What Constitutes Luxury & How is it Marketed Right Now?

L' Association des Professionnels du Luxe is today debating the question of luxe and premium as pertaining to terms used to communicate products to consumers at the Westin hotel (with the participation of Michel Teychène, marketing director at Air France and a trio off Added Value comprising Cécile Gorgeon-Pompéi, director, Leslie Pascaud, marketing director et Mark Whiting, director.) This gives us an excellent opportunity to question the theme for our own purposes regarding luxury brands and lessons learned from them.

News surrounding the luxury segment devising new techniques to capture the attention of consumers amidst an economy that is still not recuperating from the recession (and in fact might be in for another bout) have been landing on news sites thickly recently. Witness the mega-news that Gucci devotes an entire blog-site to the China market: Gucci China. The question of whether China is an applicable market for luxury brands or not is rather an over-discussed point. Obviously it is, otherwise so many brands with huge marketing offices standing behind them wouldn't try to infiltrate it so passionately. To point, the Hermes offspring specifically for it, as announced on these pages over a year ago, has been doing amazingly well according to reports. What makes Gucci stand out in this piece of news is that they dedicate a blog site, rather than just a part of their site, thus personalizing the platform for users and importing content that can be peripheral. The marked similarities with the Sartorialist in the layout of street fashion photography is also intriguing to watch. Could it mean, to make this a broader discussion, that one successful amateur might pose as an exemplar to the professionals? To bring this to perfumes, could it mean that specific elements of presentation offered by amateur/indie authors (be it producers of aromatic compositions or troubadours of perfume prose) can slowly become the expected way in which certain aspects of the trade will be communicated from now on?

The Missoni Target collection which sold out within the first day is another example of a new spin to the techniques of making luxe products stand out. “The combination of the excellent marketing strategy, a large number of resellers looking to profit off of the limited availability of the line and Target vastly underestimating the popularity of the collaboration are what led to such a successful, sold-out first day of the Missoni for Target launch,” said Emily Connor, conversation manager at Media Logic, Albany, NY. It's also a lesson in how social media could be of tremendous help when mobile Web problems and in-store fights erupted due to over-demand (Web crash happened on Sept.13th 9am.Eastern time).

On what constitutes the targeted market segments, two interesting facts emerge: Male consumers with an aspirational streak consume more luxe goods and the affluent family is becoming a new target within brands.

Aspiration male consumers increase their spending "dramatically", according to American Express. “As consumers grow more confident coming out of the recession, many are returning to their luxury fashion shopping behaviors from years past,” said Ed Jay, senior vice president at American Express Business Insights, New York. "[...]online and discount and flash-sale spending has provided another platform for buying favorite brands, all contributing to increases in luxury retail spend across the board". (According to numbers, that's a staggering 126% increase on premium luxe brands for non-enthusiast males in the USA). Maybe some of the Missoni-Target audience consisted of those? Compare and contrast with male fashion enthusiasts, who spent 11% less on premium luxury overall, while affluent female consumers did not change their spending habits.
Cuing in this data with the rise in masculine fragrances released by mainstream luxury and niche perfumery brands makes sense: indeed the tsunami of releases presents fragrance addressed to men like never before seen in the history of mankind. There's definitely something here. Could it also mean that the (traditional) role of women buying perfume has finally shifted?

But it's the affluent family which might be the emerging target of the luxury world: According to the Ipsos Mandelsohn 2011 Annual Affluent Survey families buy products in mass (that pertains to the digital and electronic goods especially, but a concept store that caters to each and every member of the family can also see this materialized in higher sales). The reason behind it is suggested to be one of being in control and effecting changes in an are that the consumers feel they can make a difference. Children and teenagers are increasingly monitoring purchases for families. A fact that is well known by the perfume industry as well, which has been catapulting us with releases that address the under-teens (see Justin Bieber celebrity fragrance) or slightly above.

“Additionally, it’s undeniable that the line is successful in the fact that it was truly able to keep the traditional Missoni elements, yet design a much less-expensive group of products, ranging from clothing to luggage to kitchenware to electronic accessories, that was accepted by this key demographic,” she said.

Quotes & data provided by Rachel Lamb and Kayla Hutzler. Photo via thelocal.de