THE HIGH ROAD
MASTERS OUTSIDE THE FASHION GAME SAY THERE’S NO SHORTCUT TO BRANDED LONGEVITY.
Byline: Miles Socha
Fashion may be fickle, but the vanguard of the luxury market aspires to nothing more than this: consistency.
It is a word that comes up repeatedly in conversations with the marketing minds behind all sorts of high-end goods and services, from champagne to crystal, from pens to personal jets. They say the path to “ultimate” luxury brand status, no matter what the category, is unwavering commitment to authenticity, quality and original style — along with a willingness to move with the times.
Indeed, fashion and beauty firms could learn a lot from the way a luxury image is cultivated in other industries, sometimes over centuries. Most prize quality of manufacturing and distribution over advertising and hype, for instance. To wit: a window on how a variety of firms — outside fashion’s circle — has unlocked the key to luxe longevity.
Dining: The Four Seasons’ Regularity
For regulars at this landmark restaurant of New York’s power elite, there’s nothing quite as reassuring as the timeless Philip Johnson design of the space — or the familiar face of managing partner Julian Niccolini, who has been welcoming them for more than 20 years.
Since it opened in 1959, the restaurant has not strayed from its concept, to bring the best of American food, wine and service to an upscale clientele. But Niccolini — who says his presence helps cement a “connection between the customer and the restaurant” — stresses the “continuous evolution” of its products. One cycle is the seasonal menu changes to keep the customers inspired, but more fundamental changes in the menu have accommodated changing lifestyles. For example, the wine list has grown more dependent on red than five years ago, when diners consumed far more white wine than red wine. Today, the restaurant serves 30 percent more red than white.
Niccolini says the restaurant’s chefs and sommeliers must stay abreast of all new products that come on the market, in order to fulfill the mandate inherent in its name and still stay on top in a ruthlessly trendy industry. “We’re constantly reinventing ourselves and focusing on the best of each particular season,” he boasts. “It’s very rare that you have a restaurant going strong for 41 years. We have consistency, commitment and a willingness to change every season. That’s important.”
For Niccolini, drawing a parallel to the fashion industry comes easily. If The Four Seasons were a designer instead of a restaurant, it would be Yves Saint Laurent. “Look at his stuff,” he says. “It’s timeless.”
Motorcycles: Ducati’s Winding Road
A big turnaround story in the Nineties, the Italian motorcycle firm Ducati Motor SpA was acquired by Texas Pacific Group in 1996, which allowed the company to pay suppliers properly and thus purchase the best components available.
That, according to Ducati spokeswoman Kristin Schelter, in turn allowed it to increase quality levels. From there, it was clear the company could make the jump to secure its status as an icon not only in the racing world, but also in the world of luxury.
But staying close to the customer — a phrase bandied about freely in fashion — is something Ducati takes extremely seriously. Schelter says almost everyone who works for the company rides a motorcycle; and the product’s success on the racetrack is a high priority.
“Most businesses are not as ephemeral as fashion. Ducati counts heavily on the actual performance and heritage of its motorcycles,” she says. “In this way, it could be compared to the older brands in fashion, like Hermes. Ducati makes a serious effort to buck trends and create products that the Ducati enthusiast will embrace. By becoming a lifestyle, the product has become a luxury good, representing the ultimate motorcycling experience.”
To help transform the brand from a cult favorite to a lifestyle label, Ducati introduced a line of clothing in 1997, much of it high-performance, with built-in body armor, and it launched its first catalogs and advertising campaigns.
Schelter notes that while Ducati’s racetrack heritage and the performance of its machines are the most important factors to its success, design is also considered crucial.
“Ducati places a premium on design,” she says. “Ducati motorcycles have been included in exhibits at the Guggenheim and the San Francisco Museum of Modern Art, as well as other museums and galleries.”
Some devotees are moved to create personal shrines. “People put them in their living rooms for sculpture. Or people tattoo the name Ducati on themselves. People really live Ducati.”
Writing Instruments: Montblanc Holds Its Line
Founded in Hamburg, Germany, in 1906, Montblanc continues to produce styles that are more than 75 years old. While manufactured using high tech methods, the Meisterstuck model, for example, looks much the same as it did in 1924.
That’s one reason why Eric Werner, vice president of marketing, is puzzled by the licensing frenzy in fashion. “The only thing that strikes me negatively is when brands enter a new category such as watches, and launch a product without a unique design concept, that just has a designer label stuck on it,” he says.
Werner says the key to becoming the ultimate in a luxury category is “not to follow the latest fads, but to develop and cultivate a unique brand personality that is based on a product which is authentic, of uncompromising quality and supported by a dedicated customer service.
“Authenticity, quality and customer service — and that [holds] true for our writing instruments, watches, leather items, jewelry items and paper, which are all built around the same common philosophy.”
Indeed, that explains why the company’s founding fathers chose Montblanc, the highest peak in Europe, as its symbol.
Werner also emphasizes the importance of controlled distribution, the lack of which is a common pitfall in the writing-instruments industry. He warns that selling in an “inappropriate environment,” which would include superstores and the Internet, can damage Montblanc’s carefully polished image, “which is why our company prohibits sales in these channels.”
