The Best Strategy For a Luxury Business to Attract and Sell to the 1% ─ Also Known As The Ultra-High Net Worth Individuals

James D. Roumeliotis

Attracting and selling to the ultra-high net worth individuals (UHNWIs), often referred to as the 1%, requires a strategic and personalized approach given their distinct preferences, expectations, and purchasing behaviors. Here are some effective strategies for a luxury business targeting this exclusive market:

1. Personalization and Customization:
   • UHNWIs appreciate personalized and bespoke experiences. Tailor your products and services to meet individual preferences and offer exclusive customization options.
2. Exclusivity and Limited Editions:
   • Create limited edition products or services that are exclusive to UHNWIs. Limited availability enhances the allure of your brand and products.
3. VIP Services and Privileges:
   • Offer VIP services such as priority access, private viewings, and exclusive events. UHNWIs value unique experiences and providing them with privileged treatment enhances their connection to your brand.
4. Private Consultations:
   • Provide private consultations or concierge services where UHNWIs can receive personalized attention and guidance. This can include private shopping experiences or dedicated advisors.
5. Exceptional Quality and Craftsmanship:
   • UHNWIs seek the highest quality and craftsmanship. Ensure that your products or services are of unparalleled quality, using the finest materials and skilled artisans.
6. Brand Heritage and Legacy:
   • Highlight your brand’s heritage and legacy. UHNWIs often appreciate the history and traditions associated with luxury brands.
7. Collaborations with Influencers:
   • Partner with influential personalities or celebrities who resonate with the tastes and lifestyles of UHNWIs. Their endorsement can enhance your brand’s desirability.
8. Exclusive Membership Programs:
   • Introduce exclusive membership programs that offer unique benefits, such as access to limited editions, private events, and personalized services.
9. Art and Cultural Connections:
   • Align your brand with art, culture, and philanthropy. UHNWIs often have a keen interest in supporting and engaging with cultural and charitable initiatives.
10. Digital Presence with Discretion:
    • Maintain a sophisticated and discreet digital presence. UHNWIs value privacy, so ensure that your online interactions and communications respect their need for confidentiality.
11. White Glove Service:
    • Implement a white glove service approach, going above and beyond to meet the expectations of UHNWIs. This includes seamless and personalized customer service.
12. Networking Opportunities:
    • Create exclusive networking events where UHNWIs can connect with like-minded individuals. Building a community around your brand enhances its appeal.
13. Tailored Marketing and Communication:
    • Craft marketing messages and communication materials that resonate with the aspirations and lifestyle of UHNWIs. Use high-end publications and targeted platforms.
14. Innovative Technology Integration:
    • Incorporate innovative technologies or cutting-edge features into your products or services to demonstrate a commitment to staying at the forefront of luxury trends.

In the end, building trust, maintaining discretion, and consistently delivering exceptional experiences are key elements in attracting and retaining UHNWIs. It’s not just about selling a product; it’s about creating a lifestyle and a sense of exclusivity that aligns with their values and aspirations.

____________________________________________________ 

Request your TWO FREE chapters of this popular book with no obligation.

The Distinction Between CPG Brand Management and Luxury Brand Management

By James D. Roumeliotis

Brand management is the process of creating, developing, and maintaining a brand in order to achieve business goals. It involves establishing a brand identity, building brand equity, and ensuring that the brand remains relevant and competitive in the market. However, brand management strategies can vary depending on the type of brand being managed. In this article, we will explore the differences between managing a consumer-packaged goods (CPG) brand and a luxury brand.

What is CPG brand management?

CPG brands are typically everyday products that consumers use on a regular basis, such as food, beverages, personal care products, and household items. CPG brand management is all about creating a brand that appeals to a broad range of consumers and maintaining that brand in a highly competitive market. CPG brand managers need to focus on product innovation, pricing, packaging, distribution, and marketing in order to succeed.

The focus of CPG brand management is on creating a consistent and reliable product that consumers can trust. CPG brands often have lower profit margins than luxury brands, which means that cost control is critical to their success. CPG brand managers need to carefully balance the cost of producing their products with the price they charge consumers in order to maximize profits. Additionally, CPG brands need to be marketed in a way that appeals to a broad audience and drives sales volume.

What is luxury brand management?

Luxury brands, on the other hand, are products or services that are associated with high levels of quality, exclusivity, and status. Luxury brand management is all about creating a brand that conveys a sense of prestige and luxury to consumers. Luxury brand managers need to focus on product design, craftsmanship, exclusivity, and marketing in order to succeed.

The focus of luxury brand management is on creating a sense of exclusivity and rarity that appeals to a select group of consumers. Luxury brands often have higher profit margins than CPG brands, which means that their pricing strategy can be more flexible. Luxury brand managers can charge premium prices for their products, and they often use scarcity and limited availability to create a sense of exclusivity.

Luxury brands are also marketed in a way that is different from CPG brands. Instead of appealing to a broad audience, luxury brands target a niche market of high-net-worth individuals who are willing to pay a premium for quality and exclusivity. Luxury brand managers often use celebrity endorsements, event sponsorships, and other high-end marketing techniques to build brand awareness and create a sense of exclusivity.

Key differences between CPG brand management and luxury brand management:

• Target market: CPG brands target a broad audience, while luxury brands target a niche market of high-net-worth individuals.
• Product features: CPG brands focus on creating a reliable and consistent product, while luxury brands focus on exclusivity and rarity.
• Pricing strategy: CPG brands typically have lower profit margins and need to balance the cost of production with the price they charge consumers, while luxury brands can charge premium prices and use scarcity to create a sense of exclusivity.
• Marketing strategy: CPG brands are marketed in a way that appeals to a broad audience, while luxury brands use high-end marketing techniques to build brand awareness and create a sense of exclusivity.

In conclusion

While both CPG brand management and luxury brand management involve creating and maintaining a brand, the strategies used to achieve these goals can be very different. CPG brands focus on creating a consistent and reliable product that appeals to a broad audience, while luxury brands focus on exclusivity and rarity to appeal to a select group of high-net-worth consumers. Understanding these key differences is essential for developing effective brand management strategies in either context.

__________________________________________

Request your TWO FREE chapters of this popular book with no obligation.

The Art of Selling Luxury Products: Brand Story Telling & Persuasion

By James D. Roumeliotis

Correct link: https://bit.ly/3ew7I56

Recently, I followed a Linkedin luxury sector group thread. Discussion centered on the appropriate manner clients should be treated by sales personnel in a luxury retail shop such as Gucci.

To my astonishment, one participant, posing as an expert stated that salespeople at such boutiques should be snooty. The reason given was that this attitude was part of the luxury cachet.

How ludicrous and puerile, I thought.

In my experience, this is precisely what you should not do. Whether you spend $10,000 or more on a Rolex or $20,000 or more at Hermes all clients should be treated with respect. Period. Aspiration and negative attitude sales pitches are not only counterproductive, but they are also destructive. (I might add, that this should be true of all human interaction and not just the act of buying luxury products.)

Does Luxury Really Have Meaning?

Luxury was never about price. This is an outdated concept built on a social model which is incompatible with democratic values. It is about brands, which are authentic. Authenticity implies function, design, intrinsic value, and in certain cases heritage and pedigree.

Luxury must provide the right experience.

Sophisticated customers want the wow factor.

This means touching the heart and dazzling the senses. When done in this manner, the client feels their lifestyle enhanced. Yes, I know, like you do that a product is just a thing. However, things act as a trigger and can alter perception, inner balance, and outer harmony.

Look at the keys to luxury brand management and you will recognize the essentials in selling aspiration:

1) Self-expression and sense of self
2) Exceptional treatment and experience when in the act of purchase
3) Craftsmanship=Quality
4) Authenticity
5) The Rarity Factor
6) Emotional Bonding
7) Mystique

To achieve these elements the brand must be expert storytellers. One of the grand storytelling kings, Ralph Lauren, understands this like the lines on his hand.

Exceeding Expectations

Luxury goods are not sold the same way as mainstream products. It’s not enough to simply introduce and sell a luxury brand surrounded by a fancy store with design-inspired display cases either. Consumers of luxury brands tend to have higher expectations than that of traditional consumers. They are discerning and sensitive to questionable tactics, as well as intolerant when comes to aggressive salespeople.

The attitude, product knowledge, and overall delivery/presentation of the product by the sales consultant/brand ambassador all play an equally important role. This translates to a well-educated, skilled staff having good communication skills, a high level of presentation skills, and a customer-centric approach.

A study by The Luxury Institute, in New York, finds that Burberry and Bottega Veneta excel far better in CRM (Customer Relationship Management) than other companies. Their key findings were under the title:

“Leading Edge Insights Into The World Of The Wealthy”

Sales associates should be employed from related luxury brands and products, with consideration given to those in the service sector such as hospitality or premium airlines: Singapore Airlines, Swiss Airlines, Emirates, and others — or perhaps from premium apparel brands and high-end cosmetic brands. One thing is certain: Training ought to be based on specific brand requirements.

As more luxury brands open their own retail outlets to stand apart, they need to better control sales channels, image, and front-line personnel.

One cannot stress enough for Sales teams to have the right training.
For new sales hires not familiar with selling luxury brands, a company has to invest to train them and ensure occasional retraining including recap courses. Luxury sales training should include:
– In-depth product knowledge – specifically how it will help satisfy the customer’s needs;
– Focus on the customer – who they are, what they like/dislike, determine needs, motivations and preferences;
– Exceed customer expectations by delighting and surprising;
– Appeal to client emotions;
– Never put down the competition.

Ultimately, craftsmanship, design innovation, exclusivity, and pedigree sell themselves. Correct sales attitudes should personify the luxury branded products and it becomes in the client’s eyes a done deal.

