The Transformation of Luxury Brand Marketing

There are many good postings to share:

André Galhardo: As “Jacques Lacan pointed out, human-beings need to learn how and what to desire. ‘Desire is the Desire of the Other.’ It is on the basis of this fundamental understanding of identity that Lacan maintained throughout his career that desire is the desire of the Other. What is meant by him in this formulation is not the triviality that humans desire others, when they sexually desire (an observation which is not universally true).

Flavio Azevedo: "What constitutes luxury becomes a wholly individual and emotional decision." Clearly the rules of luxury are not set exclusively by a few educated minds anymore. Experience is luxury. Silence is luxury. To some, not mentioning the word luxury is luxury. Very human. Not so engineer-friendly.

Bart Suichies: Luxury comes from exclusivity. Individualism equals exclusivity. So by definition, every time a brand gives room to consumers to express their individualism, it becomes an exclusive, luxurious good. This will lead to a future of consumers using their self-expression to get the luxury into pretty much any brand in their brandsphere.

Christian Briggs: If this is the case, then the current weak version of experience co-creation (which is still more like mass configuration at this point, despite its own protestations to the contrary) may give way to what I have been calling "deep co-creation," in which customers not only co-create the experience and some of the value, but the business itself (and, by extension the brand). And they will of course do this as a large, interconnected community. So in this changed world, a big part of people's meaning might come from co-creating a business and seeing it thrive.

Thanks everyone for these are great insights. So we all agreed that the very idea of ‘luxury” has changed. .  What you buy is more important than what you earn. Luxury is not a goal anymore. For many, it has become a necessity, part of our daily experiences. Although the purchases are the same, motivations are different.  While consumers are always eager to rationalize their luxury purchases, today they do so based on different value systems. Today’s luxury drivers are rooted much more firmly in personal well-being and self-satisfaction while purchases such as jewelry, watches and handbags continue to satisfy the desire and to indulge one-self and one’s loved ones.

Here are some further insights into luxury goods purchase behavior:

Real vs. Imaginary- Consumption sometimes operates at a level of the imaginary, but it also has real effects in facilitating the construction of self-identity. While luxury shoppers are led by rational desire to purchase items of high value and craftsmanship, eight of the ten top purchase motivators are emotionally driven.  Marketers must tap into consumers’ desires for well-being, self-concept and indulgence. The consumption of symbolic meaning, reinforced through advertising, provides the individual with the opportunity to construct, maintain and communicate identity and social meanings. Victoria Secrets is a great example of a marketer using the unobtainable, imaginary dreams of its consumers to drive sales. Beautiful and perfectly proportioned models strut down the runway and grace glitzy catalog pages to convey the notion that the company’s products can enhance—or even instill such glamour. If Victoria’s Secret products are worn by the beautiful, does the inverse also hold true? Will wearing them make one beautiful? Women scoop up the product for themselves and dazzling elegance will rub off the wearer. Ask this important question: What are your key target segments’ wildest imaginations?

Material vs. the Symbolic After a product fulfills its ability to satisfy a physical need, we enter the realm of the symbolic, and it is symbolic meaning that is used in the search for the meaning of existence. We become consumers of “illusions”. De Beers’ slogan “A diamond is forever” has been so successful in creating the illusion of “love and eternity” that a diamond is the material symbol of love and marriage. For many, the gift of a diamond symbolizes eternal love, which in itself is an elusive concept (ok not all agree). Now marketers are trying to do the same with platinum. Ask this question: What illusions does your product help consumers to create or maintain?

Social vs. the Self - The function of symbolic meanings of products operate in two directions, outward in constructing the social world—social-symbolism—and inward towards constructing our self-identity: self-symbolism. In other words, using products to help us become our “Possible Selves”. Most SUVs and sports equipment brand images are built on this very concept. SUVs have an image of being sporty, powerful, tough and rugged. They appeal to men (and some women) who may not travel anywhere more treacherous than the local supermarket.  The Hummer sold to civilians is radically different from the one used by the military, yet the brand’s image, as an enduring, robust all-terrain vehicle remains intact.  Expensive and “cool”, SUVs are popular yet practical—they hold a carpool full of kids and their hockey equipment—without saddling their upscale owners with a “minivan” image. Ask this question: What are your target luxury segments’ ideal possible selves?

