Luxury Institute News

April 30, 2009

News Release: High Net-Worth Consumers Rank the “Best of the Best” Luxury and Ultra-Luxury Automobiles

(NEW YORK) April 30, 2009 – The Luxury Institute reported today the top-rated brands in the Luxury and Ultra-Luxury Automobile categories of the 2009 Luxury Brand Status Index (LBSI) survey, which identifies the top brands that exhibit true luxury in these critical categories.  The brands are evaluated in numerous categories based solely on the unbiased ratings of wealthy and ultra-wealthy consumers. 

Which luxury automobile brands deliver the best combination of quality, exclusivity, customer experience and peer prestige? High net-worth consumers rated Porsche, Mercedes and Lexus the “Best of the Best” among the 12 brands that were rated. In the Ultra-Luxury Automobiles category, ultra-wealthy consumers rated Maybach, Roll-Royce and Bentley the three most prestigious  among 12 brands. 

The LBSI asks high net-worth consumers to rate luxury brands by category across four equally weighted components: Consistently Superior Quality, Uniqueness and Exclusivity, Making the Customer Feel Special Across the Entire Experience and Being Consumed by People Who Are Admired and Respected. 

The “Best of the Best” are: (LBSI score out of 10)

  • Luxury Automobiles
  • o Porsche-7.70
  • o Mercedes-7.53
  • o Lexus-7.39
  • Ultra-Luxury Automobiles
  • o Maybach-7.93
  • o Rolls-Royce-7.86
  • o Bentley-7.73 

“The days of faux luxury, where some brands pretended to deliver luxury and aspirational consumers pretended they can afford it, are long gone. Today, true luxury is being acquired by those who can afford it, and that is healthy for everyone” said Milton Pedraza, CEO of the Luxury Institute.  “In the 21st century, luxury and ultra-luxury automobiles still validate their clients, but with the advent of truly independent rating entities it is more important that customers also validate the brands. Our independent ratings provide guidance to consumers and brands corresponding to direct ratings from the voice of the wealthy consumer.” 

The proprietary Luxury Brand Status Index (LBSI) survey is the only unbiased measure of the prestige of leading brands among wealthy Americans. For the luxury auto survey, a national sample of 1,505 wealthy American consumers, with an average income of $278,000 and average net-worth of $2.5 million, was surveyed online. For the ultra-luxury survey, a national sample of 1,013 ultra-wealthy American consumers with an average income of $489,000 and average investable assets of $6.8 million was surveyed online. Survey results are weighted to match demographic and net-worth profiles of the same audience according to the latest Survey of Consumer Finances from The Federal Reserve.

For Further Information, Please Contact:

The Luxury Institute, LLC
Martin Swanson
Business Development
Phone: (914) 909-6350
E-mail: mswanson@luxuryinstitute.com

April 29, 2009

Rules of the Road for Online Luxury Success – #7

Well you’ve read our other 6 Rules of the Road that will help make your journey a profitable one.  Here is our 7th and final one.  Definitely review these and post your comments.

Rule #7

You have to be reasonable with Return on Investment
Many luxury executives who have been spending significant sums on print, events and other non-measurable marketing spends over the years are now demanding that the Internet deliver instant measurable ROI. You have the right to expect concrete returns from any investment, but the reality is that the profit impact of most marketing investments cannot be measured to the nth degree. The Internet comes closest, but still fails the perfection test. Give Internet marketing an opportunity to prove itself and it should deliver solid results above print and other offline marketing investments. If you are committed to testing and learning you will control the dollars in a way that allows you to innovate economically and intelligently. 

In many corners of luxury, there is optimism that perhaps the worst has passed, and, that while profound changes have occurred, we will once again become leading innovators who deliver massive value to our clients. Online marketing and selling is an opportunity we need to embrace with vigor and skill. We need to go beyond mainstream retailers into new breakthroughs. A few years from now, the friendly, heated discussions about luxury online will be seen as just another step towards the rapid evolution of the true luxury industry.

April 27, 2009

Rules of the Road for Online Luxury Success – #6

We have 7 Rules of the Road that will help make the journey a profitable one. The rules are inspired by rich conversations with top executives at luxury conferences and one-on-one meetings with all the critical constituencies involved in online luxury.

