What is luxury?
Is this luxury? what about this?
Is it a luxury to take a day off,
to purchase an antique at auction,
to eat sushi?
The fact is we readily dismiss luxury as bling bling
for the rich and extravagance and ignore what lies behind it.
What is luxury exactly?
By definition, it is anything beyond the essential.
In a world without luxury, you couldn’t find an elegant watch,
优质葡萄酒 时髦沙发 或者舒适旅行
a premium wine, a designer sofa or travel.
Imagine a world without legendary watchmakers,
sommeliers, world-class companies or travel agencies.
So luxury makes life more colorful? exactly!
Male birds strut their plumage to express virility.
People use luxury goods to stand out.
他们用品牌 商品去秀地位 时尚 财富和成功
They use brands and products to demonstrate taste, style, wealth and success.
Then a display of luxury is a means of communication.
Sure, but that’s not all.
It can also mean deliberately foregoing communication.
In that case, the experience has priority
or it depends on the savoir-faire of the person who sewed the dress.
Okay. Indulging in luxury signals extraordinary achievements.
Yes, that and even more.
It also acknowledges the fabrication of luxury products require skills that
has painstakingly evolved over centuries in some cases.
Luxury brands are justifiably proud of their rich histories
and they are like specific luxury goods.
They are handed down, treasured over generations.
That is why luxury also symbolizes unique traditions.
Luxury is culture,
and of course it is expensive.
So luxury represents a lot of things to people,
but it is not superfluous.
The luxury goods industry not only helps define culture and aesthetics,
but is also an important economic engine.
In Switzerland, luxury goods account for a tenth of all exports,
and Western Europe is the world’s largest producer in luxury goods.
On the buy side, the US is the biggest market.
Partly because many Asians buy there as well.
Meanwhile, in addition to providing raw materials,
南美洲和非洲在服装 家具和艺术品的设计影响 日益增强
south America and Africa have a growing impact on the design of clothes, furniture and art objects.
Luxury goods dealers look for the world’s best products
to sell them to richest people at premium prices.
Is that ethically acceptable?
Not if raw materials are extracted under inhumane conditions
or if animals are abused and resources wasted,
but the flip side of that coin is acceptable even desirable.
Luxury is ethical if workers are trained for special manufacturing processes.
And if all links of the value chain get a fair wage, thanks to high margins,
that model supports manufacturing in Europe too.
Still, suppliers of luxury goods face three specific challenges.
Challenge number one: the brands are often interchangeable from the consumers perspective,
even experts are unable to identify the brands of clothes and watches featured in a lifestyle magazine.
So how can luxury brands differentiate themselves?
At HSG’s competence center for luxury management,
we have identified the best course to differentiation is creating unique brand experiences.
These could be memorable encounters with sales staff,
visiting a brand event, or discovering an immersive online presentation.
With any measure, the key to success is its alignment with the brand’s core promise.
The Ritz-Carlton, for example, stands out over the decades through its treatment of staff.
Ladies and gentlemen serving ladies and gentlemen.
That is the attitude employees are asked to adopt when interacting with guests.
The staff feels highly valued
同时 奢侈品消费者在同样的基础上 体验一流的服务
while the luxury consumers experience excellent service on equal footing.
Challenge number two: luxury brands are often less market-oriented.
They define themselves through their legacies and traditions of excellence,
and gives less weight to customers’ views.
There is a specific logic to this self-referential approach.
毕竟 市场导向的奢侈品 吸引了大众却失去特性
After all, market-oriented luxury loses its distinction by appealing to the many.
Performance-oriented luxury brands risk starting a contest to themselves to maintain their positioning.
This navel-gazing is risky.
Companies that define themselves mainly through their existing resources
may miss the turn of changing customer behavior.
Thus, the question is how can luxury companies strike a balance
between self referentiality and customer focus.
Our findings tell us by positioning their brands in different segments.
几十年来 英国奢侈时尚之屋Burberry 都不是有目地使其利益最大化
For decades, the British luxury fashion house Burberry maximize its profit purposelessly and aimlessly
by licensing its brand name and damaged a great brand story.
Only when it started to refocus on customer requirements,
and concentrate on its core product,
did it once again stand out from its competitors.
Challenge number three: luxury brands cannot grow.
Luxury products are luxury products mostly because they are rare.
如果奢侈品牌增多 就会削减其独特性 从而破坏利益基础
If luxury brands grow, they undermine their exclusivity and thus the basis for their profitability.
And that raises a question:what kind of growth is compatible with luxury?
There are different paths to growth.
For some, it can mean complementing their product portfolio by adding services.
Others grow by further refining their products,
still others achieve growth with an international distribution system.
You recognize the VW Beetle and you know about Rolex watches.
One is a classic example for mass production, the other a classic example of a luxury product.
In an 80 year period, Volkswagen rolled 21.5 million VW beetles off the assembly line.
Guess how many Rolex watches were produced in those same decades.
More than 23 million!Still a Rolex is considered a luxury good.
Thanks to a sophisticated international distribution system.
Luxury can come across as superficial,
but a closer look reveals its significance.
其传统 技艺和文化都至关重要 更何况是成千上万的就业岗位
Tradition, craftsmanship and culture are an important part of a picture, not to mention thousands of jobs.
Plus it helps define open and free societies
where individuals can decide how they want to fulfill themselves,
as a luxury yachts designer or as the owner.