Category Archives: luxury lifestyle

Authentic Luxury Brands and E-Commerce: Incompatible to their Core Values

By James D. Roumeliotis

online-luxury-sales-image

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Definitions of “luxury” vary significantly and depend on with whom you discuss the topic and in what context. The term “luxury” is not the easiest to define. It is relative, mysterious and elusive. In essence, it revolves around subjective criteria, depending who you ask. Irrespective what anyone considers the term, it denotes a privileged lifestyle and a “nice to have” product or experience.

Gary Harwood at HKLM, one of the founders and directors of a leading strategic branding and communication design consultancy, stated: “A luxury brand is very expensive, exclusive and very rare – not meant for everyone. When it ceases to be these things, then it’s lost its exclusive cachet. Commoditizing luxury brands and making them more accessible to the middle market puts them at risk of becoming ordinary, common and less desirable. And the more available a brand is, the less luxurious it becomes.”

Authentic luxury brands compete on the basis of their ability to invoke exclusivity, prestige and hedonism to their appropriate market segments not the masses. There is a classic litmus test:

  • Is the product manufactured in artificially limited quantities? (i.e. the rarity factor)
  • Does the firm have a story to tell? (i.e. history & pedigree)
  • Is the firm portraying a unique lifestyle?
  • Is craftsmanship the hallmark, which delivers products that only High Net Worth individuals can purchase without question?
  • Does the brand offer authenticity?
  • Does it implement an absolutely no discounting policy?
  • Is the product (and at least most of its materials/parts) manufactured only in its country of origin?

Rationale of an absence of “authentic” luxury sales online

Many genuine luxury brands such as Hermes, Chanel and Louis Vuitton are reluctant to utilize the internet to sell their pricey merchandise ─ other than a limited number of more affordable items such as their cosmetic lines, fragrances and small leather goods, as well as their silk scarfs.

There are three major reasons why luxuries brands of this caliber should not sell their products online.

  • Unique business model: The top tier luxury brands such as Hermes, Chanel, Dior and Patek Philippe, amongst other prestige marques, require a controlled distribution environment whereby they determine merchandising and pricing. They are ultra-sensitive in the manner in which their label gets handled. This is why they target and legally pursue third party e-commerce sites vigorously. Moreover, unlike traditional marketing, the mention of price is considered a taboo in the unconventional luxury marketing strategy. In the ideal luxury world, price is not something which should be divulged ─ let alone online. As a golden rule of thumb, the presumptive price should be higher than it really is.
  • Total customer engagement: High-end luxury brand executives firmly and unanimously believe that high-priced and exclusive goods should be viewed and felt in person in a plush and attentive retail environment which attracts their best shoppers. Additionally, the well trained sales staff offer fashion advice and alterations on the spot. Their swanky online presence serves to bring the consumers to their bricks and mortar shops. This approach confirms the answer to this question: Do the well-heeled, who seek exclusivity and personalized experiences with their luxury purchases, want to make their extravagant purchases online such as a $15,000 watch or handbag? Probably not.
  • They are privately owned and operated: Unlike the mainstream market and publicly traded luxury brands such as Ralph Lauren, Coach, Tiffany & Co and others, top tier luxury brands are not eager for volume sales. To retain their scarcity, cache, and avoid diluting their intrinsic value, they refuse to respond to rising demand. They also include a conservative policy of making it more inaccessible to consumers whom they are not targeting. Consequently, with privately held luxury brands, profits are done with the long term in mind, not necessarily the next quarter. In comparison, the publicly traded ones, which are accountable to their shareholders, are constantly under pressure to trim production costs and increase revenues and profits which lead them to cater to a larger audience ‒ the mass affluent. So much for all the elements of ‘genuine’ luxury purveyors who are doing away with scarcity and exclusivity.

Vice president and principal analyst at Forrester, Sucharita Mulpuru-Kodali, stated, “Yes, maybe they could increase sales (through e-commerce).” However, she elaborated, “a brand’s goals aren’t always to increase sales. It may be to preserve the quality of the brand so that it stays in business for another 100 years.

According to David Sadigh, founder and CEO of the Swiss digital banking magazine, “Swissquote”, the share of e-commerce sales in the luxury domain amounts to about 5%.