Rule #6

Rapid Cycle Testing and Learning is the only way to go with online innovations.

Beware of Internet gurus, especially the ones that tell you that everything online should be free while charging you $10k per day for their sage advice. They cannot predict the future or tell you what will work. You will need that crash course on the fundamentals, but you need to know that, ultimately, the only way to go in an organic online world is to experiment your way to success. Fail smart, fail fast and fail cheap is the mantra. Start innovating with the confidence that you can invest small amounts to test what will work. You also need to know that most things will not work.  Learn to accept failure in order to achieve success. Finally, if anyone tells you that you have to bet big dollars on any one online innovation, fire them!

April 24, 2009

News Release: High Net-Worth Consumers Rank “Best of the Best” Luxury Hotel Brands

(NEW YORK) April 23, 2009 – The Luxury Institute reported today the top-rated luxury hotel brands in the 2009 Luxury Brand Status Index (LBSI) survey, which identifies the top brands that exhibit true luxury.  The brands are evaluated in numerous categories based solely on the independently verified ratings of wealthy consumers.

For the third year in a row, high net-worth consumers rated Small Luxury Hotels of the World the “Best of the Best” among 22 luxury hotel brands in a very competitive and highly rated category. Small Luxury Hotels of the World swept top rankings in all four components of the LBSI and received by far the highest scores as the luxury hotel brand that wealthy consumers are most willing to recommend. Typical comments for recommending Small Luxury Hotels of the World are: “We have stayed at several Small Luxury Hotels of the World and were impressed with their uniqueness, location, level of service and beauty,” and “so different, yet all are great service.”

The LBSI asks high net-worth consumers to rate luxury brands according to four equally weighted components: Consistently Superior Quality, Uniqueness and Exclusivity, Making the Customer Feel Special Across the Entire Experience and Being Consumed by People Who Are Admired and Respected.

The “Best of the Best” are: (LBSI score out of 10)

  • Luxury Hotels
  • o Small Luxury Hotels of the World-8.54
  • o Peninsula-8.31
  • o Ritz-Carlton-8.26

“A paradox is occurring in today’s luxury marketplace. As wealthy consumers have cut back, many luxury brands have also cut back unfortunately on the great experiences they were known to deliver. Yes, economics are really important, but delivering an extraordinary customer experience is critical,” said Milton Pedraza, CEO of the Luxury Institute.  “This is the time when luxury leadership counts most. In Small Luxury Hotels of the World, we see both brand leaders and hotel owners cooperating to increase customer loyalty. In fact, all top-three brands in this year’s survey, which include Peninsula and Ritz-Carlton, have been consistently rated in the top-three for several years. That kind of culture and consistency tells us that these three brands are committed to providing the optimal luxury experience long-term”. 

The proprietary Luxury Brand Status Index (LBSI) survey is the only unbiased measure of the prestige of leading brands among wealthy Americans. A national sample of 1,505 wealthy American consumers, with average weighted household income of $343,000 and $3.2 million in household net worth was surveyed online. Survey results are weighted to match demographic and net-worth profiles of the same audience according to the latest Survey of Consumer Finances from The Federal Reserve.

To purchase this survey, please contact us via our contact form and an associate will reply promptly. http://www.luxuryinstitute.com/contact/contact1.cgi

About the Luxury Institute (www.LuxuryInstitute.com)

The Luxury Institute is the uniquely independent and impartial ratings and research institution that is the trusted and respected voice of the high net-worth consumer. The Institute provides a portfolio of proprietary publications and research and consulting services that guides and educates high net-worth individuals and the companies that cater to them on leading edge trends, high net-worth consumer rankings and ratings of luxury brands, and best practices. The Luxury Institute also operates the LuxuryBoard.com (www.LuxuryBoard.com), the world’s first global, membership-based online community for luxury goods and services executives, professionals and entrepreneurs.

April 20, 2009

Rules of the Road for Online Luxury Success – #5

We have 7 Rules of the Road that will help make the journey a profitable one. The rules are inspired by rich conversations with top executives at luxury conferences and one-on-one meetings with all the critical constituencies involved in online luxury.

