Luxury Brands: From Masters to Concierges
By Manfredi Ricca
Luxury brands once sought discerning customers in the so-called mature markets while being sought after themselves as objects of desire for status-seeking consumers. It was a game of hide-and-seek, with a need to be as subtle as possible for the sophisticated elites, and as visible as necessary for the icon-thirsty masses at the borders of these brands’ empires.
How times have changed. Recent lukewarm results by some major luxury brands indicate that, even in fast-developing markets, the relationship between exposure and desire is no longer a sky-rocketing straight line, but a declining curve. The gradual transition from showing to knowing (or from status
to substance), once waved off by some as being a purely European concern, is now beginning to impact more brands’ bottom lines.
While there will always be demand for logo-laden fare, the global sweet spot for luxury brands will be subtlety in approach and rarity in manifestation. And this won’t be just a question of taste in product design, but will also affect volume growth and retail network expansion. Finding a place in people’s hearts will increasingly become a question of absence rather than presence, and the number of directly operated stores may have to be reconsidered.
The desire for less-conspicuous forms of luxury may seem like a passing fad. But increasingly, the global social and political debate will center on wealth distribution, not creation, making the use and marketing of brands as status symbols out of step with the spirit of the times. Consumption will therefore no longer be a viable paradigm for these brands. Focusing on uncompromising product excellence, not merely quality, will become more critical than ever.
The curatorial concierge
Many luxury brands think of “experience” as the ceremony leading to a purchase, transforming individuals into customers. The new pattern will reverse this, with purchase being the starting point of an experience transforming a customer into a unique individual. Leading luxury brands will need to be more than a skilled master. A global luxury brand will have to serve as a ubiquitous concierge, providing exclusive products, services, and counsel that are consistent with the distinctive lens of its own characteristic heritage and focus.
How this role can be engineered into a viable business model should not spur a revival of the defunct brand extension model of the nineties. Rather, luxury brands must build an ecosystem of talent around themselves, tapping into the insights, craft, and technology of completely different industries and like-minded partners.
— Manfredi Ricca (email@example.com) is Managing Director, Interbrand Milan