As a recession-ridden 2011 comes to a close, a few men stand and whisper the word “luxury.” The bold souls I’m referring to not only don fine fabric ties and crocodile satchels, but they also advise companies that produce these costly goods. Each of these men has climbed the luxury ladder for over a decade, and each has earned a rightful place at the head of luxe market’s table. So, what insights can our experts offer on the industry’s present state? Have the rules changed since 2010? Will luxury reclaim its glistening throne in 2012? Stay tuned, as a mixed field of industry elites share secrets of luxury, today and tomorrow.
MILTON PEDRAZA: CEO, Luxury Institute
The Luxury Institute is recognized as a global leader in CRM and luxury research. The company works closely with respected high-end brands, engaging in new and innovative methods to enhance customer-based brand experience.
My Company: “My company helps facilitate deeper relationships between luxury brands and consumers. We increase the retention rate between luxury companies and their customers, create targeted referrals and provide insight into the components that make up today’s luxury culture.”
How the Luxe Market is Changing: “The global recession has affected customers, making them more discerning now. Developed nations have seen hard times causing them to weaken, while developing markets continue to thrive. These developing countries have experienced increased demand because they offer more value. They are gaining a wider consumer base, as they have prompted more to become interested in luxury.”
The Future of Luxury: “Brands will begin to further differentiate products in the coming years. Products themselves, such as handbags, will become more unique in design, though I’m not necessarily talking about logos. Also, brands that find success will have enhanced consumer relations. They will become a trustworthy provider that makes your customer experience easier. Customers will be won over by out-behaving –– not outperforming.”
VENANZIO CIAMPA: Founder, The Promotion Factory
The Promotion Factory serves as a top-tier communications firm specializing in luxury, fashion, entertainment and lifestyle. The company offers a strong blend of creativity and veteran understanding to help empower renowned names like Gucci, Hublot, and Kenneth Cole.
My Company: “We don’t aim to follow demand, but to serve the ideal of luxury. We are placing more focus on content-related activity, which is becoming increasingly important. This is great for someone like me, who comes from media and communications, because it allows for more creating and not just distributing.”
How the Luxe Market is Changing: “I think the Web, e-tail and social media are playing a big role. Ten years ago luxury was afraid of the Web — it approached it like an enemy — but today companies are investing more time and frankly passion in the Internet because it allows direct communication with clients. With the Web 2 phase, luxury companies will soon be forced to become more ‘editorial’ in nature and not simply function as an online catalogue.”
The Future of Luxury: “The ‘how’ we buy is already being shaped by technology, but I believe we will still need to touch and feel. You can tell that by visiting Saks on a Sunday and seeing how women buy shoes. Also, I foresee a peculiar blending of the editorial and the commercial. Retailers will play editors and vice-versa, and this could be good or somewhat perverse. Luxury companies will look to improve the multimedia content of their brands on social media platforms. They will need to understand their audiences’ desires and respond in a flash.”
RICHARD CHRISTIANSEN: Founder, Chandelier Creative
In a world leaking imagination, ideas float Chandelier Creative to the top. The company was built on the crux that curiosity lends superior answers. And Chandelier loans their passionate intrigue to some of the biggest names around: Givenchy, Versace and Bulgari, to name a few.
My Company: “We are content creators. Our specialty is cross-channel development, bridging the gap between digital and social media and more traditional forms of marketing. What our clients all have in common is a desire to gain a fresh, modern perspective that respects and leverages their heritage or brand values. We believe in telling stories and creating experiences to connect people to the product.”
How the Luxe Market is Changing: “There is a new customer profile, the mass luxury shopper, that has created an interesting marketing challenge –– how do you appeal to 2 sets of consumers of different income levels and lifestyles without devaluing the brand or destroying the heritage? The core, upper-class shoppers have brand loyalty and make consistent purchases for all aspects of their lives –– clothes, furniture, food and wine, cars and hotels. The emerging middle-class shoppers spend relatively small amounts in less consistent patterns, but have the possibility of long-term brand loyalty.”
The Future of Luxury: “The word ‘technology’ had nerdy, undesirable connotations for years. It was seen as a hobby and something that only few people could utilize and understand. Then Apple came along and redefined it in a matter of a few years. Technology now means enabling desirable tools to millions of people. It’s easy to forget that a combination lock on a briefcase was once considered hi-tech. Will Vuitton develop fingerprint scanner locks on their trunks? Luxury brands will have to continue to find ways to communicate to customers and fans alike. Having a social media presence makes them fair game for scrutiny, so they can no longer distance themselves from the masses. They will have to stand for something and deliver on the promise.”
JOSEPH JANUS: Creative Director, BODHI
While many handbag companies can boast handcrafted clutches and Italian leathers, few can also match BODHI’s design sensibility. The bag specialists outshine competitors with a passionate eye for detail and craftsmanship.
My Company: “I think it’s the responsibility of companies like BODHI to keep making luxury more affordable but to maintain the quality, the functionality and the beauty of luxury pieces.”
How the Luxe Market is Changing: “The luxury market has changed a lot in the past decade and is changing more and more every day. Internet membership sale sites like Gilt have really changed the game. You can buy bags from Chanel, Chloe, BODHI and more at a discount price, and you no longer have to shop on Madison Avenue to find quality luxury products. Luxury products have a much farther reach now, not only in the United States but all around the world in places like China.”
The Future of Luxury: “This is the Age of Technology. There really is a lifestyle change going on, driven by tech and the way we live, work, play, socialize and conduct our everyday lives. For the past 5 years I have been introducing tech accessories into our line, and retailers that carry my bags have finally taken notice of the lifestyle change, demanding more of our tech accessories on their sales floors. I think the luxury market will continue to reinvent itself in the next decade. Companies will continue reaching more people by marketing affordable luxury in their product lines.”