Marketing of luxury goods is in the middle of a transformation. The individual must experience consumption as part of the journey towards personal development, achievement and self-creation. They are content to map their lives on a marketer’s segmentation chart. Marketing of luxury goods is evolving away from a top-down approach towards one that provides or facilitates innovations for new ideas and meanings- empowered by Web 2.0. The co-creation of brand meanings through social networks and virtual interactions has become the basis for value. This, in fact, challenges the convention view of product-centric innovation. 

Some examples invclude a social networking site targeting affluent consumers under 35 years old launched a weeks ago. Squa.re, is a members-only site offering internet protocol TV and a focus on luxury. The company behind the start-up, Square Media Ventures, which describes itself as a Web 2.0 internet broadcaster, says Squa.re "aims to bridge the online gap in the luxury sector and the affluent 18 - 35-year-old professionals market". The founders Olivier Bassil and Jeremy Genin say that the site will "move one step beyond the MySpace and YouTube generation" and will go up against other select sites, such as aSmallWorld. Bassil adds: "Leveraging social networks is a powerful sales and marketing tool. We want to help luxury brands increase their awareness among an engaged and highly influential audience." They allow members to create their own online TV channels and showcase their lifestyles with like-minded individuals with user-generated and professional video content. See you guys there in your Dolce Cabana purple jacket!

Comments

[Bart]

"Marketing of luxury goods is evolving away from a top-down approach towards one that provides or facilitates innovations for new ideas and meanings- empowered by Web 2.0. The co-creation of brand meanings through social networks and virtual interactions has become the basis for value."

A though about this interesting point that has been raised in previous discussions in combination with the 'brandsphere' concept. Most people tend to think in terms of co-creation by brands and consumers. But what about B2B? Could (luxury) brands benefit from a social network existing of 'likeminded' brands, that have the same beliefs and values and tap into similar emotions?

I think we're already seeing such networks emerge (the first thing that comes to mind is Apple & BMW), but they're mostly still partnerships and not open networks based on certain beliefs. Any thoughts about what influence these kinds of networks would have on consumers if they'd open up?

[Morgan Gerard]

In Grade 10, I had a friend who liked to make loud farting noises in French class and who once did something relevant to the current luxury crisis, transformation or challenge.

Over the weekend, my friend visited every store on Yonge Street in Toronto that sold Zod Lacoste. In dressing rooms and on display floors, he used an exacto knife to perform a little brand surgery and, arriving at school Monday morning, proudly showed us all his new t-shirt, complete with over 100 safety-pinned alligators. Even though he had long hair and listened to Ozzy, we all thought that was pretty fucking punk rock!

20 years later that same aesthetic is back, maybe in a bigger way than ever. Some hints?

COUNTERFEIT
On Canal St. in NYC or at the corner of Brimley & Sheppard in Toronto, there are more locations selling knock-offs of luxury goods than there are Barney’s, Bloomingdales and Holt Renfrews times 1000. If brands are signs and not just products, need we look for any more proof than here? And if consumers can’t make an authentic connection with a brand (translate, in this case: afford it) you can bet they’ll steal it. Will counterfeit chic come to rear its pirate head in the near fashion future?

THE MECONOMY
A report from Amsterdam-based trendwatching.com predicts 2008 as the year of the ‘meconomy’ (as opposed to the me-too economy of aspirationalism). Why?

- a disdain for big-box retailers
- a loss of faith in the cost of luxury goods.
- a feeling that luxury brands have flopped on their promise by sometimes producing less-than-stellar quality goods
- luxury house are run by brand managers rather than designers
- luxury brands have diluted their exclusivity (Lagerfeld at H&M, anyone?).

