Lorre White, The Guru of Luxury

Affluent consumer confidence is on the rise, signaling new willingness to indulge in luxury purchases

 

As you've probably heard, Unity Marketing's latest Luxury Tracking Survey found luxury consumers' confidence rose at its fastest pace ever in the fourth quarter 2012.  With renewed confidence, luxury consumers spent much more on luxury goods and services as well; total spending was up more than 25 percent from the previous quarter.

But while total luxury spending was up at the individual consumer level, not all segments in the luxury market rose in step.  For example, luxury consumers spent less on luxury furniture, lamps/lighting and rugs/floor coverings last quarter, and spending on both luxury home and personal electronics was down as well. 

 

So while the luxury consumer confidence 'tide' is rising, that doesn't mean that all 'boats' will necessarily rise along with it.  Your company, your brand, your store must be properly positioned now in order to benefit from the improved consumer environment.

Take for example jewelry, the most luxurious of luxury goods categories included in our Luxury Tracking Survey.  In the most recent study period, spending on luxury jewelry was down both from the previous quarter and from the same period last year.  This cut in spending actually coincided with strong demand, as measured by the share of luxury consumers who made purchases in the category.

 
Strong demand for jewelry coupled with reduced spending by customers with plenty of cash on hand (the average income for those surveyed in the fourth quarter was $290,600) points to jewelry customers looking for discounts and bargains or trading down to less premium jewelry selections -- which is exactly what happened this time.  

For example, fine gold jewelry, the category's typical top seller, was bumped from first place by strong spending on sterling silver; further instead of buying premium-priced platinum jewelry, this quarter's buyers opted instead for palladium and platinum/rhodium-plate jewelry.  Luxury jewelry customers also economized on their gemstone selections, cutting back on diamonds while favoring less-expensive pearl, crystal and faux/manmade gem alternatives.

 

New patterns emerged in luxury jewelry buyers' choice of stores in which to shop.  Spending at discount stores (think Costco, Kohl's and other discounters that sell fine jewelry) more than doubled this time.  And while Tiffany still ranked as the number one luxury jewelry retailer, its share of jewelry buyers declined by nearly 10 percentage points, which signifies that Tiffany may be losing its edge with luxury jewelry shoppers.

 

What luxury marketers should take away from this analysis of the jewelry market is that not every brand, every company, every retailer is necessarily going to profit from luxury consumer's return to the market.  Their needs may have changed and the criteria they are using to determine value may be different now.  Marketers need to assess their current position and make sure that their brand, their offerings, their pricing, their services line up with today's, not yesterday's, luxury consumer.

 

   With the economic environment starting to improve and luxury consumers willing to indulge again, businesses need a new road map that will help grow profits now and in the future.  Too many companies are approaching the new consumer environment with the same old strategic marketing plan in place.  But the luxury consumer market is very different today than it was two years, five years, ten years ago.  Brands need a plan that is designed for today's environment and today's customer - one who younger and from a new generation than the Baby Boomers who have been the core customer for luxury brands for so long.

 

 

 

 

 

 

 

 

 

Pam Danziger

 

International consumer purchases tripled on Black Friday weekend: FiftyOne

Diane von Furstenberg Cyber Monday email

International consumer purchases at U.S. retailers tripled Black Friday through Cyber Monday, according to data from FiftyOne Global Ecommerce.

FiftyOne found that international customers spent the most at luxury department stores throughout the Black Friday weekend. In addition, the data revealed that email marketing was the strongest driver of purchasing and product awareness.

“This Black Friday and Cyber Monday we found that more than 35 top retailers ran marketing campaigns and exclusive promotions targeting to specific countries, despite this typically being viewed as an American-only shopping holiday,” said Jennifer Raezer, head of marketing communications for FiftyOne, New York.

“There is absolutely an opportunity for marketers to expand current campaigns into new regions and engage with their international audience more directly,” she said.

International sales data was collected over a four-day period between Black Friday and Cyber Monday. Consumer insights were collected from a poll that included more than 4,000 adults from 90 countries who were surveyed online Nov. 27-28.

International buyers
FiftyOne found that international consumers will be important for U.S. retailers this holiday season.

Colombian residents spent the most on Black Friday weekend. They spent 11 times more than the average daily spend during the four days.

Shoppers from countries such as Israel, Ireland, Mexico, South Korea, Russia and China also showed a significant increase in spending over the four days.

International consumers, as a whole, spent the most money at luxury department stores. They spent approximately $337 on each transaction.

In addition, international customers spent on fashion retailers and brands, discount retailers and shoe retailers.

The top categories shopped were apparel, shoes and home, per the data.

