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How Indian Millennials percieve Luxury Brands' Communication (Love Ranga)

It is with immense gratication that we present to you the rst of its kind analytical report on the impact of communication tactics employed by Luxury brands on Indian millennial segment. Only second under the wing The Ghost of Luxury: Luxury Industry Analytics, “The Indian Millennial Codication of Luxury Communication 2017” as a heartbreakingly unadulterated report exposes the long prevalent myths about wealthy Indian luxury clientele.

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How Indian Millennials percieve Luxury Brands' Communication (Love Ranga)

  1. 1. The Indian Millennial Codification of Luxury Communication ICX2017 How Indian Millennials interpret Luxury Brands' Communication The Ghost of Luxury: Luxury Industry Analytics | Feb, 2017 www.theghostouxury.com
  2. 2. The Ghost of Luxury 2017
  3. 3. Content Foreword 40 Executive Summary 50 Figures and Findings 60 Feature-based Communication 70 Identity-based Communication 80 Product-based Communication 15 Online-Ofine Communication 16 About Us 18 Disclaimer 19 Contact Us 20 3
  4. 4. Dear Luxury Enthusiast It is with immense gratication that we present to you the rst of its kind analytical report on the impact of communication tactics employed by Luxury brands on Indian millennial segment. Only second under the wing The Ghost of Luxury: Luxury Industry Analytics, “The Indian Millennial Codication of Luxury Communication 2017” as a heartbreakingly unadulterated report exposes the long prevalent myths about wealthy Indian luxury clientele. This myth-busting report is a ready read for any individual in charge of a luxury brand irrespective of the concerned product or service category. Both internal and external communication professionals working with luxury brands, including the upper level students, scholars and the ones imparting education on luxury will nd this report extremely useful. The Indian millennial survey represents the voice of more than 950 closed responses collected from 7 prominent cities of India. Our ndings suggest Luxury brands to make considerable changes in their communication strategies if they have to scale the peculiar heights created by Indian Millennials. This also means that the next wave of luxury managers have to come pre-installed with new age communication weaponry to tackle the situation. While every luxury brand has a different promotion strategy, the basics like heritage and exclusivity remain common across the industry. The mature luxury acionados understand this since long. Does Indian millennial client nd them important too? As questioned by many, do they even understand the true essence of luxury? Are luxury brands educating them enough to hasten maturity? Let us together go through what the wealthy Indian Millennials have to reveal about themselves in this report. Love Ranga | Chief Strategy Ofcer The Ghost of Luxury: Luxury Industry Analytics Foreword 4
  5. 5. The Luxury of Fallacy What started with a huge fanfare is worth wondering why India has not risen to luxury as expected. The cause in fact is quite simple for understanding. What does not breathe, cannot consume pure air. Projections after projections appeared, only to reappear as new muted market size predictions in the following years. Luxury market grew but not at all at the pace advertised, and certainly not in the categories emphasised. The client proling became complicated every year, while the sales went thinner on reasoning. The credit goes to the so called 'Luxury Consultants', 'Sophisticated Socialites' and 'Glorious PR retirees', who could dress up well but knew nothing much about management of luxury. Today, the number of misconceptions about Indian Luxury Market outdoes the number of luxury brands present in India. The latest addition to the list is that Indians buy luxury online. When a validated fact states that they indulge in luxury while vacationing abroad, the idea of buying it online at home has to be a manufactured one. If not, how big is this market? Only mass brands sell online in India because they are deeply discounted, not out of brand loyalty. The Toddler Syndrome The Indian Millennials demonstrate varying behavioural patterns in harmony with Global Millennials. A signicant abnormality lies in the fundamental understanding of luxury, which unfortunately in case of Indians is yet to mature. In a nation where drinking water and Chanel handbag are both luxury at the same time, it is not shocking at all. To intensify things, there is an unparallel fascination to value for money and discounting. A certain client segment also has critical issues with 'cashless' economy for obvious reasons. The challenge therefore for any luxury brand is to feel the pulse the right way, not through a hired consultant. Connect to Reconnect India's relationship with luxury is innate unlike China's, where it started abruptly. The example of Indian maharajas is a famous one in this context. The great Mughal emperor, Akbar used to renew his wardrobe every year. He gifted his expensive dresses away to courtsmen and commoners. His amirs in no way shied away from maintaining an expensive lifestyle. What luxury brands need to do now is to reconnect Indian Millennials to their ancient roots. Their fascination for Executive Summary 5
