Luxury Institute News

December 2, 2016

55pc of affluents deem luxury prices unjustified by product value

Luxury Daily
By: Staff Reports
December 2, 2016

Image courtesy of Printemps 

Quality tops attributes such as craftsmanship and service as the number one defining attribute affluent consumers use to discern a good’s luxury status, according to new research by the Luxury Institute.

Behind quality comes customer service, which more than half of consumers mentioned as a characteristic they associate with luxury. Despite global trends, residents of individual nations have varied priorities when it comes to luxury goods, with differing sentiments towards the value of products.

Luxury Institute’s survey was conducted in the United States, the United Kingdom, France, Germany, Italy, Japan and China, with respondents from about the top 10 percent of earners in their respective countries.

Divided priorities

Customers in the U.K. and the U.S. are more apt than respondents from Japan and China to mention superior customer service as a necessity for luxury. A superior design ranks third, but those in the U.K. and U.S. mention it more frequently than those from other countries.

While superior craftsmanship comes in fourth among global consumers, this attribute is mentioned by 59 percent of U.S. residents, compared to 33 percent across the other six nations.

Personalized offers, loyalty programs and value add-ons were mentioned by less than a quarter of consumers, but those who do define luxury by these points are inclined to say they are improving.

There is a disparity about the general quality of luxury goods. Those in China and Italy are more likely to report improvement in quality, while those in the U.S. are more apt to believe that luxury goods’ quality is declining.

When considering the ideal front line staff in a luxury boutique, courtesy and politeness are most important to affluent shoppers. Product expertise is a close second, with more than half saying they look for this knowledge in the associates they deal with.

 

Hugo Boss On Demand

Boss on Demand

The survey participants mentioned jewelry and hospitality brands as having the best customer service staff, while real estate and designer shoes got the least nods for their quality of service.

“From our numerous one-on-one discussions with luxury CEOs, we’ve often heard that a majority of success stems from superior products, but the rest depends on relationship-building expertise and execution of front-line teams,” says Milton Pedraza, CEO of the Luxury Institute. “Half of affluent consumers we just surveyed say that luxury sales associates deliver a personalized and relationship-oriented experience, which is encouraging, but it also suggests plenty of room for improvement when it comes to delivering a superior customer experience.

Even with the rise of digital channels, frontline sales staff are far from obsolete, according to results of a survey conducted by InMoment.

The bricks-and-mortar shopping experience no longer exists in a vacuum, with consumers arriving at a store armed with information from research conducted before or even during their trip. However, while shoppers spend about twice as much in-store when they navigate to a brand’s Web site while shopping, their expenditures grow to four times more if they interact with both an associate and the brand’s Web site while in-store (see story).

Source: https://www.luxurydaily.com/55pc-of-affluents-deem-luxury-prices-unjustified-by-product-value/

 

November 1, 2016

Affluent consumers to decrease luxury market spend, says Luxury Institute

Luxury Daily
November 1, 2016
By: Brielle Jaekel

The drastic shift in consumer behavior from the rapid evolution of technology has resulted in a 20 percent drop in customer spend with luxury brands, according to the Luxury Institute.

 Luxury Institute’s “2016 State of the Luxury Industry” report shows that consumers are spending much less in the luxury market compared to two years ago, but luxury marketers will have an uphill battle to determine how to combat this. While digital and mobile avenues are vital to success for any retailer or brand, it seems that affluent consumers are interested more in shopping with luxury brands at bricks-and-mortar locations.

The report surveyed 3,900 affluent consumers from the U.S., U.K., Europe, Japan and China, all of which made higher than $150,000 USD, £60,000, EUR50,000, 1 million CNY and Japan ¥150 million.

 Consumer habits

Luxury spending in the United States is ahead of many other countries, but the United Kingdom and Italy are leading the pack. The average spend within the luxury market in Italy is expected to be $17,660, $16,715 in the U.K. and $16,360 in the U.S.