Rule #5

Luxury executives need to get over the “lack of control online” issue. The truth is that the only thing they control is their customer experience.

The heated discussions about controlling your brand online, especially what is said about your luxury brand online, are pure nonsense. In an open and transparent online and offline world, the only things you can control are your business values and ethics, your offerings, your business model and the customer experience that you choose to deliver. If you deliver extraordinary customer experiences, the natural “buzz” surrounding your brand will be overwhelmingly positive. The web will amplify your reputation, good or bad, among consumers and other constituents. While public relations tactics can help, the truth will eventually be known. If the truth is that you deliver extraordinary experiences, detractors will be drowned out and many advocates will come to your immediate defense.

The opposite is also true. So, get over the “lack of control” issue online and start innovating. It’s a non-issue.

April 17, 2009

Small Luxury Hotels Adds 25 Hotels In Q1 2009

Hotels.com, 4/15/2009 9:30:00 AM

Despite the ongoing global economic crisis, Small Luxury Hotels of the World (SLH) has bucked the trend with the addition of 25 hotels in the first quarter of 2009. This follows close on the heels of the addition of 66 hotels at the end of last year, which represented a net growth of 10% over the previous year. SLH now comprises more than 500 of some of the world’s finest small independent hotels in more than 70 countries.

“Contrary to what you would expect in an economic downturn, we have received an unprecedented increase in the number of inquiries from luxury hotels wanting to be part of the SLH brand,” comments Paul Kerr, CEO of Small Luxury Hotels of the World.

“We believe that part of this is due to the fact that hotels look towards a brand like SLH to provide them with a safe haven when conditions are challenging. In spite of the large number of inquiries, standards of excellence remain core to SLH’s success and our selection criteria therefore remain as strict as ever,” he adds.

In terms of the geographic spread of the news hotels, Europe, Middle East and Africa (EMEA) remains the strongest area of development with an intake so far of 13 hotels across seven countries. In the Asia Pacific region, eight new hotels joined the brand across seven countries; while the Americas added another four hotels in four countries in the first three months of 2009.

As part of its development strategy, SLH continues to identify hidden gems in destinations where it is yet to have a presence. As such, the first quarter of this year has seen a number of notable additions to the brand. Of particular significance is the addition of Hoshinoya Karuizawa, which marks Small Luxury Hotels of the World’s first foray into Japan. Also new to the brand and definitely worthy of note is Han’s Royal Garden,

the brand’s first hotel in Beijing. This, together with an additional hotel in Shanghai (Pudi Boutique Hotel), brings SLH’s China portfolio to eight hotels.

Other firsts include Taunovo Bay Resort & Spa in Fiji, and in Aruba, the luxury boutique resort of Canucu Arubiano adds further depth to SLH’s Caribbean portfolio. A further demonstration of the diversity of the individual hotels within the Small Luxury Hotels of the World brand is the addition of Blow Up Hall, in the Polish city Poznán. Designed by Tadao Ando, and based on a project by Rafael Lozano-Hemmer, the aim of the hotel is to allow guests to experience and participate in the creation of art.

Everything about this hotel shouts ‘cutting-edge design’ – from the high resolution, interactive display in the lobby to a personal i-Phone, which amongst other things electronically opens your room at the touch of a button. The UK also has been a strong area of growth for SLH, with the addition of four hotels in the first quarter of the year. These include Pennyhill Park Hotel in Surrey, whose restaurant has just been awarded its first Michelin star; South Lodge Hotel in West Sussex whose restaurant has recently been awarded three AA Rosettes; Lainston House

Hotel in Hampshire and The Feversham Arms Hotel in North Yorkshire. Since the start of the year, Small Luxury Hotels of the World has received close to 100 inquiries a month via its dedicated website www.joinslh.com, representing a 20% increase over last year. There has been a particular increase in enquiries from Eastern Europe, South America and China. However, SLH believes that the strength and credibility of the brand is dependent on the quality of its individual hotels and as such strict controls are applied to ensure that only the very best hotels with the highest standards are accepted. As a result only 5% of inquiries are successful.

