Luxury Institute News

September 19, 2016

The Big Business Of Red Carpet Bling

www.fastmagazine.com
By: Rina Raphael
September 18, 2016

Jewelry companies of all sizes compete to get their baubles on the right celebrities at the right time—including the Emmys.

Actress Cate Blanchett is celebrated for her unconventional, avant-garde awards-show fashion. But at the 2015 Oscars, it was her jewelry that stole the red carpet show: She paired a long, simple black Maison Margiela gown with a Tiffany & Co. turquoise and diamond necklace. It dominated fashion headlines and soon thereafter, inspired knock-offs and Etsy reimaginings. Us Weeklypromoted a $75 Blanchett-inspired jewelry giveaway.

“We didn’t plan on it,” says Blanchett’s stylist, Elizabeth Stewart. “But it worked.”

When it comes to Hollywood baubles, the motto is generally, “Go big or go home.” To compete with couture gowns and Cinderella moments, top jewelers such as Bulgari, Chopard, and Forevermark go all out to secure their celebrity endorsements. It’s a lengthy, complicated loaning process, and a chance at worldwide brand recognition.

Sometimes celebrities or stylists are paid to wear the accessories, with compensation potentially hovering in the hundreds of thousands. Sometimes the jeweler will “thank” the star by “gifting” them jewelry. Sometimes the generous one-night loan is the sum total. It varies, and those involved are historically mum on the transaction specifics.

[Photo: Flickr user Kyle Garrity]

[Photo: Flickr user Kyle Garrity]

A PRICEY PROCESS

It starts with the stylist, the unsung maestro of all Hollywood red carpets. Stewart, whose clients also include Julia Roberts, Sandra Bullock, and January Jones, starts with the dress, then moves her way to accessories. “Often, the jewelry comes last,” she says, but stresses that it is “very important” to create a full look.

The next step is the insurance companies. Jewelers might provide the insurance, but most commonly, stars already have existing relationships with insurance agents and a policy that seamlessly weaves in additional loans.

“Individuals of some level of wealth normally have some kind of jewelry coverage in place,” explains Janece White, vice president, North American underwriting and jewelry specialist of Chubb Personal Risk Services, which counts high-profile celebrities as clients. Even if it’s just for what she calls “the basics”—their engagement rings or earrings—deep-pocketed celebrities often get covered.

If the client is a “good customer” who has had a relationship with the agent for years, Chubb will offer the additional coverage, but they need the specifics of the loaned pieces and how they will be stored, transported, and secured. “It’s usually not just one piece of jewelry,” White says. “The stylist brings back a number of pieces—sometimes a couple million dollars worth.”

White and her associates are available throughout the days leading up to awards shows, waiting on frantic last-minute calls from clients who might need to insure a $5 million diamond choker. It’s a frenzy. They also act as consultants, offering recommendations on services such as security firms that can provide armored trucks and guards, which could run well over $20,000.

“Would it be acceptable to throw [the jewelry] in the back of a cab? No,” White says. “Would it be acceptable to have [the client] come with someone very secure to take the items back by personal car? Yes.” Most clients, says White, take good care of their loans, because “they want to borrow something again the next award season.”

With all that prep work, there is still no guarantee the star will wear a specific item. A stylist has multiple looks on hold in the dressing room hours prior to an event, and sometimes last-minute decisions occur.

“I can’t tell you how many times the backup dress becomes the dress,” said Stewart. “You really don’t know until it’s all put together.” And if the gown changes, so too will the accessories. Stewart cites a number of reasons why one or both might not make the final cut: hair, makeup, and even just one’s mood.

THE BRAND NAME GAME

For many companies, the goal is to tie themselves to the right star whose name signifies aspirational wealth and glamour.

“There’s a lot that goes on behind the scenes in terms of determining who that million-dollar actor is going to be walking down the red carpet,” says style expert Anna De Souza. “It’s not about selling that particular piece—it’s about brand recognition.” Celebrities are repeatedly asked, “Who are you wearing?” with designer names appearing in celebrity and fashion magazines for weeks thereafter.

For stars, borrowing baubles is a mark of success. And consumers understand that the bigger the star, the bigger the bauble.

“Beyond the event itself, media will cover different celebrity looks—i.e., who wore what, not to mention a huge social media audience weighing in on each celebrity look, garnering mentions for brands,” says Crosby Noricks, a fashion brand strategist and founder of PR Couture. “When a company like Tiffany’s or Bulgari does a product-placement deal with a celebrity, if they get the right star, it can certainly add a valuable spotlight to their product, image, and brand.” It can also bolster a certain campaign. Cate Blanchett’s turquoise homerun served to promote Tiffany & Co.’s Blue Book collection.