Brands must now focus on how to properly balance ecommerce initiatives and in-store strategy to appeal to the modern affluent U.S. consumer. Bricks-and-mortar are making a slight comeback with 54 percent of high-net-worth individuals preferring to shop in store for luxury brands, compared to only 49 percent two years ago.

Hugo Boss New York Fifth Ave store 400

Social media is now the main avenue luxury fashion brands are using to communicate with consumers for customer service, with 58 percent leveraging Facebook Messenger, according to another report from L2.

Traditional customer service communication platforms are tired and outdated, and consumers now expect a more modern method for reaching out to brands and retailers. Many brands are taking note and launching communication methods on mobile messaging platforms such as Facebook Messenger, with 71 percent of watch and jewelry brands following suit (see more).

The growth of the luxury market is slowing, with only 19 percent of high-income individuals planning to spend more within the next year, compared to the 30 percent from two years ago.

While growth will slow, many U.S. consumers are still planning to spend on luxury goods and services. For instance, 92 percent of affluent consumers in the U.S. plan to spend money on luxury brands within the next 12 months.

The average anticipated spend per consumer is estimated to be $16,360, dropping almost $4,000 from $20,085 in 2014.

Luxury sectors

Watches, fine art, handbags, home appliances and jewelry are likely to be the areas hurt the most from the cut back. About 33 percent of consumers claiming to cutback on spend with watches, 28 percent on art, 24 percent on handbags and home appliances and 23 percent on jewelry.

Michael Kors Access smartwatch

However, travel remains as the dominating sector in which U.S. consumers with high incomes will be spending with luxury brands.

Hilton-owned Waldorf Astoria Hotels & Resorts climbed the ranks in terms of international brand awareness, despite consumers spending less time traveling, according to another report from Luxury Institute.

JW Marriott, InterContinental, Four Seasons, Grand Hyatt and The Ritz-Carlton maintained their places as the most visited hotel brands, reported last year and this year in the LBSI Global Hotel study. However, affluent consumers are cutting down on hotel stays with modest decrease in number of nights stayed (see more).

“The biggest surprise is that while ecommerce is critical to success in luxury, slightly more consumers still prefer the store experience,” Mr. Pedraza said. “Additionally luxury consumers are following less, not more, luxury brands on social media.

“As millennials mature they are recognizing that they have to focus on careers and relationships, not just social media,” he said.

Source: https://www.luxurydaily.com/affluent-consumers-to-decrease-spending-in-luxury-marketers/

October 22, 2015

She Who Controls the Purse Strings

IDEX
October 22, 2015
By: Danielle Max

There’s good news from a recent survey released by the Luxury Institute, which revealed that watch and jewelry companies are more successfully marketing to affluent women these days. In fact, 62 percent of respondents said that these companies do a good job of marketing to them; up from 53 percent in 2012.

The research from the New York-based Luxury Institute ranks industries and specific brands based on their success marketing to women with a minimum household income of $150,000 per year. Respondents reported average household income of $289,000, and a $2.9 million average net worth, so these are exactly the sort of households that the diamond and jewelry industries need to be targeting.

Overall, the watch and jewelry category ranks fifth among industries trying to sell their goods to women – and, given that high-ticket items such as watches and jewelry are not exactly a spur of the moment purchase – that seems pretty good to me.

The top four industries most frequently viewed as doing a good job marketing to women from high-income households through advertising and social media are clothing (75%), shampoos and conditioners (74%), fragrances and cosmetics (72%) and shoes (72%).

And it seems that marketeers overall are doing a better job of selling to what is clearly a key demographic. The Luxury Institute says that compared to 2012, each of these categories enjoys a wider share of women who view their marketing efforts favorably.

However, lest you think the gender gap is a thing of the past, among the industries that affluent women say are doing the poorest jobs of marketing to them are insurance, liquor, electronics, banks, brokerages and private jets, each of which earns an approval rating of less than 5 percent and has fallen in approval since 2012.

In addition, the automobile industry also needs to stop thinking (and acting as if) men hold the purse strings. Apparently, only 6 percent of women are impressed by the efforts of car companies to market to them.