One effect, according to the report, is a desire to tell more personal brand stories through odder, more obscure and more curated puchases made from local, independent retailers and designers.

STREETWEAR
With its focus on obscure brands (1-man lifestyles like A-Ron), Customized and Limited Edition and Artist Series remixes of standards (hundreds of Air Force 1 variations since 1982), and personal tweaks on product templates (Nike I.D.), streetwear will drive more consumers towards purchasing personal and defining brand space through exclusivity.

Traditional luxury brands have a place in that space (streetwear’s musical arm, hip hop, made that obvious in breaking Prada, Gucci, LV, Moet to the mainstream), but only if they jive with core value placed on heritage and on the core aesthetic of curating one’s style by mixing & matching high and low cultures of Paris runways and NYC streets.

Online continues driving core consumers towards new products from afar (www.hypebeat.com for the world) but don’t forget the ‘street’ in streetwear: some exclusivities and subcultural luxuries are available only to the hyper-local consumer.

THE 100 MILE CONSUMER
Forget ‘Can I afford luxury?’ With increased environmental and social concerns, more and more consumers could be asking themselves, Can we afford luxury?

Big cities are seeing this with top chefs tailoring (curating, again) menus to fit meat and produce available locally and seasonally. Where a luxury food market has sprouted from the soil of organic green beans grown on farms outside city limits and then sold at the Farmer’s Market in the local park for 3x times the price of green beans in the grocery store, so too might a similar scenario emerge in established luxury brands and products.

Will fashion designer Arthur Mendonca become even more popular among consumers in his home city of Toronto because he and his labour are local? Will future car purchases be influenced by the proximity of the manufacturing plant? Will vacations be taken closer to home so as not to jet-fuel the environment?

QUESTION OF THE WEEK?
What are the unobtainables that your brands or products are based on? I’ll pass on that one when it comes to traditional luxury and where Web 2.0 fits into marketing them because buying online, making messages too public and SNSing with just anybody about the $52,500 Louis Vuitton Patchwork bag seem to contradict the anti-massness of luxury.

Instead, I’ll run with life-caches and life-streams as a luxury performance category.

- start with biographies of clients: income, status, life cycle, goals, social concerns
- meet the needs of clients paring down purchases and simplifying lives by helping them decide what Best Things In Life are worth holding on to or attaining
- help them create ‘most’ experiences (vacations that are the most exotic, extreme, relaxing, educational, wine & food-oriented) and ‘best’ services (financials where stocks and funds are in collaboration with their level of social consciousness)
- customize service in Luxury Offsetting for clients in New York that want to buy German cars, French wine and Italian purses but feel a need to compensate (Don’t plant any tree just anywhere - pay for Pinot Gris vines or a locally-sustaining crop to be planted in the upper New York State region of your choice)
- dig deep into those biographies to curate those ‘most’ and ‘best’ so clients can access not only the cultural capitals of high culture but also the subcultural capitals (coolness, obscurity, localisms, underground-ness, hyper-speed taste-making, activism etc.) of the ‘low’ and ‘mass’ cultures of the street and Internet

[Flavio Azevedo]

I like Morgan´s comments. Maybe I can try to summarize it, surely loosing a lot of the richness, but could be worth it.

Trends are emerging in a small corner of the globe. And becoming global, through the net, in weeks.

Brands are watching, trying to understand how to regain control over communication.

Forget it. That kind of control will never be gained again. The rebels found a flaw in the matrix.

It´s like if you go into this crazy party, with a lot of interesting people, but you don´t know no one. What can you hope for then? That you can find a connected-friend that will introduce you to the right people.

Brands can try to be that best friend in the crazy party.

But trying too hard or sounding fake can risk everything. Legitimacy is lost in seconds.

Once again, marketing is now a job for humans. Not for systems or methods.