Both men and women reported spending more than they anticipated.

Also, mobile devices made an impact over the Black Friday weekend. Twenty-seven percent of international customers said that they completed at least one purchase on a mobile device.

There was not much of a difference between Black Friday and Cyber Monday in terms of the number of purchases and average order value, per the data.

“This global demand for luxury goods presents an exciting growth opportunity for retailers,” Ms. Raezer said.

Email boost
Email marketing from retailers was the top driver for product awareness and purchasing of U.S. brands, according the FiftyOne.

In fact, email was the reason why 79 percent of international consumers shopped on Black Friday weekend.

Other marketing tools such as online advertising and social media were ranked before influence from friends and family as reasons to shop that weekend.

Online advertising reached 34 percent of consumers and social media reached 16 percent while influence from friends and family affected 13 percent.

“We recommend that brands build and segment their database of international shoppers and run email campaigns informing them of upcoming sales and special promotions, such as free or flat-rate shipping to their country,” Ms. Raezer said.

 

 

 

 

 

 

 

 

By Erin Shea

http://www.luxurydaily.com

2014 Venom GT2 by Hennessey Performance

Here's a first look at next year's road demon, the Venom GT2 by Texas-based auto tuner Hennessey Performance Engineering. Powered by a 7.0-liter twin turbo V8 engine, the new hypercar claims to be able to eke out an astonishing 1500 horsepower. Other mindblowing stats: the new Venom is expected to zip from zero to 60 mph in just two seconds, finish a quarter-mile drag race in 8.8 seconds and boasts a top speed of 287 mph.

Design tweaks have been implemented to the Lotus Elise body to improve aerodynamic performance. These include modifications to the side mirrors, roof and front air dam. “The Venom GT will continue to offer the best power-to-weight ratio for any hypercar available on the market,” Hennessey said. And at a starting price of US$1.25 million, it better. The Venom GT2 is set to debut later in 2013, with an optional seven-speed paddle shift transmission model available for an added US$165,000.

Hennessey Performance

Gucci launches Equestrian Collection in Paris

Gucci Equestrian

With the occassion of Gucci Paris Masters which takes places until December 3rd, the Italian house presented exclusively its new Equestrian Collection at its Parisian flagship store on Rue Royale. Attending the launch event was Edwina Tops-Alexander, the world’s top jumping equestrian, who was also the muse for Gucci Creative Director Frida Giannini.

The line is part of the Cruise 2013 collection and includes a ready-to-wear assortment featuring 15 styles, completed by a refined and well-coordinated selection of accessories. The collection is characterized by the distinctive symbols of the House: the Gucci Crest, the horsebit and the green-red-green web stripe.

 

 

 

 

 

 

www.cpp-luxury.com

52pc of wealthy individuals purchase luxury for personal use: report

More than half of wealthy consumers purchase luxury for personal use

The majority of U.S. adults with a household income of more than $500,000 purchase luxury products for themselves versus a family member or as a gift, according to a new report by Shullman Research Center.

The Shullman Luxury and Affluence Monthly Pulse uncovered U.S. consumers’ intentions when spending with results separated by household incomes of more than $75,000, more than $250,000 and more than $500,000. One key finding from the report is that the most popular shopping outlet for wealthy consumers is Amazon.com and marketers wishing to lure similar transactions to their own ecommerce sites may want to examine the traits of the shopping outlet’s purchase journey.

“When you look at some of the plan-to’s in the Monthly Pulse, clearly a lot of affluent consumers are planning to buy,” said Bob Shullman, founder/CEO of the Shullman Research Center, New York. “Their plans are equal to or greater than this year.

“As of today, the outlook for luxury is as positive as it has been,” he said. “One thing that did surprise me is that a lot of people are buying luxuries for themselves.

“A lot of luxury is about buying gifts, but now it seems to be about them gifting themselves.”

The Shullman Research Center was established this year. The Shullman Luxury and Affluence Monthly Pulse is a new monthly report that provides insights on purchasing intentions of the luxury and affluent marketplaces in the United States, perspective on current events and affluent shopping, buying and spending patterns.

Data for the new report was gathered Oct. 30-Nov. 9 from a sampling of more than 1,500 U.S. adults.

Staying positive
U.S. consumers are generally positive about their status.

For instance, the study found that 46 percent of adults with a household income of more than 500,000 consider themselves to be the upper-middle class and 36 percent consider themselves to be in the upper class.

Fifty-eight percent of adults with a household income of more than $250,000 consider themselves to be in the upper-middle class.

Shullman Research Center also polled consumers on how their status has improved since their childhood.

