Lorre White, The Guru of Luxury

2009 Technology Summit & Awards

If you are interested not only in the future, but in meeting the people who are actually creating it, attend the 2009 World Technology Summit & Awards, held in association with TIME magazine, Fortune magazine, Nasdaq, and Science magazine.

THE 2009 WORLD TECHNOLOGY SUMMIT & AWARDS The Time Conference Center, Time & Life Building, NYC July 15th and 16th (daytime, for the Summit conference) July 16th (evening, for the Awards ceremony)

Speakers include: CEO of Verizon Wireless; The "Sun King" of China (founder of world's largest solar company); The President of Rwanda; CEO of Corning; as well as many top entrepreneurs, scientists, thinkers, do-ers.

Friends-of-Lorre can register for a Friends-of-Jim discount by contacting me (Jim Clark on FB or at jpclark@wtn.net). Go to

http://www.facebook.com/l/;http://www.wtn.net/summit2009

Affluence.org

Question:  As someone that studies the social clubs of the elite and writes about them for your luxury consulting clients; what can you tell me about the private on line social group called affluence.org.  They asked me for my financials?  I am well beyond what they require for a minimum, but I am not sure why I would want to give any stranger that information.  Am I buying something?  What do I get for giving them this personal information?  It is a scam?

 

Lorre: I cannot tell you how many email I get about this site.  There are a few like Elysiam.com (which tends to be more heavily middle eastern) that require you to prove your wealth to become a member.  This allows them to charge more to there advertisers as they can prove the wealth demographic of their members.  After all the reason they are creating these groups is to get advertising dollars.  The wealthier the membership the more they can charge the brands to reach them. I have had many friends and clients, including some whose wealth began with a B that refused the invite.  First of all, membership serves as a benefit only if your purpose is to hit these people up for money, as you know that they are qualified investors.  Thus, they are setting them self up to be hit up for money from every real estate, yacht, private jet, broker out there.  Secondly, this qualifying assumes that there is no person of quality that they may have any interest in knowing, if their portfolio is not of a certain size.  This tends to offend those that like to think of themselves as more enlightened.  As to those that are members, it tends to attract new money, those that are insecure in their status and want people to prove they are important.  It has been my experience that the wealthy qualified people seem to separate along old and new money lines or the flashy VS the understated, which of course, also follows different cultural rules as to what is in good taste.  You do not get anything more than you get on the mass of other boring free social networking sites that are popping up daily.  As to if it is a scam…..technically no it is not.  However, there are many that would argue that point.  There is no right and wrong answer; it is a matter of personal preference.  I have many friends that have decided to join and many that have chosen not to join.  That is for you to decide.

How To Reach The Luxury Customer

Here's some of the trends articulated by members of The Luxury Marketing Council in recent explorations on the state of the changing luxury customer

Ostentation, long dead, is being replaced by the ability to tell a story (NOT 'bragging rights") about a great service, experiene or product.

EXPERIENCE of the brand and how the brand is sold, presented and marketed is more important than ever before.  HIGH TOUCH' rules! Knowing the bairthdays, anniversaries, hobbies, pets' names, philanthropic involvements, bonus cycles, history of purchase is the only way to win great share of wallet.

Bespoke, intimate, salon-like events which allow best customers to invite their friends and in a sophisticated way 'get smart' about why great things cost a lot and are worth it have proven highly effective.

Luxury no longer lives by BRAND alone. Heritage and awareness will get the best customer in the door. But service and intelligence of selling will keep them.  In these challenging times best customers need a "REASON TO SHOP".  Special, limited-time offers to inspire customers to shop products related to their history of purchase beat radical discounting every time.

AD DEAFNESS: The most sophisticated consumer is more cynical about 'corporate' advertising and 'PUSH TO INSPIRE DESIRE" strategies. They want to be heard; to have increasingly personal connections with brands they love. This means brands must LISTEN first, market/sell second.

VALUE and UNDERSTANDING THE PRICE/VALUE EQUATION is more critical than any time in the last two decades.  Thoughtful handwritten notes and personal gifting to 'surprise and delight' really work, especially these days.