To ensure that these exceptional standards of excellence are maintained, SLH has a carefully monitored ‘mystery guest’ program, which relies on valuable reviews from inspectors who importantly are also consumers. As the brand continues to grow, SLH will recruit additional inspectors.

Demand to be part of the SLH brand continues to be driven by heightened global brand awareness resulting from accolades such as being named ‘No. 1 Luxury Hotel Brand’ by the New York-based Luxury Institute for the second consecutive year, and also the luxury hotel brand that is able to deliver the ‘Best Customer Experience’. In Asia Pacific, SLH has for the third consecutive year been named ‘Best Brand Management Company’ at the HM Awards for Hotel & Accommodation Excellence.

April 16, 2009

Rules of the Road for Online Luxury Success – #4

We have 7 Rules of the Road that will help make the journey a profitable one. The rules are inspired by rich conversations with top executives at luxury conferences and one-on-one meetings with all the critical constituencies involved in online luxury.

Rule #4

4. Luxury CEOs and their senior management teams need a crash course on the fundamentals of the Internet.

On a scale of 1-10, today’s luxury CEOs and most of their executive teams probably rate a generous 5 on Internet knowledge and expertise. In a high-growth environment, these executives were too busy growing the business via traditional channels. In a severe downturn, they are busy making sure the business survives. Internet innovation is not on the list of the top three most critical courses of action needed to run the business in a severe economic crisis. And yet, the Internet will become the flagship store and strategic centerpiece for most luxury brands (and, yes, there will be successful exceptions), although many executive teams do not yet realize this. What is needed is profound, objective, unbiased education on consumer habits and online selling and marketing options. Only then will senior luxury executives be able to make strategic and tactical decisions on the current and future customer experience. And only by educating themselves first, will they be able to lead their brands to innovation beyond the commoditized customer experiences one finds today on the Internet.

 

News Release: Ultra-High Net-Worth Consumers Rank the “Best of the Best” Luxury Watch Brands

(NEW YORK) April 16, 2009 – The Luxury Institute reported today the top-rated luxury watch brands in the 2009 Luxury Brand Status Index (LBSI) survey, which identifies the top brands that exhibit true luxury in numerous categories based solely on the independently verified ratings of wealthy and ultra-wealthy consumers.

 

Ultra-high net-worth consumers rated IWC the “Best of the Best” among 33 luxury watch brands. IWC is the top-ranking brand for three out of four components of the LBSI. IWC also swept highest scores as the luxury watch brand that wealthy consumers consider to be most worthy of a price premium and are most willing to recommend. Consumers who rated IWC number one described the brand as “rare and exceptional,” “the standard” and having “unique design and classic looks.”

 

The LBSI asks high net-worth consumers to rate luxury brands by category across four equally weighted components: Consistently Superior Quality, Uniqueness and Exclusivity, Making the Customer Feel Special across the entire experience and Being Consumed by People Who Are Admired and Respected.

 

The “Best of the Best” are: (LBSI score out of 10)

·         Luxury Watches

o   IWC-7.87

o   Patek Philippe-7.65

o   Vacheron Constantin-7.52

 

“In the U.S., IWC is a luxury brand that stands out beyond their product history, great design, quality and craftsmanship,” said Milton Pedraza, CEO of the Luxury Institute.  “It is a brand that seeks to create seamless customer journeys while other brands struggle to deliver disconnected customer experiences. It is a brand that cares deeply about customer feedback and is among a few luxury brands that has active collector communities. At a time when many luxury brands are having identity crises in the midst of an economic crisis, IWC knows exactly who they are, what they offer, and who they serve. They are a true 21st century luxury brand, as rated by the ultimate brand constituents: consumers. Additionally, Patek Philippe and Vacheron Constantin are consistently rated among the top luxury watches by ultra-wealthy consumers. The ability of these brands to be rated so highly year after year makes them brands that deliver the luxury value consumers look for universally”.

