Lorre White, The Guru of Luxury

Lorre White Specializes In "Class Affluent", not "Mass Affluent". It Is The Former That Will Be Carring The Luxury World Forward.

White Light Consulting is an international marketing consulting company for companies needing to reach the Ultra High Net Worth or what is called the "Class Affluent". www.WhiteLightConsulting.net

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According to today's Wall Street Journal, "The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23%, threatening prospects for a sustained housing recovery."

The continued difficult outlook means luxury brands are going to have continued difficulty generating sales from the Mass Affluent and a new report from Unity Marketing endorses that thesis.

Titled "A Study of the 'New Normal' Luxury Consumer Market After the Recession," the report is based upon 2,049 Mass Affluent luxury consumers (average income $196,974).  Think consumers similar to readers of Robb Report and Departures, or even a level above W, Town & Country, Condé Nast Traveler and the like.

According to the report, among the key findings that signal a profound and lasting change in the attitudes of affluent consumers regarding their luxury lifestyles:

"For most affluents, luxury is best enjoyed as an occasional pleasure, rather than part of one's everyday life experience, as 80 percent of those surveyed agreed, 'I've been lucky to enjoy certain luxuries in my life, but luxury is not a part of my lifestyle.'"

Significantly a cultural shift is taking place among the Mass Affluent away from
luxury indulgence toward a more conscious, careful consumer mindset.  The end result will be people unlikely to pay such high prices again for luxury, as half of those surveyed agreed, "Even after the economy improves, people aren't going to go back to buying luxury like they used to."

Doug Gollan
Elite Traveler

Household Income has become a critical measure.

With consumers less likely to be able to charge on already maxed out credit cards and few new credit cards being offered, Household Income has become a critical measure.  Reporting Pre-Tax Household Income, Elle led the way, with Household Income among women at $77,292, according to Mediamark Research and Intelligence's new fall report. Harper's Bazaar was right behind Elle at  $69,089, followed by Vogue at $68,143, while Cosmopolitan was $61,232. InStyle reported a 4 percent gain to $84,112, Allure's household income rose 3.3 percent to $65,677, and Glamour and Lucky were both down 2.5 percent to $67,555 and $82,732, respectively. Meanwhile, a few titles reported modest declines in household income, with W down 7.7 percent to $81,816. Town & Country fell 7.4 percent to $60,193 and Marie Claire posted a 5 percent decline, to $74,116, according to WWD.


By Doug Gollan
Elite Traveler

Over 90 percent of today's Super Rich are Self Made and over 80 percent of the Super Rich have made their fortune in the past 10 years. They want to learn about luxury in a way where they are not embarrassed, that allows them to save face. Luxury brands

Luxury Words

Promoting a shared comprehension of key terms within the luxury industry,

Handmade

Made by craftsmen rather
than machines and typically of superior quality.  Many luxury brands retain a tradition of making their products by hand instead of succumbing to the labor-reducing benefits of automation. Although they may take longer to produce, handmade goods come with a promise of quality and the tangible output of skills that have been passed down and refined over generations. Such goods may display minor idiosyncrasies or even blemishes but this is merely an unavoidable, and often reassuring, side effect of the production process.

Heritage

Customs and culture passed down from previous generations.  For luxury brands, heritage is about the knowledge, customs and culture that were acquired during their past. Heritage therefore encapsulates the life story of the brand, a tradition that imbues it with a sense of community internally, while adding to its perceived status and appeal externally.

LEXICON

The vocabulary of a person, language, or branch of knowledge.

ORIGIN early 17th century: modern Latin, from Greek lexikon (biblion) ‘(book) of words,’ from lexis ‘word.’  “The search for the mot juste is not a pedantic fad but a vital necessity. Words are our precision tools. Imprecision engenders ambiguity and hours are wasted in removing verbal misunderstandings before the argument of substance can begin.”

Anonymous Civil Servant

Luxury Branding www.luxury-branding.com

European's Top Choice In Luxury Brands : Lorre White's Luxury Blog

The Luxury Institute has just released the results of their LBSI “Best of the Best” Luxury Brands survey, as ranked by European high net-worth consumers.

 

The survey finds that Chanel and Louboutin are at the top of the women’s market, while Loro Piana and Bottega Veneta dominate the men’s fashions.  Predictably, Porsche is ranked highest, with Mercedes-Benz and Jaguar following, out of the 20 automobile brands.