Greg Furman

The Luxury Counsil

Lorre White Answers Fan's Questions (series)

Q: I am thinking about purchasing a yacht.  In doing my research I have seen a fractional ownership concept called Yacht Plus.  What do you think of the long term sustainability of this concept?

Lorre:  Fractional ownership of private jets has been a great success lowering the cost point that individuals could enter the private aviation market.  The concept was created by NetJets.  The planes interiors are all identical so there is no difference in the quality of the different aircraft customers use.  The entrance point for someone is about 50 flying hours and $50 Million in liquid assets.

This same concept has been attempted before in the yacht industry and has always failed.  Partly because the jet is a mode of transportation and a yacht is more of a place of living.  It is more agreeable to share the former with other unknown individuals but disruptive in a living situation.  It means that you can’t leave belongs on the boat and you have to pack up like a hotel.  If you are going to do this….it is just easier to charter and you have more flexibility than in a timeshared yacht experience.  The new yacht plans for Yacht Plus have a very attractive look, but these issues, plus a long list of others, make it a risky investment proposition.  Once everyone puts their money in, it is 2 years until the boat is build. 

 

Q: Is having a yacht or a private jet considered more of a luxury?

Lorre:  That is a good question and one that luxury marketers need to understand.  Studies show that in the US, having a yacht is considered more of a luxury and a private jet more of a necessity.  This may have something to do with the large amount of space the US takes up and travel for business or pleasure takes up a large chunk of our time.  In Europe they see a yacht as more practical and the private jet as more of a luxury, however this is rapidly changing and private aviation is becoming much more common place, like it is in the US.

Letters To Lorre (Part Of A Series Of Fan mail)

Dear Luxury Guru:

 

I just watched your web series on “World Class Wines w/ Lorre White - $125 to $7000/bottle” where you interview the wine director of Le Cirque restaurants.  I really enjoyed the series.  I found them informative and fun.  I appreciate that you covered wines from many countries.  I felt informed and ready go out and explore this world of luxury wines.

 

You have a very pleasant way about you on camera.  I never felt like you talked down to the viewer but instead took them on a luxury journey with you to learn about each bottle.  I also really appreciated the one that feature the correct stemware for each wine.  I almost skipped it as I thought I knew…. and was surprised that I learned several facts!

 

I signed up for your blog and love the “inside scoop” from a luxury expert like you.

 

Thanks again,

 

B. Benssousan

France

More Fan Mail From Followers Of Lorre White, The Luxury Guru, Media Personality And Luxury Marketing Consultant.

Dear Ms. White,

Hello. I am writing to you about your Lorre White, Luxury Guru eletter

(blog www.LuxGuru.Typepad.com).

I am going to guess that I am not your typical reader and you might be surprised to know that I am out there waiting for your next post; I am an artist-illustrator of hand-drawn personalized greeting and correspondance cards.

My relatively new niche began after I had been chosen to design a Christmas Gala invitation for the Paris Opera and Balletproduction of The Nutcracker almost two years ago.(They heard about me having seen my humorous cartoon strip about life as an expat in Paris.)The Paris Opera and Ballet opportunity enabled me to spotlight my creative skills to a new set and quicker than you can say Drosselmeyer 'a grand donator' contacted me and I designed some unusually intricate and unique correspondance cards for her personal means and again for her family holiday cards.

Her friends contacted me too and I feel that I may be right where I want to be: within this enchanted world of people with the means to encourage my creative best.

I stumbled upon your site when researching private jets on behalf of one of my friends. I consider this a lucky accident!

Your articles are so informative and are helping me understand how a luxury brand can function. I am not sure that I would feel as comfortable in this new path had I not had the backing of your expert reflections!It is heartening to know that there might be some kind of rules to follow and you are leading me.So more to the point, Ms White, this is a letter to thank you for YOUR excellent work and attention to detail-- your sound advice and experience resonates even for 'the little luxury players' like me. I do wish you the very best!!

Sincerely,

 

Andrea Ipaktchi

http://www.illustratrice.com

http://aprilinparis.blog.com/

+33 6 60 02 75 74

26 rue Greuze 75116 Paris

�

 

Clinique La Prairie Mixes Luxury Lifestyle into the Spa Experience...

During a period when many companies involved in luxury are having a difficult run, it is always nice to run into success stories.
 
