Teacup

For many of us, the closest we’ve gotten to owning products from the luxury market is oogling the shopfront through the window. But for the privileged few, the luxury market is a world of wonder where any desire can be filled with the swipe of the card.

Who is the luxury consumer?

The luxury market consists of the top 10% of the wealthiest people in the world. Despite the limited number of consumers that are able to afford the products, the luxury market is no small player. Research done by Mastercard in 2008 showed that US luxury sales topped at $891 million in September this year, up 3.4% from last year. Research by Unity Marketing also showed that in the last 3 months leading to September, the luxury consumer spent an average of $18,826 each (highest-income earners spending an average of $43,111). With an average annual income of $228,800 and so many products to choose from, you have to wonder, what tickles a luxury consumer’s fancy?

Luxury consumers are motivated by enjoyment and personal growth

Luxury consumers indulge in luxuries for two reasons: pleasure and enjoyment; and to improve the quality of life through self-actualisation. So as marketers, it’s important that we try to enhance the pleasure the consumer feels while consuming the product and provide ways for them to improve their own personal growth and life experiences through the product.

In the video clip below, marketing and advertising agency Atelier (a division of Leo Bernett) looks at how the luxury market is changing in the financial downturn. According to the guys at Atelier, the luxury consumer is no longer about status building – up until now, luxury goods signified status and glamour. Consumers today are engaging with luxury products to please themselves instead of conveying their lifestyle. They look for new forms of experiencing luxury in smaller amounts that provide an even higher quality. Instead of buying several lower-priced items, they will spend more on a single longer-lasting luxury.

They expect authentic products and a high level of ethical practice

In today’s market, luxury consumers look for exclusivity, authenticity, quality and dependability, reports Forbes.com. They also suggest that although consumers recognise ‘green washing’ (where a company overstates their environmental commitment), they expect luxury companies to uphold a high ethical standard. As consumers become more and more aware of manufacturing process and the increasing trends for goods being produced outside mainland Europe, shoppers are looking for assurance that they are getting their money’s worth. To address this, many high end companies have started releasing ‘behind the scenes’ look inside how they make their products (See Making of a Hermes Bag below).

Luxury consumers are not immune to the recession

Reporter Mirril Mascarenhas at the Canadian Marketing Association claims that there is a new sense of discretion with luxury spending. “Instead of that coveted shopping bag with an iconic brand name, some are asking for something a little less ostentatious.” Well aware of public backlash that could erupt in this economic turmoil, luxury shoppers are looking to conceal their wealth in order to be considerate of less wealthy consumers.

“Wealthy customers are asking for plain bags, no boxes, or requesting goods be delivered later. They don’t want everyone to know nor do they want to flaunt their brands. Another study argues 62% of wealthy consumers say openly flaunting wealth is out,” writes Mirril.

Like the consumers, the luxury brands are not immune to this recession either, even those that do promote quality over quantity. According to Forbes, “Even the privately owned French label Chanel–known best for $2,000 bags and $6,000 suits that last a lifetime–announced that it would cut 200 jobs this month.”

Can money really buy us happiness?

Despite its changing nature, the luxury market is not going anywhere soon. Changes in luxury consumer behaviour reflect their evolving attributes and the effects of the recession on the luxury market. But for those of us who still have a few years left before we can call ourselves a luxury consumer, I leave you with this: Journalist Benjamin Wallace trials some of the most luxurious goods in the world to try answer Can our happiness be bought?

Hmm.. when you look at some of the products… Maybe…

An interesting talk from advertising guru Rory Sutherland at the TED Talks 2009.

Rory talks about how changes in perception can influence the value your product provides to your customers. What constitutes value in the eyes of the consumer however is a mixture of various criteria including price, quality, features and service received.

What is Value? It comprises of many different factors.

Before potential customers even walk into your shop, they will see whether they identify with your brand personality and what overall value they expect to get from your brand. They would have already made prejudgements about your brand based on your prior marketing, your shop window and demographics of your existing customers. So you must portray compelling value to seduce customers into your shop and work even harder to maintain your value levels for existing customers.

How do we provide value?

Research by Cotton Incorporated in their Lifestyle Monitor shows 3 key trends during the recession times. We are more likely to:

• invest in durable, classic pieces that will last several seasons,
• purchase as many trendy items as our budget will allow, and
• stick with our favourite brands regardless of price, but buy less of them.

Although traditionally, we have worked to provide tangible value to customer through tactics such as sales, free gifts with purchase and two for one deals, Rory suggests that providing intangible value should constitute a greater proportion part of overall value as it will build a long term connection with the client.