 

The LBSI asks high net-worth consumers to rate luxury brands by category across four equally weighted components: Consistently Superior Quality, Uniqueness and Exclusivity, Making the Customer Feel Special Across the Entire Experience and Being Consumed by People Who Are Admired and Respected.

 

Which luxury providers deliver the best combination of quality, exclusivity, customer experience and peer prestige in

Europe

?

 

The “Best of the Best” are: (LBSI score out of 10)

 

·         Women’s Fashion:

o        Chanel-7.56

o        Valentino-7.54

o        Louis Vuitton-7.53

 

·         Women’s Shoes:

o        Christian Louboutin-8.37

o        Manolo Blahnik-8.35

o        Jimmy Choo-8.30

 

·         Handbags:

o        Hermes- 7.84

o        Chanel-7.69

o        Jimmy Choo-7.66

 

·         Men’s Fashion:

o        Loro Piana-7.79

o        Ermenegildo Zegna-7.32

o        Giorgio Armani-6.94

 

·         Men’s Shoes:

o        Bottega Veneta-7.83

o        Piaciotti Cesare-7.77

o        Salvatore Ferragamo-7.64

 

·         Automobiles:

o        Porsche-7.53

o        Mercedes-Benz-7.24

o        Jaguar-7.18

 

·         Hotels:

o        Small Luxury Hotels of the World-8.40

o        The Luxury Collection-8.25

o        Maybourne Hotels-8.11

 

“

Europe

will always be a core market for the luxury industry, said Milton Pedraza, CEO of the Luxury Institute.  “It is still the largest continental economy in the world and continues to be the cradle of luxury.

Understanding the Mainland China Luxury Consumer

Understanding the Mainland China Luxury Consumer

Questions and Answers with Ms. Patriica Pao, president of the Pao Principle, a global business strategy consulting firm, that conducts studies of the emerging Chinese luxury consumer.

1.  What are some key similarities between Chinese luxury consumer attitudes and those of Americans?

Both mainland Chinese and Americans value individualism.  As a result, they look to luxury goods to help differentiate themselves from the crowd.  This is a fairly recent phenomenon in mainland China resulting from its "one-child" policy.

Additionally, both groups value quality.  Until fairly recently, mainland Chinese were more concerned with the logo.

And like Americans, mainland Chinese luxury buyers value selection.
Specifically, they want what is shown in New York, Tokyo and Paris brand boutiques.

2. What are some of the key differences?

Mainland Chinese love to bargain.  As a result, over 80% of panelists said that receiving a discount would motivate them to purchase more luxury goods.

Unlike the U.S. where demand for watches is driven by both sexes, in mainland China, men account for the majority of watch sales.  Over 60% of our male panelists reported purchasing a watch over the past 12 months.  In contrast, only 30% of our female panelists reported purchasing a watch over this same time period.

Mainland Chinese possess more limited knowledge of luxury brands.
Interviews with our panelists consistently resulted in the following
question:  "Why is this [item] worth so much money?"

Unlike the Americans who make most of their luxury goods purchases in the U.S., the majority of mainland Chinese purchase in Hong Kong due to lower prices/taxes and better selection.

Magazines continue to thrive in mainland China as they are the number one source of information for luxury goods

3. Among luxury product category, do Chinese consumers favor specific
countries' products?    i.e. which countries offer highest status?

Mainland China luxury customers tend to favor U.S., French and Italian brands for their handbags and fine jewelry purchases.  With regards to watches, they tend to favor Swiss, French and Italian brands.

4. How would you say American brands rank?

U.S. brands do well in handbags and fine jewelry.  Specifically, Tiffany was the top jewelry brand of choice with almost 30% share of panelists who had reported purchasing a piece of fine jewelry over the past 12 months and Coach tied for the #2 ranking (with Gucci) in terms of handbag purchases over the past 12 months.

5. Can you paint a picture of the fashion brands the Chinese luxury fashionista is now wearing?

The Chinese fashionista taste and style mirrors that of the New York fashionista.  Specifically, she wears brands such as Chanel, Miu Miu, Balenciaga, Yves St. Laurent and Louis Vuitton but  she is careful to "mix it up" as "head to toe" designer dressing is frowned upon.