Sixty-six percent of adults with a household income of more than $500,000 said that their social status has gone up since their childhood.

“If you are looking at the United States today, among many of the adults, the American Dream seems to have been achieved by those in the upper incomes, in terms of how they describe themselves today versus how they describe their family upbringing,” Mr. Shullman said.

Bricks not required
The survey also found that 59 percent of adults with a household income of more than $250,000 and 56 of adults with a household income of more than $500,000 made a purchase from Amazon.com in the last 12 months. 

This is the highest response of any of the 113 retailers measured. The closest behind Amazon for the $500,000 household income group is Target with 37 percent of those adults reporting a purchase from the retailer in the last 12 months.

This could be a predictor that affluent consumers are no longer requiring a bricks-and-mortar location, per Mr. Shullman.

Three key benefits of the Amazon shopping experience are convenience, lower price and easy returns. Despite the fact that affluent consumers are not always attracted to the lowest prices, they can be impressed by getting value for the amount that they pay.

In fact, survey respondents were asked to describe “luxury” and “luxurious.” Some of the most-used words were expensive, quality, best, money and nice.

“Marketers need to look at what benefits the consumer sees Amazon fulfilling,” Mr. Shullman said. “We asked consumers secondary questions such as if they are Amazon Prime members.

“Of those higher-income groups that have shopped at Amazon, about half are Prime members,” he said. “It just makes it incredibly easy to buy from them.

“Marketers should ask themselves, why are people shopping at Amazon and what does it offer as far as a consumer benefit that they do not offer?”

Store vs. site
Other shopping behavior examined in the Shullman Luxury and Affluence Monthly Pulse include where wealthy consumers are most apt to shop.

Twenty-seven percent of adults with a household income of more than $250,000 make purchases in-person at a retail store. Thirty-nine percent of adults with a household income of more than $500,000 do the same.

Close behind, 21 percent of consumers in the $250,000 group and 30 percent in the $500,000 group complete transactions online from a computer.

Also of note, 14 percent of adults with a household income of more than $250,000 and 19 percent of adults with a household income of more than $500,000 make purchases in-person at an outlet store.

Mobile and tablet transactions were also examined.

“We asked people to tell us where they shopped – brick-and-mortar, mail, online or phone,” Mr. Shullman said. “In the world of luxury I was surprised when I looked at the number of people who are buying luxury on a smartphones and online on a computer or tablet.

“What also amazed me is the number of people who purchase in-person at an outlet store,” he said. “One out of seven people in the higher income groups said that they went to purchase luxury at an outlet.”

 

 

 

 

 

 

 

By Tricia Carr

Storytelling in luxury marketing becomes interdisciplinary

 

Content curation is a descriptive term. It denotes the act of organizing material or information to be displayed or broadcast with the goal to tell a story.

Curation has become a trend and deeply affects the way we organize, transmit and receive information. The trend, even though a well-known technique put to use by historians, art historians, and museum curators, has become more prevalent today thanks to the multiplication of social media platforms.

Curate’s e.g.
Fashion bloggers were among the first who popularized content curation as an alternative to mainstream media. They felt that the establishment of fashion media represented a uniform and somewhat rigid voice in fashion marketing.

Fashion blogs were a reaction against that rigidity of turning fashion exclusive.

As fashion blogs began proliferating, the audience became increasingly familiar with the flexibility that social curation allows.

In addition, social platforms such as Facebook, Twitter or Pinterest reinforced the public’s newly acquired habit of curating their own ideas, posts or pictures.

This renewed interest in storytelling by means of curated content suits the world of luxury goods perfectly.

Successful luxury marketing is by default associated with fine storytelling.

Luxury brands have the added privilege of owning beautiful products or properties. Memorable visual material is the most powerful ingredient of storytelling.

For example, think of the power of an artistically photographed exotic leather bag or a majestic landscape view from a luxury hotel. The visual commands attention but also frees the imagination.

Vintage advice
Storytelling is achieved by creating a dreamlike universe that truly represents the core values of the luxury brand but also by allowing the audience to partake in this fantasy world.

The trick is in devising access points for the public to relate to the brand in a way that the brand values become understood while also the brand environment maintains its mystique.

Take, for example, the latest in-house curated exhibition by Verdura at the company’s headquarters at 745 Fifth Avenue in New York.

The company, owned by a father-and-son team, Ward and Nico Landrigan, is a “fine jewelry company focusing on retail, with a limited wholesale segment. The core business focus is design-intensive pieces produced directly from the archives.”

These archives contain Fulco di Verdura’s vast collection of fine jewelry drawings, some of which had already been produced during his lifetime whereas some others not.