Selling, or Rather, Storytelling with Product Knowledge and Finesse

Consumers today are sophisticated when it comes to shopping – thanks primarily to the internet where information on just about any product can be researched and used for comparison purposes. Consequently, when a prospective client walks into a store, he/she is armed with knowledge – which is why the sales professional should be product proficient and adept at assisting and guiding the client to the purchase by making use of flattery, romance, and showmanship. Charisma is an asset.

To illustrate, if a sales consultant, wearing a pristine white pair of gloves is presenting, for instance, a Chopard watch, he/she will utilize terms with finesse and avoid using language which discusses a specific price tag. In its place, the word “value” can be used. Instead of calling the product an obvious “watch”, the sales consultant can say, “timepiece”, “masterpiece” or simply pronounce the model name. It should then be demonstrated in a dazzling manner emphasizing its innate qualities and timeless design with functionality – amongst other features that focus on one’s sentiments.

When selling a niche automobile such as a Porsche, the sales professional can talk about racetracks, describe road-holding capabilities, and build up a fascinating story – after which time he/she can bring up reliability and the technical details which confirm to the discerning client what he/she is already aware of.

Hiring Selection Process: Who Should Make the Cut?

When seeking to hire sales consultants, there should be a set of criteria established to ensure a successful performance. The people selected for the end-user contact should have the following characteristics:

1) Retail sales experience in a luxury environment;

2) Empathetic: expertise in establishing customer relationships that translate into sales;

3) Image: proper attire and fashion accessories, verbal communication, and grooming. Clients should see the brand made manifest so it has a personal connection;

4) Skilled at the emotional aspects of a sale: bond with customers so that relationship leverage is genuine;

5) Passionate and Professional mindset;

6) Highly collaborative: knows how to work with and through others in a team-based environment;

7) Entrepreneurial, competitive, self-confident, and self-motivated.

Discounted Luxury is an Oxymoron

Under no circumstances should luxury brands be discounted. They need to stick to their true sense of meaning and heritage. By cutting prices, brands risk changing the quality-price relationship in the customer’s mind. This practice normally stems from sales consultants, who may not be convinced that the particular luxury goods offered for sale actually merit the price.

Such an attitude can be tricky to navigate effectively. Customers need to believe otherwise they question and the product is devalued in their eyes. Salespeople, who are not up to this aspect of brand personification should not be hired.

Price discounts should be a tactic of last resort.

A robust alternative is to offer gift items or bonuses such as complimentary tickets to Art exhibitions, gift certificates, or access to a coveted local restaurant.

Employ Mystery Shoppers

In the retail brand experience, nothing should be taken for granted. In a progressive customer-driven entity, training and developing human assets should be an ongoing process. Moreover, brands should be an enemy of the status quo.

Hiring mystery shoppers to gauge the total sales cycle approach and report back their experience to management should not be ignored.

Another suggestion is for the luxury boutique owners to hire a third party such as a consultancy firm, which specializes in the high-end retail domain, to shadow the sales consultants and evaluate their performance.

Both techniques need to be conducted with frequency. How can you understand what the client expects by acting and gauging behavior in the field? You can’t.

The Final Take

Remember, a luxury sales professional does not pressure customers to buy.

He/She plays the role of a luxury purveyor and advisor – someone who is an expert product consultant and keeps a client’s best interests at heart. By demonstrating value, a sales consultant establishes himself/herself as a professional.

It’s about establishing a person-to-person relationship as opposed to a salesperson-to-customer relationship.

In today’s economy, service has become a core competitive advantage. Hiring the right people and training them to sell properly, increase sales and retain the brand’s luster should all be part of its ongoing ambitions.

Sophisticated customers want products that dazzle their senses, touch their hearts and stimulate their minds – which they can relate to and can incorporate into their lifestyles. The degree to which a luxury product is able to deliver a desirable customer experience is vital.

__________________________________________________

Request your TWO FREE chapters of this popular book with no obligation.

The Top 10 Most Read Articles in this Blog for 2020

To begin the new year, I have once again rounded up the ten most read/popular articles — this time for  2020. The following ten captured the most attention by numbers and from 152 countries in all. See them all below! 

Your views are always encouraged including subject matter you think I should be covering more of.

THANK YOU for your readership and I look forward to feeding your mind with additional practical business food for thought this year which can be applied for timely results.

1] Start-up Essentials: A Universal Roadmap for Starting a Business — Infographic

2] The Luxury Brand Ranking and Consumer Accessibility Pyramid: What It Takes to Move Up

3] Why do Rolex Watches Retain Their Value? Quality, Savvy Marketing and Cache are the Core Motives

4] The Notorious Cruise Industry: A Glorified and Reckless Offshore Business

5] Sex and Sensuality in Advertising: Why it is effective and how to refine it

6] What Products and Services Must Do to Flourish: Increasing the Odds at Profiting in a Competitive Market

7] Exceeding the Hotel Guest Experience: Anticipating and Executing Desires Flawlessly

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

9] The Art of Selling Luxury Products: Brand Story Telling & Persuasion

10] The Ultra Luxury Purveyors: Lessons from brands catering to the wealthiest one percent

__________________________

Request your TWO FREE chapters of this popular book with no obligation.

The Ultra Luxury Purveyors: Lessons from brands catering to the wealthiest one percent

by James D. Roumeliotis

Several years ago, I had the privilege of working on-board the 147m/482 ft Saudi Royal family yacht the “Prince Abdul Aziz.” It was a first-hand experience with the wealthy 1% and was quite an eye-opener.  A typical day with its owners consisted of shopping at Gucci, LV, Hermes and Bulgari when we made port regardless of location in the Western Mediterranean region. The 25K euro daily average shopping splurge prompted the support staff to purchase large suitcases or trunks to be used as temporary storage. Not surprisingly, given the situation among visiting VIPs and royalty, this was the norm.

Given my professional métier in luxury brand management, I realized that this target audience belonged to a category distinct from any other which are labelled as the One Percenters.

The frequent conspicuous consumption was considered a normal occurrence for the Royalty and its VIP guests as were the elaborate prepared meals devoured that would make the mainstream cringe.

Who on earth are the one percenters?

Along with Sheikhs and Princes, HNWI (High Net Worth Individuals) are considered, by luxury marketers, as the elite segment of the market. According to the Capgemini Wealth Management World’s Wealth Report 2021, it defines HNWIs as those who possess at least US$1 million in financial assets. On the other hand, there are the ultra-HNWIs or UHNWI as those who hold at least US$30 million in financial assets, with both excluding collectibles, consumables, consumer durables and primary residences. The report states that following a robust growth of 8.3% in 2010, the global population of HNWIs grew marginally by 0.8% to 11.0 million in 2011. Most of the growth can be attributed to HNWIs in the US$1 million to US $5 million wealth band that represent 90% of the global HNWI population. The top three countries, U.S, Japan and Germany, retained 53.3% of the total share of HNWIs

Clearly, One Percenters have different expectations and experiences than the rest of us. Here are just a few of this target audience’s distinguishing traits:

–       They are better educated;

–       Have traveled more (and continue to do so);

–       Own one or more successful business and/or inherited their wealth;

–       Possess investments mainly in real estate, stocks and bonds;

–       Are avid connoisseurs of the fine arts/cultural events and vintage/wines;

–       Own top quality merchandise: elaborate homes, exotic cars, bespoke attire, as well as seek services which cater to their discernment;

–       Have explored plenty more in their lives due to their significant disposable income/wealth.

In a recent American Affluence Research Center report, its founder and researcher, Ron Kurtz recommends that: “Luxury brands and luxury marketers should be focused on the wealthiest one percent because they are the least likely to be cutting back (during tough economic times) and are the most knowledgeable about the price points and brands that are true high-end luxury.”

What do the HNWIs and UHNWIs seek in their lifestyle?

According to the white paper, Strategies for Effectively Marketing to High Net Worth Consumers”, written by Richard Becker (August 2008), High Net Worth Individuals enjoy Golf, tennis and physical fitness ‒ endeavors typically associated with exclusive ‘members only’ clubs.

HNWIs/UHNWIs cherish their time and know what they want. Even time is a luxury and limited resource for them, thus saving time greatly trumps saving money. This is part of the reason service is crucial for them. They can be generally described as:

– Seek a higher and exacting standard with a minimum set of expectations;
– Fussy in nature;
– Often require customized solutions to mirror their lifestyle – whether a product or service;
– Take pleasure on getting extra attention from the brands they pursue;

– Prefer the uncommon to the mundane;
– Expect to be offered unique choices and experiences;
– Synonymous with a taste for luxury with pedigree and craftsmanship which they’re able and willing to pay;
– Aspire an aura of exclusivity;
– Crave an experience heightened by exceptional service along with a personal relationship;
– Seek products which are different and more sophisticated – whether it’s apparel, electronics, food or insurance;
– Want to feel in command of their purchase decision without any pressure;

– Expect discretion and confidentiality – most notably from service providers such as private wealth institutions and concierge services amongst others.

Likewise, what they purchase is a visual extension of their individuality and lifestyle. A well-crafted product, for example, reflects an individual call to beauty.

The preeminent luxury brands remain top of mind with the HNWI/UHNWI

When the premium plumbing brand, The Kohler Company, introduced the ultimate toilet fit for the well-heeled, it developed a contemporary industrial design that would make Apple glow with envy. Numi, as the model was baptized, includes technology and engineering that is unconventional with most toilets as we know them. Its features include, amongst others, ambient lighting, a bidet, foot warmers, a seat warmer, music, lighting, and hands-free flushing – which are all controlled through a remote which, with a press of a button, also lifts and lowers the lid. All this can be had for a mere $6500.

Luxury purveyors who aspire to cater to the top tier of spenders should have a mission, vision and a sound implementation strategy to reach this elite demographic target ‒ short of simultaneously pursuing the aspirational consumers who are prone to cutting back when the economy takes a dive. This latter group of consumers dilutes the cachet of the brand and can turn out less profitable in the long run. Moreover, the HNWI/UHNWI frown upon offerings which are accessible to the mainstream as they desire status and exclusivity.

