n.05_September_October.2009.Englisch._

• GLOBALBUSINESSLUXURY

Hermes,CarrierandLouis,---------~.

A CLOSER LOOK

Vuinoninthemid-1800s,it

hashadtOadiusttuchang- "Consplcuous consump·

ingsocialattitude~.When tion"isatermintroduced

1 h

' bytheNorwegian-American

uxury amongstt e pnvi- economistandsociologist

Icged few bccomes exccs· ThorsteinVeblen in 1899

sive,it~ moralques- todescribetheoslenlatjotJs

riODSthathavecodowith behaviour of the new

self-indul~cnce.Asfarback weafthyc1assesbeingcre-

asc1assical Green: there atedinIheSecondIndus-

wasa centuries-lon~ cun- trial Revol~tion. It n?w

. '.' Imeans buymg expensive
filet betwcen ~edomstlc goodsandservicesmainly
Athens3ndaSCetlCSparta. toshowone'swealth.
Keepingthebalance be-
tweensellingadreamandsellingthcnsrentaeiousis,
therefore, oneofthe grcarestchallcngesfor luxury
firms."\Vhcnaproductbecomesexccssive,itcanno
longcrbe ealled a luxury hrand," writcJean-Noel
KapfererandVincenrBastieninrheirbookTbcLIIXlIry
Straleg)'(seebox,page21)."'Excessiveluxury,"theysay,
"'iscorealluxurywhatpornographyistOeroticism."

Whatmakesthebalancingactespeciallydiffi-

eultisthatthcglobalmarketsareatdifferentlevelsof

sophjstication.ThetrendindevelopcdcOuntriesisto-

wardseonsumingresponsibly,whilethcnouyeauriche

inBRIecOllntriesrypicaJlya11wantconspicuouscon-

sumption.So,forexample,inrheWestthereistalkof

"'Iuxuryshame",andBritisbpopcdebriO'"'Posh"(Vic-

roriaBcckham)reccndyreceivednegativepublicityfor

hercol1ecrionof] 00 Hermeshandbags.TheRussian

oligarchandowneroftheChelseafootballclubRoman

Abramovich,however,showsnosignsofshame.He

Interview

JAMESOGILVY,oubHsheroftheIUKury-

industrymagazineLUJwry.B!i.efi!Jg

Isthereanythingpositivewecansay

aOOuttheroleofluxuryinsociety?

Yes,itencouragestheverybestdesign

andtheverybestdesigntalent,anduses

thehighest-qualitymaterials.Andthat

influencestherestofthemarket.Also,

luxuryproductsmeetcurrenlconcerns

abouttheenvironment,sustainability

andtheideathatthingsmustlaslalongtime.Theytend 10 be

veryweilmade,andareusuallyrenewablematerialsIikewoodand

leather.

Whatarethethreebiggesttrendsintheluxuryindustrytoday?
Inresponse 10 havinggoneinto 100 manyproductsandplaces,
many~aretryingtoprovidemorebespokeservices,more
made-la-orderproducts,wherepossible.Secondly,theyaretrymg
todelivermoreproouclstai!oredforloealmarkets.Averygoodex-
ampieislouisVuitton,whichisnowdesigningsarisfortheIndian

20 8U§inessSp:ltligbt

recenrlypaid€340millionforhisfourth megaboat,

whichhastwohelipads.a cinemaanda disco.

Firmssellingluxllryproductsinfashion,accessories,

perfumes,travelandtransporthavemadestrategiemis-

takes,sayKapfererandßastien,Onewasthat,intheir

rushtoglobalize,theycopiedconvemionalmarketing

methods.Thiscannotwork,saytheauthors,becausc

reueluxurybrandsarerareandexc1usive:"'Theyarea

recogni7.cdsignarureofa1lthatisbcautifuland~

riona!."Whentheyeanbefoundineveryareaof.ttrail.

manufaeturingandservices,theylosetheirmagie.

Gucci madethis painful experience in 1979.

Afterproducingtheiconichandbagsandscarvesworn

byAudreyHepburn311dJackieOnas~isinthe1960sand

70s,thcfirmbegantoseIlcheapcl"accessoriesthroush

thousandsofshopsinAmerica.By the1980s,Gueel

hadlostirseultstamsamongtheriehandfamous.

Believing super-wealthy managers and BRIC

economieswouldprovidcanendlessstrcamofneweus-

rorners, large luxury cornpanies also rnissed major

trendsinthesophistieatedmarkers:agrowing!ejecrion

ofthc"'wearand-tcar"socieryandareturncobuying

productsthatlase;wncernsaboursusrainabiliryandthe

environment;thedesitefOtmorepersonalcustomerser-

vice. Whilemanyfirmsarenowadiustingbyoffering

besppkeservices,theyarestillbchindonehetrendto-

wards sustainabiliry,says LuxtlryBriefingpublisbet

JamesOgilvy(seeboxbclow).

Thefirmstharsuryiwdthecrashbcstunderstand

wharluxurycusromersreally want.Onee.xampleis

Lanvin,whosedesignerAlberE1bazrecenrlyroldln-

telligefl/ Life(a supplementofThcEconQmjst) [hat

marketthatwillnotbeavailableanywhereelse.Thethirdhuge

chaltengeisthaialot 01 luxurybrandsareverybehindand~

~inwhattheyaredoingonline.

Howweilwilltheluxuryindustrygetthroughthiscrisis?

Manyofthec1assicbrandslikeCartier,louisVuitton,TIffanyand

HermesareOV"J 150 yearsold.So,they'veexperiencedtwoworld

wars,revolutions,financialcrashes,recessionsandallsortsof

otherdisasters.Buttheyhavecomethroughthose.We'vehada

verydifficultyear,maybeItwillturnintotwoyears,butit'snot

anythinglikeasseriousasawar.Theoldluxurycompanlesareall

extremelystrengandtheyknowthatluxuryisaverylong-term

business,Thingswillimproveagain,andtheyunderstandthatget-

lingthereisjustamaUerofpatienceandcarefulmanagement.

Howshouldyoumanageluxurybrandsinditticulttimes?

ThemostimportantthingIStomaintalOyourbrandimage.Vou

must,ofcourse,tightenupoperations,butnotoverreactandmake

drasticcuts,Youneedtomaintaina presenceinlhemarketandto

communicateevenmorewithcustomers.Theclassicbrandsareall

doingthis.Ofcourse,somemarketshavebeenhitharderthanoth-

ers- forexample,watchesandjewellery,SoTiffanyandBulgari

havesufferedmorethanmost.Bulthey'llrecover.

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