2. LUXURY Defining Luxury The basic Gucci or LV ladies handbag is a canvas bag selling for $1000.
3. LUXURY Defining Luxury The emotionalism of luxury “ Purchase of luxury items gives the buyer an immense amount of joy which surpasses the economic value of the product.” “… it is bought to satiate an altruistic need and the joy of possessing a piece of extreme luxury is an end in itself.” Louis Vuitton CEO, Yves Carcelle
4. LUXURY Defining Luxury Characteristics Luxury brands live in people’s hearts & minds Luxury brands have range Can be teamed with many products Luxury brands have permanence Don’t go out of style/are classic
5. LUXURY Defining Luxury Wealth & other forms of luxury Luxury is most often associated with wealth & exclusivity. Other forms: Time, Experience, etc A recent US study (2000 affluent consumers by the CBC Research Centre remarkable similarity in perspective around the world largest chunk (44%): ‘ luxury is having enough time to do whatever you want and being able to afford it’. Next chunk: ‘life experiences’ and ‘comfort, beauty and quality’. Material products become just a tool or a toy for that greater ‘life experience’. Exotic luxury packages: A flight into outer space on the Virgin Atlantic? Cont :-
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7. LUXURY Luxury defined today The maker of dreams. “ The luxury industry sells a share of a dream to the customer”. Luxury Defined Madame Laggard, French Trade Minister
8. LUXURY Downside The Ethics of Luxury Opulent & decadent Materialist & consumerist Social segmentation & vanity Exploitative - $1000 LV bag in canvas Not essential Conspicuous consumption Upnside Need not be vulgar but sophisticated Aesthetic expression Social positioning more democratic than ‘caste’ system Can be genuine pursuit of excellence Selling dreams/mystical experience
9. LUXURY Luxury Products & Services Cars: Jaguar, Mercedes Benz, Lamborghini, Rolls Royce, Bentley, Ferrari, Bugatti Couture: Versace Indian couture designers: Rohit Bal, Tarun Tahiliani May not include prêt designs Hotels & resorts Amar Vilas (Oberoi), Four Seasons
10. LUXURY Luxury Products & Services Accessories Footwear: Jimmy Choo Handbags: Louis Vuitton, Aigner, Leiber, Hermes, Prada Small leather goods: Dunhill Watches: Piaget, Tag Heur Eyewear: Armani, D&G, Chanel
11. LUXURY Luxury Products & Services Perfumes: Channel Jewellery & Gems: Cartier, Tiffany Writing instruments: Mont Blanc Luggage: Louis Vuitton Liquor: Henessy (vodka), Blue Label, rare wines Art Not Luxury: Mango
12. LUXURY International Powerhouses in Luxury French luxury conglomerate Chairman: Francois-Henri Pinault Gucci, Yves Saint Laurent, Sergio Rossi, Bottega Veneta Alexander McQueen, Stella McCartney, Belanciaga Turnover: 18 billion euros LVMH Moet Hennessy-Louis Vuitton SA Louis Vuitton founded in 1854 - luggage Merger in 1987 Bernard Arnault, Chairman Tag heur, Louis Vuitton, Fendi, Celine, Kenzo, Dior, Marc Jacobs Turnover: 16bil euros, Employees: 72,000 PPR (formerly Pinault-Printemps-Redoute), 1963
13. LUXURY The Marketing of Luxury Entry level items Under $250 Cuff links, scarves, fragrances, ties Bought by aspirational buyers. Investment Pieces Above $250 watches, apparel, figurines Bulgari Aviator sunglasses $330 Burberry Classic Trench Coat $1,184 Omega constellation Double Eagle $3,450 Hermes crocodile Kelly bag $30,000 Bought by regular luxury buyers.