  6. 6. western styling and aesthetics is not to be ignored at the same time. Not every product localisation worked well in India. Could Hermès saree achieve that what it set out to? The Path of Masses Many as an answer repeatedly propose educating Indians in order to harness their loyalty. It is no doubt the right way, but what happens when another brand offers better discount. The problem worsens, when no party in the franchising agreement wants to bear the cost of education. There is a reason why BMW, Audi and Mercedes are considered luxury in India. The thought of owning either of them is planted in Indian brains quite early in life. Do the true luxury brands like Cartier and Fendi enjoy the same level of desirability in India? A solution lies in promoting luxury the mass way. As 'out of the ordinary' as it sounds, but initially it has to be done in the way of masses. Did we not detect a rise in the number of luxury-mass brand collaborations globally? Remember Hermès-Hyundai joint effort? Hybrid Luxury Brand Management Communication is essentially a part of grand scheme of things referred to as Luxury Brand Management. India, with all its wonders and variations insist novelty in approach and implementation. At micro strategy level, one has to juggle between conventional luxury strategy and modernity depending on the situation. Controlling the diversity of this nation, was never going to be easy anyway. 6
  7. 7. Figures & Findings Communication is in all probability the most demanding part of a luxury business. If it was not, the Millennials leave no stone unturned to conrm this. Much has been said about various ways of promoting a luxury brand in contemporary world. We decided to corroborate it all by directly probing Millennials on the very basics and on more complicated luxury communication strategies. Conducted in three parts, the survey covers results from all of them, but not in entirety. The inclusive ndings can be found in the book, The Ghost of Luxury: Strategic Luxury Brand Management, where they have been utilised to decode the new era of luxury brand management. Planned on the lines of Global Millennial report, we have divided luxury communication approach under four categories. The headers are: | Feature-based Communication | Product-based Communication | Identity-based Communication | Online Communication Let us now go through what Indian Millennials revealed on how they interpret communication strategies used by Luxury brands. 7
  8. 8. Feature-based Communication Indian luxury clientele is often wrongly quoted on their understanding of luxury. The reality in fact is very different in their obliviousness. The wealthy Indian millennials did not surprise, as the results though normal for us, may be quite shocking for global luxury enthusiasts. For majority of our respondents i.e. 45%, luxury is a mere show off. 29% of them nd 'owning what is unattainable' as a tting denition to luxury. Q: What does Luxury mean to you? Note: All gures are in % 29 Owning the unattainable 17 Deliberately muted sophistication 45 09 Bling Tradition and Culture 8
  9. 9. There were times when Indians would grade Nike as a luxury brand. The situation has changed, but not drastically. 34% chose Steve Madden as a luxury brand out of the shown list. Only 5% found Riva good enough for the category. So, is the problem more related to awareness? Probably not, when 'the Indian Luxury Client shops abroad' and is 'well travelled' are two highlighted facts. Q: Choose luxury out of the following: Note: All gures are in % 18 15 Jaquet Droz Loro Piana Riva Montegrappa Steve Madden 05 28 34 9
  10. 10. Wealthy Indians' fondness towards western culture and styling is evident. At the same time, Indian luxury brands do nd favour, but mostly during the festivities. On asking what do they prefer more, 41% showed inclination to western luxury. Only 27% of the respondents said they preferred Indian luxury goods. What is important to note here is that 34% prefer both. Is this the reason why Canali Bandhgalas gained popularity? How did Hermès saree perform? Food for thought, may be? Q: What do you prefer more? Note: All gures are in % 29Indian Luxury 38Western Luxury 33Both For sake of surety, we added another question with the same agenda as in the last one. The Indian millennials once again helped a non-luxury brand, Tanishq take over the likes of Cartier and Van Cleef & Arpels. Only, 7% went in Nirav Modi's favor. The results are evidently not in accordance with the global understanding of luxury. In mature markets, we do not nd such confusion between what is luxury and what's not. Q: Choose your favourite luxury brand out of the following: Note: All gures are in % 14 19 Van Cleed & Arpels Tribhovandas Bhimji Zaveri Tanishq Cartier Nirav Modi 32 27 08 10
  11. 11. Exclusivity is said to be one of the basic requirements of Luxury. It has long been in the list of luxury features a brand must possess. While their parents did not doubt it, the Millennials are not as afrmative about it. Just as how we found out in our Global Millennial Report, the majority of Indian respondents think that luxury goods aren’t exclusive in reality. In other words, according to them, the perception of exclusivity is being created either through communication or is induced articially. Going forward, we feel it will become even more difcult for luxury brands to convince the clients of their true exclusivity. Luxury Goods are exclusive: Note: All gures are in % 27 By Nature 37 In Communication 36 By Force Limited editions are one of the nest ways of highlighting exclusivity. Most of the product categories within luxury exercise this conscientiously. Every now and then, we see luxury brands promoting their quantity-bound items. Do they really work their magic now? Or is luxury blindly doing what it has been doing since decades? Probably, yes, because Indian millennials in our survey do not seem to get excited by limited editions. A good 71% conveyed that they don’t intrigue them enough. A stronger effort is therefore required to instil their trust back in limited editions. Otherwise, a replacement is difcult to think of. Do limited-editions intrigue you enough to indulge in them? Note: All gures are in % 29Yes 71No 11
