Category Archives: niche perfumery

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

by James D. Roumeliotis

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

There was a time when customized products and personalized services were catered exclusively for the discerning and well heeled.

London’s Savile Row stands as a testament to personalized luxury.   In a world full of luxury dumbed down and mainstream, there has been an up-shift by certain manufacturers trying to offer tailored ranges and services to a wider audience.

This development is technically referred to as “mass customization” and “mass personalization”.  So why the shift?

Simply put, clients are demanding more and don’t share the same sense of brand loyalty as previous generations. Marketing strategists believe that focus must be on generating a community tied to customer satisfaction.  I won’t call this CRM on steroids but the analogy could hold.

With ever increased competition, brands must show genuine benefit to hold the client’s attention as well as affection. The trend is quite sweeping once you start to examine the determinants. Look at fashion apparel, beauty care products, shoes, bicycles, laptops, and even smart phones. All claim they are perfect for customization.

Mass Customization vs. Mass Personalization

According to Wikipedia, the definition of the term “mass customization” in marketing, manufacturing, call centers and management, is the use of flexible computer-aided manufacturing systems to produce custom output.

These systems combine the low unit cost of mass production processes with the flexibility of individual customization.

“Mass personalization” on the other hand, is the custom tailoring by a company in accordance with its end users tastes and preferences.

The main difference between the two concepts is the ability for a company to give its customers an opportunity to create and choose product specifications. There are however limits.

The Financial Times lists “personalized production” among six other factors driving the future of manufacturing – namely network manufacturing, technological innovation, industrial democracy, boutique manufacturing, cluster dynamics, and environmental imperatives.

A case in point: Pomarfin is a small family owned Finnish footwear company. With strong competition from Asian manufacturers, the firm decided to change its strategy.  It carefully looked at the adaptation to the mass customization paradigm, alongside a revision of its business model. Its choices were to either outsource the manufacturing of its shoes to China and simply become an ubiquitous brand, or differentiate itself while keeping its production in Europe.  It chose the latter, by deciding to compete in mass customization, making made-to-measure shoes for discerning and affluent men.  Pomarfin then introduced the clever concept of installing and utilizing a foot scanner in retail stores, which sells its shoes. The client’s foot gets scanned and the image is then uploaded to a server and sent to the firm’s manufacturing plant.  The client then decides if he wants his exact fitting shoes shipped directly to his address of choice or picked up at the retailer.

Moreover, as an additional convenience, the customer can reorder custom shoes through Pomarfin’s website. To be fair and retain loyalty with its retailing partners, Pomarfin pays them a royalty for life for each new pair of shoes purchased by a customer sent its way.

Broad Marketing of Bespoke Products & Services

Clients have simply become more demanding. They expect more, and have no loyalty to brands that do not come up with the experience to match the product or service hype. This trend is both at the B2C and B2B level.

Everyone it seems is looking for the enviable win-win scenario.

It is natural to think that bespoke is the sole domain of the fashion industry whether shoes, suits, shirts or haute couture. These items with their stress on handmade carry heavy price tags and are geared to people with a high DPI.

You would be mistaken to believe that this is not possible for a mass market. For example, Dell computers was the first firm to offer customization to their entire range. In fact, designing your own computer needs with a consultant is the DNA of this organization. Dell understood that this type of differentiation would mark them apart from anyone else in the industry.

Other consumer goods operations quickly followed suit. For example, Adidas AG launched the miAdidas unit which offers custom sports shoes. Nestle delivered a market coup to the coffee industry with Nespresso, bringing single serve coffee into the home and office. Now you can serve different types of coffee within a group with no effort.

Individuality is a Sign of Personality: The Way Forward

The mass customization trend has been a rolling bandwagon. Understanding and harvesting this demand is easier said than done. Smart firms generally respond by building production facilities and systems with an increasing number of modifications in order to produce and deliver individualized units as per customer’s preference.

This certainly has its benefits and drawbacks:

Advantages
– Allows customers to create customized products
– Products deliver excellent value for money
– Makes comparative shopping difficult
– Shifts the focus from price to benefits
– Economies of scale/mass efficiency
– Manufacturer can justify charging a premium
– Easily differentiated against similar products
– Provides deeper form of customer engagement and data

Disadvantages:
– Increased overall complexity
– A significant initial investment + per unit cost of production
– Layover time – takes longer to manufacture
– No return policy on custom orders

Progress in manufacturing technology such as computer-aided manufacturing (CAM) and computer-aided design (CAD) have increased the flexibility, as well as the efficiency of the modern-day factory to achieve build-to-order products.