Authentic luxury brands who are not catering to the mass affluent are in a league of their own when it comes to e-commerce. Having said that, their present conservative strategy achieves its intended purpose. Essentially, when someone acquires an object of desire, he or she purchases craftsmanship, cache, pedigree, created in limited quantities, enhance one’s lifestyle and offer exclusivity ─ the top tier in its domain.  This is a contrast to the “masstige” brands such as Ralph Lauren and Michael Kors, which according to a trend report from PMX – a marketing and research agency, revealed that both of those fashion labels dominated the online market share in their luxury category.

When it comes to authentic luxury sales, every touch point in the purchase process affects brand perception, which in turn makes customer service and presentation vital.

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Filed under Business, lifestyle marketing, luxury e-commerce, luxury lifestyle, luxury online sales, luxury storytelling

Enticing the Luxury Home Buyer Through a Holistic Marketing and Sales Approach

by James D. Roumeliotis

Med Style residence

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It is not surprising that luxury home buyers have much higher expectations compared to mainstream home buyers. It is about the amenities and the enhanced lifestyle which comes with the property in an upscale neighborhood. Those buyers also prefer a new home which is in a move-in condition and has an open floor plan alongside a fully automated home environment. Wealthy home buyers also remain attracted to high-end real estate because of a strong perception of value and location.

Another important factor to consider is that luxury home buyers are becoming ever more interested in holistic experiences.

Mainstream vs premium vs a luxury home

Most homes for sale are considered “mainstream”, or “conventional.” Their standards differ from country to country subject to local traditions, construction criteria and bylaws, cost of living, and other economic indicators. These type of homes includes basic amenities for the average population and considered affordable for the working class and middle class.

Premium homes are a better alternative to mainstream homes. They are larger, more attractively designed, built with finer materials, include many upgrades, as well as additional comforts. Moreover, part or the entire home can be custom built as per buyer’s personalized wishes.

As for “luxury” homes, they have it all – location (neighborhood, schools, affluent community), imposing and attractive architecture, high beamed ceilings, plenty of lighting, quality millwork, top end materials throughout, perhaps even a gym, movie theatre, temperature controlled wine room, indoor garage space for at least three to four vehicles, as well as an elaborate layout with a great deal of living space. In some cases, unobstructed views and high-tech home gadgets. Above all, they possess elegance, quality, integrity and are distinct with no expense spared. The threshold for a property to be considered luxury is at least $1 million depending on location. Large urban condominiums are also included into this mix ─ most notably penthouses. Generally speaking, luxury is considered “exclusivity” and what separates an ordinary house and an extraordinary house ─ with classifications such as a “villa”, “mansion”, a “manor”, “estate”, or even a “ranch.”

The art of living – going beyond beautiful homes

Luxury real estate projects should be marketed in similar fashion to what Cartier, BMW or Rolex are achieving. This marketing approach is based on demographic and psycho-graphic analysis which equates to extreme attention to customer experience and demands; integrated marketing across every touch point. The formula is straightforward: the right designer and appliance brand, the right location, the right product, and the right ambiance for the luxury customer. A custom luxury home is incomparable which is designed specifically for a client and explicitly for the location chosen or owned by the client. It resonates with the client’s personality.

Understand what your home offers which is unique to its competition. There is an emotive component of any luxury purchase. Create a display area on the property that allows your potential buyers to have the emotional experience of what living in the residence would be like. It is all about evoking and engaging the potential new owner. Creating a sense of a desirable lifestyle. Seduce and dazzle your clients with the emotional “wow” factor. Create an experience. Very good examples of this are the marketing techniques applied by luxury real estate brokers Sotheby’s International Realty, Christie’s International Real Estate, Savills (U.K.), as well as New York City luxury condominium project maven, Michael Shvo. The theme is the same: dazzle them and emphasize “lifestyle.”. This helps in spreading the word. Associate the property with renowned names/brands/designers as part of the cachet. That’s what helps trigger a sale and at prices beyond what one would expect to pay for the property.

New York by Gehry Lifestyle Photo

“Irreplaceable Property Marketing” ─ Unique & Hard to Emulate

Make the look and experience authentic with the impression that it’s irreplaceable. People want to feel they own something that has a personality and a story. This entails more than just the usual appliance upgrades or other high-end amenities. It is also the staging of the appropriate furniture making the prospective home buyer feel at home and envisioning himself or herself what it feels like living there. Doing so requires applying the art of elegance, art, culture and design along with a touch of pizazz. The key to a successful sale with a high-end property is to offer something the buyer is not able to find elsewhere.