6. What are some of the key mistakes luxury brands have made entering the Chinese marketplace?

There is no such thing as "one china."  Companies entering into mainland China assume they are serving a homogenous population when in fact tastes and habits differ tremendously by region.

Not recognizing that there is a tremendous gap in their belief of what mainland Chinese luxury buyers want versus what they actually need

Not investing in programs that facilitate knowledge and understanding of their brand

Not understanding the impact the "one-child" policy has on the way mainland Chinese consumers view luxury goods

Not effectively dealing with the language barrier.  Even in first-tier cities such as Shanghai and Beijing, most mainland Chinese do not speak English.

7. What advice can you offer these marketers?

Hire people to work at headquarters who are fluent in Mandarin both written and speaking who have demonstrated true insider understanding of current mainland China cultural trends and shifts.  For example, regarding social media, brands such as Twitter and Facebook cannot be leveraged as these brands are not accessible to mainland Chinese.

Maintain a close relationship with handbag buyers.  They are extremely brand loyal and purchase multiple pieces.  Of the almost 90% of panelists reported purchasing a handbag over the past 12 months, 46% said they would definitely purchase another handbag within the next 6 months.

Those brands possessing beauty and fragrance brands need to identify and cultivate these buyers as today's beauty buyer is tomorrow's handbag buyer.  Of the 77.8% of beauty purchasers in our study who had not purchased a handbag, watch or fine jewelry piece in the past 12 months, 100% of these buyers said they would definitely purchase an additional item from the brand with handbags being the top choice.

Creatively "tweek" the existing promotional program to make mainland Chinese buyers believe they are getting a deal.  This can take the form of gift-with-purchase, tickets to special events, frequent buyer clubs, etc.

Don't use mainland China as a dumping ground for excess inventory.
Instead improve selection by offering limited edition pieces and the same merchandise that is only available in New York, Paris and Tokyo brand boutiques (but not Hong Kong).

Invest in programs that increase mainland Chinese' knowledge of your brand.  Remember that education is key to conversion.

www.paoprinciple.com.

Long-Range Forecast for the Luxury Travel Market Is Mixed

Please note that this group defines affluent is really aspirational upper middle class.  Just the fact that it talks about commercial flights instead of private jets etc, but it does give interesting information about the effects on the Mass Luxury client.

The long-range forecast for the luxury travel sector now through 2010 is mixed -- Bright and sunny for travel providers catering to the pleasure market, with storms and changing winds ahead for marketers that rely primarily on the business travel segment.  This according to a new trend report published by Unity Marketing entitled Forecast for Luxury Travel Through 2010:  A Luxury Trend Report.  It is based upon  the results of a survey conducted in October 2-7, 2009 among 1,067 affluent consumers (avg. income $228,800). 

Pam Danziger, president of Unity Marketing, says, "So far in Unity Marketing's quarterly luxury tracking study, the luxury travel sector has been one of the categories slower to recover from the recession.  The data shows that the recession for affluent consumers bottomed out at the end of third quarter 2008, but so far spending on luxury travel is down 22 percent for the first three quarters of 2009 as compared with same period last year.  In effect, luxury travel was slower going into the recession, and is slower coming out."

More business travel planned on reduced budgets – That means budget, discount, value are key words for travel providers that cater to the business market through 2010

The survey which looked at both the business and personal travel plans among affluent consumers (80 percent of whom are employed) found that while over 75 percent of business travelers expect to spend less or the same on business travel over the next 15 months, they will actually be increasing the pace of business travel.

Danziger explains, "Net/Net:  The research findings point to a modest increase in planned business travel, as a greater share of the market's most active travelers expect to be on the road more through 2010.  But they also expect to spend less on that travel.  'Road-warriors' in the short term will be looking for value from the travel brands they patronize.  The research finds they want more budget and business class hotels and budget, lower cost dining options.  Low on their list of business travel priorities through 2010 are dining in five-star restaurants; first-class air fare; or staying in five-star hotels." 

Affluents traveling for pleasure are likely to trade up to luxury level

The prospects for luxury travel through 2010 is more positive for the personal travel sector than business travel.  The survey finds that when affluents travel for their personal pleasure, they are far more likely to move up-scale to the four- and five-star accommodations that they have come to enjoy over the years.  Danziger explains, "A trend toward increased spending on personal travel is noted in this survey.  In the coming year luxury travel providers will be serving fewer business guests whose companies have put those brands on the forbidden list.  Rather they must focus on services directed toward the primarily pleasure travel market."

