That will be the mantra of the luxury customer worldwide as “fast luxury” fatigue spreads rapidly, according to “Luxury: Considered,” a report commissioned by De Beers and released earlier this month. The study, conducted by Ledbury Research, explores trends in the luxury sector and is a warning for brands to clean up their acts — or perish.
De Beers and Ledbury polled heavyweights from the $200 billion luxury industry, including Domenico De Sole, Mohan Murjani, Michael Kowalski and François Curiel, as well as Barclays Bank and Merrill Lynch.
“The tide is turning with a new breed of consumers who are seeking style with substance,” said Stephen Lussier, executive director of De Beers Group. “These new consumers desire something more meaningful than just an expensive piece. They want brands to live and breathe their values through the way they do business.”
De Beers took the findings so seriously that it decided to more than double its U.S. consumer marketing budget for the Christmas period. “Women want a deeper relationship with fewer, better things,” said David Lamb, chief strategic officer of Forevermark, the recently launched De Beers diamond brand.
The report says the luxury consumer is a rapidly evolving animal, and nowhere is that more evident than in emerging markets.
“We used to say that it takes several generations before new money becomes old money, but this is changing quickly,” said Radha Chadha, a Hong Kong-based brand strategist. “You see the same person graduating very rapidly from covering herself up with logos to becoming a very sophisticated lady five years later.”
Indeed, emerging market consumers also are hopping on exactly the same bandwagons as their Western cousins. “Stores like Comme des Garçons and Martin Margiela are opening up [in India and China], which we wouldn’t have thought possible five or six years ago,” said Mark Henderson, chairman of Savile Row Bespoke Association. “And because of that, brands are now starting to introduce a higher level of luxury, like bespoke services or a tailored experience.”
The report also hones in on the importance of consumers’ emotions — and thirst for knowledge and experience — when making a purchase. Shoppers increasingly will pause for thought before they buy, which means brands have to woo them more than ever with better customer service, sourcing policies — and interesting back stories.
The report cites the carmaker Bentley, which allows customers to visit the factory to watch their car being constructed, and Dunhill, which earlier this year opened Alfred’s, a members club in London’s Mayfair, where shoppers can eat in the private dining room, sample the wine cellars and even book a room for the night.
“You actually have to show the product attributes that make you better than your competition,” said Simonetta Morrison, Ferragamo’s director of worldwide merchandising and marketing of women’s leather goods.
According to Tom Ford, the consumer’s environment needs to be intimate — rather than scene-y. To wit, his new stores are furnished with items from his own home, according to the report.
In addition, a brand’s provenance will be an increasingly important factor in a consumer’s future purchases. The De Beers report, quoting a 2008 MasterCard study of wealthy Chinese consumers, said: “Fifty-six percent…prefer to buy world-famous or foreign brands, compared with 31 percent who choose domestic and local upscale brands.”
Environmental credentials, too, will carry increasing weight among consumers: “A few people always cared about the environmental and sustainable impacts of their purchases,” said Sylvie Benard, environment director at LVMH Moët Hennessy Louis Vuitton. “But something happened one-and-a-half to two years ago to make consumers more interested in these issues. About 30 to 40 percent of luxury consumers claim to be concerned with purchasing responsibly,” she said.
Lussier of De Beers believes this is a pivotal moment for the industry.
“We are seeing a move away from immediate gratification, and in tough times, luxury consumers return to basics — to investment pieces that represent genuine value because they deliver on a promise — and last,” he said.
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