Aircraft: Gulfstream Aerospace’s Unlimited Ceiling
A flawless understanding of the customer’s needs is the best foundation for a brand’s image. That’s the stance of Gulfstream’s Joe Walker, senior vice president of sales and marketing.
“Image is important, but it is maintained by producing a quality product that in our case is highly reliable and well serviced,” he explains. “You must meet your customers’ needs. Our aircraft are designed specifically for our individual customers. They are customized totally for their individual taste and needs.”
Founded in 1958, Gulfstream now claims a 56 percent share of the market for long-range and ultra-long-range business jet aircraft. The Gulfstream V, introduced in 1997, is capable of flying nonstop for 6,500 nautical miles, at speeds up to Mach .885, and cruise at altitudes as high as 51,000 feet, well above commercial traffic and adverse weather. At present, more than 1,160 Gulfstream aircraft are in service.
“It’s what you bring to the table in terms of the product that defines the value to the consumer,” he says. “Each Gulfstream model has been an improvement over the previous. Our customers wanted more range, reliability, speed, comfort, communications — and our current focus is on-demand availability. We are constantly raising the bar on ourselves, to reduce our scheduled maintenance cycles so that our end user has more of the product available to him.”
Electronics: Bang & Olufsen’s Fidelity to Function
“Fashion can be a slave to trends. This is something B&O has never been and hopefully will never be,” professes Ole Bek, president of Bang & Olufsen America. Celebrating its 75th anniversary this year, this maker of high-end electronics continues to base its products on simplicity of design and convenience.
In recent years, it introduced a range of products that are more affordable, including telephones, but Bek insists this tier of products has to meet the same standards of design, quality and detail.
Bek credits tightly controlled distribution for helping the firm maintain a luxury reputation.
“We have recently eliminated all distribution from multibranded stores and are only focusing on Bang & Olufsen retail stores. These stores effectively communicate our commitment to design and quality and at the same time have created greater brand awareness in the U.S.,” he continues. “The quality of your distribution is as important as the quality of your product.”
This, he says, rings truer than a multimillion-dollar advertising campaign. “For a company of our size and status, we spend very little money on advertising. We are not concerned with image. Instead, we let the design and quality of our products speak for us.”
Tableware: Christofle Sets Its Own Standard
When Charles Christofle founded the famous silver house in 1830, he declared that he would specialize in only one type of quality: “the best.” Since then, the concept has been extended to everything for the luxury table, including porcelain, linens and crystal.
Jean-Marc Gallot, president of Christofle Silver Inc., the U.S. subsidiary of Christofle Inc., is convinced such adherence to consistency is the key to longevity in any luxury category.
“It is important for companies to develop their own signature look and be consistent to that image,” he says. “Luxury companies should also be selective in their distribution to maintain a level of exclusivity.” At present, Christofle has 10 freestanding stores and 180 wholesale accounts in the U.S.
In the tableware industry, inconsistent quality and discounts at retail are anathema to a luxury image, Gallot remarks. But the main sin he sees committed by fashion and beauty firms is to veer too far from their heritage, “following the trends when it may not suit their customer.”
Motor Cars: Mercedes-Benz Matures Emotionally
Ten years ago, Mercedes-Benz was in a quandary. People considered its cars the safest and most durable around, but said they planned to buy other brands nonetheless.
It was a crisis of relevancy. The German car maker realized it had the rational reasons for purchasing covered, but not the emotional ones.
“People have so many choices now, that they can expect a car to meet their specific lifestyle needs, even to express who they are,” says Ken Enders, vice president of marketing, Mercedes-Benz USA. That’s why Mercedes recently introduced lifestyle-oriented cars like its SLK roadster and CLK coupe.
“We have something of an advantage in terms of a brand that’s had a strong identity for over a century. But then the challenge becomes keeping the brand relevant to new and different generations of buyers,” he says. “In recent years, we’ve stretched the image of the brand. With the new products we’ve introduced, the brand is multi-dimensional — full of excitement and emotion, yet classic Mercedes.
“Conventional wisdom warns against changing the image of a successful brand. Our feeling was that the most dangerous thing you can do is to not change the brand, to not tend to its relevancy, to not keep it fresh.”
Enders recognizes market dynamics, economic considerations and consumer expectations are fluid, “so the only thing you can do is keep your finger on the pulse.
“We learned our lesson the hard way in the late Eighties: Don’t rest on your laurels, no matter how successful you are, because the second you fail to anticipate and deliver on your customer’s expectations, someone else will. Build a relationship with your customers and potential customers as well, on their terms, and keep up a constant, nonintrusive dialog so you know exactly what their needs and expectations are.”
He warns against becoming too greedy, stressing that value is always a crucial measure, even for monied customers.
“In times like these, when the economy’s good and all the indicators are positive, it’s easy to assume that a consumer flush with money will pay whatever price you put out there,” he acknowledges. “But eventually, things change and spending is not so free, and suddenly your customer can’t afford you, which is bad enough, but they resent you enough to go to your competitor. Even our most affluent customers want to know that they have gotten good value, irrespective of the cost.”
