Is Luxury History? / Event Debrief
Creative agency Imagination gathered experts on the luxury market at its London office to explore developments and future opportunities within the sector
James Lawson, co-founder at luxury-focused research company Ledbury, gave a brief overview of the development of wealth and luxury over the last 20 years. Most notably - but no prizes for spotting it - the centre of wealth is shifting to Eastern regions. What's perhaps more intriguing is the idea that the relationship between wealth and luxury is changing; the simple idea that luxury would be bought by the wealthy is becoming more nuanced and complex as 'luxury consumers' can increasingly be found across a wide range of income groups and backgrounds. This increasing breadth of the potential market for luxury is making things interesting (if not exactly easy) for some venerable brands.
With a particular focus on marketing, Lawson was able to observe the following trends for the luxury market based on his research:
• Luxury marques seeking greater control of brand by buying up the supply chain to maximise their influence, eg Chanel and Louis Vuitton
• Brands launching educational initiatives in their areas of expertise, such as Van Cleef & Arpels' L'Ecole, which aims to 'give insight and understanding, to share the expertise of these exceptional crafts'
• A strong focus on brand heritage as seen in particular with brands such as Tod's and Fendi
Jean-Noël Kapferer, co-author of The Luxury Strategy and a renowned lecturer and consultant, gave a brief overview of some marketing observations that apply to luxury brands. He pointed out that the difference between premium and luxury brands is that for luxury products, demand should always be higher than supply -- and as a result successful luxury brands always retain an aspirational quality. He referred to a quote by Hermès CEO Patrick Thomas who said that 'when one product sells too much, we discontinue it.'
With luxury brands, too, he argued, there is no need to justify the price -- whereas with premium brands, there is always a 'pay more, get more' (function, feature etc) aspect. According to Kapferer, luxury is a balancing act. He cited a quote that defined luxury as 'the ordinary of extraordinary people AND the extraordinary of ordinary people.' When both of these ideas are managed successfully, he suggested, this resulted in growth.
Imagination's Tony O'Toole, head of strategy for automotive in the EMEA region, stated that 'the closer luxury brands embrace technology, the more the concept of luxury evaporates'. He feels that tech devalues luxury, and when integrated into products needs to be well hidden, rather than on display. He further pointed out that technology could play a vital role in making consumers feel cocooned and protected, and increasingly technology was used to effectively demonstrate outstanding customer service.
Event description on Imagination's website