Branding of your label adds to your overall value

The branding of your label has a lot to do with the value you will provide: it affects your pricing strategies, promotions, locations, product designs and storefront.

Reporter Bobby Riley writes: ”A good brand strategy creatively reframes what the brand stands for in culture beyond a product description and tactical marketing ideas. It’s a directional creative idea that drives everything the brand does, and goes much deeper than the surface aesthetics of the fashion business.”

Your branding is the public face of your label. Thus, you must show your message, values, philosophy and personality in a relevant and unique way.

Becoming a Purple Cow

To ensure your brand is continually growing, you need to be outstanding – stand out from the crowd, and as marketing guru Seth Gordon puts it, be like a purple cow in a herd of brown cows.

When you cater your promotions to the masses, you typically end up creating campaigns that is like vanilla: easy on the eyes but safe and generic. By doing this, you are inadvertently creating something that may be adequate, but is not remarkable to anyone. Have a look at the advertisements below from various fashion and beauty houses. Which of them do you actually take notice of and will remember?

Now look at the ones below. If you saw these ads in a magazine, would they stand out?

These ads were spotted by consumers around the world, taken note of, remembers and passed on through word of mouth. The video below from TrendHunter TV shows the top 10 innovative fashion campaigns that has been passed on to them from consumers themselves.

Providing a memorable brand experience

In a world that is so cluttered by advertising, like the brands featured in the TrendHunter TV video above, we need to make sure that our customers are able to pick out our brand from the the chaos. This is why we need to be innovative and start thinking outside the box as to how we can present our thoughts in a distinct and entertaining way.

Tonight, I leave you with a remarkable brand experience from Philippe Meyersohn, Brand General Manager at MABE Canadam, from visiting an Aveda store. He writes:

“As I came through the door, I was greeted with an offer of a relaxing cup of tea. From the start, I was given the impression that the sales people wanted my visit to be stress-free. Throughout my time spent there, the sales people were friendly, offering me help in selecting products. The surprising moment came at the end after my purchase – I was given a hand massage! This unexpected service at the end made my experience at Aveda very memorable.”

Thanks to this unique experience that Aveda has created, he was pleasantly surprised with the value that he received and he had shared this joy with an infinite number of customers (including myself and now you as well) through the power of the web. After reading his testimonial, I know that I can now happily go visit an Aveda shop to get the same experience without having doubts about what kind of value I will receive.

Colour is beautiful. But, sadly, today I am not talking about colours as in red, yellow, green and blue. I am talking about racial and ethnic colours. Recently, there has been many controversy brewing about (or more about the lack there of) coloured models on the runway. Supermodel Naomi Campbell accused companies in August of this year for using the recession as an excuse to drop black models. Experts have shone light on many of the issues in the fashion racial debate including runway organisers deciding that having one coloured model per runway show is enough, the perception that a cover or an advertisement featuring a coloured model will not sell as well as one with a white model, designers not feeling conscious enough of the lack of diversity in their shows and those with the power to influence not pushing for more inclusion of coloured models.

In 22 fashion spreads in 9 magazines, only 1 featured a black woman

Surely, this cannot apply here as well, I thought. So, I went to find out and picked up this month’s Marie Claire issue with Ms Rachel McAdams on the front cover. Although it was good to see there was an editorial feature on racial prejudice (perhaps indicating Naomi’s concerns do go beyond the fashion industry), I was shocked and deeply saddened to see that only 7 of all the 330 pages in the entire magazine contained models from a non-western background and only 1 advertiser using a coloured model in their ad. And it seems that other magazines are no different. You only have to flick through the first couple of pages to see the effects. A fellow blogger Jezebel did an analysis of all major women’s magazines in December of 2007 and found that in 22 fashion spreads in 9 different magazines, only one featured a black woman (singer Beyonce Knowles – whom, in my opinion you can’t really count as a model, she’s a superstar! If you can get her, of course you’re going to put her in the magazine!).

Italian Vogue’s All Black Issue

However, it is not all lost. In July 2005, Vogue Italy launched an ‘All-Black’ issue to raise awareness of racial prejudice in the fashion industry featuring only black women throughout the entire issue. The issue was such a success that it was sold out within 72 hours in UK and the US and was rushed to reprint an excess of 60,000 copies. Just recently this year in July, the ‘All Black’ Italian Vogue returned but featuring the new all-black Barbie (not all-black models).

All Black model line ups

In fashion weeks world-wide, designers have also started featuring all-black or all-coloured model line ups including PPQ at London Fashion Week, Sophie Theallet at New York Fashion Week and Jean Paul Gaultier in Paris Fashion Week (although Gaultier did feature a couple of western young ladies).