Clinique La Prairie (CLP) in Clarens-MontreuxSwitzerland year-to-date is actually ahead of 2008 in terms of revenue according to Yael Bruigom, Marketing & PR Manager, thanks to a few wealthy clients.  Like virtually all entities in the hospitality arena, actual bookings are down; however, a couple of large bookings from ultra-wealthy Middle East families has kept the revenue numbers strong.
 
A perennial name on lists of top Destination and Medical Spas, perhaps one reason that CLP is enjoying continued success (70% of its guests return within 18 months) is that in addition to luxury accommodations and a unique array of treatments and picturesque surroundings, under Bruigom (who previously served under Swiss watch marketing Guru Jean-Claude Biver at Blancpain and before that was a marketer for Oracle) the spa has aggressively cultivated partnerships that speak to their clients' lifestyle.  "Many of our guests arrive by private jet," she told us during a recent visit.
 
Shopping and affinity for special products is a passion of many guests, and to make sure they don't feel isolated, Bruigom has created what some refer to as the "CLP Mall," a series of hallways with vitrines and showcases featuring the works of Breguet, Boucheron, Audemars Piguet, Lalique, Piaget, Chopard, Roger Dubuis, Prada, Gucci, Salvatore Ferragamo and of course Hublot to name a few.
 
In fact, a $40,000 green crocodile Hermès Kelly bag sold the day after it was placed in its showcase.  "Guests have a lot of free time while they here," Bruigom notes, adding there has never been a complaint about the various high-end displays.  "They are done in a very nice way, and we only really feature companies we know our guests will have an interest in."
 
It is in many ways a comparable strategy to Elite Traveler and Luxus with our distribution aboard private jets and in private jet terminals as well as on mega-yachts.
 
From watches, jewelry and accessories, there are even displays featuring Persian rugs (yes, guests have made purchases as a result), private client services from UBS and a local purveyor of caviar.
 
When it comes to accommodations, the 59 units range from standard single rooms to an Imperial Suite with a private elevator and rooftop garden.  All are furnished to the standards of a five star hotel "except there is a call for the nurse next to every bed."  With 210 employees, CLP has a staff-to-guest ratio of more than 3-to-1. 
 
Guests stay from a minimum of seven days to as much as a year (a princess who wanted to lose weight before her marriage) with many clients staying several weeks and a significant percentage coming as couples.  One week with the basics starts at about $20,000 but with a clientele that includes billionaires from all continents, spending can range into the millions based on treatments and length of stay.
 
Known specifically for its Cellular therapy treatments using sheep fetus extract, CLP also offers dental and plastic surgery, hydro therapy and literally dozens of more health focused programs.  Its restaurant is so popular that it is now open and gets a strong local clientele who enjoy the haute cuisine prepared in a healthy way.  For patients who are used to the private jet lifestyle, they each receive menus customized by a dietician "so if there are 50 people, there are 50 menu variations."
 
Cuisine is so highly rated by guests that from time-to-time guests will bring a chef home with them to train their staff on how to prepare meals the CLP way.
 
The spa, Bruigom notes, has a unique public relations tool.  While the number one source of new customers is current client referrals, the La Prairie cosmetic brand (which was sold by the owners in the early 80s and today has no connection to the spa) has built the CLP into a name with high worldwide awareness.  It's interesting that the skincare products that are now used exclusively at CLP are "Swiss Perfection," a house brand developed by the owner which started to gain a strong following outside CLP.
 
In addition to the various displays of luxury goods, CLP also offers its guests art exhibits from time to time, including one sponsored by Hublot.  For further amusement there are ornate and complex music boxes from haute couture maker Reuge, stop-bys of exotic cars as part of auto rallies, and even some shopping trips, where all guests at a local Hermès boutique received a replica of their picture imposed on to the cover of the Hermès house magazine, wearing of course an Hermès scarf.
 
With business strong, CLP is open to new projects to enhance customer experience and provide an even more unique experience.  "We weren't just waiting around for the recession to start before getting into action.  This has been our direction for the last several years," she noted.

By Doug Gollan

Elite Traveler

Lorre Answers More Fan's Questions - (Part of a series)

Q:  You always say luxury is for everyone not just the rich, can you give 5 examples of luxuries that you like that cost very little?