Snagging an international star is paramount. This is especially true for smaller jewelry companies trying to secure placement in bigger retailers or to enter a new market, like Dubai. Being able to approach new opportunities with the claim that “Jennifer Lopez wears our jewelry” can be the ticket in.

Labels have their own specific needs and who they want to reach. For publicly traded companies like Tiffany & Co., which boasts over 300 stores and sells high and more modestly priced collections, it makes sense for them to place their products on a wide range of stars, ranging from Oscar winners to TV actresses, at various industry events. Chopard wants to master the red carpet, so you might see their products at movie premieres, in addition to awards shows.

Anna Hu Haute Joaillerie sells colorful jewelry with whimsical, intricate imagery like flowers and butterflies. Price points range from $100,000 to $7 million. The brand was relatively unknown until Madonna wore an Anna Hu Haute Joaillerie diamond cross pendant necklace to the 2009 Met Gala. “That put Anna on the global map,” says Carineh Martin, the company’s chief marketing officer.

Today, Hu’s styles adorn A-listers such as Gwyneth Paltrow and Emily Blunt—but only at the three high-profile events: the Oscars, the Met Gala, and the Cannes Film Festival. The designer takes the rare approach of relying on a select few celebrities to foster an image of exclusivity.

“It has to be the top event, the top actress, with the top jewels, otherwise it’s just not interesting for us,” Martin says. “If that means only one or two a year, that’s all we’re interested in.”

It makes sense, considering the brand has only one store, and most sales are private custom orders. That’s precisely what a certain clientele wants—the sense that they’re wearing something rare and special. “How can you be exclusive when you have 600 stores worldwide?” Martin says.

“We are about being private jewelers to a very small echelon of clientele, so everything we do is with that in mind, including our red carpet approach,” she says. “We could dress a lot more people and have a lot more awareness, but when you’re not readily available all over the world, what’s all that awareness going to do for you? We’d rather be known by fewer people, but the type of people who respond to our jewels.”

screen-shot-2016-09-19-at-11-47-21

AS SEEN ON . . .

There are those who want exactly what the stars are wearing. Fine jewelry designer Irene Neuwirth has been contacted while celebrities were still modeling her designs on the red carpet. She sold two emerald cuffs, each at $150,000, while they were still on Julianne Moore’s wrist at the 2013 Met Gala.

Iconic moments can immediately help sell a style. Gwyneth Paltrow went down in fashion history following her 1999 Oscar win, when she clutched her gold statue in a pink Ralph Lauren gown and a 40-carat Harry Winston diamond necklace. The jewelry house immediately sold a few necklaces in the same style, reportedly at over $100,000 each. One buyer was Paltrow’s own father, who gave his daughter the jewels as a gift.

As for how this visibility affects companies’ bottom lines, that’s a complicated equation. According to Milton Pedraza, CEO of the Luxury Institute, a consulting firm serving more than 1,000 luxury and premium goods, what consumers consider the most prestigious and what consumers actually buy don’t always align. In a recent study, the Luxury Institute found that households earning over $200,000 were most familiar with the following brands, in descending order: Tiffany & Co., Cartier, Bulgari, Gucci, Chanel, Harry Winston, De Beers, Van Cleef & Arpels, Mikimoto, and David Yurman.

And here’s where they spent their money: Tiffany & Co., Cartier, Alexis Bittar, David Yurman, Gucci, Bulgari, Chanel, Boucheron, Mikimoto, and Judith Ripka. The two categories diverge, since consumers can’t always afford what they’re familiar with, but they still want designer.

Consumers with household incomes under $75,000 tend to own items from Tiffany (76%), Bulgari (32%), and David Yurman (21%).

“Millennials are very aspirational,” Pedraza says, noting their constant media intake of celebrity fashion and culture. They’re attuned to researching a product or a celebrity they want to emulate. “They are now in the know.” They might only buy a pendant necklace or bracelet, but they’re still buying.

The majority of Americans don’t have the means to even consider buying a pricey piece of jewelry that was seen on the red carpet, but there are other opportunities to partake in the luxury sector.

“The average TV viewer isn’t going to go out and purchase [the exact item], but they might pick up a pair of sunglasses, perfume, or wallet in order to align themselves with an aspirational brand worn by their favorite celebrity,” Noricks says.