Are we really ready to change?

A study done last year by professors at Villanova University and College of New Jersey found that although ads with thinner models made women feel more self-conscious, they feel better about the product being featured in the ad. Reporter Jack Neff from AdAge writes “Despite the negative effect on their body image, women preferred ads showing thin models and said they were more likely to buy products featured in those ads than in ones showing ‘regular-size models,’ said Jeremy Kees, a business professor at Villanova.” Why do we expect magazines to embrace women of all colours, shapes and sizes, when we, the women reading them, fail to do so?

How do you feel about this issue?

In the midst of fashion industry, you will never see a high end brand without beautiful campaigns. Thousands of dollars are spent every year on ad campaigns and photoshoots to make sure we have stunning shots to represent our brands. You just have to flick through any of the glossy magazine to see the number of beautiful women (and men) spread across the pages. It is a well known fact that glossies themselves spend tremendous amount of time and money altering images from the cover to the back of the mag to ensure that no detail is left imperfect. But, even though we are aware of this fact, I don’t think we, as consumers, grasp the degree to which this is taken to affect. In fact, 99% of what we see in magazines is somehow retouched or altered and many of us do not realise this.

The world is taking a stand against this however as the French government contemplates enforcing laws to require photoshopped images in magazines to be stamped with a ‘health warning’ claiming:

“Photograph retouched to modify the physical appearance of a person.”

The British government is going one step further and pushing to ban photoshopping completely on ads aimed at people under 16 years of age after pictures of 59 year old Twiggy appeared an Olay ad almost airbrushed to death.

One of the more recent culprits that we publicly shamed is Ralph Lauren with their model Filippa Hamilton whom they later fired for being ‘too fat’.

The photo was sent to Photoshop Disasters by the source and widely spread within days. One internet blogger form Boing Boing wrote: “Dude, her head’s bigger than her pelvis”.

If the new laws were put in place, you have to wonder though whether they will actually work. Isn’t it the same idea as putting ’smoking kills’ warnings on cigarette boxes? It’s shocking the first time we see it, but after a while we slowly just skim over it. Not knowing how much alteration has been done to the image also makes it easier to not really think about it all that much.

Nevertheless, I think that creating unrealistic standards of beauty is unfair especially to kids growing up idealising what they see in TV and magazines and have little idea about whether what they see is close to reality or not. Although simply putting a fineprint warning may not be perfect, it does create some sort of awareness and I think it is a good start.

Welcome to Teacup – a blog celebrating and discussing marketing within the fashion, beauty and luxury industries. To launch this blog, in today’s post, I will be discussing the effects of social media itself such as blogs, facebook and twitter on the fashion industry. I hope you enjoy it and look forward to many posts to come

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Despite the many benefits we’ve seen in marketing through social media, do the same rules apply to the fashion, beauty and luxury industries? With our ever increasing need to maintain our exclusivity, making our brands widely available through sites such as Twitter, Facebook and YouTube can sometimes be detrimental according to Online Fashion Marketing strategists Macala Wright and Yuli Ziv.

You can’t be a control freak with social media

Why is this? Social media limits the amount of control you have with things that are associated with your brand. For example, your readers or followers may publicly comment or critic your label – this can sometimes good feedback from your customers but you also run the risk of negative feedback or attack from ‘brand bashers’. As a label trying to uphold a certain upmarket standard, you loose the ability filter content and control your message.

Power shift to the consumer

Social media also gives more power to the consumer. Traditionally fashion trends were dictated by the fashion houses and trickled down to the mass markets. With the rise of fashion bloggers, fashion websites, review sites, DIY fashion, this power is shifting towards the end consumer to decide what styles he/she prefers, whether they make their purchase directly from the designer or from a distributor, how much they’re willing to pay, and when things go wrong, whether they will take matters into their own hands and (a marketer’s worst nightmare) publicly humiliate the company online.

SME’s and Mass markets can tweet away

However, it is not all bad. Social media is fantastic for small to medium brands who need low cost promotional mediums and mass market brands who are not as concerned with creating an excessive feel. It allows these companies to turn customers into fans and create an interactive community to engage their clients. However, Macala and Yuli claim that most brands are simply using social media as an online outlet store offering sales, discounts and promotions. The fashion industry having a reputation for being a one way communicator, the brands that do take on twitter and facebook, it’s important to understand that they are social media and as the name implies, need to use it to create content that would hold a conversation with your customer.

View Video  (fast forward to about 2 minutes to skip the intros)

See Part 2 of the Seminar