For the exhibit, Verdura displayed a variety of pieces either vintage or newly produced.

Vintage are the pieces that had been produced during Fulco’s lifetime and acquired by important clients such as the Duchess of Windsor, Mona Bismarck and Dorothy Paley Hirshon.

The provenance of these pieces adds to their value and to their appeal for today’s customer.

In other words, provenance contributes to enchanting the public. The story is crafted to mesmerize the client.

By design
In other cases, it is hard to make that association with famous clients. Nina Shoes is a brand that started in Brooklyn, New York, by Cuban émigrés right after the Second World War.

While the brand is mass market, the company has managed to manipulate its corporate image and move the product upmarket by means of investing in the creation of a solid archive that reaches back to 1953, the year the company was founded.

Compared to Verdura, a company that re-emerged because of the existence of the designer’s original archive, Nina is a company that has been in production continuously since 1953 and has expanded internationally.

By frequenting flea markets and vintage boutiques, Nina’s archivist managed to assemble a complete archive of all the models produced. She also recorded the oral history of the founding family and devised a classification system that allows in-house designers to easily retrieve information on any particular model.

These steps resulted in inspired re-interpretations of their designs. The brand moves forward while also maintaining a coherent voice and style.

WHAT DISTINGUISHES luxury brands today is their ability to capitalize on their own intellectual property and historic past by retelling their story. This has opened up the area of marketing to other disciplines that were previously considered tangential to commerce.

Today, luxury marketing needs to take advantage of the skills that historians, archivists, visual designers and curators have to offer.

In other words, the more complex the story to be told, the more interdisciplinary the brand’s approach to marketing. In turn, the complexity and depth of the story is what moves the brand higher up in the hierarchy of luxury brands.

 

 

 

 

 

 

 

 

By Thomaï Serdari 

By a Luxury Daily columnist

 

 

ROGER DUBUIS - Excalibur 36, this new model willl be presented at the SIHH 2013

 

One model in the Excalibur collection adds a precious touch to its daring designs. The Excalibur 36 in pink gold and set with a halo of 672 diamonds (approx 4.78 carats) sparkles with the light of a thousand fires. Its aesthetic codes- dynamic shapes, sharp angles, powerful design – give it an allure that links refinement and beautiful watchmaking, without affecting the Roger Dubuis signature in any way.

Excalibur 36. © Roger Dubuis

In the Geneva Manufacture women are seen as heroines: it has created an exceptional timepiece that is a true hymn to femininity. The Excalibur 36 in pink gold offers a remarkable mechanism in a powerful design. The brand’s craftsmen have been very ambitious in creating an ultra-precise piece with a charm that is only matched by its performance.

The watch represents the avant-garde spirit that characterises Roger Dubuis and is the essence of its excellence in jewellery. It embraces preciousness and beauty with its bracelet set with 624 diamonds totalling approximately 3.79 carats. Precious stones surround the centre of the polished bracelet with its two rows of symmetrical brilliant-cut diamonds. The magic continues on the bezel set with 48 diamonds totalling around 0.99 carats.

Echoing this flamboyance, pink gold extends all the way to the Roman numerals applied delicately on the dial and around the small seconds counter at 6 o’clock.

And because excellence is the benchmark of this creation, it is fitted with the latest generation of a Roger Dubuis mechanical movement with automatic winding: the calibre RD821. Composed of 172 parts, it indicates the hours, minutes and seconds and can draw on a power reserve of 48 hours. Lastly, the Excalibur 36 has received the highest recognition in the world of Fine Jewellery: it is certified by the Official Swiss Chronometer Testing Institute (COSC), and is stamped with the prestigious Hallmark of Geneva.

An object of indisputable technical excellence that is also an exceptional piece of jewellery, the Excalibur 36 is facing a stellar future. Its boldness glows like the fire of the diamonds that form a disc of light on its bezel and bracelet. The sparkle of time touches us here as if to remind us that each moment is unique.

Christian Louboutin opens third men’s dedicated store in London

Luxury French shoemaker, known for its women’s designs, is now expanding its men’s line. This week, Louboutin opened its third store in London – the first dedicated to men, on Dover Street, in a Georgian style building. The store covers 170 sqm on two floors. The new store covers a larger men’s shoes collection and sources indicate the designer will be launching a men’s bag.

Christian Louboutin Men’s store, London – Dover Street

 

 

 

 

 

 

 

 

www.cpp-luxury.com

 

Indian conglomerate completes purchase of New York’s The Plaza

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November 28, 2012

Fairmont's The Plaza in New York

Conglomerate Sahara India Pariwar completed the $575 million purchase of the majority of Fairmont-managed The Plaza Hotel in New York yesterday and plans to make improvements to the property.