Buying the jewelry isn’t necessarily the point of these celebrity endorsements. It’s to get the brand on your mind—for future purchases. They’re in this for the long haul.

As style expert Anna De Souza says, “It goes way beyond the 10-minute walk down the red carpet for these brands.”

Source: https://www.fastcompany.com/3063093/fashion-forward/the-big-business-of-red-carpet-bling

High-End Shopping In The Sharing Economy: Now We Can All Have Couture

www.fastcompany.com
By: Rina Raphael
September 15, 2016

Between consignment e-tailers and luxury-label rental sites, consumers are approaching designer fashion with a whole new mentality.

The Kardashians don’t exemplify thriftiness, so it was surprising when Khloé, Kendall, and Kylie partnered with the luxury consignment site The RealReal in August. The sisters listed 200 pieces from their personal closets, ranging from Chanel purses to Christian Louboutin heels, at nearly 80% off retail value. “Now you can own pieces from my closet!” Khloé Kardashian proudly tweeted to her 21 million followers.

The entire collection sold out within 24 hours, a rep for The RealReal confirmed.

The reality TV stars’ participation confirmed the site as a destination for all incomes and demographics, including celebrities. Today, luxury rental e-retailers, consignment shops, and loan services are destigmatizing what was once considered the domain of aspirational shoppers. More than that, it’s democratizing high fashion and shifting how we buy (and keep) designer clothing.

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EVEN DISNEY STARS WEAR DESIGNER

The constant influx of celebrity news, celebrity stylists, and brand participation on social media means we know everyone’s fashion tastes. Whereas previous generations may have only been familiar with a few design houses—Chanel, Oscar de la Renta, Yves Saint Laurent, for instance—today’s woman is familiar with dozens more, ranging from big (Balmain, thanks to Kim Kardashian) to emerging (Jason Wu, thanks to the Michelle Obama).

Many women once dreamed of emulating Elizabeth Taylor’s wardrobe—and it remained just that: a dream. But today, a savvy shopper could potentially wear whatever Julia Roberts donned for the Oscars. The shopper might only rent the gown for a night, but the Cinderella moment is no longer a fairy-tale fantasy.

“Luxury is changing—and changing for the more value-centric consumers who are much greater in number than pure luxury [products],” says Marshal Cohen, chief industry analyst of the market research company The NPD Group.

“Something that used to be attainable purely for the elite is now becoming more accessible to those who are willing to splurge,” says style expert Jacqui Stafford. “It’s still a splurge, there’s no question about it. You’re still going to be spending at least $500 [to rent] a gown that you might have to pay $5,000 to buy.”

It’s not just Oscar winners who inspire the masses. Teen stars also employ celebrity stylists who deck them in Preen and Vetements. “These labels are definitely more accessible now, and we have social media to thank for that,” Stafford says. “Even Disney stars are sitting front row at Paris Fashion Week shows. You’re seeing the younger demographic really embrace couture, bringing it to a new audience.”

That means a growing percentage of teens and millennials now look way beyond what’s available at the neighborhood mall. They want Gucci, Cartier, and Chanel and they’re getting savvier when it comes to acquiring those marquee designer brands. They are not a demographic to ignore: According to a recent study, millennials spend $200 billion annually and are set to outspend baby boomers by 2017.

The Kardashians don’t exemplify thriftiness, so it was surprising when Khloé, Kendall, and Kylie partnered with the luxury consignment site The RealReal in August. The sisters listed 200 pieces from their personal closets, ranging from Chanel purses to Christian Louboutin heels, at nearly 80% off retail value. “Now you can own pieces from my closet!” Khloé Kardashian proudly tweeted to her 21 million followers.

The entire collection sold out within 24 hours, a rep for The RealReal confirmed.

The reality TV stars’ participation confirmed the site as a destination for all incomes and demographics, including celebrities. Today, luxury rental e-retailers, consignment shops, and loan services are destigmatizing what was once considered the domain of aspirational shoppers. More than that, it’s democratizing high fashion and shifting how we buy (and keep) designer clothing.

Many of The RealReal’s customers are millennials with strong brand loyalty. And they tend to adhere to a specific strategy. They start as first-time buyers, enjoying their discounted designer item until they eventually tire of it and resell it. They then take the money earned to the primary market—to, say, Neiman Marcus, where they buy a new high-end item. Once it’s been seen enough times by their social group, they sell it in the consignment space. Then the process repeats itself. In a way, they’re learning about investment, depreciation, and retaining value, but in the context of designer fashion.