 

 

The proprietary Luxury Brand Status Index (LBSI) survey is the only unbiased measure of the prestige of leading brands among wealthy and ultra-wealthy Americans. A national sample of 1,013 ultra-wealthy American consumers, with minimum investable assets of $2.0 million, and median investable assets of $4.1 million, was surveyed online. Survey results are weighted to match demographic and net-worth profiles of the same audience according to the latest Survey of Consumer Finances from The Federal Reserve.

 

About the Luxury Institute (www.LuxuryInstitute.com)

The Luxury Institute is the uniquely independent and impartial ratings and research institution that is the trusted and respected voice of the high net-worth consumer. The Institute provides a portfolio of proprietary publications and research and consulting services that guides and educates high net-worth individuals and the companies that cater to them on leading edge trends, high net-worth consumer rankings and ratings of luxury brands, and best practices. The Luxury Institute also operates the LuxuryBoard.com (www.LuxuryBoard.com), the world’s first global, membership-based online community for luxury goods and services executives, professionals and entrepreneurs.

For Further Information, Please Contact:

The Luxury Institute, LLC
Martin Swanson
Business Development
Phone: (914) 909-6350
E-mail: mswanson@luxuryinstitute.com

April 15, 2009

Ethical and Environment Friendly Luxury

Economic Times -10 Apr 2009, 0605 hrs IST, Reshmi Dasgupta, ET Bureau

“I have always been influenced by women,” says luxury czar Francois-Henri Pinault, almost shyly. It is the day before the launch of his new Foundation for Women’s Dignity and Rights, a cause he was made aware of by, who else, a woman in his life. Not any woman though, but the woman he married just this Valentine’s Day: Salma Hayek, the sizzling Mexican-born filmstar and mother of his daughter.

It’s logical, given that his business hinges mostly on women – both as employees and customers – that he focuses on this crucial constituency, which he concedes with another bashful smile. However, the women’s story of the 46 year-old head of PPR, the conglomerate that his father Francois Pinault built up from scratch in 1963 to rival Bernard Arnault’s LVMH, goes back further. Not to the ladies he squired around much to the delight of the tabloids, but to his stepmother who almost made him go vegetarian years ago and his first wife Dorothee who opened his eyes to animal rights.

His interest could just as well have stopped at the women who covet Gucci and Bottega Veneta, Balenciaga or Boucheron. That it did not end there led him to this moment, at the Imperial Hotel in New Delhi on a muggy March evening, to speak about twin consuming passions. It could almost be called a culmination of all the female influences in his life for what Pinault spoke of was not the latest Gucci ‘Sloaney’ bag or Nicolas Ghesquière’s 2009 requiem for YSL at Balenciaga, but the foundation (which has writer Taslima Nasreen among its directors), and a film by Luc Besson and Yann Arthus-Bertrand that he’s financed, on what concerns us all: Home.

Pinault was inspired by the famous French photographer’s stunning aerial shots of the earth to commission Arthus-Bertrand to do a film to drive home the message that the Earth can only be saved by the ones who are killing it – us. But why would the head of a Euro 19 billion retail-to-fashion group be concerned with the Earth, given that PPR has plenty of internal issues to be dealt with? After all, while net profit in 2008 was Euro 924 million or $1.16 billion, it grew just 0.1% with retail ventures Fnac, Redcats, La Redoute and Conforama seeing a fall, and Gucci group sales remaining flat.

The answer lies in the slowdown, which has prompted introspection about the raison d’etre of luxury and its sustainability in this economic hiatus, as incomes shrink faster than the polar ice caps. As ethical business becomes a factor in buying choices, as much as value for money, suddenly, the connect becomes obvious in the otherwise oxymoronic phrase ‘sustainable luxury’. Concern about seemingly unconnected issues – population explosion, biodiversity under seige, climate change and polluted water bodies have actually become ways for the luxurati to prove their true worth.

The independent New York-based Luxury Institute says elite consumers’ preference for socially responsible brands has been growing steadily every year, from 51% in 2006 to 57% in 2007 and rising. “The global crisis of confidence in governmental, financial, and other institutions will drive luxury consumers to demand that luxury brands serve not just them but society as a whole,” says the Luxury Institute report. “They will require luxury brands to be ethical with all constituents, charitable in ways that make a difference to their beneficiaries, and ecofriendly in ways that can be documented.”