Of course, it’s not just money that comes into play in such issues. According to the research, affluent women in the 45-64 age bracket are much more likely than women under the age of 45 to say that companies are doing well in marketing specifically to them.

Part of the problem seems to be that companies just don’t seem to realize who they should be targeting. The Luxury Institute specifically singles out married women who, according to its research, make two-thirds of all household purchasing decisions.

“Women maintain huge economic power and it is a necessity for companies to step up marketing and how they connect with affluent women regardless of industry,” says Luxury Institute CEO Milton Pedraza. “Research that includes speaking directly with these women about what appeals to them and what turns them off removes much of the guesswork in making marketing decisions.”

We couldn’t agree more.

Have a fabulous weekend.

Source: http://www.idexonline.com/Memo?Id=41250

Women neglected by marketers despite making two-thirds of household purchases

Luxury Daily
October 22, 2015
By: Staff Reports

Brands in the apparel, personal care and footwear sectors are among the best at marketing to affluent women, according to research by Luxury Institute.

The best industries targeting affluent women through advertising and social media do not come as a surprise, but it does shine a light on the sectors that are not doing well at focusing their attentions on this demographic of wealthy consumers. Survey respondents felt that the industries doing the least to target affluent women include insurance, liquor, consumer electronics, banks and brokerages and transportation including automobiles and private jets.

Luxury Institute surveyed women ranging in age from 21-years-old to more than 65-years-old with a household income minimum of $150,000 per year. The respondent pool’s had a reported average household income of $289,000, and a $2.9 million average net worth.

A battle of the affluent sexes
When it comes to marketing to a female demographic, brands in apparel (75 percent), shampoos and conditioners (74 percent), fragrances and cosmetics (72 percent) and footwear (72 percent) unsurprisingly fared the best.

In regard to the industries that are failing at capitalizing on the purchasing power of affluent women, each had an approval rating of less than 5 percent. This approval rating has continued to fall since 2012.

Efforts put forth by automotive brands, for instance, have only impressed 6 percent of the female respondents. Although traditionally associated with a masculine culture, the auto industry should expand its marketing efforts to cater to the sentiments of its female consumers, especially those with families, by touting the safety of high-end vehicles.

On the corporate side, automakers have made strides in being more inclusive of females in general. For instance, British automaker Aston Martin looked to close the gender gap in engineering by teaming up the Royal Air Force to introduce female students to various career routes (see story).

Sectors improving outreach to female consumers include the jewelry and watch sector, which has seen the largest improvement over the past three years. Sixty-two percent of respondents felt that these brands do a good job marketing to their demographic, a 53 percent increase from 2012.

In addition, department stores are listed sixth, with 60 percent of affluent women appreciating the efforts put forth by retailers.

Lux institute.womens marketing graph
Graph provided by Luxury Institute 

Across the board, older affluent women aged 45-64 felt that brands across industries are doing well when marketing to their demographic. This response was much more likely from the older age group than it was for women 45-years-old and under.

But, 25 percent of women 21- to 44-years-old felt that the wine industry is not doing enough, or not marketing to them well enough. This propensity decreases with age, with 21 percent of 45- to 54-year-olds, 16 percent of those between the ages of 55 and 64 and 12 percent ages 65 or older approve of the wine category’s marketing efforts.

In a statement, Luxury Institute CEO Milton Pedraza said, “Married women tell us that they make two-thirds of all household purchasing decisions. Women maintain huge economic power and it is a necessity for companies to step up marketing and how they connect with affluent women regardless of industry. Research that includes speaking directly with these women about what appeals to them and what turns them off removes much of the guesswork in making marketing decisions.”

Source: http://www.luxurydaily.com/women-neglected-by-marketers-despite-making-two-thirds-of-household-purchases/ 

September 9, 2015

LVMH swipes Apple exec for head of digital role in a bid to boost online presence

Cosmetics Design USA
By: Lucy Whitehouse
September 9, 2015

The announcement of the hiring of former Apple executive, Ian Rogers, as LVMH’s new head of digital confirms the luxury goods multinational is rising to meet the promise of e-retailing in the luxury sector.