Products and services should be unique, well designed and packaged, finely crafted ‒ and executed with refinement for the elite. Those are ways to entice the interest of, and ultimately retain, the ultra-wealthy. Products and services should never appear as ordinary yet absolutely personal.

In the luxury sector, traditionally there hasn’t been any shortage of customization for the very well heeled. Exclusive and bespoke travel companies provide tailor made adventures and excursions, whereas, the ultra-luxury and exotic automobile sectors such as Rolls Royce and Ferrari respectively offer a wide array of customization options. Each vehicle coming out of the studio will be completely unique and guided by a personal designer at the manufacturers. This is how ‘the total customer experience’ materializes.

Some of the most prominent companies that cater to the 1% include:

LVMH Moët Hennessy ‒ Louis Vuitton S.A (French conglomerate that owns a legion of luxury brands including Louis Vuitton, Marc Jacobs, Fendi, TAG Heuer, and Dior cosmetics among many others and in various categories), Chanel, Hermes, PPR/Kering (owns controlling shares of Gucci and Yves Saint Laurent, among others), Richemont (owns the prestigious Alfred Dunhill, Cartier and Montblanc brands along with many others), Rolls Royce Motors, Bentley Motors, Bugatti Motors, Rolex, Patek Philippe, Goldman Sachs, Gulfstream, Sotheby’s, Bulgari, Tiffany & Co., and Harry Winston to name a few.

Luxury service brands follow a similar pattern. 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.

How the luxury purveyors reach, cater and retain the 1%

Studies over the years have shown that the HNWIs/UHNWIs travel frequently and usually do so on a private jet. It’s also a fact that emerging markets from commodity rich countries such as Brazil, Russia, India and China, have a tremendous amount of new ultra wealthy citizens that can’t be ignored.

Reaching them is not easy. However, following are several approaches the prestigious luxury brands are utilizing.

–       Target them in their gathering places in major cities where most UHNWIs reside – London is such a prominent location;

–       Sponsor and/or advertise where the HNWI/UHNWI meet and play such as prestigious golf clubs, polo events etc. Rolex supports prestigious sporting and cultural events all over the world including tennis, the arts, golf tournaments and yachting.

–       Advertise in private jet terminals worldwide called Fixed Base Operators (FBOs) ‒ facilities that handle non-scheduled flights. One such opportunity is in Davos (Switzerland), towards the end of January, where the World Economic Forum is held. There are also magazines, such as “Privat Air” which are published specifically for private jet travelers. In 2012, there were over six million private jet flights. It is, undoubtedly, a targeted audience where one reaches the ultra-wealthy family together – which may be discussing a product or service you may be offering. Swiss watchmaker Audemars Piguet had several helipads with their logo located on Manhattan’s 34th Street.  The helipads included paintings of their watches which functioned as landing markers.

–       Meet and woo its discerning target customers at high profile industry shows and events. Burgess Yachts, for example, participates at the annual Super Yacht Show in Monaco which draws the well-heeled shopping for a multi-million dollar yacht.

–       Hone in cities where the ultra-wealthy normally visit for the finest luxury shopping experiences – mainly Milan, Paris and London with their shops on prestigious avenues;

–       Are promoters of good taste and the arts which is what the super-rich equally enjoy;

–       Make an effort to approach/communicate with influential members of entourages such as drivers, personal assistants, pilots and bodyguards;

–       Advertise and contribute content in prestigious lifestyle magazines which cater to the ultra-affluent including Amex’s ‘Departures’ magazine, ‘Worth’, ‘Elite Traveler’, ‘Monocle’ and ‘Burgess’ amongst others.

–       It goes without saying that successful brands have an online presence/visibility including a clean looking and engaging website, along with a carefully targeted social media existence to build long term online awareness, loyalty and value for the brand.

Along with what the prestigious brands are doing to attract the top spenders, consider creating an exclusive/”members only” online club/site. Moreover, if you’re offering products, boasting about artistic development by engaging with them and encouraging a visit to your atelier to witness your product being crafted. Videos should also be considered for viewing online.

Research where the wealthy neighborhoods are worldwide by using demographic data.  This information reveals everything from median income and age, educational levels and consumption statistics.  Demographic data also helps improve target marketing and advertising.

Sell a distinct lifestyle which is what discerning clients look for. Be in the forefront of creativity and have all your staff, regardless of department/responsibility, as your brand ambassadors.

Occasionally, organize exclusive “by invitation” events as a patron appreciation gesture. Being invited to an exclusive event makes 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.

Create/publish an upscale lifestyle magazine, every other month or quarter, which should include noteworthy information on the brand and the arts, as well as the causes it supports – in an environmentally friendly print format, along with a digital version. The Bentley motors magazine is a good case in point. The layout, choice of articles/stories and advertisers reflect the tastes of its existing and potential customers.

Removing some of the guilt of ostentatiousness

Corporate Social Responsibility or CSR, along with sustainability issues, is a trend increasingly practiced in the luxury domain to send a message to their audience that they it cares. This is communicated through sponsorships, advertising, public relations, their websites and other media sources. The message conveyed is to enjoy guilt-free ostentatious purchases where part of the purchase price is donated to a worthwhile cause. Louis Vuitton uses celebrities in its advertising campaigns whose fee goes to charity.

Any business which is willing to get involved in social causes to impress its target market should make a genuine effort genuine, as sophisticated consumers can tell when it doesn’t come across as a genuine effort

Putting it all into perspective

A September 2017 study by the U.S. Federal Reserve reported that the top 1% owned 38.5% of the country’s wealth in 2016. According to a June 2017 report by the Boston Consulting Group, around 70% of the nation’s wealth will be in the hands of millionaires and billionaires by 2023.

Fickle and discriminating, these customers’ purchasing attitudes are based on personal beliefs and taste for finer things in life along with discretion. They are quite selective, know what they want and aspire to be catered to effortlessly. They seek the total customer experience along with pampering, personalized service which can include fashion consultations and exotic journeys. Best of all, they are willing to pay top money for the products and services they want.

An offline strategy requires an equal online presence. This is accomplished by placing stunning imagery, video, engaging content and constant refinements along with savvy Internet marketing to connect the brand with luxury social channels. It’s connecting with its like-minded audience.

Think brand positioning and focus on, as well as cater solely to, your core market rather than be all things to all people. Stay out of the bottom end and aspirational markets and instead, aim at the top end markets.

_________________________________________________________

Request your TWO FREE chapters of this popular book with no obligation.

The Luxury Brand Ranking and Consumer Accessibility Pyramid: What It Takes to Move Up

Commentary by James D. Roumeliotis with pyramid created by Erwan Rambourg

Few brands can really claim the trademark of luxury. It is those which combine allure with pedigree and quality attributes. Discounting is not part of their strategy and their entire raison d’être is geared to the Ultra High Net Worth (UHNW). Many of their products actually increase in value over time since they are either discontinued, necessitate a long waiting list/time and are most desirable (supply/demand). Many also offer bespoke products and services since their type of discreet clientele prefer personalization and/or one of a kind. Brands that become too accessible are less appealing to such well-heeled buyers.

Erwan Rambourg, an HSBC managing director and author of the book, “The Bling Dynasty: Why the Reign of Chinese Luxury Shoppers Has Only Just Begun” created a luxury brand pyramid which depicts how major brands range in accessibility from the lower end with “accessible luxury”, such as spirits, a fine steak and perfume, to ultra-high-end luxury like rare diamonds. This is the luxury influence level ranking pyramid:

Getting On Top of the Pyramid

Luxury purveyors who aspire to cater to the top tier of spenders should have a mission, vision and a sound implementation strategy to reach this elite demographic target ‒ short of simultaneously pursuing the aspirational consumers who are prone to cutting back when the economy takes a dive. This latter group of consumers dilutes the cachet of the brand and can turn out less profitable in the long run. Moreover, the High Net Worth Individuals or HNWI and Ultra High Net Worth Individuals or UHNWI frown upon offerings which are accessible to the mainstream as they desire status and exclusivity.

Products and services should be unique, well designed and packaged, finely crafted ‒ and executed with refinement for the elite. Those are ways to entice the interest of, and ultimately retain, the ultra-wealthy. Products and services should never appear as ordinary yet absolutely personal.

In the luxury sector, traditionally there hasn’t been any shortage of customization for the very well heeled. Exclusive and bespoke travel companies provide tailor made adventures and excursions, whereas, the ultra-luxury and exotic automobile sectors such as Rolls Royce and Ferrari respectively offer a wide array of customization options. Each vehicle coming out of the studio will be completely unique and guided by a personal designer at the manufacturers. This is how ‘the total customer experience’ materializes.

What do the HNWIs and UHNWIs seek in their lifestyle?

According to the white paper, Strategies for Effectively Marketing to High Net Worth Consumers”, written by Richard Becker (August 2008), High Net Worth Individuals enjoy Golf, tennis and physical fitness ‒ endeavors typically associated with exclusive ‘members only’ clubs.

HNWIs/UHNWIs cherish their time and know what they want. Even time is a luxury and limited resource for them, thus saving time greatly trumps saving money. This is part of the reason service is crucial for them. They can be generally described as:

– Seek a higher and exacting standard with a minimum set of expectations;
– Fussy in nature;
– Often require customized solutions to mirror their lifestyle – whether a product or service;
– Take pleasure on getting extra attention from the brands they pursue;

– Prefer the uncommon to the mundane;
– Expect to be offered unique choices and experiences;
– Synonymous with a taste for luxury with pedigree and craftsmanship which they’re able and willing to pay;
– Aspire an aura of exclusivity;
– Crave an experience heightened by exceptional service along with a personal relationship;
– Seek products which are different and more sophisticated – whether it’s apparel, electronics, food or insurance;
– Want to feel in command of their purchase decision without any pressure;

– Expect discretion and confidentiality – most notably from service providers such as private wealth institutions and concierge services amongst others.