Most Powerful Luxury Brands

10 World Most Powerful Luxury Brands

Three brands – Hermes, Gucci and Rolex have maintained double digit growth in brand value.

This acomplishment is significant at a time when many consumers can no longer afford expensive products. And those who can often feel compelled to constrain spending, concerned that flaunting Luxury
Badges would project insensitivity and poor taste.

The Luxury category has grown by 10 percent in brand value, driven mostly by demand in China and other developing markets. In addition, classic and timeless brands have done a better job of resisting the recession.

As the most ubiquitous Luxury brand, Louis Vuitton, which leads the category with a brand value of $19.4 billion, also benefited from this trend.

All the Luxury brands score high on brand contribution, reflecting the tight bond They have with customers. These scores have not softened, despite the economic pressure, suggesting that spending will resume when consumer confidence returnes.
Luxury brands may benefit in a recession as customers reward themselves with affordable Luxury treats. Some investment gurus have even suggested investing in Luxury items as more reliable return on investment than the stock market. Rolex watches, for example, often increase in value on the second-hand market.

Several Luxury brands held secret sales late in the year to move excess stock without tarnishing Their brand image. Brands such as Moet & Chandon, Gucci, and Louis Vuitton adjusted their messages to emphasize brand heritage, with resonates with the more reflective consumer mood.

After many years of high groth, with exciting and avant-garde designs and advertising, in 2008 Louis Vuitton went back to Its heritage with the launch of the Journey campaign, featuring celebrities such as Keith Richards and Sean Connery. The idea of the campaign is a celebration of Louis Vuitton’s origins: travel and discovery, but also an invitation for consumers to live their lives as a journey. This was a masterstroke in the current times. People are looking for brands that They can trust, that have stood the test of time and that They perceive to provide value. Louis Vuitton’s classic quality and timeless style play straight into this trend.

Read full article at

www.claudiodiniz-claudiodiniz.blogspot.co

Lorre White - The Luxury Guru

From Yoga to Yachts, Cars to Candles, Private Jets to Perfumes, Lorre is the guru of all things luxury.  “Luxury is not just about amassing quantity in life, it is about living life to the fullest.  Luxury is anything we do above simple survival, it is what brings comfort, enjoyment and creates life’s memories.  Luxury is for everyone” says Lorre.  “The fastest growing luxury segment is the one that supplies an emotional component.  Luxury supplies a very special opportunity to experience something new.  It is often educational and can be shared with friends and loved ones. The Robin Leech 80’s excessive decadence, disrespectful wastefulness of resources, and gaudy gluttony is gone.  It is now an enlightened approach to living.”

6 common misconceptions about (luxury) online retail

6 common misconceptions about (luxury) online retail by Nicholas Mir Chaikin - 26 Oct 2009