  12. 12. The right mix of tangibles and intangibles translates into a triumphant luxury brand. While paying for a luxury product one has to pay for intangibles too, is a universal understanding that. How else can we describe the price tags beyond the real value of used material? We observed in our Global Millennial Report how majority of millennials are less likely to loosen their pocket for intangibles. It is not much different in India with 68% respondents not wanting to invest in the intangibles. How is It for a tricky question: what is luxury without the intangibles? Q: What are you less likely to spend on? Note: All gures are in %. 32 68 Tangibles Intangibles 12
  13. 13. Both clients and brands fancy inimitable products in their ownership. Uniqueness is something luxury derives right from brand's Identity. However, there are other disconnected ways of attaining supercial uniqueness. Not every brand creates products in accordance to their identity. In fact, most of them don’t have an identity in rst place. As authenticated by our Global Millennial Report, the millennials are much more informed than their predecessors are. Though not by a margin, but the fact that genuine uniqueness emerges from the brand core is in their knowledge. Indian millennials on the other hand think uniqueness is best earned through designs. Only 9% respondents supported brand DNA or Identity in this case. Q: Best way to achieve enticing uniqueness for a luxury brand is: Note: All gures are in % 48 Through their Designs 28 Through their Experience 15 Through their Personalized Products 09 Through their DNA 13
  14. 14. Identity-based Communication Managers, Consultants and Academicians around the globe have constantly stressed upon the signicance of brand identity in the eld of luxury. Owning this understanding is quite ordinary for learned practitioners, but not for luxury buyers. Millennials however tend to research and know what exactly they are buying. The fact that most luxury brands exposed themselves to exploit the medium has left younger generation more knowledgeable than ever. A good 44% feel that luxury brands need a distinguishing identity more than the mass and premium brands. It is overwhelming to note that 38% feel the same for mass brands. Q: What kind of brands need a clearly distinct Identity more? Note: All gures are in % 38 Mass Brands 18 Premium Brands 44 Luxury Brands 14
  15. 15. The report Cx2017 helped us analyse that the luxury brand with most difcult to comprehend communication style is not only the most intriguing, but is also rated highest on luxury quotient and buying preference. The Indian millennials have turned things on their head. The luxury brand with easiest to comprehend communication style is rated highest on luxury quotient. We assume it is equally surprising for you as it is for us. Louis Vuitton wins the battle clearly in India. Q1: Whose communication style is most intriguing? Q2: Whose communication style is easier to understand? Q3: Rate them on their luxury quotient: Q4: Given a choice, which brand would you buy irrespective of product prices? Note: All gures are in % 38 2817 17 45 3209 14 49 2611 14 41 3409 16 Q1 Q3 Q4 Q2 CoachGucciHermèsLouis Vuitton 15
  16. 16. Extending a luxury brand translates into a brilliant business move, but it also present its own challenges. In recent times, we have seen truly charming brand extensions in luxury. The idea of diversifying into a lifestyle brand has found favour in many global business plans. The Indian millennials however do not seem to favour them. A majority 76% require strong reason to buy cross products of a luxury brand with dominant parent product category. The brands therefore have two options. One, to venture into 'natural' or 'relatable' Extensions and those for obvious reasons can only accommodate a maximum of two or three product categories away from the core one. And two, to communicate every extension in a way that it appears to be unquestionably 'natural'. Q1: Do you need a strong reason to buy an expensive watch from, what by denition is a leather brand? Note: All gures are in % 76 Yes 24 No 16
  17. 17. An uncomplicated enquiry as it appears reveals much more than it seems. 52% of our respondents feel that Luxury brands bring in celebrities only to lure them into buying their goods. 22% feel they try to highlight a certain lifestyle by using celebrities. Only a low 3% feel that they are used to promote Brand Identity. Q: Why do Luxury brands choose celebrities in their promotional campaigns? Note: All gures are in % 22 To suggest you appear how the celebrities appear 23 You listen more to celebrities than the Brands 52 To lure you in to buying their products 12 Celebrities help them in promoting their Brand Identity 17
  18. 18. Product-based Communication It is on old acceptance that product functions and features do not matter much when it comes to luxury. Things for now and for new have changed if not severely. 65% Indian millennials feel that a feature based communication approach helps them in deciding their luxury purchase. Does this further adulterate the demarcation between the communication style of luxury and premium? Q: Does product feature based Communication help you in deciding your luxury purchase? Note: All gures are in % 65 Yes 21 No 14 Depends on the product 18