Likewise, what they purchase is a visual extension of their individuality and lifestyle. A well-crafted product, for example, reflects an individual call to beauty.

Putting it all into perspective

In the United States the top 1% possess 40% of the wealth owns half of all the stocks, bonds and mutual funds.

Fickle and discriminating, these customers’ purchasing attitudes are based on personal beliefs and taste for finer things in life along with discretion. They are quite selective, know what they want and aspire to be catered to effortlessly. They seek the total customer experience along with pampering, personalized service which can include fashion consultations and exotic journeys. Best of all, they are willing to pay top money for the products and services they want.

An offline strategy requires an equal online presence. This is accomplished by placing stunning imagery, video, engaging content and constant refinements along with savvy Internet marketing to connect the brand with luxury social channels. It’s connecting with its like-minded audience.

Think brand positioning and focus on, as well as cater solely to, your core market rather than be all things to all people. Stay out of the bottom end and aspirational markets and instead, aim at the top end markets.

____________________________________________________

Try the Free Trademark Checker link

Free Trademark Search – Instant Worldwide Results – Squadhelp

___________________________________________________

Request your TWO FREE chapters of this popular book with no obligation.

Google

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

By James D. Roumeliotis

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.

_____________________________________

Request your TWO FREE chapters of this popular book with no obligation.

Inquire about our 30 minute free consultation

Google

 

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

by James D. Roumeliotis

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.

“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.”

________________________________________

Request your TWO FREE chapters of this popular book with no obligation.

Inquire about our 30 minute free consultation

Google

The Top 10 Most Read Articles in this Blog for 2015

by James D. Roumeliotis

As in every year, I have once again rounded up the ten most read/popular articles — this time for  2015. The following ten captured the most attention by numbers and from 154 countries in all. See them all below in descending order.  Your views are always encouraged including subject matter you think I should be covering more of.

THANK YOU for your readership and I look forward to feeding your mind with much more business practical food for thought this year which can be applied for timely results.

1 Luxury vs. Premium vs. Fashion: Clarifying the Disparity

2 Perceived Quality: Why Brands Are Intangible

3 The Art of Selling Luxury Products: Brand Story Telling & Persuasion

4 Mass Customization & Personalization: The Pinnacle of Differentiation and Brand Loyalty

5 Exceeding the Hotel Guest Experience: Anticipating and Executing Desires Flawlessly

6 Brand Awareness: the influence in consumers’ purchasing decisions

7 The Ultra Luxury Purveyors: Lessons from brands catering to the richest 1 percent

8 Identifying and Catering to the Discerning Consumer: Quality and Service Above All

9 Start-up Essentials: A Universal Roadmap for Starting a Business — Infographic

10 Product Features vs Benefits: The Brand Differentiation

______________________

Request your TWO FREE chapters of this popular book with no obligation.

Google

 

Exploring the Luxury British Automotive Total Customer Experience: Part 2 ‒ Jaguar Cars

Viewpoint by James D. Roumeliotis and Petrona J. Joseph

In part 1 of this 4 part series, the Aston Martin automotive brand was the star focus. In this part, the spotlight is on the customer expectations with the British luxury automaker Jaguar Motors. For over 90 years, this high-status marque has pushed the boundaries of what was once considered impossible in the automotive industry.

Sir William Lyons – founder of Jaguar Motors, combined performance and beauty in the designs and manufacturing of the ‘Jag’. A feat unprecedented of his time, his uncompromising vision set new benchmarks which is still followed by the manufacturer until today. Despite a tumultuous period during the Ford Motor Company ownership, its present owner (the Tata industrial conglomerate based in India) has invigorated a new model lineup together with a bold marketing strategy through a substantial cash infusion. It also acquired, from Ford, the Land Rover luxury SUV brand.

With the big news of Jaguar’s upcoming justDrive™ ‒ an industry-leading app technology that integrates multiple smartphone apps into a single, voice-activated in-car experience; it is now a leading contender amongst its competitors.

The Jaguar driver profile

The Jaguar customer is typically a refined man or woman – for the most part, a university graduate with a dynamic presence, and status symbol visible. Moreover, the Jaguar driver can be classified on some levels to the “blue temperament” – which is an analytical, prudent, detail-oriented and precise personality. In serving a Jaguar customer, one must not sway into personal details on the onset. In addition, the sales consultants have been trained to not ask many open-ended questions but rather ask close-ended questions and listen attentively. I also suggest note-taking, because the majority of Jaguar drivers (most in Executive positions) do not like to repeat themselves. By taking notes, one demonstrates the prospective Jaguar owner that you are unconsciously like them by mirroring their behavior.

Following is an outline on how authorized Jaguar dealers respond to customers – from Sales to Service.

Initial Sales Consultation

– Greeted promptly by the receptionist

– The sales consultant must greet the potential Jaguar consumer with the appropriate handshake (particularly the dominant handshake)

– Ask close-ended questions to ensure need and quality prospect.

– Initiate test drive

– Review objectives & listen to this customer clearly while note-taking

– Warning- there is a fine line between explain the benefits to this customer versus being aggressive in your approach. Allow this customer time to review the advantages of owning a Jaguar.

– An overnight test drive is quite rare, however during the test drive, outline the benefits of the drive and the technology.

Sales Process

Allow the appropriate time for this customer to choose options, colors and technology combinations. At this point, once trust and careful attention has been established- then proceed with open-ended questions.

Delivery

– Short and succinct (keeping in mind that this customer is discerning and either a professional practitioner, executive or a successful entrepreneur who may have to return to the office for an important meeting.

– The customer should be shown the basic functionality of his or her new Jaguar

– The customer should be asked to reschedule a one hour detailed information session at his/her place and time of convenience.

The automobile which reflects a luxury lifestyle

Premium and luxury car owners seek the total package with the car brand they choose to be loyal to as they would when checking in to a luxury resort. They seek more than just a vehicle they can enjoy from point A to B. In practice, its owner might use this automobile to commute to work, but this is not sole incentive. Jaguar is clearly a brand with authenticity and heritage. The principals shaping the consumer’s buyer behavior go beyond intention. There is a sense of engagement in fulfilling a dream. It can be to make a social status statement or a personal style choice. Whatever it is, it is not an unconscious choice. The codifiers are clear: This is who I am, and what I believe in. Ultimately, it can also articulate the owners’ sense of self-worth and their emotional aspirations. The most important emotional benefit is that a product of this caliber and class expresses itself when the consumer can declare: “It suits my lifestyle.”

Discreet and unconventional selling approach

Jaguar in North America is testing, in several major cities in the U.S., a novel way it presents new vehicles by showing appreciation to its most loyal customers, which it labels as “super-loyalists” by hosting elaborate receptions in their homes. In turn, the “super-loyalists” invite friends and associates who may be interested, and can afford, one of Jaguar’s elegant models. This idea takes away the perception of any high pressure sales normally associated with auto sales at dealerships.

Dealers of prestigious auto brands as custodians of heritage

A luxury dealership’s ultimate goal is to make an entire ownership experience a pleasure ‒ let alone a Jaguar. They strive to build relationships, which is why so many of their clients remain loyal. A luxury dealership serves as a guardian for the rich heritage of their prestigious brands thus make certain to continue their legacy.

______________________

Request your TWO FREE chapters of this popular book with no obligation.

Inquire about our 30 minute free consultation

Google

Exploring the “Super Luxury” British Automotive Total Customer Experience: Part 1 ‒ The Aston Martin

Viewpoint by James D. Roumeliotis and Petrona J. Joseph

When we encounter the word “luxury”, images of: seamlessness, awe, the rarity factor, cache, opulence, aristocracy, supreme workmanship, stellar service and reverence come to mind, amongst others

Now, close your eyes for a moment. What images come to mind when you consider mention of the following vehicles: Aston Martin, Jaguar, Bentley and Range Rover? That’s what we will be analyzing in this four part series of the luxury British automotive icons and the above average expectations of consumers seeking such extravagant motor vehicles.

What qualifies the authors to give such commentary? Having worked and served — most notably with prestigious brands such as Gucci, Aston Martin, Jaguar, Bentley and Range Rover, as well as with mega yachts and coupled with extensive research and consultations in this domain –, both can accurately define the exceptional treatment tendered to a HNWI (High Net Worth Individual) luxury seeking discerning consumer. Brands which qualify to serve this exclusive market provide attention to detail, a plethora of product knowledge/competence, and discretion along with an implementation of an anticipated flawless post-sale/follow-up policy.

Price aside, a luxury car brand should embody cache, exclusivity, pedigree, craftsmanship and limited production. R.L. Polk and Company, a global automotive information and marketing firm that provides solutions to automotive and related industries, has re-defined the term with the appellation, “super luxury”, ‒ i.e. cars that cost over $100K. This category includes brands such as Rolls Royce, Bentley, Maserati as well as the Aston Martin being featured here.

Aston Martin: License to thrill

We begin with the initial luxury automotive brand in this four part series: Aston Martin. This high valued motor car producer brings images of James Bond, a ladies gent, British heritage, sophisticated technology, sex appeal, speed, agility and soul.

Considering the above persona, the makeup of a typical Aston Martin customer.is a male (no gender discrimination intended), in his late 30’s early 40’s, handsome, successful, possibly with an attractive spouse (or if single, a striking companion), possesses a deep knowledge of refined luxury, knows what he wants virtually at any price level, and enjoys adventure, as well as thrives at constant new challenges.

Initial impressions and consultative sales process

When a prospective owner, or existing customer of an Aston Martin walks into any impressive looking Aston Martin showroom, the total experience should normally result as follows:

– To be greeted initially by the attractive receptionist/hostess (brand ambassadors) by the owner or General Manager of the dealership;

– Introduce the prospective client to an Aston Martin specialist;

– Offer a hot or cold fine beverage;

– Be given a tour of the impressive premises;

– Exhibit the various models and a test drive initiated during which time rapport is being built;

– Offer of an overnight test drive to create the feel and experience of the automobile and its performance characteristics;

– Thank and greet the prospect by the dealership owner or GM upon returning the vehicle followed by the sales specialist;

– Customer’s contact information should be entered into the dealer database (CRM);

– If a sale is initiated – the sales process should ensue. However, if a sale does not occur, effort should be exerted in a discreet and pragmatic manner (consider “consultative” selling) to close the sale. Statistics show that 60% of car purchases have been consummated on the spot when they received what they considered was an excellent presentation and demonstration. Either way, a follow-up is imperative within 24 hours.