“They’re saving their money for that special Celine bag, and when they’re done with it, they’re consigning it,” says Rati Sahi, chief merchant for The RealReal. “You see them think differently about their purchases. They’re calculating [whether] they can get 60% back with the resale value.”

They’re willing to pay, up to a point. “Millennials are interested in high fashion but not willing to pay those high prices,” Cohen says. “So discount sites, secondhand sites, and stores, as well as auction sites, do well for the luxe millennial.”

If Selena Gomez’s fans are wearing Chanel in greater numbers, how does that affect the label’s mystique? “Ease of access to luxe helps, but also hurts,” Cohen says. “The luxe market is also so accessible it loses some of the panache.”

Former interior designer Sallie Giordano was surrounded by professional women in New York City who complained of the increasing cost of maintaining their wardrobes. They had full social calendars: speaking engagements, conferences, galas. With designer retailer sales so frequent, consumers “felt stupid” if they purchased full price, Giordano says.

In April 2015, Giordano launched Couture Collective, a luxury clothing rental membership club. It’s like a “timeshare” of seasonal designer apparel. Members pay an annual fee of $250, then each season, they can borrow up to five dresses from, say, Valentino and Christian Dior, after they’ve purchased a one-fifth share in an item, at 20% of the retail price. “If you look at the statistics, people will wear a dress three or four times and then they consider it an old dress,” says Giordano, who says she sees lots of women who will only wear current season styles.

Couture Collective’s clientele ranges from wealthy women to upper-middle-class aspirational shoppers, all looking to showcase a well-kept designer closet.

“I think the average person is interested in wearing these [designer] styles because honestly, they’re better styles,” Giordano says, noting how high-end garments are well made with quality fabrics and flattering cuts. “When you wear these dresses, there’s a huge difference. You just feel special and confident.”

For Couture Collective’s clientele, there’s an appealing ease to the idea of renting: No need to store or care for items they intend to wear once. “It’s not about ownership anymore,” Giordano says. “It’s about being able to do something without all the responsibilities of ownership … This allows them to wear the trends of the designers and not feel ridiculous then they’re sitting unworn in their closet the next season.”

Social media has certainly changed the amount of times we wear an article of clothing. Couture Collective’s clients don’t want to repeat an outfit, especially if their event is photographed for publication on Instagram or Facebook.

The Instagramming of outfits was a consideration for Armarium, an on-demand luxury rental site that launched in November 2015. It is a true high-fashion lover’s dream, featuring selections from the top design houses as well as emerging international labels. While the options on Rent the Runway can feel a bit sartorially safe, Armarium caters to those looking to get noticed in fashion-forward garments. Some offerings are exclusive to Armarium, which directly negotiates with fashion houses.

“Social media has drastically changed the game of how we access products, particularly with statement pieces,” Armarium cofounder and CEO Trisha Gregory says. Her business works in tandem with retail and e-commerce, with the goal of serving as a complement to full-price investment staples like black pants or a white shirt. Armarium partnered with Net-a-Porter to assist customers in putting together an ensemble that’s part rented, part purchased. For example, you can rent a statement Sonia Rykiel tunic from Armarium, then link out to Net-a-Porter to finish the look with a splurge trouser or investment stiletto.

“This is a smart way to complement [a customer's] existing wardrobe and the pieces she will buy for the season,” says Gregory, whose clientele is made up primarily of women aged 28-34. Helping customers discover new items is a big aspect of the service; the full range of offerings are visible on the site and there are also showrooms with experienced stylists on hand. “We want to give them access to shopping in an innovative way,” Gregory says.

Armarium sees two types of renters. The first is the busy, high-net-worth individual who values convenience. She’s on the move, attending multiple conferences or vacationing in St. Barts. “We’re packing her bags and getting her out the door, easing her schedule,” Gregory says. “We’re seeing the stigma [around renting] debunked with what the high-net-worth individual thought about the concept of renting…. For them, this is about access to statement pieces that aren’t in the market most times.”

Then there’s what they call the “HENRY,” the high-earner-but-not-rich-yet aspirational shopper. She’s social media-savvy and cares about brand identity. In Gregory’s words, it’s “very hard” for her to re-wear pieces. Both types are return customers, on average 28% of the time. Business is booming: Sales have tripled since Armarium launched its mobile app in April, with a 40% month-over-month growth of app downloads and site visits.