August 14, 2015

Millennials’ wealth management preferences differ from boomers: report

Luxury Daily
By: Kay Sorin
August 14, 2015

Millennial investors have different preferences compared to their baby boomer parents when it comes to wealth management, according to a new report by Luxury Institute.

While baby boomers and older generations prefer to work with full-service brokerage firms, wealthy millennials and members of Generation X are showing an increased preference for working with private advisors. Independent financial advisors can offer a more individual approach that is often appealing to younger investors who are accustomed to personalization.

“Independent financial advisors are able to do more things for their clients, because they are not working for a firm that has rules and regulations about what they can or can’t do,” said Milton Pedraza, CEO of Luxury Institute, New York. “The IFA is the fastest growing industry in wealth management.”

Different strokes
Luxury Institute surveyed investors earning at least $150,000 and found that at least 46 percent used some form of advisor to help them manage their finances. Among respondents aged 65 and over, this number rose to 59 percent.

Michael Kors affluent couple car
Wealthy millennials are inclined to prefer independent wealth managers

Respondents varied in their preferences for an independent wealth manager versus a full-service brokerage firm such as Morgan Stanley or Merrill Lynch. Interestingly, this preference strongly correlated with age.

“A full service firm doesn’t have a fiduciary relationship with the client, meaning that they are not legally obliged to serve the client’s interests only,” Mr. Pedraza said. “They can recommend an investment in which they will make a bigger commission.”

Millennials and members of Generation X and Y, defined as those 45 and younger, showed a significant preference for independent wealth managers compared to full-service brokerage firms. Thirty-eight percent chose to work with individual advisors while 27 percent preferred a big brokerage firm.

Michael Kors case
Millennials have access to more information and are well informed

Investors over 65 were much less likely to work with an independent advisor and only 28 percent reported doing so. They strongly preferred to go full-service with 56 percent using large firms to manage their wealth.

This difference between the generations is likely a result of their upbringing. Baby boomers were raised to expect to work with a big brokerage firm, while millennials may be more wary and distrustful after the recession of 2008.

Sotheby's London Property
Financial advisors can assist in major life decisions such as purchasing a home

Additionally, millennials have more information at hand, which allows them to be more selective with their advisors.

“Millennials are so much more informed that they depend less on a brokerage firm providing them with research,” Mr. Pedraza said. “Millennials don’t need as much because they are so informed.

“They know that very few financial advisors can outperform the market in the long term.”

One way in which individual advisors often distinguish themselves is by providing a more personal connection for clients. Luxury Institute found that expertise, trustworthiness and generosity were the most valued traits in financial advisors.

Affluent family
As millennials age they are in greater need of financial advice

More than numbers
Investors looking for both a personal relationship and a full-service brokerage firm may seek other solutions to find the ideal compromise. Ultra-affluent consumers often appreciate the relationship-building culture fostered at boutique wealth management firms, according to a report by the Luxury Institute.

The New York-based Rockefeller Wealth Management firm received the highest score in the report, followed by Atlanta-based Atlantic Trust Private Wealth Management and Convergent Wealth Advisors. As wealth management firms continue to repair their reputations following the financial crisis, prioritizing relationships over transactions will be important (see story).

Regardless of the size of a firm, relationships are often the deciding factor when it comes to choosing a financial advisor. To differentiate themselves from competitors, wealth management companies must make crucial changes that will only work if the alterations are part of the company’s core DNA, according to a speaker from the 2012 Forrester Customer Experience Forum.

It is no longer enough to just return calls and give a great customer experience, since clients at wealth management companies are not even thinking about those that do not require this. Instead, Morgan Stanley Smith Barney was forced to bolster its customer service in terms of technology, getting to know the customer and its consultants (see story).

Looking forward, it is essential for wealth management companies to take personal relationships into account in order to appeal to wealthy millennials.

“Millennials will be keen to stay with those who deliver and will dispense with those who don’t,” Mr. Pedraza said. “They will choose advisors based more on the client’s experience than on the client’s return.

“The baby boomers are kind of exiting the stage. Millennials will demand a far more objective and independent metric.