  19. 19. Less than 1% of the respondents conveyed that their liking a brand's social media page or post means they would go on to buy their product. Their interest is mostly restricted to the excellence of content. 59% said it means nothing at all. Social Media can inate reach, not revenues for luxury is the unambiguous conclusion. Is the number of views a better metric then? Have luxury brands gured out something better? Q: What do you mean, when you like a luxury brand's Social Media Page or Post? Note: All gures are in % Online-Ofine Communication 59 Means nothing 40 Means I like the content 01 Means I will buy their product 19
  20. 20. The Indian Millennials are more likely to be introduced to a luxury product online, but would prefer to buy it ofine. Against the popular myth, it becomes quite clear that at present they do not want to indulge in online luxury. Q1: Where are you more likely to buy a luxury product? Q2: Where are you more likely to get introduced to a luxury product? Note: All gures are in % Online Ofine Q1 Q2 11 89 62 38 Online Ofine 20
  21. 21. About Us The Ghost of Luxury is an organization set-up to foster luxury industry. With experts from around the globe, the company envisions to help luxury brands meet their business objectives. Against the popular business ideology, the company undertakes only those projects that offer strong intellectual stimulation. The rm is primarily active in Strategic Luxury Brand Management, Communication Creation & Management, Ofine-Online Alignment and Archive Creation & Promotion. Luxury Industry Analytics (LIA) LIA is a not for prot wing created under The Ghost of Luxury with an aim to facilitate luxury brands in better aligning their strategies in accordance with the modern world. It intends to be a common forum for global professionals to come together for the greater good of luxury business. Luxury Business Advisory Program Luxury Business Advisory is a free consulting service for the emerging and mature luxury brands. To become eligible please visit our website and answer a simple question. The Ghost of Luxury: Luxury Education Advisory We are witnessing the rise of education institutes offering luxury-oriented courses. Even now, many business entities desire to venture in the realm of luxury education. We intend to help them meet their objectives by exploiting our vast experience in the concerned eld of planning, formulating and maintaining luxury courses globally. With amplication in the number of luxury courses has risen a shortage of talented faculties and trainers. Luxury professionals can share knowledge but lack in pedagogical features and teaching strategies. The management faculties are equipped with them, but lack in advanced luxury strategies and management tact. As a solution, we offer a completely free of charge short training workshop on Luxury Teaching Management. The Ghost of Luxury: Strategic Luxury Brand Management The Book is a radical explication built atop the strong founding principles of legendary heritage luxury houses. It not only highlights the stratagems that have now become obsolete, but also recommends their ultra modern replacement. The Book is an innovative take on management of luxury, making it a common read for enthusiasts with varying levels of luxury exposure. While the greatest ones were formalized keeping mature luxury professionals in mind, this book in addition takes care of academicians, luxury education aspirants and general luxury enthusiasts as well. It is the reason why every chapter precedes a thought provoking prologue. 21
  22. 22. Disclaimer The matter herein is for informational and educational purpose only. It is not intended for distribution or use by any person or organisation in any country, where it would subject The Ghost of Luxury to any kind of licensing or registration requirements. This report is written in general terms. It should be construed neither as professional advice, nor as a commendation of any specic approach or strategy. The results herein do not present any company, brand or situation-specic solution, and they should not be taken as comprehensive or partial representation of the environment under argument. The report does not mean to classify or pass judgement on the market value, positioning or strategies of any brand or company. We also do not intend to favour any brand or phenomenon through this report.The views summarised herein are those of the respondents and we do not guarantee their accuracy or completeness in anyway. The Ghost of Luxury has not recorded respondents’ personal information that exposes their nancial status, physical or digital location. We also do not intend to disclose respondent data cited in this report for any commercial gains. This document was originally written in French. Translation in Italian and English has been performed with a view to appeal to a larger readership. The Ghost of Luxury holds no accountability of translational inaccuracies and errors. The information provided herein is on "as-is" basis, The Ghost of Luxury disclaims any warranties if at all are provided in this report. 22
  23. 23. Contact Us For more information, Please write to us via Contact Us For Press enquiries, Please contact Mr. Launce Renoir at launce@theghostouxury.com To subscribe us, Please visit the homepage of our website, www.theghostouxury.com 23
  24. 24. LOVE RANGA THE GHOST OF LUXURYSTRATEGIC LUXURY BRAND MANAGEMENT FIRST EDITION The Ghost of Luxury The Indian Millennial Codication of Luxury Communication 2017 New Delhi | Paris | Milan www.theghostouxury.com