14. LUXURY Luxury sales & growth World turnover in 2007: $233 bil Powerhouses of luxury consumption USA – largest, accounts for one third Japan China Europe Growth in luxury markets North America 2% Europe 12% Asia Pacific 18%
15. LUXURY Luxury in Asia Cult of the Luxury Brand Inside Asia’s Love Affair with luxury Radha Chadha & Paul Husband Luxplosion rocking Asia 94% of women in Tokyo in their 20’s have something from LV Asis is now the world’s biggest market for luxe 37% in Asia + 15% by Asians abroad China will be the biggest in 7 years Luxury in India has become more accessible. Bollywood is an influencer
16. LUXURY Luxury model for Asia Stage 1: Subjugation, desire based Stage 2: Start of money, India Stage 3: Show off, new rich, China Stage 4: Fit in, Conformity, Joneses, Taiwan/Korea Stage 5: Way of life, Japan, Hong Kong India has gone from old money to new money India could be in top 5 consumers by 2025
17. LUXURY The story in India Luxury is not new to India but the modern form is yet to evolve Branding Lasting customers relations Signature look Virgin market
18. LUXURY The story in India Ermenegildo Zegna First store opened at Crossrads in 1999. Closed in 2005 A 3000sqft store opened at Taj, Mumbai in 2007 Third store to come up at Emporio Have taken a 51% ownership in Indian operations Jimmy Choo Name now synonymous with luxury shoes for women Jimmy discovered, bought & guided by Tamara Mellon Accessories editor at Vogue Ten years later company valued at ₤185 million Halle Berry, Hilary Swank and Helen Mirren on Oscar night 60 stores across the world Launched India store through Murjani Group in Sep08 Located at Nariman Point, Mumbai Worn by Aishwarya Rai, Preity Zinta Internationally launching sunglasses, fragrances & handbags
19. LUXURY Louis Vuitton LV’s association goes back to the Maharaja’s for luggage First store opened in 2003 at Oberoi Hotel, New Delhi Second store opened in Mumbai in 2004 Now opened at Emporio Staying away from apparel for India Have taken 51% stake
20. LUXURY Online poll in 48 countries covering 25,000 consumers Nielsen Survey on Luxury International Gucci most coveted (one in five) Chanel & Calvin Klein tied for second place Followed by Louis Vuitton, Giorgio Armani, Christian Dior, Versace India 57% see labels as status symbols Most coveted; Gucci (41%) Calvin Klein (31%) Dior (26%) Versace (25%) Armani (22%)
21. LUXURY The Sachdev Group – Priya Chatwal & Charu Sachdev Brands: Lanvin, Alberta Ferretti, Jean-Paul Gaultier, Moschino, Stella McCartney Promoters of Luxury in India Genesis Colors Sanjay Kapoor of Satya Paul fame Brands: Aigner, Canali, Kenzo, Paul Smith, Just Cavalli Murjani Group Gucci, Jimmy Choo, Calvin Klein, Bottega Veneta Brandhouse Retail (S.Kumar Group) Escada, Dunhill JV’s in the pipeline DLF with Armani Hermes with Neelam Khanna (PRS Oberoi clan) Reliance Retail TSG International Marketing Pvt Ltd
22. LUXURY The Indian Luxury Market & Industry Over one million luxury consumers Potential new customers: eight million With high disposable income Target audience: 22-55 years Currently worth: US$444mil/Rs2,400cr KSA Technopak India Luxury Trends Report
23. LUXURY Retailing of luxury US: Fifth Avenue (NYC), Rodeo Drive (Los Angeles) Germany: Konigsallee (Dusseldorf) London: Bond Street The luxury mile India The Galleria (Mumbai) Gucci, Bottega Veneta, Jimmy Choo Emporio, Delhi UB City, Bangalore Taj Mahal shopping arcade, Mumbai Louis Vuitton, Zegna, Fendi Oberoi Hotel, Delhi Louis Vuitton Set to open: Palladium (Mumbai) at Phoenix Mills
24. LUXURY Emporio The first Indian luxury destination: Officially inaugurated: Sunday, 30th Aug Developer: DLF 130 luxury brands Apparel: Dolce & Gabana, Canali, Louis Vuitton, Chistian Dior Jewellery: Cartier, Harry Winston, Leather Goods: Tods Men: Paul Smith, Armani Watches: Piaget, Chopard, Jaegar Indian designers: Rohit Bal, Tarun Tahiliani, JJ Valaya
25. LUXURY Issues facing luxury in India Lack of appropriate space Adjacencies important – nightmare McDonald’s Started with use of hotel space Makeshift space in malls/markets Emporio – perhaps the first luxury mall in India Expensive real estate Lack of trained manpower Specialized programs in Institutes Lack of Indian products & brands FDI restrictions
26. LUXURY Scope for Indian brands Can you think of an Indian luxury brand? Acquiring Western brands: Tata acquires Jaguar from Ford in the UK Oberoi hotels: Rajvilas, Udaivislas, Amarvilas India’s strengths: excellence in craftsmanship, heritage, business potential Some suggested areas: hotels & hospitality, spas, jewellery, meditation (Mahesh Yogi), art, Indian fashion
27. LUXURY Luxury Education Essec Business School, France Most prestigious international course in luxury One year MBA program since 1995 Student size: 30 IIM, Ahmedabad Tied up with Essec for new luxury program Student size: 9 International University of Monaco 10month MSC program in management of luxury goods & services cost: 12,000 euros Stern School of Business, New York Since 2006
28. LUXURY Luxury Education Columbia University, New York Course in design & marketing of luxury goods HEC Paris & Tsinghua Univ., Beijing Six month module Pearl Academy, Delhi Luxury module as part of Fashion Marketing