Sale & delivery

– An appointment should be set for delivery;

– Upon arrival to pick-up the vehicle, customer should be congratulated by owner and/or GM;

– Explanation of vehicle model should be thorough along with a post-sale follow-up the following day;

– Customer should be offered a token appreciation for his/her business. This can be in the form of champagne from a strategic partnership for example, Moët & Chandon and/or an additional gift in good taste.

Exceeding customer expectations for the discerning client-driver

To succeed in gratifying the seemingly sophisticated client, a high-end organization should develop a comprehensive strategy along with efficient implementation tactics. These include:
– Having a clear and unique value proposition that hooks them;
– Consider exploiting the five senses to attract and retain them – categorized as “ambiance”/”sensorial” marketing and branding;
– Staff must be customer centric, patient, empathetic, and good listeners – remaining calm under duress during client interactions;
– Employee retention – hiring for attitude and training for skills;
– Utilizing a hands-on approach;
– Probing clients’ specific needs/requirements – recognizing their motivations – reading their body language;;
– Earning their trust and respect by exuding confidence, empathy and transparency;
– Offering a personal touch – individualized attention with customized solutions – It’s all about the customer;
– Being frank and transparent with pricing, offers, proposals and promotions;
– Proposing an expansive product selection and service options;
– Outstanding and consistent levels of customer service throughout the organization;
– Reducing or eliminating waiting times – whether on the phone (reservations, customer service etc.), as well as for service or an appointment at the physical location;
– Offering customer loyalty programs through joint collaborations with other luxury purveyors – a great way to make them feel special by receiving something extra;
– Asking for feedback with regards to service and product experiences for ways to improve those experiences. Discerning clientele are typically strongly opinionated and relish giving their views.
– Implementing the latest technology with all touch points.

The Aston Martin automotive brand with its power, beauty, soul and heritage as its tagline delivers to a specific and limited market segment by giving way to its consumer target to acquire their models they associate with a “luxurious and sporty lifestyle.” The brand is essentially a status symbol.

Brand loyalty is about building an emotional, and in some cases, irrational, attachment in a product. “Total customer experience” is not an option but rather compulsory as part of an alluring brand. It takes savvy planning, execution and perpetual refinements to stand above the crowd. It’s how you get noticed and remain relevant. Luxury brand desirability is driven by standout design, craftsmanship, as well as what is felt.

A typical Aston Martin showroom portrays a super luxury car brand able to offer a “wow” factor to its intended customers with an unconventional retail experience which exploits the five senses. This includes a showroom floor with ideal lighting, the various models well positioned/presented, impeccably dressed/groomed staff, and an upscale lounge ‒ overall, presenting sight, sound, smell, touch sensorial experiences and creating a feeling of lavishness. Some will go as far as offer art exhibitions on the premises, five star dining events and wine tasting to name a few. It’s what its type of clientele crave.

_____________________________________________________________________________

Request your TWO FREE chapters of this popular book with no obligation.

Inquire about our 30 minute free consultation

Google

The Genuine Luxury Domain and Its Country of Origin: Why the Latter Matters

Viewpoint by James D. Roumeliotis

With the proliferation of Italian and French luxury brands bearing the ‘Made in China”, ‘Made in Turkey’ or made elsewhere remote from their land of origin, it makes one ponder whether the brands are diluting their image for the sake of lower prices and higher profits. This begs us to revisit the question of what constitutes an “authentic” luxury product and whether manufacturing in a country unknown and unfamiliar for evoking luxury is a good long term strategy for the brand with heritage.

Luxury vs. Premium vs. Fashion: Clarifying the Disparity

Definitions of “luxury” vary enormously and depend on with whom you discuss the topic and in what context. The term “Luxury” has never been something easy to define. It is relative, mysterious and elusive. In essence, it revolves around subjective criteria in the mind, which creates a mood and what is generally referred to today as lifestyle.

The proliferation and marketing misuse of the word “luxury” on many products across sectors is quite evident. Brands either do it out of ignorance or to enhance the desire for the consumer to purchase their products.

Gary Harwood at HKLM, one of the founders and directors of a leading strategic branding and communication design consultancy, affirmed:

“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?

Luxury is not premium – and premium is not luxury. They are two dissimilar categories catering to different market segments.

Luxury Product Roots and Perception: Key Factors of Authentic Luxury

A luxury product is rooted in a culture and comes along with a small fragment of its native soil, of its heritage. This proposes that in order for a “luxury” product to remain true to its origins, as one of its main criteria, its production shall remain in the country of origin ‒ whether that is France, Italy or elsewhere (most notably in Europe). Tempting to relocate production elsewhere can cause the brand to lose its lustre and character.

Professor Jean-Noël Kapferer, an author and lecturer at the Kellogg Business School (Northwestern University, USA), as well as at HEC Paris, Europe’s premier academic research center on Luxury, clarified his views on this subject matter by stating that:

“Looking at luxury companies’ own attitudes, there is a clear segmentation, based on their brand positioning and business model. A first group (such as Louis Vuitton, Hermès, Chanel) emphasize quality and heritage as the main sources of their incomparability. They are patriots. For them, a country of origin is a homeland, much like the soil in a vineyard – a miracle made of earth, nature, sun, rain, and sophisticated human labor, loaded with culture. For them, ‘made in…’ tells a whole story, tying production to a long heritage.”

He further affirmed that:

“To remain a true luxury brand, following the luxury business model, entails sticking to local production. This is not an easy task for many luxury brands. Those that comply must create the conditions that are necessary to sustain this production. This is why they often buy their local sub-contractors in case the latter go bankrupt, to be sure to keep alive a historical know-how that might otherwise disappear.”

France and Italy are considered the leading countries for luxury and trend setters for clothing and accessories. Luxury watches (better known as “timepieces”) are manufactured in Switzerland ‒ the undisputed leader in this category. London, is considered to be the luxury spirit capital of the world with Burberry as the most prominent luxury brand. Whereas, Germany Italy, as well as the UK are for luxury automobiles. However, what they do produce elsewhere in the world are not ‘luxury’ but rather their lower priced “premium” derivatives (think BMW, Mercedes and Audi). Other illustrious automotive names, such as Ferrari and Rolls Royce, continue to manufacture solely in their native country.

Private vs. Public Luxury Purveyors

For the good of their distinguished image and cache, top-tier luxury brands should remain small privately held, with no pressure to sell and family run beyond the reach of speculators. These companies are managed, and their equity held, by those families. Consequently, management of brands, people and profits are done with the long term in mind, not necessarily the next quarter, which most investors would not have the patience to deal with if the luxury brand was publicly traded. In essence, the privately held have the luxury of taking risks as they desire and staying the course when they don’t. They have the freedom to invest for 5-10 years without receiving a financial return. 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 which are doing away with scarcity and exclusivity.

The most prominent smaller and privately held ‘authentic’ luxury brands which fulfill every criteria ‘luxury’ truly exudes are as follows:

Soft Luxury Goods (high-end apparel, leather goods and exclusive fragrances) include: Hermès (70% owned/controlled by the Dumas family ‒ the descendants of its founder), Chanel (100% ownership by the Wertheimer family) and the niche perfume house, Creed Fragrance Company founded in 1760 (100% ownership by the Creed family ‒ descendants of its founder).

Hard Luxury Goods (products such as watches, jewellery and pens) include: Rolex, Chopard, Patek Philippe amongst others.

According to the Millward Brown luxury brand survey, which includes the large luxury groups, Louis Vuitton, Hermes, Gucci, Chanel, LVMH (Moët Hennessy Louis Vuitton), Rolex, Cartier, Fendi and Tiffany & Co. respectively, are the most successful family owned luxury brands. Moreover, research done by SDA Bocconi, renowned for providing world class luxury education, revealed that unique characteristics of most family-owned or managed business fit almost perfectly with the competitive logic of hard and soft luxury approaches. Needless to say, their management culture, retaining the mystique (crucial in the ultra-luxury domain), and long-term decision approach are all instrumental for cultivating and preserving their brand heritage.

Hermes 2013 Ad Campaign

In the Final Analysis

There should be no confusion between luxury and premium or even a fashion category. When someone buys a luxury object, he/she purchases craftsmanship, cache, pedigree, made in limited quantities, a special place in the world of lifestyle and exclusivity (made for the few). The premium business model is based on the manufacturing of best-in-class products, with an image of style. Fashion is a general term for a popular style or practice, especially in clothing, foot wear, and accessories. Fashion references to anything that is the current trend in look and dress up of a person. Usually not timeless. A “luxury” and a ‘premium” product can be both – as in a tailored made fine wool suit for example.

Therein lies the major differences between a luxury product and a premium product. It’s legitimate for a premium product to seek out the most suitable and most economical manufacturing location, so long as quality and service levels can be maintained.

Brands such as Nike, Adidas, Ralph Lauren, Hugo Boss, Tommy Hilfiger, amongst others, are doing an exceptional job of selling solely an image to the masses. Indeed, far from being a genuine ‘luxury’ brand, most of their products are manufactured in low labor countries such as China.

The ‘made in’ label plays a significant role for luxury aficionados who hold higher expectations including a value added quotient to ‘luxury’ brands who produce their products in their respective country of origin – mainly France, Italy and the U.K. For categories other than apparel and accessories, production should be elsewhere in Western Europe.

