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Polestar's quick look at the world of luxury brands and how they engage with consumers

Polestar's quick look at the world of luxury brands and how they engage with consumers

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  • Product integrity is important (e.g Burberry actually didn’t suffer) - Burberry NEVER suffered from the chav thing (balance sheet) BECAUSE they maintained product integrity via Chris Bailey’s designs
  • Logic – business has got to be the best in market – distribution needs to be best in market, have the best quality suppliers, point of sale standards extremely high, technical superiority – etc. Magic – harder to define how this is attained, can come largely from product and brand stories, the company it keeps etc. 0
  • Logic point at end: e.g. Sailing / skiing gear worn by world’s best sailors and skiiers / Quality is paramount Move from a niche offering to a broader one without losing product/brand integrity
  • (‘Selfridges-appeal’ the premium megastore) More contemporary than Prada’s classic offering High end Fast fashion offered via Miu Miu rather than dilute Prada’s integral brand values Younger, flirtier, more approachable brand
  • New store openings using cutting edge architects to create a store ‘experience’ that is vastly different from the traditional maroquinerie stores in Italy Reflects brand values of contemporary design
  • Just because they are a brand with a century of heritage, doesn’t mean they can’t step into the mass trends area in consumer purchasing habits One –off online auction to sell off ‘samples’ from current collection Used Ebay style auction approach but given exclusivity of items it reinforced, rather than undermined, the brand’s premium-ness Adopting current consumer trends without compromising their brand positioning.
  • Trends presentation Stores are offering this bespoke, indulgent shopping experience to consumers because they are shopping for luxury online and therefore the maison is a go-to destination not just a store to browse as they can browse items online.
  • Consumer feels like they’re buying into a rare product – emotional connection by enhancing the magic Smythson,
  • Use an axis and state – terminology from their research
  • The Know group is more valuable to BB&R than the Show group – advocacy, long term use vs. fashion
  • Need to take an increasingly international Business Perspective on Business 276 Want to get to the very top of my career 255 I often notice adverts on taxis 222 I follow the stock market 219 I use my credit cards mostly for business 203 I read the financial pages of my newspaper 194 I never have enough time for my family 181 First amongst friends to know what’s going on 175 I like taking risks 174 Economy is more important than the Environment 173 I tend to spend money without thinking 172 Prepared to spend more for good quality of wine 169 Like to stand out from the crowd 150 When it comes to wine, I consider myself a bit of a connoisseur 143 Prepared to pay more for luxury cosmetics and toiletries 168 Some luxuries I can’t do without 117 Advertising should be entertaining 121 Imp to look attractive to the opp sex 141 Designer labels improve a person’s image 150 Imp to look well dressed 139 Refer to the internet before making a purchase 121
  • Need to take an increasingly international Business Perspective on Business 276 Want to get to the very top of my career 255 I often notice adverts on taxis 222 I follow the stock market 219 I use my credit cards mostly for business 203 I read the financial pages of my newspaper 194 I never have enough time for my family 181 First amongst friends to know what’s going on 175 I like taking risks 174 Economy is more important than the Environment 173 I tend to spend money without thinking 172 Prepared to spend more for good quality of wine 169 Like to stand out from the crowd 150 When it comes to wine, I consider myself a bit of a connoisseur 143 Prepared to pay more for luxury cosmetics and toiletries 168 Some luxuries I can’t do without 117 Advertising should be entertaining 121 Imp to look attractive to the opp sex 141 Designer labels improve a person’s image 150 Imp to look well dressed 139 Refer to the internet before making a purchase 121