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Nicholas Mir Chaikin, creative director of Spill, Parisian boutique web agency, dispels some commonly held myths about ecommerce and cautions against blindly following online business ‘rules’. 1. Ecommerce is hard. Nothing about ecommerce is intrinsically difficult. Programs that manage the logic and workflow of buying online have been pre-packaged and available inexpensively or free since before Spill set up our agency’s first eshop in 1996. However, even today, brands separate design and communication strategies from their online sales strategies. This unfortunate situation is tantamount to a premium watch company buying two pages in Vogue; the first a sleek and sexy campaign and the second, a dull pack-shot followed by the text “this watch is very expensive, please refer to the previous page to see why you want it.” Ultimately it is a waste of resources for both brands and their agencies. I have dubbed this incoherence “le iPeur” or “the iFear” (in French because I live in France) — it is basically a fear of computing and the misconception that unless the entity charged with building your eshop has 40 bespectacled engineers per room they will not be able to program a shopping cart. This follows the misconception that an entity of good designers cannot be an entity of good technicians. This is simply not true. Remember, designers are part artist and part technician, and in more “mature” arts the misconception of their mutual exclusivity has been eschewed. No one would assume that Frank Lloyd Wright’s firm could not engineer a building because he made beautiful windows, or that the design prowess of Ferrari implies that their engines are inferior. Mammoth engineering firms are important for mammoth IT projects (think public utilities or social security) but will rarely serve the interests of brand image. The professions are simply distinct. Any reasonably good web-agency with a reasonably good IT director will be able to manage ecommerce — remember that web agencies are summoned to far more complex tasks these days: social networks. Most of us have had to build a social network for one start up or another so we should have no problem even with complex CRM situations. The hard part is the same as it has always been: creating desire, communicating, and building image and goodwill. 2. Social features are necessary. While this can be true for certain brands it tends not to be a prerequisite for a luxury brand’s success online. All the same, I have seen many a brief with “allow users to rate products.” NO. Never. These are, and should be, privileged relationships from brand to client, with brands profiting from user feedback. Building an Achilles heel into your own website is a mistake. While community building may be pertinent and important in certain circumstances, it must be extremely well thought out, with impeccably executed mise-en-scene. Community building cannot be achieved via a checklist of standard offerings on out-of-the-box ecommerce software. Tweets, Facebook groups and other such tools are inherently outside of the brand space that your agency has created. Their use should be weighed in the context of the total brand experience — if they bring meaning to the experience please use them, if they do not, don’t. They can do more harm than good. 3. I need Magento! (or the buzz ecommerce software of the month) And speaking of out-of-the-box ecommerce software, today’s flavor of the month is Magento. Before that it was OScommerce, before that it was Intershop etc. The good news is that these were, or are, all good programs. The better news is that the two more recent ones (Magento and OScommerce) represent a maturation of the industry towards open source and free software, a good thing for all of us. The bad news is that they might not be the best choice for you. Magento is very good and complete software, well structured, feature-rich, it installs in seconds, and is perfect for the little shop around the corner. Why? Because, being a software package that is supposed to do everything for anyone, it has everything. It has a front-end, a back-end and an everything-in-the-middle-end. However when you need a specific front-end, and relationships with existing information systems (ERP, logistics, CRM etc.), and some haute-couture modifications, you will need to start taking it apart. Any luxury brand will have important image guidelines and objectives. An ecommerce site should be built at the uncompromising service of those objectives and not adapted from an all-purpose tool with the hope of meeting those objectives. The complexity of “un-engineering” software for the purpose of re-engineering it will probably cause compromise and unnecessary complexity. Design and specification choices should drive the technology choices and not the inverse. Beware the brother-in-law, the database programmer, who read in PC World magazine that Magento was the best ecommerce software of 2009. 4. We must heed the Ergonomist. I would not say that you want to confuse people, but beware the Ergonomist. This odd and mediocre profession is based on the notion that normalcy is superior to innovation and that focus groups should drive design. Luxury industries have not and can not work in that fashion. The products or fashions we create are not created by the consensus of a focus group but by individual artists, designers and stylists. Thus in our communication we must innovate and not be afraid to challenge and question traditional techniques. The Ergonomist will say “the search field must be in the upper right corner,” and I say “maybe!” The various stars of the vocation of web design did not get there by consensual design. The major success stories in the world of luxury industries did not communicate in consensual ways or design only consensual products. They innovated by creating desires or the need of something new. Successful communication and retailing continued such innovation. It must continue on the web as well. Throw away your focus group report (or take it with a grain of salt) and use the skills that are implicit to your industry. Karl Largerfeld would. 5. The fewer clicks the better. Again, this is the battle cry of the Ergonomist. Various site rating or “report card” documents flying around the net put a great deal of weight on this single factor, without context or a mitigating “why?” While I concur that obfuscation is not desirable, the bigger picture of user experience must weigh in as the most important criterion of your brand relationship. There is nothing inherently wrong with an extra click if the user experience justifies it. Inversely, in some cases, the more clicks the better. People may be enjoying browsing, reading, watching and learning about a brand, as they might linger in a beautiful boutique. The long-term benefits of a rich brand experience may be more important than driving people to a quick checkout. 6. Send that newsletter! Yes, you should, but only if you have something really important and motivating to say. Too often newsletters adhere to a rhythm (e.g. once a month) and not to real events in the story of a brand. Non-compelling newsletters result in subsequent newsletters being ignored, or worse, being relegated to the dreaded SPAM box. Newsletters should be considered as episodes in the unfolding tale of a brand, and your customers should thirst for the next episode.