Lorre:  Sure, I can do better, I will give you 10.

1)       yoga

2)       a good book

3)       sitting in the sun on a warm sunny day

4)       lighting a scented candle

5)       my favorite chocolate

6)       a perfect cup of tea or coffee made just the way I like it from my favorite mug.

7)       Snuggling my dog Bella

8)       An extremely chilled, high quality vodka dirty martini w/ hand stuffed blue cheese Spanish olives

9)       A long talk with a good friend

10)   A good movie on a rainy cold day

Luxury is not about the cost of an item.  There may be many expensive things that do not appeal to you.  Luxury is about having an experience.  Luxury has a strong emotional component; it offers us a way to create lasting life memories with those we care most about.  All the things I listed above are free or cost very little and they make me feel good.  All of them are even better when shared with a good friend or a loved one.

Q:  You have such beautiful porcelain skin.  What do you do to keep it that way.  What do you think of the mineral based cosmetics?

Lorre:  Thank you for the compliment.  I think a lot of it is genetic but I do use skin care products religiously.  I have several particular items I like, but the truth is I am being sent the newest of the luxury skin care lines to try that I am usually using many different brands in an attempt to test them.

 I think that they are finding that much of the old cosmetics has elements that were harmful to us.  I think that the new natural cosmetic lines are a wonderful idea.  Anything that is healthier and more natural is a good thing and there is not really any thing that we have to give up to get it.

How the best brands will servive the recession.

What the smartest luxury brands are doing

• Increasingly marketing is seen as president’s job not just the marketing department’s. – And ‘marketing” which used to be seen as great product, great location and major investment in advertising is increasingly following a packaged goods model.  Advertising is being cut and the remaining investment going to niche publications like Departures, Elite Traveler, The Robb Report, Modern Luxury, Niche Media titles and others.

• Marketing which used to be the first thing cut in tough times is now seen not as a cost but as an investment by the smartest brands.  Those that continue to spend, while the rest of the herd is cutting, enjoy significant competitive advantage. Luxury Marketing Council research shows that those that continue to invest are putting their marketing dollars into: improving customer service and heightening the quality of interaction with best customers; investing in more  ‘third-party-testimonial generating’ local public relations; engaging people/employees/sales folks” on the line”, with direct customer contact as strategic partners and genuinely soliciting their insights into the changing customer and market place and sharing with people/employess/sales folks insight into the bottom line in ways once deemed ‘for top management only.’

• Paying more than lip service to ‘competitive intelligence’. More companies are monitoring their top competitors’ advertising, public relations, merchandising, web-initiatives; special events and looking for ways to ‘one up’ their competition by being more creative, faster, more resourceful in the ways that engage their teams and the way their teams ‘touch’ their best customers.

• One-to-one top-management telemarketing.  It’s no longer unusual to hear stories about how the president or CEO personally contact best customers to invite them to special events or solicit their thinking.

• The renewed interest in measure, qualitative and quantitative, as part of the discipline of doing business on a daily basis.  Did it work?  How do we know?  What were the measures?  If it didn’t work, why not?  What should we do differently?  All questions more aggressively asked than ever before.

• Loyalty rewards and programs, once seen as unnecessary COST and ‘money pit’ are more important than ever  For best examples see Bergdorf Goodman and Neiman Marcus In-Circle.

• High -Touch Programs.  Seadream Yacht club calls select guests after every cruise and offers to have the CEO fly out to their home and host at Seadream’s expense a brunch or reception for a dozen of the couple’s best friends. The cruisers tell the story of their cruise. Seadream offers a great rate to their guests and sell several cruises at $1,000 per person per night.  Not to mention the friends of the couple telling their friends.  This was so successful for Seadream that they abandoned most traditional advertising.  When Steinway sells a Steinway Grand, they do something similar.  They offer to host a social event for the buyer in their homes, have a Steinway artist perform.  Both strategies are ‘out of the box’, highly personal and create a community of ‘brand evangelists’ who tell the story to prospective buyers/friends, precisely the right target group.

• Knowing the Best Customer Better and Segmenting that Customer more personally and more precisely.  See Jack Mitchell’s “Hug Your Customers” if you haven’t already is all I can say.

