Luxury's New Challenges

In sluggish socioeconomic times, when consumers' moods range from cynicism to chronic worry, luxury is a response to what sociologist Robert Ebguy calls "La sociйtй de consolation": the consolation society. Luxury is really a concentrated pleasure, an indulgence, something we treat ourselves to in a society that is becoming more anxiety provoking and less rewarding.

Philosopher Gilles Lipovetsky agrees: "Having lost faith in a future that will be mechanically better and more just, people have nothing left but the hope of feeling better, a celebration of the senses, and an anticipation of beauty that will take them away from the drabness of their daily lives. Luxury is no longer an accursed share, but the part of dreams, excellence, and superlatives that people need."

Pleasure seeking is now becoming the primary motivation for luxury purchases among traditional buyers. According to the Ipsos study France des Hauts Revenus 2005 (French High-Income Earners 2005):

• Luxury is mainly associated with personal pleasure (55%)
• Luxury promotes the feeling of belonging to an exclusive club (23%)
• Luxury is a way to show status (10%)

The motivation regarding luxury in today's society is quite different from that of the `80s and `90s, when luxury purchases were motivated mainly by two factors: status seeking and appearance. Since then, luxury has stopped being a social constraint demanding a certain set of behaviours. Conscious of this change, mass-market and premium brands have started to move into luxury's territory in an attempt to ramp up the prestige of their brands by association.

The benchmark has changed, as one trendsetter explains: "Luxury isn't ostentatious, it's self-centred; it's about making me happy." Hoping to take advantage of luxury's more widespread appeal, luxury brands have tended to focus on finance and marketing, neglecting their origins in family and artisanship. They adopt mass-marketing practices such as continuous launches, megastores, blanket advertising, trend watching and co-branding, drifting away from the fundamental rules of luxury marketing: an exclusive target, select availability, and discreet messaging.

Luxury consumers, who have a less uptight, more personal relationships to luxury, now reject brands that call attention to themselves with designer names, logos, and status symbols in favour of ones that use the emotional leveraging of mass marketing (appealing to the senses and pleasure).

The twofold mass-marketization of luxury, imposed both by premium mass-market brands looking to differentiate themselves and raise their prestige and by luxury brands facing increasingly urgent financial and economic pressures, risks creating confusion between genuine luxury brands and other brands. The situation could put real pressure on luxury brands. Now more than ever, they need to reassert themselves, get back to basics, and re-establish a special relationship with their clientele.

Luxury brands need to take a threefold approach:

1. Perpetuate brand vision

   Make the brand apparent through its behaviour and over-accentuating its signature qualities. By slavishly following fashion, we lose our identity. This is the challenge for luxury brands, whose purpose is to position themselves ahead of fashion. Sociologist Elyette Roux, an expert on luxury, has this to say: "Luxury isn't fashion. Luxury isn't trendy; it's what's left after trends are over. Luxury brands cannot follow trends, they must create them." As a result, the first challenge for a brand is to reassert what is essential about it by reinterpreting it in new and surprising ways, daring and invention being the trademark of the luxury brand. Reasserting brand vision, reviving the mystique of craftsmanship, refining signature qualities, and developing a vocabulary specific to luxury are the essential elements to perpetuating the luxury brand vision.

   Reasserting brand vision: Going back to the source of the brand and what distinguishes it--the original idea--by going beyond its mere history to its vision, its aims, and its mission. Chanel embodies women's freedom, Louis Vuitton, the art of travel, etc.

   Reviving the mystique of craftsmanship: With consumers needing tangible proof of a brand's true value more than ever, we need to return to the mystique of the product by re-emphasizing the skilled craftsmanship and the brand's authenticity; in other words, all the artisanal aspects of luxury. We need to prize expertise, limited editions, single copies, talented people, and personalization, all of which reflect the culture and education and increase the prestige of an owner. Refining signature qualities: Determining the brand's main signatures by combing through its genetic heritage and refining them in all brand expressions: visual identity, design, published material, products, packaging, media, website, etc. Adopting a new vocabulary: Borrowing vocabulary from craftsmen, artisans, traditional know-how, and rituals to testify both to a brand's distinctive origins and to the durability of its expertise over time.

2. Approaching the client not as a consumer, but as one of the select few initiated to the brand circle

   Luxury clients cannot be considered simply as consumers, but as people belonging to the brand's network or select few. We build a sense of belonging to a community by sharing shopping rituals with them, teaching them the rituals of using products and creating exclusive places for them. For example, Louis Vuitton's Celux Club in Tokyo, which offers specially designed or selected brands and products from the LVMH Group to best match the personality of each client, or Baccarat's Crystal Room in Paris, where diners eat from genuine china to rediscover the rituals of fine living

3. Invest heavily in the essential medium: point of purchase

   The act of purchasing should no longer be a mere ceremonial pleasure, but one that involves an experience, emotions, and the senses, an exploratory journey into the heart of the brand. Mass-market brands present themselves as products for sale; luxury must sell all dimensions of the brand.

   "Consuming luxury is consuming a product, a legend/myth, a tradition, expertise and a ritual of use all at once." Gilles Lipovetsky

   Luxury brands need to bring their clients into the experience of the brand by steeping their senses in the brand's values and symbols. The point of purchase must also become a multi-sensory environment dedicated to immersing the consumer in the brand and leaving sales to the website. For example, the Louis Vuitton flagship, which not only sells Louis Vuitton products in its 1,800 m2 space, but also aims to be a cultural destination in itself, or the wall of scents at the Frйdйric Malle perfume boutique in Paris.

(Next issue: Luxury and Advertising: Distancing advertising of luxury brands from that of mass-premium brands by cultivating the emotional and the sensual)