  • Need to take an increasingly international Business Perspective on Business 276 Want to get to the very top of my career 255 I often notice adverts on taxis 222 I follow the stock market 219 I use my credit cards mostly for business 203 I read the financial pages of my newspaper 194 I never have enough time for my family 181 First amongst friends to know what’s going on 175 I like taking risks 174 Economy is more important than the Environment 173 I tend to spend money without thinking 172 Prepared to spend more for good quality of wine 169 Like to stand out from the crowd 150 When it comes to wine, I consider myself a bit of a connoisseur 143 Prepared to pay more for luxury cosmetics and toiletries 168 Some luxuries I can’t do without 117 Advertising should be entertaining 121 Imp to look attractive to the opp sex 141 Designer labels improve a person’s image 150 Imp to look well dressed 139 Refer to the internet before making a purchase 121
  • Bvlgari 1873 Breitling 1022 Swatch 401 Tag Heuer 330 Rolex 274 Rotary 264 Lorus 225 Omega 225
  • Gin Brands: Tanqueray, Bombay Sapphire, Beefeater, Hendricks, Gordon’s Champagne: Taittinger, Heidsieck Co & Monopole, Laurent Perrier, Pommerey, Nicolas Feuillatte Liqueur Brands: Chartreuse, Benedictine, Amarula Cream, Disaronno, Bailey’s, Cointreau Vodka: Flavoured Smirnoff, Finlandia Vodka, Smirnoff black label, Stolichnaya Scotch Whiskey: Bailie Nicol Jarvie, Teacher’s, JW Red Label, JW Black Label Malt whiskey: Oban, Lagavulin, Laphroaig, Cardhu, Glen Moray, The Balvenie Brandy/Cognac/Armagnac: Hine, Martell, Remy Martin
  • They use the internet for shopping, information & to make life easier as they are quite time-poor FT Online 591 The Sun 390 The Independent Online 345 Economist Online 330 Visiting Sites on Share Prices or Dealings/Investments/ 324 Visiting Sites on Business Info 319 Telegraph.co.uk 294 Times Online 291 Buying Gardening Eqip 246 Visiting Sites on Magazines 242 Sites Visited: Reuters 227 Sites Visited: Apple 207 Buying Flowers 206 Expedia 168 Regularly Visiting Amazon 136 Buying Books 123 Buying Music 173 Buying beer/Spirits/Wine 185 Reg visiting sports sites 176 Visiting Travel Websites 127 regularly visit news websites (exc newspapers) – [154]
  • i.e. Those able to buy into Luxury brands in the first place are still buying; those who were stretching themselves to buy into Luxury have stopped Conde Nast Trend Report, taken from GQ presentation. Quant survey, 1500 ABC1 Men aged 15-49 Autumn 2009 plus telephone interviews
  • Retain core values in everything you do Further stretches require whole new diffusion/new brands/segmented brands Operate at the extremes of Logic & Magic Technical brilliance in performance Confer status via brand ‘specialness’ Consumers want a story to tell others, products that say something about them Partnerships: deploying low-cost models of reaching HVCs with something new and richer The BB&R audience is valuable They are knowledgeable and they are advocates (of food & drink) They won’t or can’t do without Luxuries Career focused, frequent travellers, commuters – time is precious They ‘live’ online The recession has affected their attitudes more than their behaviour Still spending, just thinking twice about it first – and then buying it anyway
  • They are light TV and Radio consumers. The radio they listen to is mainly the BBC. They are not very likely to notice adverts in pubs/clubs/bar, washrooms, on buses.

Transcript

  • 1. 08 th June 2010 The Luxury Market & Consumer
  • 2. Introduction
    • What is Luxury and how do Luxury brands work?
      • Case study: Prada
    • Key trends in the Luxury marketplace
    • Know vs. Show – the Luxury consumer defined
      • Audience understanding
    • The Recession and the Luxury consumer
  • 3. What is Luxury? Logic & Magic
    • Two core tactics must be deployed to achieve success in Luxury marketing:
      • Logic - what makes the business ‘work’
      • Magic - what makes the brand ‘special’
    • Logic has to play a part to justify spending a large amount of money:
      • Must be technically superior
      • Uniquely made; scarce; bespoke etc.