• Rewarding best customers for referral.  Something simple: a bottle of wine, an art book, a special offer on a passion of the customer.  Too few brands ask.  Too few brands reward

• Personal gifting, communications (hand written notes).  The power of such a simple strategy multiplied is immense.

• Customer Councils.  The conventional wisdom was that the richest of the rich won’t take time to share their thinking and time.  Many won’t . Many will.  Those companies that assemble that create customer councils enjoy disproportionate advantage.

• Collaborations and Partnerships.  Any brand not engaging this way is missing a way to be smarter; to share costs; to win new customers by being more imaginative with ‘kindred spirit’ luxury brands.  Example:  Brioni, Escada and Mercedes worked together on the 11 city launch of a new top of the line Mercedes.  They pooled their best customer lists having agreed upon confidentiality and each in 11 cities ‘won’ 600 new customers of the same profile.

• Scaling down and making more approachable ‘special events.’  Less about ‘wow’ and more about the right people in the room.  Smaller, more discrete, more about taste than splash.

•¨One-to-one, with permission e-marketing: the greatest tool for cross selling and upselling; the best source of knowledge of the best customer; the greatest lever to work with other brands.  Neiman Marcus in six years changed their e-business from a ‘remaindering’ business to a $500 million enterprise without cannibalizing their store or catalog businesses.

• Easy to say, harder to do but inspiring the entire team to have a  passion for and placing a  premium on creativity, ‘out of the box’ solutions and rewarding those who  ‘raise the bar.’

• Focusing strategically on ‘niche markets’ often ignored: the millennials (young people 16 – 25); the black, African American community; the hispanic, latino community; the Asian community; the gay, lesbian, transgender, bi-sexual communities.  There are consulting firms and publishers who specialize in reaching these people on their own terms.

• Instead of radical discounting, smarter luxury brands are turning to limited-time, special-price-off offers on categories that their customers haven’t purchased before.  So, they – pick your category/brand – offer Brioni suit buyers a special opportunity to buy accessories or custom shirts or outerwear  at a special price.  This does two things:  gives the loyal customer “a reason to shop” (critical these days), migrates the customer to new categories and preserves the pricing integrity of  the product historically purchased , preserving profit and margins and avoiding the need to re-educated a ‘sale-price-off-‘trained’ customer back to full price when  good times return.

One might think of the above list as a ‘recession cocktail’, the blend of any or all providing a way out of tough times and into the heart and mind and wallet of the best customer.  And this is a laundry list of the best brands and how they are in fact thinking.

Footnote:  The convergence of television, phone, computer, camera, fax, computer, web are revolutionizing the way the ‘new, young luxury consumer’ will buy and be influenced.

Wish I knew the answer to where this is going.  But it’s definitely moving away from the old corporate model of PUSH, CREATE DESIRE to LISTEN, AND CREATE HAVING HEARD.

THE LUXURY CUSTOMER IS NOW IN CHARGE AS NEVER BEFORE.

This ‘recession’ is a call to be more creative, to assemble communities, to share best practices and to win by redefining the entire marketing proposition based on what our customers say it should be.

 

 

 

Greg Furman, Founder and Chairman of The Luxury Marketing Council

Notes From A Luxury Business Speach.

Robert Frank, Author of "Richistan" and Wall Street Journal columnist

From a speach at the 21 club ro luxury experts.

 

Where are the Wealthy?

What happened to the population of the wealthy? The Merrill Lynch Capgemini report comes out at the end of June. That should give us a clear picture, but some early numbers show that the population of millionaires in three years in the US so far has fallen by about one- third; the population fell 27% in 2008. Now it probably fell a little bit more this year.

So in the UK, which had a similar profile to the US, it lost 50% of their millionaires.

That sounds like a stunning statistic rate but if you look at the 30%, that just brings us back to '04. Not so bad. '04 wasn't so bad. We all have to forget that '07 was not typical in the sense that we can expect a return to that any time soon. So with your population going back to about '04, the amount of wealth lost by the global leaders is about $10 trillion. So we've essentially lost the entire GDPs of Japan, Germany and Italy.

