Blogging From the American Express Publishing Luxury Summit: What Do Consumers Want?
As the American Express Publishing Luxury Summit got underway all old was new again. This is a crowd much shaken by the fickle consumer but also ready to focus on the future. They want your dollars, luxury consumer, and they are tentatively certain you might be ready to spend them again. But they also know that you've changed.
Cynthia McFarlane, President, Saatchi & Saatchi Latin America, broke down the results of her survey of luxury consumers around the world and found some core points of global connection. Customers want what is classic, quality and a known quantity. And yet, they want to be surprised, they want to be dazzled, they want thrills. They want choice, but not too much choice, deals but not discounts. It's all a bit confusing for brands trying to maintain consistency while creating the excitement luxury consumers need to see.
One things interesting to note across the panels was that when it came to discussions of successful luxury one name kept coming up, Hermes. Luxury advisor Michel Gutsatz praised the brand for its integration of ad campaigns, website and stores to create a distinctive unified brand. William S. Taubman, the Chief Operating Officer of the Taubman Centers chain of shopping centers also highlighted the brand for its commitment to quality and authenticity. Time and again the distinctive orange brand received accolades. Louis Vuitton also got approving nods for focusing on core values of craftsmanship, a message neatly shown off in their recent ad campaign featuring everyone from famous astronauts to Baryshnikov. Pretty amazing that the future of luxury branding is being shown by luxury brands with very long histories. Another brand often discussed was Apple. Why Apple? Because nobody gets Apple discounts and that itself is a form of luxury and a little bit of magic that other brands would love to emulate.
And then there's green, except we don't seem to be calling it "green" anymore. Sustainable, eco-friendly, social entrepreneurship are all important buzzwords. Michel Gutsatz pointed out that consumers look to governments, NGOs but also companies to lead the way in socially responsible behavior. In a panel discussion on the power of being (and doing) moderated by Nancy Novogrod, Editor in Chief of Travel + Leisure, with panelists Michael Kowalski, Chairman of Tiffany & Co.; Adam D. Tihany, Principal of Tihany Design; and Christopher Cowdray, Chief Executive Officer, Dorchester Collection, it was mentioned that what true luxury is today is sustainability. But brands are finding ways to make changes that don't impact the consumer too much. Examples that were given included changing paper used in the TIffany bags, using low VOC paint in hotels, the old standard of changing the hotel towels less often, using induction ovens in kitchens and focusing on energy conservation. For luxury brands this move toward responsible luxury has to be subtle. Tiffany is a good example, in the past few years they've gotten greater control over their supply chain, cutting diamonds in Botswana and Namibia and manufacturing their own jewelry. These changes aren't something the customers see right away but it makes a difference to how the brand exists in the world. One thing that Mike Kowalski noted is that while this is good for customers it is also rewarding for Tiffany's employees and that has its own value.
No trend conference is complete without a discussion of the world of digital. For luxury brands part of the challenge is in carrying the core brand onto the internet. Having a Twitter account and a Facebook account is just the beginning. Virtual reality, once the scary out-there outpost of the web could have real value for brands in the form of virtual fashion shows and more. Several lecturers at this conference exhorted the luxury brand representatives in attendance to double their digital investment. Whatever you are spending, said one, it's not enough.
Another thing that is different from 2008, the last time this Summit was held, is the rapid rise of limited sale sites. In a couple of years of doom and gloom one bright spot has been time-sensitive sale sites like One Kings Lane, Gilt and Rue La La, at this summit another, travel website Vacationist, was launched. What these sites provide in addition to good deals is a sense of curation, the sales offer discounts on a few selected items. This saves both money and time for the consumer. Time remains the ultimate luxury. What these sites also offer is a bit of built-in connoisseurship something that Marian Salzman, President, EuroRSCG Worldwide PR defines as a huge trend going forward. But Stephen Sadove, Chairman, Saks Incorporated mentioned in a panel discussion that while these sites move major merchandise at 70 percent off they find that product moves more slowly at lower discount points. Some of these sites also sprung up as a response to massive inventory overflows that happened when the boom went bust in 2008. As luxury brands cut back on what they made in 2009, it may be harder, particularly for fashion fast sale sites to find the merchandise. The message here is that the conversation needs to shift away from price and more into emotion. Make it a must-have and the shoppers will throw caution to the wind and buy anyway.
We're entering a new decade and it's an uncertain world, luxury brands are happy to no longer be in freefall but they are chastened, tentative and hopeful that, for now, the storm is passing. They hope you believe it too.