The conglomerate now owns 75 percent of The Plaza, while the remaining 25 percent is owned by Saudi Arabian investment company Kingdom Holding Co. The purchase was initiated this summer and was completed Nov. 27.

“I think the Plaza is an iconic property in New York and it seemed like an attractive investment,” said Greg Rice, president of Solid Rock Advisors, New York. “It is great for a long-term investor since it is one of the world’s most valuable pieces of real estate.

“Sahara India Pariwar’s intent was to purchase the entire hotel completely, but Kingdom Holding Co. did not want to sell its share,” he said.

“The conglomerate does plan on making some improvements to the hotel, but decisions have not been made yet.”

Solid Rock Advisors advised the seller El Ad U.S. Holding Inc. in this transaction.

Fairmont Hotels & Resorts was unable to comment directly.

Keeping the legacy
Fairmont will continue its long-term agreement to operate The Plaza Hotel, but Sahara India Pariwar is planning to make some changes.

The Plaza Hotel

The Plaza expects guest service to continue as usual despite the change in ownership, per Fairmont.

“Fairmont gets to keep the management agreement, which is good for the brand as a source of revenue and for maintaining its flag in this important market,” said Ron Kurtz, president of American Affluence Research Center, Atlanta.

“Sahara India Pariwar may be more inclined and able to invest in property improvements than El Ad U.S. Holdings,” he said. “It is not yet clear whether this will add value to The Plaza.

“The new owners may simply be parking money in an asset that they believe will appreciate in value.”

Other investments
Sahara India Pariwar owns hotels, news media, entertainment channels, sports teams, housing developments, a hospital, a film production studio and other investments. 

The group’s other hotels are the 5-star Sahara Star, Mumbai, and the Grosvenor House Hotel, London.

Sahara Star

The conglomerate’s founder is Subrata Roy Sahara. It is located in Lucknow, Uttar Pradesh, India.

The minority owner Kingdom Holding Co. has holdings in numerous companies around the world including Four Seasons, Apple, Time Warner, Pepsi, Citigroup and Walt Disney.

Kingdom Holding Co. is based in Riyadh, Saudi Arabia. Its chairman/CEO is HRH Prince Alwaleed Bin Talal, a member of the Saudi royal family.

“Sahara India Pariwar is already in the luxury hotel business and this gives it an iconic property in perhaps the world’s key hotel market,” Mr. Kurtz said. “This may be a link in a strategic partnership with Kingdom Holding Co., which has great resources to invest in other ventures.”

Offer on the table
Recently an offer for another iconic New York hotel was made.

A $900 million offer was on the table for the owner of Four Seasons Hotels and Resorts’ New York property. If the deal was to go through, the hotel would need to quickly reassert its presence in the market, experts said.

On Nov. 4, an unidentified buyer offered owner Ty Warner $900 million for the Four Seasons Hotel New York. Since the brand has essentially created a landmark in the market out of its flagship property, the potential transition could be tricky, but experts agree that Four Seasons is sure to bounce back quickly (see story).

The owner of any luxury hotel property should know what it wants to get out of the investment to successfully and profitably operate it.

“The conglomerate needs to have a long-term perspective for its investment in this property, especially given the price per room that they are paying,” Mr. Kurtz said.

 

 

 

 

 

 

By Erin Shea

http://www.luxurydaily.com

Pierre Frapin Cuvee 1888 Grand Cru is Star of Bonhams Sale

Headlining Bonhams' upcoming Fine and Rare Wine auction is a very fine and rare spirit indeed, the Pierre Frapin Cuvee 1888 Grand Cru. Housed in a stunning crystal glass decanter and embellished with a 24 carat gold spiral encircling the bottle and stopper, the Pierre Frapin Cuvee 1888 Grand Cru Cognac pays tribute to its founder Pierre Frapin, who in 1888 selected the cuvée which won the Gold Medal at the ‘Exhibition Universelle’ in Paris in 1889.

Made by renowned Cristalleries Royales de Champagne, the crystal glass decanter is presented in a polished wood cabinet with a neat surprise of its own: slide open a drawer and you'll discover a gold-plated "pocket watch" filled with Pierre Frapin perfume, designed to complement the nose and tasting notes of the precious cognac.

Besides this extravagant item, the Bonhams Fine & Rare wine sale in London will also some exceptional wines from private European cellars, including a remarkable range of Spanish wines from 1925 to 1982 and 12 vintages of Lebanese Chateau Musar from 1979 to 1994.

Bonhams