What is Luxury How do you define luxury
- Slides: 25
What is Luxury?
How do you define luxury?
What is luxury? I know it when I see it! I know it when I feel it & experience it!
What is Luxury? It’s personal • • Based on Our life experiences Our standards Our expectations
Definition Products that represent the top sector in any product market. (Mintel, 2011)
Definition Luxury brands have desirable qualities of being scarce, sophisticated, and in good taste, as well as a dimension of being slightly understated and aristocratic (Chevalier & Mazzalovo, 2008).
Definition The special element of a luxury product, which makes it desired for its own sake rather than any function that it may have (Mintel, 2011).
What is Haute Couture? Legally protected term First formalized after WWII in 1945 High-level of creativity Individualization Parisian Workroom 20 employees Produce 25 outfits per season
How does the marketplace define luxury? Prestige rather than luxury without a history of couture
8 characteristics of luxury 1. Rarity 2. Excellence • • (Fraser, 2014) Exclusive Limited Restrictive Controlled • Quality • No concessions • Consistent
8 characteristics of luxury 3. Expensiveness 4. Timelessness (Fraser, 2014) • All luxury products are expensive • Intensifies rarity • Has a past • Immortal • Lasting, indelible impression
8 characteristics of luxury 5. Honest 6. Tailored (Fraser, 2014) • No reproductions • Cannot be replicated • Feels bespoke • Knows what customers want before they do
8 characteristics of luxury (Fraser, 2014) 7. Pleasurable • Rational (tactile) • Emotional 8. Experience • Service • Packaging • Environment
Three tiers of luxury 1. Inaccessible – handmade, one-of-a-kind, exclusive models – very expensive & very unique 2. Intermediary – expensive replicas of inaccessible luxury brands – the duplication of a couture design 3. Accessible – luxury products manufactured on a larger scale – Christian Dior RTW, designer fragrance, or Ferragamo loafers
3 qualities of Luxury products 1. Have strong artistic content 2. International appeal 3. High levels of craftsmanship
Artistic content Stimulates an emotional connection Consumers buy aesthetically pleasing objects, not products
Craftsmanship Selectively and exclusively selling hand-produced, beautiful, artistic, well-crafted objects (Chevalier & Mazzalovo, 2008).
International appeal World-wide exposure Luxury brands absent from international fashion capitals may have less value to some customers Discernible look in all locations (merchandising)
Three Differences in luxury & Non-Luxury 1. Company size Does not determine brand awareness • Dior sales $1 B (approximately) • Peugeot sales $73 B (approximately) • Which has more brand awareness?
Three Differences in luxury & Non-Luxury 2. Financial Most luxury brands lose money • Survive because they are part of a luxury group (LVMH) • Luxury brands have a very high break-even • High overhead to make a global impression of being powerful & wealthy • Fashion shows
Three Differences in luxury & Non-Luxury 3. Time frames • Very rigid • Lead times of 18 months to 2 years
Luxury is changing Still important Current customer concerns • Exclusivity • Quality • Refinement • The actual worth of the product • Being authentic • Finding real happiness
Luxury is changing Human History’s Law of Accelerating returns Bigger advances Happen faster and faster Technological changes affect societal norms and cultural beliefs Consumer’s values & preferences are in flux Globalization Consumer mindset changes Disruptive technology Shankman, 2018
Luxury is changing “Luxury goods and services are about differentiating myself from others. ” 2/3 US, UK UAE 90% China 75% Mexico Growth in disposable income around the world Self-actualization – Maslow’s Hierarchy of Needs – ultimate luxury Shankman, 2108
Next class discussion~ 1. How are Millennials influencing other generational cohorts? 2. What is the Millennial attitude about luxury? 3. How have Millennials changed the luxury business? 4. How will Gen Z influence other generational cohorts? 5. What is the Gen Z attitude about luxury? 6. How are Millennials and Gen Z different?
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