    • For a brand to attain Luxury status there needs to be an air of magic about it:
      • Must represent a superior level of wealth and social status and this comes from the way a brand behaves or conducts itself
      • Must promote self expression – make the consumer emotionally linked to the brand values
    Practical Concrete Intangible Emotive
  • 4. Case Study – Prada – Expanding a Luxury brand
    • Retained brand magic & defended brand provenance by establishing Prada Sport
      • Spawned the ‘utility chic’ trend
      • Validated by technical integrity
      • True to core brand attributes, e.g. Sailing heritage
    • Logic also becomes important when unlocking new markets, sectors or consumers
    ‘ Massclusive’ Exclusive
  • 5. Broadening (diffusing) the brand without dilution
    • Allowing more rule-breaking and creative freedom
    • Appealing to a younger and (somewhat) more price-sensitive customer
    Diffusion lines
  • 6. Using Art and Architecture to build Brand Experience
    • Prada applies their design principles to everything they do – the wow factor features in everything, including their stores
    • Dominating the visual and conceptual landscape…not just the strict domain of fashion
    • Innovative, original and ingenious form of PR vehicle
  • 7. Digitally Brave
    • In-touch with how people live
    • Sample sale via Ebay-style auction
    • Way of artificially driving up price and collectability of Prada ‘artefacts’
  • 8. Current Brand Trends
    • Partnerships with more mass-market outlets whilst retaining exclusivity. Positioning collection as limited edition, limited places and creating a thrill of the hunt
    • Partnerships with other luxury brands.
    • Trading brand values, e.g. Jimmy Choo (a Show brand) and Hunter (a Know brand)
    • Sharing consumer fan-bases e.g. Diptique & Jo Malone
    • “ Lux you ry*” – placing the consumer experience at the heart of the brand. Offering a more bespoke, unique, personalised experience, e.g. new Louis Vuitton destination store in New Bond St - a “Maison” rather than a “shop”
  • 9. Current Consumer Themes
    • Self expression through personalising
    • Experiences and stories over just “things”
    • Simplification of life as time is increasingly precious –online shopping for luxury products is welcomed
    • Recession has had some impact. Consumers are still spending but need recommendations or justification e.g. ‘investment buys’
  • 10. Who are we Targeting?
    • We have analysed the Luxury audience using the Premier version of the Target Group Index survey
        • The UK’s biggest lifestyle research study
        • This premier version of the study only focuses on the top 10% of the population, allowing for a greater understanding of the target market
    • The audience we’re focussing on for Luxury brands is:
    • Social class A, 20+, personal income of £100,000+
  • 11. The Luxury Audience in Detail
    • There are 101,000 people in this target group
    • Most of them are aged between 35 and 54 (76%)
    • 78% of them are men
    • Most likely to live in the South East (36%) or Greater London (35%)
    • 33% of them work in the business services sector, 20% work in banking and 11% in the medical profession
  • 12. Luxury Consumers: 2 Cohorts
    • Knowers
    Show-ers A.A Gill Zac Goldsmith Sean Coombs Paris Hilton Jennifer Lopez Cheryl Cole &Victoria Beckham Christiano Ronaldo
    • Sophisticated. Money has helped these people gain knowledge, including a repertoire of good quality products and taste for the finer things in life.
    • Over the top show of wealth, ostentatious. Money has brought these people “stuff” and the more expensive, the better. More motivated by fashion than by quality.
    Jeremy Clarkson Nigella Lawson Fiona Bruce
  • 13. ‘ Knowers’ – A More Valuable Target
    • This audience considers themselves quite the connoisseurs of food and drink and places to consume them
      • 65% of them claim to have a large/moderate amount of knowledge of food and wine
      • 70% of them say they have a large/moderate amount of knowledge of restaurants
    • They are also over 4 times more likely than the average AB Adult to say they have a large amount of knowledge of stocks and shares
  • 14. More valuable because they advocate e.g. food and drink
    • They are a valuable audience as over half of them (51%) are very/quite likely to convince others about food and wine
    • They are 27% more likely to do this compared to all AB Adults
  • 15. Work-Orientated and Time-Poor Compared to all AB adults, they are very focussed on their career and the world of business. Having an international business perspective is important to them and they aim to get to the very top of their career. They are more likely to use smart phones such as iPhone and Blackberry . They like to follow the stock market and tend to read the financial pages of their newspaper and think the economy is more important than the environment They tend to use their credit cards mainly for business. They say they don’t have enough time for their family.
  • 16. Quality and the Finer Things They consider themselves in-the-know and say they are the first amongst their friends to know what’s going on. They like taking risks and spend money without thinking. They are prepared to pay more for quality wine as well as luxury cosmetics and toiletries. They say they consider themselves connoisseurs of wine . There are some luxuries that they just cannot do without. Needless to say, they like to stand out from the crowd!
  • 17. Image Conscious They think it’s important to look attractive to the opposite sex and like to be well dressed. Designer labels are considered to improve a person’s image. When it comes to advertising , they like it to be entertaining and 60% of them say they refer to the internet before making a purchase.