New developments and modernized properties should be design conscious and unique – able to cater to the discerning as with single detached residential homes. They ought to be promoted and presented with panache, flair, and hype but tasteful. A professional marketer, with refined brand image skills and savoir-faire in the luxury real estate domain, can develop and execute a strategy that will make the project and its identity speak on its own. Branding is not a logo, it is a perception in the mind of the consumer about the personality of a company and what it stands for. With a favorable brand name, which in essence is “reputation”, attracting and making the sale requires less effort.

Seductive marketing: Demonstrating the properties by unconventional methods

New York City entrepreneur, luxury real estate broker and diplomat Paolo Zampolli applies novel methods of promoting and selling his listings while offering his high net worth clients the first-rate treatment. He hires former fashion models as his assistant agents touting exclusive properties ─ or taking them onboard his yacht, by way of the Hudson river, for clients to view their potential properties. His creative mind takes it one step above, literally, as he hires a helicopter to give the prospective buyer’s spread a bird’s eye view.

Raymond Bolduc, the top real estate agent with Sotheby’s International Realty in Florida, believes that closing a deal requires throwing a party. As a means of advertising and promotional exposure, he creates attention by hosting lavish social events at his multi-million-dollar home listings to lure in prospective buyers. He does so with panache complete with luxury cars ─ and yachts if it is a waterfront property.

The following marketing channels should be considered to increase the exposure of the properties for sale.

  • Global websites
  • Glossy print campaigns
  • Newspaper inserts
  • National media coverage
  • Advanced social media platforms
  • Mobile technology

In the end

Since luxury home buyers are inherently wealthy, they should be approached and sold to differently. That said, property consultants/real estate agents should be well trained and very knowledgeable in sales, marketing, as well as thoroughly familiar with the unique properties they sell. They also retain client confidentiality and avoid conducting typical open houses to ward off the curious public since multi-million dollar homes demand pre-qualified buyers only.

Luxury home builders and real estate agents should focus their marketing activities to well-heeled and tech savvy Millennial buyers who seek turn-key homes that are eco-friendly, smart wired and cater to their busy and connected lifestyles.

As Lew Geffen, the Sotheby’s International Realty partner in South Africa, states in its marketing collateral,Property marketing is essentially ‘Show Business’ but Sotheby’s International Realty has aimed at ‘theatre’ ─ with all the levels of drama and passion the brand is fully capable of carrying.”

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Catering to a “Luxury Lifestyle”: Definition and Execution

by James D. Roumeliotis

Yacht Lifestyle Shot from the Air

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A “luxury lifestyle” denotes a way of life which is pleasantly enhanced through well crafted products and exceptional services. These include dining at the best restaurants, lounging in the finest hotels, dressing in premium and bespoke clothing, wearing jewellery/watches produced in limited quantities, possessing and driving the most extravagant cars, traveling to exotic destinations, and playing with the most sophisticated tech products – amongst others. Needless to say, those consumers are connoisseurs of the finest products and services money can afford them.

According to a white paper and survey, conducted by the prestigious consulting firm McKinsey & Co., it indicates that there is no widely accepted definition of “luxury lifestyle.” It goes on to say that Attendees of the 2012 Financial Times Business of Luxury Summit suggested the following definitions: “a way of living,” a set of “attitudes and values,” or specific “consumption habits.”  Consumers interviewed in London, Milan, Munich, and Paris gave equally diverse definitions. Some offered a broad perspective (“a way of being, dressing, behaving” that “sets you apart from the rest”); others referred to particular products, brands, and experiences (“staying at nice hotels”); still others took a cynical view (“it’s just brand names, that’s all” or “it’s marketing”). Its interviews with senior executives from luxury- goods companies such as Harry Winston, Hermès, and Roberto Cavalli yielded yet another varied set of definitions, including “embodying the lifestyle of an iconic designer” and “offering a holistic brand experience.” Although they all defined the phrase differently, 70 percent of the executives they interviewed said they regard their brands as luxury-lifestyle brands.

A company can define itself as a lifestyle brand when its products promote more than a product with key benefits and attributes. However, lifestyle branding is more than just promoting “a way of life.” It is a product or service that provides consumers with an emotional attachment to the lifestyle of the brand. Take Versace, for example, which besides its fashion apparel and accessories also has hotels, home furnishing/décor, linens, beauty and more. Giorgio Armani also has his eponymous name on hotels, furniture, fashion, jeans and beauty. From these two fashion icons, we can certainly surmise that they have a legitimate claim as “luxury lifestyle” purveyors.