“Women are starting to shop in a different way,” Gregory says. “People want an experience, and that’s what we strive to give them. This is basically a celebrity offering.”

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LESS IS NOW MORE

One thing celebrities have easy access to that the average woman does not: bling.

Flont is a jewelry loan service set to launch this fall. It plans to do for bling what Couture Collective does for fashion. Flont lets customers borrow a certain amount of designer jewelry at different membership rates. For $199 a month, you get $60,000 worth of jewelry a year. Up your monthly fee to $1,999 and you’re entitled to $100,000 worth of jewelry over 12 months. Designers include red carpet favorites like Irene Neuwirth and Paige Novick.

But why would the well-to-do woman rent when she could buy? Flont’s founder Cormac Kinney points to the private-jet industry as a comparison.

“Certainly, if you can afford a NetJets membership, you can afford a jet—but that’s not the point. The point is convenience,” he says. “It’s much more convenient to let someone maintain it and you just use it when you need it.”

The company commissioned a survey sampling U.S. women with a minimum household income of $65,000 who had purchased $2,000 or more in fine 18K gold jewelry in the last 12 months. They found that 88% said they would buy a piece they loved even if it was worn by someone else before, and 75% were interested in jewelry sharing.

Many don’t want the complications that come with owning burglar-bait. Jewelry insurance, for example, adds an extra layer of cost, which can run over $10,000 a year. With Flont, insurance is included.

Then there are those who, inspired by the cult decluttering bible The Life-Changing Magic of Tidying Up, simply want less stuff. Excess is no longer chic.

“A lot of young women out there think, ‘I want to have a great dress and great piece of jewelry and I’m willing to spend a few hundred dollars but I don’t want to own it,’” says Milton Pedraza, CEO of the consulting firm Luxury Institute. On the other end, baby boomers now see an alternative to constant consumption: “Many older women want to declutter their closets. They don’t want to be wasteful.”

This mentality inspired VillageLuxe, a community-based fashion borrowing site that connects women’s closets. It extends the age-old “can I borrow that?” philosophy across entire neighborhoods, like an Airbnb for fashion.

“There’s this sense of wastefulness and this big gap between my ability to wear more than three pieces at a time out of my 300 pieces,” says Julia Gudish Krieger, founder and CEO of VillageLuxe. “The [designer rental market] is focused on that aspirational consumer, but I think you polarize and leave out a whole big part of the market of people who don’t need the money—it’s just the sense of wastefulness.”

Krieger launched the site in July 2015 after asking herself, Which of my assets that I don’t use every single day would people want to rent? “After my house and my car, it’s my closet,” she says. (Though, in New York, one’s closet might actually top that list.)

“I’m such a believer in the sharing economy,” says Krieger, a former VC. “I think it’s where the world is heading in general, and it’s not just that people are becoming more efficient with how they monetize things when they’re not using them. The more interesting element is the social barriers between what’s mine and what’s yours have blended so much more in the last five years.”

Village Luxe is currently invite only, with a heavy emphasis on influencers and fashionistas who lend as well as borrow. As of August, more than 10,000 women were on the wait list. Current members are quite active, having already listed over 7,000 pieces. (VillageLuxe intends to open the list once they’ve scaled the company.) For the moment, members include Upper East Side wives with extensive jewelry collections and edgy fashion bloggers like Leandra Medine, i.e.,The Man Repeller.

The startup emphasizes vintage styles as well as current collections. Many of their clothes are garments you can’t find anywhere else, like an Alaïa cocktail dress from the ’90s. “We actually had Vogue start borrowing from us for editorials,” Krieger says.

INVESTING 101

Like The RealReal, Village Luxe is watching customer habits shift in real time.

“Once [our members] find out that VillageLuxe exists, they buy fewer but much more expensive pieces—statement pieces—because you know you can pull value out of them between wears,” Krieger says. “Then you won’t feel bad about that McQueen blazer that you really had your eye on, which you can physically only wear once a month with different groups of people.” This buy-and-share mentality, Krieger hopes, will motivate shoppers to make smarter decisions.

These sites can also alter the calculus of hemming and hawing over a pricey outfit. A customer is more likely to swipe their credit card if they know they can make some of their money back. “Women list things as soon as they buy them—they’ll list the items sometimes before it’s even arrived.”

