The Road to Luxury
Includes rigorous academic data, including information on the business attractiveness and appropriateness of various country markets
Examines strategies and success factors of key players, and insight into the systems and operations, retail, distribution and e-commerce, emerging markets and emerging brands, as well as management styles
For professionals in the luxury industry, as well as those studying it or investing in it, The Road to Luxury presents a complete and information-packed resource covering virtually every aspect of this growing sector. ASHOK SOM is Professor of Global Strategy in the Management Department at ESSEC Business School, Paris-Singapore. He is the founder of the India Research Center, was the Founding Associate Dean of the Global MBA program, and the founder of the Global Management Programs on Luxury and Retail Management (in partnership with Indian Institute of Management (IIM) Ahmedabad, India. CHRISTIAN BLANCKAERT is the Chairman of Petit-Bateau. He is also the Senior Advisor of Eurazeo and a board member of Moncler and Champagne Piper-Heidseick. He has previously served as Executive Vice President of Hermes International from 1996 to 2009.
The Road to Luxury
Definition and Crisis of Luxury
Luxury has a long and fascinating history. It is apparent in artifacts from the Egyptian period of lavishness, from 1550 to 1070 b.c. Another great wave of luxurious lifestyle occurred during the Italian Renaissance, an era of great painters, sculptors, and architects during the fourteenth through sixteenth centuries a.d. This was followed by the reign of King Louis XIV of France (1638-1715), whose reign expressed an authentic French lifestyle. Then came Charles Frederick Worth (1825-1895) of Great Britain, a designer who created the concept of haute couture. Worth moved to Paris in 1846 to perfect and then commercialize his craft, holding the first fashion shows and launching the use of fashion labels. Coco Chanel (1883-1971) and Christian Dior (1905-1957) gave birth to modern fashions and ideals, marked by the rise of New York City as a luxury capital. The 1960s and 1970s then experienced the second Italian luxury revolution. Gucci and Bernard Arnault started applying the principles of strategic management to modern luxury by building the first multibrand conglomerate, Louis Vuitton Moët Hennessey (LVMH) group. The latest chapter to this fascinating tale of luxury and high fashion is the information technology revolution, in which news about a new product spreads like wildfire and opinions on brands, products, and companies are shared at the click of a button. The story of the evolution of luxury is really about the evolution of society.
Countries evolve through various phases of luxury consumption. The first stage is deprivation, in which a country is crushed by poverty, which builds in the populace the desire to consume. As soon as the country manages to free itself from the shackles of deprivation and witness economic progress, its citizens are lured into buying luxuries that have high functional utilities, like washing machines, cars, and practical appliances. Then the wealthy and elite start buying luxury products. The third stage of development is marked by the desire of citizens to show their wealth: Mere possession is insufficient when luxury goods become a symbol of social status and bestow their owners with an aura of divinity. Then comes a stage in which most people in the nation are well-off and have sufficient resources; however, they have a need to fit in with their group. If someone is not carrying or wearing an appropriate social marker, they might find it hard to fit in with a particular group. Finally, luxury becomes a way of life. When people become used to this lifestyle, it becomes difficult for them to go back to their previous habits. Here luxury is more and more associated with personal tastes and pleasure, and not necessarily with wealth or status.
Issues of Defining Luxury
It is important to understand why certain brands are called luxury brands and what justifies the superior positioning they command. Luxury empires are not built by selling tasteful products at an exorbitant price. Luxury brands have been carefully crafted through meticulous strategies in marketing and brand building, making their mark in the consumer's subconscious and having the following main characteristics: brand strength, differentiation, exclusivity, innovation, product craftsmanship and precision, premium pricing, and high quality.
It is the differentiated quality of the material, design, and performance of a Patek Philippe watch that merits a 1,000-percent premium over a normal watch picked up from a general store. It is the craftsmanship that goes into the Kelly bag made by Hermès that justifies its exceptionally high price tag. It is only the brand strength of Louis Vuitton that can entice customers to preorder bags months in advance. It is attention to craftsmanship and nuances of details that help differentiate a luxury product.
Many misconceptions exist