  • 18. Brands Consumed
    • Watches:
    • Cars:
    • Jeans:
    • Handbags:
    • Shoes:
  • 19. Alcohol Brands Consumed
    • Gin Brands
    260 160 187 201 224 Liqueur 321 121 122 126 170 172 Champagne 483 416 409 387 348 Vodka 535 216 199 146 124 Scotch Whiskey 600+ 175 173 164 Brandy/Cognac/Armagnac 168 156 146 Malt Whiskey 292 290 289 225
  • 20. Gender Split: Top Brands by Category Gin, Vodka, Champagne and Liqueurs are fairly evenly split but the Whiskeys, and Brandies are very male Source: TGI Premier 2009, All data on this chart only, based on all AB Adults 20+
  • 21. Online Behaviour
    • Shopping
    • Buying flowers
    • Expedia
    • 37% regularly visit Amazon
    • 23% buy books
    • A quarter of them buy music
    • 18% buy their groceries
    • Buying beer, wine and spirits
    • Buying gardening equipment
    • For Information/Business Affairs
    • Share Prices/dealings websites
    • Business information sites
    • 45% of them regularly visit news websites (excluding newspapers)
    • Reuters Online
    • Personal Banking (55%)
  • 22. The Recession’s (limited) Impact
    • Brand relationship is more powerful than price or discount, despite the recession
    • Half of all men spent less in 2009 than in 2008. But within this:
      • Confident – 16% (your target)
      • Considered – 55%, Challenged – 29%
    • The majority of the ‘Confident’ group actually spent more last year vs. 80% of the ‘Challenged’ group forced to cut back
    • The Confident feel untouched by the recession.
      • A third of them feel they are ‘thriving’
      • Only 12% ‘feel uncomfortable spending money in this recession’
    • BUT 49% are ‘more likely to evaluate the quality of brands before buying’
      • And 68% ‘shop around for the best prices now’
    I guess I’m one of the lucky ones because, economically, it has pretty much passed my by. I haven’t had to change my lifestyle at all. Ian, 38 - Confident
  • 23. Summary & Implications
    • Success in Luxury
      • Power brands push the boundaries in both Logic & Magic
    • Status Redefined
      • No longer about being just bigger, better, most expensive
        • People want experiences and stories
        • They are looking for the new, the next and also the classic
        • Brands creating partnerships to reach high value consumers & deliver an experience
    • Knowledge is Currency
      • Valuable consumers consider themselves ‘in the know’ and gravitate to brands that support & enhance this
        • They are advocates (of food & drink)
        • They won’t or can’t do without Luxuries
        • Career focused, frequent travellers, commuters – time is precious; they ‘live’ online
    • Recession for them is all in the mind. So far, at least..
      • For top-end Luxury consumers, shifts have occurred in attitudes more than in behaviour
        • Still spending, just thinking twice about it first – and then buying it anyway
        • Those who were buying beyond their means have moved away from the sector
  • 24. Appendix
  • 25. Appendix Contents
    • Media Consumption - Outdoor
    • Media Consumption - Newspapers
    • Media Consumption - Magazines
    • Online Purchasing - Clothing and Accessories
  • 26. Media Consumption: They tend to be commuters and the media they heavily consume reflects that
    • They are more likely to see outdoor advertising and are heavy users of the London Underground.
    • They are much more likely than All AB Adults to notice adverts inside and on Taxis, at Airports, on the Underground and at railway stations.
  • 27. Newspapers and Topics of Interest
    • Favourite topics of interest:
    • Business/Company News
    • Personal Finance/Investment
    • Property
    • Foreign News
    • Editorial
    • European News
    • Sport
    • Cars/Motoring
    • Media/Marketing/Advertising
  • 28. Magazines
  • 29. Online shopping for Clothing and Accessories
    • 73% have bought clothing online
    • Among those who buy designer clothing, 39% have ever bought it online
    • Among those who buy high street clothing, 70% have ever bought it online
    • 57% have bought shoes online
    • 30% have bought luxury accessories online
  • 30. Contact details...
    • Kiran Kaur: [email_address]
    • Megan Butler: [email_address]
    • Simon Mathews: [email_address]