Krieger says that aspirational shoppers especially are changing their strategies. They’re more likely to go for a few select designer items than whatever is on the shelf at H&M or Zara. They see it will actually pay for itself and even create a revenue stream. “They can justify going higher market,” she said.

A high overlap exists between the renters and the lenders, with over 40% who lend using their earnings as credit to borrow. “There’s circuitry in the market,” Krieger says. Women now think one step ahead when it comes to their wardrobe, debating what’s worth what and where to put their next dollar.

It’s a whole new way of shopping—and experts don’t see the trend waning. As Giordano says, “Once you start wearing designer, it’s really hard to go back.”

Source: https://www.fastcompany.com/3063255/fashion-forward/high-end-shopping-in-the-sharing-economy-now-we-can-all-have-couture 

September 16, 2016

Why ‘Basic’ Is Bad For Starbucks

TheWashingtonPost.com
By: Abha Bhattarai
September 15, 2016

With 24,000 locations across the world, Starbucks has become an everyday stop for millions.

But that ubiquity could now be its problem.

“Starbucks is now competing with chains like Dunkin’ Donuts and McDonald’s,” Business Insider proclaimed this week. “It has gotten, in a sense, too basic.”

“Basic,” according to Urban Dictionary, is a pejorative term used to describe anything “involving obscenely obvious behavior, dress, action.” Other examples of brands deemed basic: Lululemon, Michael Kors and Ugg Australia.

So what’s an overexposed company to do?

Starbucks in recent years has begun looking for ways to restore its luster. In December 2014, it opened a Roastery & Tasting Room in Seattle, where $10 cold brews are the norm. The high-end concept is soon to expand to New York and Shanghai, with nearly a dozen other locations in the works, according to Business Insider:

“The premium coffee experience of the Roasteries is intended to have the trickle-down effect. The chain plans to open roughly 500 Reserve stores, which offers premium Roastery beverages and artisanal Princi food, and 1,500 stores with Reserve bars, which will serve drinks made in a wider variety of styles such as pour-over and siphoning.”

It’s all part of an effort, analysts say, to reinvent itself as a luxury brand.

But can a brand that’s gone mainstream turn high-end again? It’s a quandary that brands like Apple, Michael Kors and Coach have also faced in recent years, as they look to balance widespread popularity with upscale cache.

“I’ll just say this: It’s much harder to go up-market than it is to do the opposite,” said Milton Pedraza, chief executive of the Luxury Institute, a New York-based market research firm. “What Starbucks has to do at a higher level is to be personal, like when you go to Hermes and the salesperson knows your name, or when you buy a Tesla and you’re in a high-street showroom.”

When it was founded in 1971, Starbucks was a premium brand, offering a higher-priced but also a better-quality cup of coffee than most Americans were used to. In the decades since, Americans have taken to it in droves, making the Seattle-based brand a commonplace staple, as ubiquitous as McDonald’s or Wal-Mart.

“They’ve set the bar high, and now they have to keep moving to an even higher level,” Pedraza said.

It’s a phenomenon Pam Danzinger calls “lux-flation”: Our ideas of what constitutes a premium product or experience are always evolving.

“A brand like Starbucks starts at the top, and as it expands, it becomes the new normal,” said Danzinger, author of “Putting the Luxe Back in Luxury.” “Now it’s got to create that mystique once again.”

Need another example? Just look to Apple, Danzinger says. A decade or two ago, the company’s iMacs and MacBooks were seen as coveted novelty items. Today, just about everybody has at least one Apple device, which, she says, is why the company is reinventing its retail locations with free Wi-Fi, ficus trees and weekend concerts.

“They’re putting the human touch back into the equation,” Danzinger said. “That’s one way to regain that luxury edge.”

It’s not always an easy proposition, Pedraza says. Coach had tried for years to win back an air of exclusivity to no avail, as have Michael Kors and Kate Spade.

But, he says, there have been some successes: In the early ’90s, Gucci was almost done for. The Italian fashion company was in financial despair and its creative director was quoted as saying “no one would dream of wearing Gucci.” Then Tom Ford took over, and revived the brand, boosting sales and restoring the company to its previous glory.

“There are examples, but it takes a lot of money and a lot of paring back,” Pedraza said. “And frankly, not every company has the courage to do that. Everything is so grow, grow, grow in today’s world. And before you know it, you have a mainstream brand that isn’t special anymore.”

Source: https://www.washingtonpost.com/news/business/wp/2016/09/15/why-basic-is-bad-for-starbucks/

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/

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