for the property.

Its director of hospitality marketing, Kyle Matheson, told BIV that the new Pinnacle Harbourfront name makes it clear that the hotel is near Vancouver’s harbour.

Using Pinnacle in the name was done because Pinnacle International both owns and manages two other B.C. hotels: Pinnacle at the Pier in North Vancouver and Pinnacle Hotel Whistler.

“The goal with rebranding the [former Renaissance] property as Pinnacle Harbourfront was to broaden our hospitality and hotels and restaurants portfolio under our own Pinnacle name,” he said.

 Source: https://www.biv.com/article/2015/12/luxury-travellers-have-dim-view-trump-brand-survey/

 

October 22, 2015

Tesla, Musk shine from free celebrity marketing, but will it last?

Automotive News
October 22, 2015

SAN FRANCISCO (Bloomberg) — When “The Late Show With Stephen Colbert” debuted on CBS last month, the host chose Tesla CEO Elon Musk as one of his first guests.

Colbert, who commutes into Manhattan in a Model S sedan, took his enthusiasm for Tesla Motors Inc. one step further in an episode last week. He spoke for almost six minutes about his car’s latest autopilot features, the march toward self-driving vehicles and efforts by competitors Apple, Google and Uber.

“I love my Tesla — it’s so fast, it’s all electric,” he told viewers. Comparing his car to a laptop computer on wheels, he said that with the company’s latest over-the-air software update, “Tesla owners woke up to find their cars could drive themselves.”

That glowing Colbert report shows how Tesla benefits from celebrity enthusiasm — for free, from customers that include Oprah Winfrey — to promote the brand. Throw in some viral Internet clips, test drives and customer referral programs, and Tesla is able to spend money on developing products instead of on marketing. In stark contrast to other automakers, Tesla doesn’t currently pay for traditional media such as television, radio or print advertising or celebrity sponsors.

“The Colbert segment was amazing because it was so long, it was Colbert, it was Colbert’s new show and instead of being playfully sarcastic he was overwhelmingly positive,” said Lincoln Merrihew, senior vice president of client services for Millward Brown Digital in Boston, who first watched the Colbert clip on YouTube. “The magic of a celebrity evangelist is that they love a product so much that they will talk about it for free. It was more than a simple endorsement; it was more like a commercial.”

That air time is valuable. On average, 30-second spots on the “Late Show” will average $38,400 from Colbert’s debut through the end of the fourth quarter, according to media-cost forecaster SQAD Inc. It helps, of course, that the 44-year-old Musk is a brand and a celebrity in his own right — making him a worthy guest — as well as a deft user of social media.

Stock decline

At the moment, Tesla can use a little extra fan love. Its once high-flying stock has fallen to the low $200s from its July peak at $282 in the wake of last month’s long-awaited introduction of the company’s Model X SUV. Three analysts have cut their price targets amid concerns that Tesla, which aims to deliver at least 50,000 vehicles this year, faces a steep production ramp in the fourth quarter.

On Tuesday, the Model S lost its recommendation from Consumer Reports after owners complained about quality issues as mundane as a squeaky sunroof to major issues like the electric motor needing to be replaced, the publication said in its forthcoming December issue. The Consumer Reports news sent shares tumbling 6.6 percent to $213.03, its biggest drop since Aug. 6.

Musk has pushed back on Consumer Reports via Twitter, saying the publication’s reliability survey “includes a lot of early production cars. Already addressed in new cars.”

Fan power

The auto industry already is also legend with celebrity ads, from Matthew McConaughey’s oft-parodied commercials for Lincoln to Clint Eastwood’s two-minute “It’s Halftime in America” spot for Chrysler, a hit of the 2012 Super Bowl.

For Tesla, the celebrities do the work on their own accord, not for a paycheck. Stars such as actress Alyssa Milano, director Jon Favreau, and Teller, the silent partner in the magic duo Penn & Teller, have praised Tesla or promoted the brand to their social-media followers in an increasingly fragmented media market.

Teller’s “customer story” is one of several that can be read in full on Tesla’s website. Oprah shared photographs of her recently purchased white Model S with her millions of followers on Instagram and Twitter. Colbert talked in detail about autopilot — a Tesla product announcement — just as it came out.

“On a daily basis, Stephen brings a smart comedic voice to all types of topical issues,” said CBS in a statement. “We don’t tell him what to say, but we certainly enjoy it.”

Automotive advertising

Other automakers usually have to rely on traditional marketing. General Motors, Ford Motor Co. and Fiat Chrysler Automobiles all rank among the top 10 advertisers in the U.S. in terms of money spent, according to Advertising Age, an affiliate of Automotive News. In 2014 alone, GM spent almost $1.7 billion on advertising in the U.S., according to Kantar Media; Ford spent $841 million and Fiat Chrysler spent $1.1 billion. Those figures are just from the manufacturers and don’t include the vast millions that dealerships spend as well.

In its annual report filed earlier this year, Tesla notes that “we have been able to generate significant media coverage of our company and our vehicles, and we believe we will continue to do so.” But the Palo Alto, Calif.-based company also notes that “to further promote our brand, we may be required to change our marketing practices, which could result in substantially increased advertising expenses.”

For now at least, Tesla’s strategy is working.

“Colbert benefits from talking about Tesla, because it’s a brand that his millennial audience associates with,” Milton Pedraza, CEO of the Luxury Institute, said in an interview. “It’s a massive multiplier effect that is equivalent to spending tens of millions of dollars on media. Tesla doesn’t advertise: They are playing the game of not playing the game, and you win by that. They are doing it brilliantly.”

Source: http://www.autonews.com/article/20151022/RETAIL03/151029937/tesla-musk-shine-from-free-celebrity-marketing-but-will-it-last

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