The Fascination of Luxury
The luxury market, like any other sector, is experiencing considerable change and the brands that serve this segment need to know where it is heading so to adapt their offer. Quo vadis, Luxus?
The world of luxury has a fascinating appeal. It draws you in.
It draws your attention, curiosity and the desire to belong.
It draws you in by its prominence, its excellence but most of all because it is untouchable. It has mystery, elegance, innovation, history, tradition, exclusivity, sophistication and pleasure for all the senses, making it desired by many, yet accessible to few.
Luxury is essentially a state of mind. It is a way of life. It is much more than just high purchasing power. Mademoiselle Coco Chanel once said, “Some people think that luxury is the opposite of poverty. But it is not. It is the opposite of vulgarity.”
In fact, the high and insouciant purchasing power is not the only factor typical of the luxury markets. Usually, these are
guided also by education, elegance, behaviour, culture, (good) taste, refined intellect, appreciation for the exclusive and permanent creativity.
Susana Campuzano, Spanish expert in luxury markets, whom I know well, wrote in her book “El Universo del Lujo” (The Luxury Universe) that taste is the ability to appreciate beauty and hence it limits full access to luxury.
It is important that brands and professionals in the luxury segment think about these ideas to embed in their offer some kind of erudition, whether art or any other form of culture that truly makes a difference, introduce innovation, provide unforgettable experience and add intangibility that justifies the high price and wins their audience.
In high-end, refined gastronomy, customized menus – prepared by famous Chefs for private parties – and inspired by literary works and opera arias, depending on the customer’s taste, are examples of the above-mentioned creativity, erudition, experience and intangibility.
The customization that a well-known French luxury brand prepares in store at the time of purchase, before the very eyes of the customer, engraving his / her name or initials in the perfume bottle, is another such example.
It is important that brands are permanently vigilant and committed to understand what the market wants and then learn how to surprise consumers and fans, in order to improve their loyalty.
The Luxury Institute based in New York, a specialized agency for luxury market research, published in September 2009, the study “State of the Luxury Industry” based on surveys of ultra-rich consumers, where three ideas are highlighted:
- The most valued attributes by ultra-wealthy consumers in a luxury brand are extremely high quality, perfection in craftsmanship and customer service at its best;
- More than 60% of millionaire consumers believe that prices of luxury goods are too high compared to the value they offer (it is interesting to note that respondents did not say that the prices were expensive, but rather that they were out of tune with the perceived value);
- More than half of millionaire consumers declared that the current state of the world economy led to change their minds about the luxury industry.
This study suggests that luxury brands should increase investment in innovation, quality materials and craftsmanship, but above all they should invest in raising the bar as far as customer service is concerned.
In my opinion, the above findings disclose some important information for reflection and change.