There is the economic component to wealth disruption and wealth loss. It is a capacity study recently launched by Fidelity that shows that 46% of today's millionaires whose buying capacity, investable assets shrunk 46% said they no longer feel wealthy. A fact that only last year at the same time was only 19%. People with a million dollars or more no longer feel wealthy. But why is that? The majority said it's because of the financial market losses. And you know that if you were worth 300 million and lost 100 million, you're still wealthy. On a consumer perspective you still have money to spend. But psychologically you're just ready.

You just lost your 100 million and right now you're not spending.

But if you look at the luxury estates specifically, you know, we've seen reports that show that in the first quarter luxury was down about 20% and the back part of this year will be a little bit better with sales for the year shaking out somewhere down between 10 and 15%. My guess is probably closer to 5. So the back part of the year will look much better than the front.

Signs of Hope, Fear of Falling

When you look at some signs of hope already, you saw that hedge funds in May had their best month, one of their best months on record. The Dow Jones luxury index is up nearly 40% from its lows. So people are buying luxury stocks on the expectation that the wealthy will actually outpace the general consumer.

And there's a lot of talk about the shift to the Wal-Mart model that the stock market is telling us. I was looking, yesterday I did a post on their blog about wine and I was looking at the fine wine 100 in that specific index. That index is actually up 5% this year, which is very encouraging because the stocks are traded about six months in advance to what's actually happened. I'm starting to see little signs of hope in the luxury market where both prices are increasing and demand is increasing as people are getting more comfortable buying again.

The big question this morning is what does the future look like? What do we as companies change? What do we keep and whom are we going to be talking to? Nobody knows the answer to that question. Hopefully this book which I'm about to start in July, I'm going to spend a year imbedded with the world's richest men again to find out how much of this is a temporary cycle, and when I say cycle I'm meaning cycle of life 2000-2020. Or is it a super cycle, Golden Age or a Great Depression?

If it's clear we are not going to see a great depression. But a 50% decline in millionaires worth is clearly going to have an impact on the culture and the character. I don't know the specifics of what that will look like. But I can say a few things about what we seek in the long term. And then I want to go back to Richistan because a lot of people have told me that in some ways Richistan predicted what happened.

The first thing I want to talk about is the chapter called losing it.

It's about a guy with nothing. He went from a billion to a negative net worth of 40 million dollars. This can happen in record time. But yet the markets investigative technologies have created historical opportunities for entrepreneurial and corporate chiefs to make millions and even billions of dollars virtually overnight. And they have also created historical opportunities to lose it equally fast.

For Richistanis this is the new fear of falling. While the bulk of the country's top wealth used to be grounded in hard assets like land, real estate, trucks, factories and buildings much of today's wealth is tethered to stocks, options, derivatives and other intangible assets. As a consequence Richistanis are more vulnerable than ever to sudden wealth shifts.

But that anxiety after what we've just seen is very present in their investing and their spending. If you can tell someone that they can buy something that will be a sure thing investment, that will always go up in price, they just won't buy that anymore. That's one very important component to understand.

From conspicuous consumptions to conscientious consumption

The second thing is that shift away from conspicuous consumptions to what I call conscientious consumption. Stuff and status is going to be replaced by simplicity and sustainability. They're going to be looking for things that are truly lasting; the new sort of status is moments and memories. These are the things that I think people are looking for when buying products. There's also going to be a shift from what do I want, what can I afford to what do I need, a very fundamental shift in the first question that consumers ask. What do I need? This is what they're asking.

In terms of which brands will survive in this environment, I think it's simple things that good companies have been doing for a long time. There is a lot of discussion today about the luxury shame and I can't buy it.

I know that the media has spread this. I would accept some of the blame.

Politicians have certainly done their part to create an atmosphere that they could appear they are against wealth. I don't believe that. I believe that we are not a culture; we have never been driven by envy and shame.

I believe that that the core American value, which is we admire people who are wealthy and we believe that when people are successful they should buy. The people will always want the best. They'll want quality, they'll want exclusive and they'll want things that are classic. And so, you know, there's just been so much more than just getting immediate with each part of this and the question is marketers and companies, how much do we pay attention to that? How much do we worry about people shopping and taking a brown paper bag out of the store?

I guarantee you that shopping will be back very soon. If your business is well managed, if the products are classic, if you've kept a healthy respect for money and quality and exclusivity, those will be the companies that emerge stronger from this recession.