In the article “Building a Luxury Brand Image in a Digital World” by David Dubois, INSEAD Assistant Professor of Marketing and Debbie Teo, INSEAD MBA, they quote the following:

“Hermès has no desire to become ‘masstige’ (a mass producer of prestige goods) the company’s CEO Patrick Thomas stated in 2009. In essence, he asserted that his brand was not in a position to dilute its image and compromise on quality in the interest of short-term results. This is truly one of very few authentic “luxury” brands befitting the model and criteria in the sense of the word.

Privately held luxury brands are prone to view business with long-term vision and remain rigid with quality over quantity. Comparatively, their publicly traded counterparts go out of their way to please their shareholders which may dilute their “luxury” status for the sake of volume and short–term gains.

Good business decisions are not the domain of tactical “bean counters” — exploiting the luxury brands for all their worth. They may also come from strategic planning and overall financial leadership.

_____________________________________________________________

Request your TWO FREE chapters of this popular book with no obligation.

Inquire about our 30 minute free consultation

Google

Maestros of Ambiance: The Art of the Hotel & Food Establishment Experience — in visuals

by James D. Roumeliotis

 

The Genuine Luxury Establishment: Perception, Ambiance & the Total Shopping Experience

by James D. Roumeliotis with a special contribution by Stephane Delille

Consider this! You are walking on, what is considered, a prestigious street in a downtown area of a major city lined up with a slew of luxury shops. What do you particularly notice about the look of the shops as compared to mainstream stores? Would you say it’s the window displays which are striking? The entrance? The upscale and inviting interior design? The way the merchandise is displayed?

Designing a luxury shop is much more than four walls, racks and lighting. It’s a meticulous creative and holistic process taking into account that luxury stores have to transmit the identity of a luxury brand, so that the image the customer has of this brand is affirmed by each store visit. Needless to say, it’s a design concept coupled with the total customer experience in mind.

Piaget timepieces, Bond Street, London

Ambiance, personalized service and the total shopping experience 

In a world where the consumer has become savvier, luxury products more accessible through an increase in democratization of luxury brands and the rapid emergence of prestige brands, the retail environment in luxury branding is all about heightening the consumer’s brand experience and amplifying the brand aura.

A well designed luxury retail boutique should embody an extraordinary design that is timeless while maintaining a striking interior that is unique, inviting, functional, and most certainly portray a luxurious setting.

A custom designed attractive setting – yet alluring with captivating style, invites customers to truly feel the brand experience by adding character. It exudes a “You’ve arrived!” underlying message. This is accomplished by connecting the feeling of warmth and acceptance ‒ via emotions to a product or service, and infusing it with a tangible and intangible essence that remain in the customers’ minds. The vital elements are:

• Location: The luxury brand store perception all begins with its location. A prestigious address/neighborhood makes an initial luxury statement ‒ whether on a prominent avenue such as Bond Street in London, Rue Saint Honoré in Paris or Rodeo Drive in Beverly Hills and at other renowned high-fashion streets worldwide. A high-end mall and airport outlets are becoming ever more popular due to their convenient spots along with an increasingly sophisticated environment.
• Facade/Window Display: transparency/opacity of the windows, display highlights for outside windows (product type, arrangement of space, animation, colors and much more.), frequent creative displays and themes all play a vital role in showcasing merchandise with pizazz.
• Main entryway: This should reflect an imposing appearance by creating the feeling of grand luxury access to the interior of the boutique. Elizabeth Arden’s signature red door is a distinguishable fixture at her stores and spas worldwide.
• Decor: Attention to details including well-crafted attractive furnishings and materials (pillows or decorative accents) throughout. Choice of color palette, textures, combination of materials and accents all influence the overall store image in addition to being part of the overall design esthetics.
• Lighting and its effects: The proper choice of illumination adds to the overall design and ambiance.Lighting can bring focus to merchandise displays, hide imperfections, add warmth, and help create a positive shopping experience for the brand’s clients. Halogen spots and LED lighting are the preferred variety for interior designers.
• Smell and Background Music environment: These reflect the store’s personality. Smell is considered the olfactory of the fifth human sense. The scenting strategy is part of “sensory”/”sensorial” marketing and branding that’s meant to attach certain smells to brands, drive loyalty, and make people feel at home. Whereas, music/sound supports refining brand communication and in designing a better sounding environment. A discreet volume should be considered as an ideal comfort level.
• Merchandising appeal ‒ display and layout: localization of displays (size, colors, kits, messages) while keeping in line with brand values and guidelines. The spaces where your clients see and touch your products have an effect on the visual aspect along with their shopping experience.
• Lounge area: possibility or not to have private salons for VIPs, to utilize for private shows/demonstrations, presentations and other special gathering purposes.
• Service amenities: Washrooms should possess panache and be spotless. Their design can achieve the look and feel of luxury with both functionality and comfort. A kitchenette can be an additional amenity for preparing and catering light food/hors d’oeuvres. A workshop for bespoke functions such as product setting on the spot, size customization, engraving etc). Perhaps a kid’s space with animation to keep a child/children busy while their mum/dad/parents are shopping. The kids can eventually be converted to the luxury label themselves.
• Staff Caliber and Overall Customer Care: Luxury goes beyond good looks. The service offered is a major event in itself. This comprises of dress code, attitude, and politeness regardless of what the client looks/wears. As well as responsiveness, a consultative sales approach and accessibility. This requires proper hiring criteria, on-boarding and repeated training in product knowledge, presentation skills, and anticipating customer expectations to go above and beyond. Luxury firms need to implement KPIs (Key Performance Indicators) to gauge their service effectiveness which do not only measure the performance of organizational processes, but also warrant a consistent quality level of in-store service.

Bijan Boutique, Rodeo Drive

Artisans of timeless and artistic retail interior design

It takes bold strokes to prevail from the competition by showcasing a distinctive look along with creating an emotional bond with the clientele. As such, luxury brands are making their mark on the map with a radical and explosive architectural vision. It’s where design innovation coupled with creativity are paramount when delivering artistic solutions driven by each individual brand’s image.

When it comes to commissioning distinctiveness with luxury ambiance interiors in the retail, restaurant and hotel sectors respectively, Yabu & Pushelberg have become the go-to interior designers akin to what Frank Gehry is to deconstructivist architecture. In over three decades, the duo partners, based in Toronto along with a New York City design studio, have fostered a client list that ranges from Louis Vuitton and Tiffany & Co to Four Seasons Hotels and renowned French chef and restaurateur Daniel Boulud. In their work, Yabu and Pushelberg manage to articulate luxury through contrasts, austere designs with fine materials, as well as through comfort and the casual, strong points of view, including a crafty mix of art and artisanship. For them, luxury is a state of mind, not a material.

A Yabu & Pushelberg sample interior

The final take

The ambiance created in a luxury boutique is one of the finest marketing tools. The aesthetic appeal to human senses, the feel of the brand creates the image. Along with great service, it is one of the most important reasons customers will choose to shop repeatedly. It’s where the brand lives by orchestrating immaculate detailing that engages all senses of the discerning target audience. Surround the brand and its products/services with fashion, beauty, design and attractive models – without any characteristics of tackiness.

It all begins with the choice of store location, the immediate initial impression (window display, entrance, store layout, merchandising, furnishings, lighting and much more), the sales staff presentation and the impact of each touch-point in creating a unique indulging experience. The small touches that regularly go unnoticed help to create a distinct sense of place in luxury commercial spaces.

Emporio Luxury Mall, New Delhi, India

All that said, today’s savvy luxury consumers are increasingly seeking much more than merely a cosmetically elegant looking bricks and mortar shops. They have become more discerning and seeking a more knowledgeable and professional assistance to help them in managing their lifestyle and stature. It all boils down to the total customer experience which embraces knowledgeable and helpful staff, alluring presentations, storytelling, exclusive invites and privileged previews amongst other lifestyle themed activities.

FOR THE “15 Retail Essentials – Your Opening Toolbox” PRESENTATION, KINDLY COMMUNICATE WITH JAMES AT: jdr(AT)affluencemarketing(DOT) ca

 ___________________________________________________

Request your TWO FREE chapters of this popular book with no obligation.

Allow us to add sex appeal to your brand identity and products.

Inquire about our 30 minute free consultation

 

Google

 

The Top 10 Most Read Articles in my Blog for 2013

As we closed the year 2013, I have rounded up the ten most read articles of 2013 by my readers. The following ten articles captured the most attention. See them all below in descending order.  Your views are always encouraged.

THANK YOU for your readership and look forward to feeding your mind with much more business food for thought which can be applied for timely results.

10] 10 Pitfalls of Start-ups: How to Succeed Through the Initial Three Years and Beyond
9]   Luxury vs. Premium vs. Fashion: Clarifying the Disparity
8]   The Art of Selling Luxury Products: Brand Story Telling & Persuasion
7]   The Business Model: Prelude to the Business Plan
6]   The Ultra Luxury Purveyors: Lessons from brands catering to the richest 1 percent
5]   Perceived Quality: Why Brands Are Intangible
4]   Mass Customization & Personalization: The Pinnacle of Differentiation and Brand Loyalty
3]   Sensorial Purveyors: Creating an Enticing Ambiance in the Hotel Domain
2]   Sales and Marketing Functional Lingo: Defining their Differentiation
1]   Brand Awareness: the influence in consumers’ purchasing decisions

The Smell Of Exclusivity: Evolution of the Niche Perfume Market

By James D. Roumeliotis

Open any fashion magazine and you are immediately struck by the mystique of perfume adverts. It is an industry, which combines the power to make people dream, to imagine their ability to attract, and better still seduce. It plays on the psychological heartstrings of self worth and self-perception.

When the elements come together with force, people feel sexy and desirable. Billions are spent on their consumption. Large and small houses spare no expense in their creation and marketing. Perhaps this explains why so much effort is spent on designing an appropriate package along with creating the right name.

The Commercialization of Designer Fragrances

Mainstream body fragrances are usually a blend of synthetic elements. They are produced by only a handful of firms.