Pinault can credibly claim a head start on that count, as PPR adopted an ethical charter in 1996 and in 2007 when he took over and a team was Henri Pinault constituted for corporate social responsibility in seven priority areas. “My father and I want to give a sense of purpose to business besides just profit,” he says earnestly. So energy consumption has been cut by brands from Gucci to Puma, eco-friendly packaging adopted, and suppliers told to employ fair labour practices. Given India’s A-list’s partiality for Bottega’s signature latticeworked leather handbags, Pinault also mentions a school set up to ensure the continuity of that distinctive art in Italy’s Veneto region. “And it’s not merely meant for Bottega Veneta workers!” he clarifies.

Even the carbon cost of Arthus-Bertrand’s travel to 50 countries for Home has been offset by a development initiative with an NGO in Kolar, Karnataka to recycle kitchen waste and animal manure into biogas and compost, to combat depletion of forests and climate change. India also figures on the agenda of the new foundation, which will fund a project in Andhra Pradesh, Gujarat, Bihar and Jharkhand to train 200 women from disadvantaged families in hairdresssing and beauty in 2009.

This clearly points to India being high on Pinault’s radar as an important emerging market for the group – apart from being a place where it sources, for instance, for Gucci, Balenciaga and Boucheron – despite India accounting for just 0.4% of global luxury good sales (according to Bain & Co) and the static caused by the current downturn. The dim economic outlook had Pinault announce 1,200 job cuts this February, lower advertising spending and and slower store openings even though his leather and fashion goods did all right. Reiterating that PPR was “looking east even more,” alluding to the limited growth prospects at present in the US, UK and Japan, he stresses that capex will be more cautious.

The Luxury Institute reports that its 500 high net-worth respondents list quality (82%), craftsmanship (78%) and customer service (60%) as the top three requirements of a luxury brand. No wonder Pinault believes that while PPR cannot ignore smaller pockets as, “in tough times, brands have to remain accessible yet aspirational, and store merchandising has to adapt to changing situations,” he is equally convinced that “expensive items have to be worth their price, particularly if those who buy are buying less. It would be a mistake to lower prices, craftsmanship and service, or cut R&D. A high-end product has to be constantly reinforced with quality and innovation – it cannot depend on the brand to justify its price.”

And from that sentiment it is a short jump to what Pinault says in his speech a day later: “Sustainable development is equally unable to dispense with innovation, if it is to avoid repeating our past mistakes and invent new modes of production, with growing concern for the planet and greater respect for people.”

In Los Angeles a year ago, at the annual Global Green Globe pre-Oscar party, 42 year old Salma Hayek, who serves on its local board had revealed that she was more focused on environmental initiatives since her daughter, Valentina Paloma Pinault, was born in September 2007. “I get a bigger fear of what kind of world she’s going to live in. Is she going to run out of water? What kind of water is she going to drink? It’s really scary and it’s not that far away if we don’t do something about it,” she had said. The imperatives of these two important women in his life, then, will surely continue to influence Pinault’s drive towards sustainable luxury.

 

April 13, 2009

Rules of the Road for Online Luxury Success – #3

This post began on April 7th. We have 7 Rules of the Road that will help make the journey a profitable one. The rules are inspired by rich conversations with top executives at luxury conferences and one-on-one meetings with all the critical constituencies involved in online luxury.

Rule #3

The luxury media needs to innovate online beyond editorial plugs, banner ads and videos.

As the print world loses its momentum, luxury brands are asking what media is doing online to innovate its way out of a death spiral. Most luxury media brands are essentially online versions of their print brethren, only they get updated faster and have a few moving parts like all other mainstream media. Both wealthy consumers and luxury brands have the right to expect that luxury media deliver a breakthrough content and advertising experience that is beyond copy/pasting the print text, photos and videos onto a web site. And it is not enough just to aggregate wealthy consumers for a living. Instead, they should be generating extraordinarily unique and exclusive customer and advertiser experiences online that both consumers and luxury advertisers will find worthy of paying a premium.

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