Developing the luxury standard of living through desirable customer experiences

Lifestyle branding is more than just promoting “a way of life”. it is a product or service that provides consumers with an emotional attachment to the lifestyle of the brand. think of Ralph Lauren and you can readily see it is not about the clothes. it becomes an attachment such as the sports car brand Porsche to an exclusive club in which you can be a member through emotional identification through use of the products in question. Smart companies understand these principles and look to keep the customer engaged. By doing so, they clearly forge the sort of long term relationships, which become the envy of their designated sector.

The “Total Customer Experience” is the sum total of the interactions that a customer has with a company’s products, people, and processes. It goes from the moment when customers see an ad to the moment when they accept delivery of a product and beyond.

The experiences customers go through with a purveyor of luxury determine the ultimate perception of its brand and image. Customer experiences also spread the word (offline/online) to others (friends, relatives etc.) about your brand. That said, each customer contact (“touch points”) should be handled with the utmost care to ensure that the total brand experience a person has is constant.

Lifestyle brands develop emotional attachment

Brand loyalty is about building an emotional, and in some cases, irrational, attachment in a product. The most ideal examples are the diehard brand enthusiasts and early adopters who must get their hands on the latest iPhone or iPad. This happens because Apple has built an emotional attachment to their products by creating a lifestyle choice rather than a product purchase.

It’s about how it makes you feel. Same goes for baby boomers, whether accountants or attorneys or business executives who purchase a Harley Davidson motorcycle and ride them for about four or five hours every Sunday afternoon. The bike makes them feel like a rebel – sort of an escape.

A brand that is designed for a lifestyle should have a much higher emotional value to consumers than one based on features like cost or benefits alone. The goal of a lifestyle brand is to become a way that people can utilize it to relate to one another. Those brands are an attempt to sell an identity, or an image, rather than a product and what it actually does.

Lifestyle brands have gained an increased share of the luxury market such as BMW, Armani, W Hotels, Louis Vuitton and Rolex ‒ just to name a few. These have given way to consumers to buy products that they associate with a “luxurious life.” They are essentially a status symbol.

The luxury lifestyle in the services domain

In the category of “services”, the luxury lifestyle is all about execution in delivering an exceptional experience with pizzazz to the discerning ─ whether it is a bespoke travel excursion in an exotic place, producing an exceptional dining experience or organizing an over-the-top event, each one ought to create a pleasant memory which would want to be repeated.

A successful service related luxury lifestyle exists when the following take place.

– Delivered with passion
– Exclusivity
– Discretion
– Exceeding expectations
– Seamless
– Refined
– Posh
– With attention to detail

Consider American Express − most notably for its “by invitation only” Black/Centurion card. For hotels, worthwhile mentions are the Hotel Plaza Athenée, the Four Seasons (including its private jet tours), the Ritz Carlton, and boutique hotels Hotel du Cap and Hotel de Crillon to name a few prominent ones. They splurge and provide the perfect luxury experience with outstanding service, exclusivity, and pedigree.

Exclusive and bespoke travel companies provide tailor made adventures and excursions. The four key players in this category include: Abercrombie & Kent, Kuoni Travel, Orient-Express and Cunard Line. Broadening our view of luxury services, certain firms offer services and privileges to a rare percentile. Such services include fractional jet ownership such as NetJets and FlexJet, as well as global concierge services such as Quintessentially.

In the final analysis

Whether offering a product or service, it is how a luxury brand delivers an experience that distinguishes it and makes it stand-out from the mainstream. In essence, it’s a holistic approach.

Luxury lifestyle brand offerings should be constantly refreshed, giving discerning customers a reason to repeatedly do business with the brand. Tiffany & Co., decided to undergo “investing in the theater of shopping in its stores”, as its CEO Frederic Cumenal implied as regards to the renovations of its largest store ever which it opened in China.

Selling a distinct lifestyle is what discerning clients crave and gladly relate to. Organizing exclusive by-invitation-only events should be considered. Exclusive events make one feel notable. For example, Italian sports automaker Maserati invited a select number of brand loyalists to a new experience in Europe that gave them the opportunity to sail on-board the 70 ft./21,3 m Maserati sailboat. In addition, they drove models in its current range including the new Maserati Gran Turismo Sport model.

In the end, living the luxury life is irresistible to many from every range of background and nationality. The temptation includes the aspirational affluent.

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