Before anything, I believe it is essential to share a common understanding of what luxury is. I also believe that a precise understanding of the concept of luxury will lead you to envision its management principles as a simple and logical consequence. Defining luxury per se is not an easy task.
First, because the concept may appear relative, luxury to one of you may be ordinary to someone else. So luxury is a matter of perspective, the conception is a very personal element. Although luxury is said to be the ordinary of extraordinary people and the extraordinary of ordinary people, I strongly believe that luxury is defined by the extraordinary, the exception. It's only that the extraordinary differs from one person to the other. Luxury is also quite elusive in nature.
When you see a luxury product, how do you know it is luxury? Is it about its quality, raw material, craftsmanship, or originality in design style? Is it about exclusivity, prestige? For sociologists, luxury encompasses a social stratification role, in which its function is to demonstrate forms of power. And what has price to do with it?
Economic definitions of luxury center on expensive products or services priced above their functional value. And that is true, because the functional value is not the only form of value delivered by luxury. To make the matter even more complex, because luxury is intimately tied to the dreams of its customers, what it encompasses is also likely to evolve in our rapidly changing world.
Repeatedly, we see the term new luxury appearing. The conception of luxury constantly redefines itself to stick to the period. For instance, if today possessions and status symbols are still important to luxury buyers, We are also witnessing the rise of more sophistication in clients'choices.
Increasingly, it's about demonstrating knowledge, passion and values in what they are buying. And this also is increasingly achieved through experiences rather than mere possessions. In an attempt to define what luxury is, be it for objects or experiences, let's try to investigate its concrete characteristics. Research features various scales to measure luxury or the luxuriousness of an offering, based on identified characteristics of the concept.
In a thorough review of the literature, De Barnier and colleagues published a paper in which they identified a common denominator emerging from these scales by which luxury can be defined has access to hedonistic, very high-quality objects, experiences and personal services, sold at a price far beyond what their functional value would command, which represents sources of a sense of privilege, taste and refinement, and produced recognition by relevant authors, due to the power of the brand. Essentially, they identified seven essential characteristics of luxury offerings. First, quality, referring to the long-lasting characteristics of luxury goods and to their design and aesthetic appeal, but also to the craftsmanship.
They may mean additional constraints in terms of raw material selections, in terms of craftsmanship and training, or by going beyond the necessary. Gold-plated locks, for instance, may need more gold than the low wood command to satisfy longevity expectations. Second, scarcity.
At times, products may not be scarce per se, and increasingly luxury brands go beyond mere rarity of ingredients and crafts. It has been adding qualitative rarity with limited editions and collections. For instance, in the spirits categories, a special blend of cognac in a flake specifically designed for the occasion and made of a noble material. Third, delivering experiential rewards.
Luxury needs to be loaded with positive emotions and powerful brand associations to ignite an emotional connection. At times, even their packaging can evoke emotions. Think about the blue box of Tiffany. Their advertising even said blue is the color of dreams, as the box alone, and more specifically its color, evokes a world of emotions to consumers.
Signed by brands. Beyond product artistry, the brand signature, symbol of distinction and status, also is an essential element of luxury. And beyond the brand logo, all iconic elements participate to the symbolic dimensions of luxury. It may be a pattern, a colour, a design, raw material, anything that is sufficiently proprietary to be recognised as belonging. to the brand.
5th, control channels. They are essential in luxury. Besides lowering the risks of counterfeiting and grey markets, control channels certainly help brands express their universe with their products. whether it is offline or increasingly online as well. It is about conveying the emotions, the distinctions.
Control channels also enable creating and managing a direct link with the customers, which links to the next Next characteristics and 6. Personalized services. Control channels enable brands to develop rich experience delivery and to explain the products to their consumers. It is about creating the stage to express all the above mentioned characteristics of quality to nurture the emotions, sublimating and terrifying the offering.
to highlight its prestige. It is about conveying the luxuriousness and revealing elements behind the price of luxury goods. 7. The price For all these characteristics, we can also derive that the price increasingly is uncorrelated with the sole functional performance of the offering. For major brands more specifically, because the dream created immensely contributes to the overall value delivered to customers.
For developing brands, however, it is essential to remember that, because the brand power and status is not yet built in the imaginary of the customer, it remains reasonable to consider a degree of correlation between the mere functional performance and the price before a strong status is developed over time. To conclude, this video shows that, first, the 7 characteristics are seen as those allowing the measurement of the luxuriousness of an offering. Yet, the concept of luxury remains elusive and refers to different concepts. The business sector, incarnated by few brands which have shaped consumers'experience of what luxury is, but also a business model and a certain way to operate with distinct management rules and principles. So stay tuned to discover more!