Niche perfumes however, are not generally associated with fashion labels, celebs or extravagant looking bottles. Their trademarks are rare components constructed to leave an indelible mark.

Such fragrances are built on a pyramid, harness raw materials and are aromatic. Many are botanically sourced and distilled by master perfume makers. Key ingredients include Damascus rose, jasmine, citrus from Sicily or Corsica, and even tree bark such as sandalwood, juniper, and cedar.

For these reasons, trained noses are in high demand. However, the use of perfume and the selection of ingredients are cultural and even generational. Take two well-known brands as examples:

Many young clients prefer the scent marketed by Abercrombie & Fitch. It is light, sweet and attracts. Although everyone knows Chanel No.5 not everyone will wear this fragrance. It is heavy and voluptuous. Marilyn Monroe might have worn nothing else to bed, but who else follows suit? Chanel’s new advert campaign online has been designed to capture a new generation of advocates.

When Only Luxury Perfume Will Do

Recent statistics show that the demand for fragrances continues to grow most notably in the Gulf and Middle East. Euromonitor, a consumer research firm states that perfume sales in Saudi Arabia top sales in 2010 ($827.5 million) followed by the UAE, ($205.8 million) during the same year. On average, a Gulf client will spend $380 per annum on perfumes.

Lifestyle and DPI do not alone explain the stats. It is also the demand for rare elements used in their preferred fragrances some of which contain oud and amber. Just last year Christian Dior has tried to tap this lucrative market with much success.

Other classic brands such as Armani and YSL have tried to do likewise. Historically however, more emphasis was placed on naming the product and the packaging rather than the actual contents. Lifestyle has always been the key market driver when a big fashion brand launches a new perfume. They are seen as key pieces of the accessories puzzle to the brand, which can include cosmetics.

I am often reminded how such brands will even create a timepiece, which sports the brand name. However, these timepieces have nothing in common with genuine luxury watches such as a Patek Philippe.

As consumers become more sophisticated, they begin to shop around for more articulate perfumes. Think of Annick Goutal, Kilian Hennessy (Kilian Paris), Roja Dove (Roja Parfums), Serge Lutyens, or better still Frederick Malle. These houses stress sophistication as well as natural ingredients whenever possible.

The luxury brand Hermes for example, has taken great care to hire some of the noses that work for Frederick Malle. The smell Terre d’Hermes immediately comes to mind. With each creation, there is an eau de toilette and for others there is the perfume. Both products commit the client to the brand and provide accessibility as well as exclusivity, which is the hallmark of Hermes in the first place.

Distinguishing Natural Perfumes from Mainstream Fashion Brands

Contrary to popular belief, France was not the first country in the world to conceive perfumes. The ancient Greeks and Romans were devoted users of fragrance. However, Grasse, a town on the South of France, is today considered the world’s capital of perfume.

The natural perfumer is both a scientist and an artist. He/She demands rigor in his/her quest of creating beautiful perfumes including his/her “nose” as an inherent talent.

According to The Natural Perfumers Guild – the world’s largest trade association dedicated to natural fragrance, natural perfumers do not use synthetic aromatic chemicals. Natural aromatics are natural biological chemicals, thus their scents come from nature. Additionally, the need is greater than the mainstream perfumers in developing a fixative base for the perfume (so it is held onto the skin to last longer.) Mainstream perfumery has a huge number of synthetic fixatives at their disposal, and natural perfumers do not, and would not, use them. Moreover, the bottles or body care containers are filled by hand which, typically, makes the entire process personal.

Niche perfumery maker Creed, established in 1760 and one of the oldest, uses such methods of hand production, including maceration and filtration, instituted at the company’s founding. It is the industry’s firm proponent of natural ingredients in fragrance. As a result, it has a loyal following that includes royalty, Hollywood stars, political leaders, legends in business, sports, music and the fine arts as well as discerning members of the public who value beauty and quality in scent.

Applying the slogan, “Fragrance without compromise” to his brand ethos, Frederick Malle  runs the exclusive fragrance boutique in Paris, Les Editions Du Parfum. His shop and the niche perfumes he sells epitomize how the luxury perfume trade has moved on from just name brands to something beyond marketing hype.

 

Of Art and Storytelling

The fragrance industry is a very personalized one. For this reason, niche perfumes for the discerning and affluent are growing rapidly. This sector is creating new trends in the beauty and fashion world through a niche/artisan approach. As the perfume market grows in important markets including the Middle East and BRIC countries, and as companies expand outward, the traditional perfume tastes are affecting the world of perfumery. Thus, these highly coveted and hard-to-find perfume notes are becoming ever so popular. Those boutiques able to offer the most sought after fragrances such as oriental amber, Agarwood (oud), and musk amongst others, along with their striking ambiance, will distinguish them from their competitors.

Customers expect highly trained staff at bespoke perfumery shops to understand the art of fragrances such as the origins and chemical make-ups as they are able to tell a customer why a certain fragrance will or will not work with her/his body chemistry and suggest alternatives. This includes the suitability of a perfume to someone’s skin chemistry and diet.

At specialty perfumery shops such as Madison, with a location in Bucharest and Budapest, fragrance aficionados will find an exclusive array of scents, niche colognes, hard-to-find perfumes, room scents, and incense. The 46 or so brands they carry are not available in traditional department store beauty and cosmetic counters.

The Role of the Influencer in the Fragrance Domain

With the advent of in the social media sphere, most notably on YouTube, the “influencer” persona was born. An influencer is someone in a niche or in a specific industry with sway over a large target audience. This individual can also persuade others to act based on their recommendations.

The fragrance domain has several of its own. These passionate souls with their YouTube channel have amassed hundreds of thousands and in some cases, over a million subscribers. One of those on the top spot is former German model, “Jeremy Fragrance” (née Daniel Sredzinski). Jeremy vlogs about both women’s and men’s perfumes and features niche fragrances as well as the popular scents. He is a smooth-talking YouTuber who began his video platform in 2014, He has a high influencer equity score. Another one on the top three spot, is New Yorker Tiff Benson, a fragrance and beauty vlogger and blogger. She shares perfume reviews on YouTube who also writes about beauty and lifestyle topics on her eponymous blog. Tiff is part of the Sephora Squad and founder of The Fragrance Society.

The Olfactory Take – in search for something new and singular

Great perfumes are like works of art. They are inspiring, delightful and memorable – despite their staid looking bottles in contrast to those of the designer house perfumes. Perfumes and emotions are also linked together since they impact our mood considerably. They are the new luxury category which is treated as a work of art.

The lesser-known fragrance brands are often touted by celebrities who publicly declare their preference for them, because of the mystique and rarity they possess. Niche labels often use exotic and rare ingredients which make their brand stand out from the rest. The more than two century old Creed Perfumery has a large freestanding store in New York, considered one of a kind in North America, where it sells its own limited produced fragrances.

Small and privately owned fragrance producers are, for the most part, family run – which make them personally involved in all aspects of the productions process. Their uniqueness ranges from fine-quality ingredients stories of pedigree to environment-friendly practices. Such niche brands normally cater to a small, yet extremely loyal clientele. Personalized service, through well trained front line staff, adds to the emotion, as well as the total customer experience demanded by its discerning patrons.

_____________________________________________

Request your TWO FREE chapters of this popular book with no obligation.

Luxury vs. Premium vs. Fashion: Clarifying the Disparity

by James D. Roumeliotis

Luxury Brand Management is sometimes like weather forecasting. With the media and fashion industry in full tilt this autumn, there is wave upon wave of adverts, campaigns, and promotions. Within the glitzy magazines and online videos geared to seduce, consumers and even those within the industry have a difficult time distinguishing luxury from premium brands.

Price is not the only determinant. Add the crossover product strategies between the 2 types of brands and there is more confusion still. Luxury enthusiasts are always looking for the “best”. The problem arises on what this term really means if it means anything at all. Most studies indicate that the term “luxury” is highly subjective.

For this reason, I have decided to try to clarify this important topic and booming business sector.

Take for example the terms, “premium”, “luxury” and “fashion”. Is it possible to define and portray these ethereal ideas in concrete terms? Marketing hype blurs the lines, and of course, this is intentional only adding to the misinformation among diverse constituent audiences.

Defining Luxury

Definitions of “luxury” vary enormously and depend on with whom you discuss the topic and in what context. The term “Luxury” has never been something easy to define. It is relative, mysterious and elusive. In essence, it revolves around subjective criteria in the mind, which creates a mood and what is generally referred to today as lifestyle.

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 (HNWI/UHNWI) can purchase without question?

Does the brand offer authenticity?

Identifying Luxury Sectors

Luxury is classically defined in two key segments:

1) Luxury Goods: Fashion & Accessories, Watches & Jewelry,
Well-being & Beauty products

2) Lifestyle Purchases: Automotive, Experiential Travel, Home & Interiors, exclusive alcoholic beverages (read exceptional wines, champagne & spirits)

Brands Which Claim Authentic Luxury Status

Few brands can really claim the trademark of luxury. Those that do combine allure, sex appeal with pedigree and quality. Discounting is not part of their strategy and their entire raison d’être is geared to UHNW (Ultra High Net Worth).

Anyone in this business can rattle off the litany of names recognizable to most people:

Hermes, Chanel, Louis Vuitton, Bottega Veneta, Rolex and Cartier.

Other players to this core list include: Bentley, Rolls Royce, Gucci, E. Goyard, Charvet, Salvatore Ferragamo, and Bulgari.

Contrast the above lists with Daimler’s Mercedes-Benz. This firm has reduced its cachet ever since it introduced the entry levels A, B Classes respectively and the SMART car.

The firm also does not hesitate to harness frequent promotions to boost sales revenues. This type of strategy is pursued when the board is under pressure from stakeholders to tap what is referred to as affluent consumers of the mass market. DPI (Disposable Personal Income) of this segment is over $100,000.

Because of this strategy such brands can no longer be considered as “luxury” in the true meaning of the term.