“Advisors need to be completely trustworthy and very responsive,” he said. “They need to go above and beyond to make the client feel special.”

 Source: http://www.luxurydaily.com/millennials-wealth-management-preferences-differ-from-boomers-report/

July 10, 2015

Tesla Hires Ex-Burberry Executive to Lead North American Sales

Bloomberg Business
By: Dana Hull
July 10, 2015

Tesla Motors Inc. has hired former Burberry senior vice president Ganesh Srivats, adding a sales executive to help the electric-car maker extend its reputation for automotive luxury to an increasingly global audience.
Srivats, whose position as vice president for North American sales was confirmed Thursday by the company, will help Tesla deepen its already formidable brand into a premium lifestyle experience to go with its high-tech image, taking a cue from the kind of marketing BMW, Porsche and Ferrari have done.

“This makes all the sense in the world,” said Scott Galloway, a professor of marketing at New York University’s Stern School of Business, in a phone interview. “Tesla is not an automobile company, it’s a luxury company.”
Srivats joins the automaker from a British fashion house known for its heritage plaid cashmere scarf and trench coats as well as digital savvy. Apple Inc. hired former Burberry Group Plc Chief Executive Officer Angela Ahrendts as head of its retail operations in 2013.

The new Tesla executive held strategy and retail posts for Burberry starting in 2009 and most recently was senior vice president for retail in the Americas, according to his LinkedIn profile.

The North American sales job is a newly filled position for Tesla. The Palo Alto, California-based company said in March that it was reassigning Jerome Guillen, who was vice president of global sales and service, to a role focused on delivery and long-term customer care and would hire new executives to lead the sales operations by region.

Sales Target

Tesla plans to introduce its Model X SUV late in this quarter and says it will sell 55,000 vehicles worldwide this year. The automaker ended the first half with 21,552, about 40 percent of the target.
Tesla doesn’t have dealerships and sells its products directly to consumers via stores and galleries. It doesn’t pay for traditional advertising and relies heavily on free media and word-of-mouth among its customers, many of them tech-savvy early adopters.

“Srivats absolutely brings a client-centric approach to doing business,” said Milton Padraza, chief executive officer of the Luxury Institute, in a phone interview. “It’s about long-term relationships, not a transaction. Burberry is the master of client relationships.”

Digital Innovation

Burberry was one of the first luxury brands to embrace digital innovation, from live-streaming runway shows to launching on Periscope. The London-based company has had a makeover in the past five years, moving from conservative high-end fashion to haute couture, said Ken Harris, managing partner at Cadent Consulting Group in Chicago, which advises consumer and retail companies.

“If Tesla is thinking that they are selling a lifestyle and a way of thinking, then someone from Burberry could be the right choice,” Harris said in a phone interview. “Burberry gets lifestyle.”
The 159-year-old company with a “distinctly British attitude” has more than 4 million followers on Twitter and is led by Christopher Bailey, a 44-year-old designer who had been the company’s chief creative officer.

High-end automakers like to push expensive clothing and accessories to boost revenue and deepen their relationships with affluent customers. Besides T-shirts and messenger bags, Tesla has the Tesla Design Collection, which includes a $300 tote bag, $100 sheepskin leather driving gloves and a $40 iPhone sleeve.

Similarly, Porsche sells watches, luggage and other accessories under the Porsche Design brand. Ferrari also offers clothing, shoes and even a cigar box under its brand name. BMW and its Mini brand also sell pricey accouterments.

Source: http://www.bloomberg.com/news/articles/2015-07-10/tesla-hires-ex-burberry-executive-to-lead-north-american-sales

June 11, 2015

Hotels Offer Luxury Shopping Inside Your Rooms

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

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

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

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

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

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

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

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

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

June 8, 2015

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

Advertising Age
June 5, 2015

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

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

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

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

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

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

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

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

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

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

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

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

June 5, 2015

When is Luxury not Luxury?

PYMNTS
June 4th, 2015

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

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

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

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

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

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

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

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

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

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

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

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

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

After all, haters gonna hate.

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

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

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