Source: Emerald Insight

Ordinary is for the Mainstream – Do Luxury Brands Have Your Number?

Traditionally, the wealthy have great purchasing power. In theory, they are sophisticated and unafraid to express their taste as trendsetters and style mavens. They can also be the hardest segment to market to effectively because they are spoiled for choice.

Yet billions are spent catering to the tastes of this ever growing segment. Take the Paris Fashion Week shows and you can see the parade, the fanfare, and the glitz. Everyone is here: the paparazzi, fashionistas, and even fashion bloggers. Is it any wonder? Everyone craves glamor and it’s big business.

If you are one of the Jet-Set, do you want to be just mainstream? Of course, you don’t. The luxury trade has got your number, no matter how idiosyncratic your taste or preferences. Need private banking where professionalism and discretion are key? You got it. Want to stay in a boutique hotel so exclusive that few even know it exists? It’s there for the taking.

The providers of these services use what I refer to as “Bespoke Marketing” along with “Sensorial Branding” to differentiate their message and total customer experience respectively. These branding exercises are narrow in scope and speak of privilege the way its understood among the cognoscenti.

It is typical for certain shoppers at Louis Vuitton on the Champs-Elysees in Paris to serve the right customers flutes of champagne while they try things on or discuss their luggage needs upstairs. It must be said that LV knows how to coddle their clients.  As I am sure you can appreciate, LV is not the only store in this town to offer VIP red carpet treatment. Most major luxury firms do likewise such as Cartier, Dior, and Chanel.

Need a personalized briefcase? Why not pop over to Hermes? They are awaiting your next visit. The world of Hermes personifies exclusivity. Open one of their in-house magazines, and a special universe is revealed. The key beyond outstanding products is the creation of something bordering on revelation. The store itself has become a stage set, and sales pros are the players who embody the firm’s DNA.

Bespoke is the middle name of this institution. Real luxury brands understand this concept like Stradivarius handcrafted violins.

Needless to say, the term “luxury” has been misused over the years. It is mysterious and elusive. In essence, it revolves around subjective criteria referred to 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.”

Perfume connoisseurs are taking their choices a notch above most as the top-end of the fragrance industry is a very personalized one. Consequently, niche perfumes for the discerning and well-to-do are growing rapidly. This sector is creating new trends in the beauty and fashion world through an artisan approach.  Customers visiting bespoke perfumery shops expect highly trained staff to advise on fragrances. A great “nose” knows different clients value different scents, and thus will prescribe like an old fashioned doctor, who used to make house calls. Chemistry and diet also play a role in developing your own signature perfume.

Quite sophisticated and personalized indeed. But then, isn’t this the true symbiotic meaning of luxury?

novero_victoria_gold_stripes

The Final Take

“Mass customization” and “mass personalization” (or “build-to-order marketing” and “one-to-one marketing”) in delivering either products or services when properly implemented, bring about across-the-board improvements in all dimensions of a business. This includes, price, responsiveness, quality, and a positive experience. Competitiveness and operational effectiveness of a company also improve.

However, mass customization also has a few drawbacks as it does come with a cost. Along with a substantial initial investment in manufacturing equipment upgrades, the primary challenge in pursuing mass customization stems from increased complexity in its operations. A higher level of product customization requires greater product variety, which, in turn, entails greater number of parts, processes, suppliers, retailers, and distribution channels. As a result, bigger challenges exist to manage all those aspects of the business from raw material procurement to production and eventually to distribution. In addition, an increase in product variety has the effect of introducing greater uncertainty in demand realizations, increase in manufacturing cycle times, as well as an increase in shipment lead times.

In the luxury sector, traditionally there hasn’t been any shortage of customization for the ultra-high-net-worth. 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.

“Good things come to those who wait.” Or so the saying goes.

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

__________________________________________________

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

EntrepreneurialEssentials - FrontCover Final

Learn how to start or expand a business for free at
How to start a business

 

Google

4 Comments

Filed under 1, B2B sales, Branding, Business, catering to picly clients, customer service, discerning clients, discriminating clients, luxury frgrances, Marketing, niche perfumery, perfume branding, perfume marketing, selling luxury

The Smell Of Exclusivity: Evolution of the Niche Perfume Market

By James D. Roumeliotis

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

Smell Branding Image

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, 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 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.

_____________________________________________
EXTRA: Beyond Words: Ten Years of Frédéric Malle at Barneys

Be Sociable, Share!

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

_________________________________

Google

2 Comments

Filed under Branding, Business, Luxury, luxury storytelling, Marketing, niche perfumery, selling luxury