Genuine luxury purveyors should remain relatively small and select in their industry. Wealthy consumers purchase luxury products because they seek to distance themselves from the mass through the emotional value of acquiring flawless and rare objects of desire.

Luxury service brands follow a similar pattern. On the basis of my expertise and experience I would list Hotel de Crillon, Hotel Plaza Athenée, Ritz Carlton, and Hotel du Cap. All these hotels provide the perfect luxury experience of outstanding service, exclusivity, and pedigree.

Identifying department stores is a bit more tricky considering the makeover of this retail concept in the last 15 years. Despite the changes consider the following 3: Harrods (UK), Le Bon Marche (France), and Saks Fifth Avenue (USA).

Exclusive and bespoke travel companies provide tailor made adventures and excursions. The four key players in this category include: Abercrombie & Kent, Kuoni, Orient-Express and Cunard Line.

Broadening our view of luxury services, certain firms offer services and privileges to a rare percentile. Such services include credit cards with no limits, jet ownership, private plan charters, global concierge services and the like. Think NetJets and Amex.

Considering magazines, if I were asked to name one magazine catering to this crowd and speaks its language, I would nominate: Monocle. It has been described in certain circles as “Foreign Policy meets Vanity Fair.”

“Premium” Clarified

If luxury brands are related to scarcity, quality and storytelling then premium goods, on the other hand, are expensive variants of commodities in general: i.e. pay more, get more.

These brands are less ostentatious, more rational, accessible, modern, best in class, sleek design, and manufactured with precision.

For example, take the case of L’Oréal. The firm is a giant in the cosmetics sector. It positions its “premium” products with subtly. Clients get the luxury feel they hanker for and the presentations are done with élan.

Dior on the other hand makes no pretense. It is categorized as a luxury beauty product and is priced accordingly.

What about Fashion?

This is quite a question. Is it luxury, premium or neither? If you were to stroll into Camps de Luca in Paris for a bespoke suit, you will be treated like royalty and the titans of business, who make up the firm’s client base. Afterwards, you can meander over to Place des Victoires and place an order at arguably the best shirtmaker, Charvet and order a dozen shirts cut to your specifications in sea island cotton.

Clearly, these firms are luxury in every meaning of the term.

Designer labels or “fashion houses” are a different kettle of fish. Some can be quite pricey. However the nature of fashion is ephemeral and change. Pick up a copy of September Vogue and judge for yourself.

Do not confuse what you see in Vogue with “haute couture”. This niche is always there and the French keep it this way. Clients are limited by definition of the cost involved, not to mention the intense hand labor, fabric selection, and attention to the tiniest details.

These luxury fashion statements convey ostentation, glamor, lavishness, and elegance. They are one-of-a-kind garment.

The following fashion houses measure their creative worth with the designer talent, which marks the brand: Chanel, Hermes, Ralph Lauren, Burberry, Brioni, Prada, Gucci, Dior, LV, Valentino, YSL, and D&G.

Needless to say, quality control is fundamental and is offered in lifestyle controlled environments at the above brands flagship stores worldwide.

Luxury Time Waits for No One

If you need a watch to tell time, a Timex vintage piece made simply for that purpose will do the job. If you want to make a statement that you have arrived, you will undoubtedly look to see which watch best suits your personality and budget. Think James Bond and the flagrant exposure of Rolex and later Omega.

Luxury timepieces exist in many categories and can accommodate a wide variety of budgets. A good example of an entry level timepiece is a Movado at $500. At the other end of the spectrum, you could chose a Chopard at $70k. Watches are often sold via adverts of sports heroes or movie stars. The reasons are clear. Personification and self-identity play a large role in watch acquisition and social status.

Chronocentric categories watch brands in the following groups:

Basic Luxury Watches
Description: Attractive and functional
Brands include those of fashion designers such as Michael Kors, Fortis, and Movado.

Retail prices: > $1,000 stainless steel; ( >$2,000 for gold)
Strategy: Moderate to heavy discounts available among specialized dealers.

Pseudo Luxury Watches
Description: elegant and stylish
Brands: Baume & Mercier, Raymond Weil, Tag Heuer

Retail prices: $500-$2,000 (steel); $750-$4,000 (gold)
Strategy: discounting via accredited dealerships

Luxury
Description: accent is on prestige. Quality and durability are stressed. Elegance and value underpin the watch.

Brands: Breitling, Cartier, Ebel, Omega, Rolex

Retail prices: $1,000-$4,000 (steel); $2,500-$8,000 (gold with leather strap); $5,000-$20k (gold with gold bracelet)

Strategy: modest discounts sometimes available via brand-authorized dealers. (The unauthorized “gray market” can give bigger price breaks)

High-End Luxury
Highly crafted timepieces made by experts. These watches are highly “refined” and easily recognized by collectors and people “in the know.” Sold with a strong emphasis on exclusivity, design, and craftsmanship. Produced in small numbers, available via specialized dealers. In short, these are the Rolls Royce class of timepieces.

Brands: Alain Silberstein, Audemars Piguet, Blancpain, Breguet, Franck Muller, JLC, Parmigiani, Patek Phillipe, Ulysse Nardin, Vacheron Constantin.

Retail prices: starting at $5000 (steel); starting at $20k (gold). Some watches can exceed $2m.

Selection

Watch selection is highly personal. This is true no matter what the person’s budget. Even if you are shopping in a budget category, there are many to chose from. Think Swatch or Nixon.

However, once a person seeks to make a watch statement then choice will be determined by social class, DPI, sports inclinations, sense of self-esteem, pedigree, craftsmanship and of course function. Your average person does not need a chrono watch with its multiple dials and buttons. Yet, the 25-35 year old segment see these pieces as a station in life.

A youngish successful profile will not usually be drawn to a Patek Phillipe. But someone over 40 will. Most Westerners will not go gold unless it is old gold meaning a vintage high end timepiece, which is thin and elegant.

You will also notice that in certain milieus that watch brands count. People weigh there status, revenue generation, prestige in tandem to the watch or even watches that they own and collect. Lastly, even though there are many successful business women who own and wear high-end watches, men seem to be the more obsessed. This can be attributed to the fact that it is one of the few pieces of jewelry a man can wear and not draw too much attention to himself.

Baby You Can Drive My Car

In my other two columns, I tried to clarify the differences between “luxury” and “premium” in the fashion industry and in the horology markets. Similar problems also exist when assessing the automobiles.

It is quite clear to most professionals that luxury cars carry high price tags many of us normal mortals would consider exorbitant. Price aside a luxury car should embody a cache selling prices. Read here: exclusivity, pedigree, craftsmanship and limited production.

R.L. Polk and Company, a global automotive information and marketing firm that provides solutions to automotive and related industries, has re-defined the term with the appellation, “super luxury”, i.e. cars that cost +$100k. This category includes brands such as Rolls Royce, Bentley, Aston Martin, Maserati, and until 2013, Maybach, by parent Daimler AG.

Premium cars are defined as those, which offer clients cutting edge design and technology. Their target market are individuals in the upper middle class. Some label these vehicles as such because they have creature comforts with all the bells and whistles.

Cars in this category normally range from an entry level BMW 1 or 3 series (depending on the country) from ~ $30k- +$95k.

Competition for market share in the profitable premium category is fierce amongst rivals BMW, Mercedes Benz and Audi, along with their Japanese counterparts Lexus and Infiniti.

Acura and Volvo are not regarded as strong contenders. Instead, they are viewed as part of the compact executive car segment. This category is a combination of the standard class vehicles from the top name brands and top models from automakers not necessarily known as being premium category brands.

Impeccable service is also another important measure for premium automobile brands with a strong emphasis on the total customer experience.

At the same time, we are witnessing aspiring premium brands from deep rooted economy class automobile manufacturers such as Hyundai with their Genesis (including the coupe version) and Equus models. However, compared to their established counterparts, they’re lacking “brand cachet”, thus in their clever marketing, Hyundai is pitching “Smart Luxury & Engineering” as its differentiator.

There had been internal discussions within Hyundai about creating a separate brand to feature the Genesis sedan as well as the imminent Equus sedan in North America, but due to prohibitive costs and potential delays, those models will still remain labeled with the Hyundai brand.

For exotic sports cars such as Ferrari, Lamborghini, Bugatti and others, Ferrari chairman Luca Cordero Di Montezemolo, explained at a recent FT Business of Luxury Summit:

“I tell my employees listen, be careful, we are not selling a car, we are selling a dream. Because we sell something that is not a typical car, in this rests the emotion of driving.”

Ordering any one of those cars can quote an average wait of 24 months before delivery.

As with the ultra luxury cars, the exotic sports car (limited) producers are now offering their own customization program. Ferrari, for example, offers no limit on imagination to potential buyers who want something different or want to make their Ferrari unique to them.

The Takeaway

The proliferation and marketing misuse of the word “luxury” on many products across sectors is quite evident. Brands either do it out of ignorance or to enhance the desire for the consumer to purchase their products.

Some “premium” products are labeled as “luxury” and promoted that way vigorously. This is where mass brands imitate luxury and its characteristics. As a result, it has caused confusion amongst consumers along with plenty of fancy jargon adding to the perplexity.

Luxury is not premium – and premium is not luxury. They are two dissimilar categories catering to different market segments.

A luxury brand is more about prestige and appearance – it’s about pedigree and social stratification. As objects of desire, they stand out as aspirational to all but a few souls. These crucial elements keep these products exclusive on purpose. Premium, on the other hand, stands for performance, value added, state-of-the-art, craftsmanship, and timeless design.

Certain brands deliberately generate this confusion, while others can’t figure out the messages they want to send to potential clients themselves. Obviously, the wealthy know the difference. Perhaps now, so will you.

__________________

Your views are welcome

Request your TWO FREE chapters of this popular book with no obligation.

Learn how to start or expand a business with free courses at

Inquire about our 30 minute free consultation

Google