Pleasure Craft: The Straight Course of Christensen Yachts
Founded 16 years ago in Vancouver, Washington, Christensen started out building “practical production yachts,” but swiftly shifted its focus to custom-designed luxury pleasure yachts of more than 120 feet that sell from $8 million to $18 million. Once on that course, Christensen has never strayed. John Lance, marketing director, says creative designs, craftsmanship and quality are paramount.
“Our success is directly related to quality — quality in our designs, quality in our craftsmanship, and quality in our company,” he said. “We will accept nothing less, and we are always striving to become even better.”
In the shipbuilding industry, releasing products too early is a common mistake. Lance says it’s important to take the time that is needed and do it right the first time. He suggests that fashion firms take that to heart.
“They make a tradeoff between style and function,” he says. “There are boats out there that have all of the sleek styling you could imagine on the outside, but because of that, you cannot live on them. Produce a quality product that works, not just one that looks good.”
Sport Utility Vehicles: Land Rover Digs In
With sport-utility vehicles still the rage and the market more crowded than ever at the luxury end, segment veteran Land Rover North America is sitting pretty. And it plans to stay there, come what may.
“Land Rover does not try to be all things to all people,” says company spokesman Mark Schirmer. “Before sport-utility vehicles were popular, Land Rover was building sport-utility vehicles. And when sport-utility vehicles stop being popular, Land Rover will continue to sell sport-utility vehicles. We have never changed our image or lied about who we are in a shady effort to grow sales.”
Established in 1948, Land Rover has since expanded its product range to just four models: Range Rover, Discovery, Defender and Freelander. According to Schirmer, that’s helped the company increase sales and reach, without diminishing what the brand stands for.
In Land Rover’s experience, the key to thriving in the luxury category is being authentic and real. “People know a fake,” Schirmer says. “Produce an excellent product, and be honest about what it is.”
In his field, chasing trends is a no-win race, according to Schirmer. He alludes with wry derision to a famous maker of sports cars that is on the verge of introducing a sport-utility vehicle. “Would Land Rover ever introduce a sports car? Never. It would damage our image.”
Schirmer watches fashion shows on CNN and is bewildered. “It is hard to tell one from the other. Does anyone have core values, clear design cues, clear performance objectives that are easily pointed at?”
Hospitality: The One-on-One Focus of Four Seasons Hotels and Resorts “Mega” is not a word in this hotel operator’s vocabulary. In the Seventies, founder Isadore Sharp decided to specialize in medium-sized hotels, a focus the Four Seasons maintains to this day, even as consolidation grips the hospitality industry.
Hotel spokeswoman Elizabeth Pizzinato acknowledges the parallels to the fashion business, which also is increasingly dominated by a few huge, multibrand entities.
“As fewer, larger hotel companies emerge, meaningful hotel brands will become more important, as the guest experiences it: What can they count on, from visit to visit and location to location? In order to make the conglomerate concept in hotels work, it will become increasingly imperative for each brand to develop a focused, compelling and meaningful marketing strategy, one that communicates the brand’s essence and then delivers it at every level of guest interaction.”
Today, Four Seasons manages 48 properties in 20 countries and plans to add 19 more by the end of 2003. But Pizzinato emphasizes the importance of how guests are treated by employees on a one-to-one basis.
“It’s all about customer focus, and then consistency: consistency of product, of service, of delivery on brand promise,” she says. “We listen to our guests and design the service around their most important needs. Then we try to deliver every time. In a service business, that consistent quality is much more difficult because, in a sense, the product is manufactured thousands of times each day, in every staff-guest encounter.
“At the luxury level, personalization is also key. Consistency doesn’t mean sameness; it’s the starting point for personalization.”
In the luxury hotel business, she says, customers expect the surroundings to be exceptional, so they rarely comment on them. Instead, they evaluate the hotel by the service element.
“In serving those whose definition of good service is about personalization, intuition and flexibility, it’s critical to ensure that the front-line person can perform. Otherwise, the whole premise of the brand is compromised.”
Champagne: Dom Perignon, Well Aged
Although Moet & Chandon was founded in 1743, the champagne house will not pinpoint the date of the introduction of Dom Perignon, the leading brand of prestige cuvee. Which is perhaps why it is so proud of the ancient-looking, handwritten script on its crest-shaped label.
“We really like to have a traditional feel for the product,” explains brand manager Courtney Dur. “That reinforces the fact that it’s not going to change from year to year, even if the yield for the harvest may change from year to year.”
Dom Perignon is produced only in exceptional vintage years and may only be made once or twice a decade. It’s aged in cellars for six to eight years, more than twice as long as nonvintage cuvees.
“You have to be true to what you’ve established, what you’re known for,” Dur says. “The reason for Dom Perignon’s success is the absolute perfection of its style, a style that has remained consistent since its inception.”
Dur said the quality of the winemaking, distribution, design and image helped establish Dom Perignon as a luxury icon. It certainly was not advertising; in fact, the brand’s first advertising campaign appeared in 1999.