2 WSJ Articles on Luxury: "Mass Luxury and Other Oxymorons," "Luxury Isn’t Dead..."

  1. Mass Luxury and Other Oxymorons

    January 10, 2007

    Companies that to cater to the wealthy face an eternal dilemma: how to balance growth with exclusivity.

    If you expand too far down the wealth ladder, you cheapen the brand and lose cachet. If you stay exclusive, your customer base will always be limited. (Though less so all the time, since the population of rich people is soaring.)

    The past few years have seen several upscale brands sacrificed on the altar of so-called mass luxury. To my mind, there is no such thing as “mass luxury.” You can be mass. You can be luxury. You can’t be both.

    In the car business, Jaguar and Mercedes have lost status to Bentley, Maybach and others that have stressed quality and uniqueness over price. In fashion, Burberry, Gucci and Louis Vuitton have become almost ubiquitous: When half the people flying economy have Louis Vuitton carry-ons, it’s no longer a “luxury” brand.

    An article in today’s Journal goes inside Tiffany as the jeweler grapples with these questions. In the late 1990s, Tiffany started making cheap silver charms to appeal to younger buyers. As Ellen Byron writes, it worked — too well. Their stores were mobbed with teens buying $145 bracelets, and Tiffany’s traditional, older, upper-crust buyers turned up their noses.

    The chain has tried moving back up the luxury ladder, raising prices and boosting quality. It’s separated its stores into mass-buyer sections and “fine jewelry” sections, and invited the rich customers to private viewings.

    The jury is still out on this strategy. Tiffany has thinned out the crowds and gone more “upscale.” Yet Wall Street, predictably, is unhappy because the moves have pinched profit margins. Meanwhile, the truly wealthy have already moved on to more-elite jewelers such as France’s JAR. If history is any guide, Tiffany’s pursuit of the masses may have already cost the company its shine.


    January 17, 2008, 12:42 pm
    Luxury Isn’t Dead, But the Word Might Be

    A number of Web outfits have picked up on a fascinating speech given by New York-based luxury expert Andrew Sacks to the Leading Hotels of the World annual conference held in Monte Carlo. His talk was about about connecting with the wealthy, and the overuse of the term “luxury.” I’ve been harping on this myself: Is anyone else tired of seeing “luxury” slapped on everything from cellphones to toilet paper?

    The trouble for high-end marketers is how to market luxury in an age when the term has become meaningless.

    I called Mr. Sacks and got a copy of the full speech, which I knew would have some answers. Here are some of the highlights:

    1. Beware of That Word: “There are some words that simply get worn out. Like anything else, there is a natural lifespan to language — the word ‘luxury’ is the grand offender of the last several years.” That word is now, he says, “a descriptor that is highly suspicious to the very people to whom it is designed to appeal — the affluent.”
    So what to do?

    2. Respect Your Customer: “They have earned their money, they are smart and they are demanding. But they are also regular people — usually. The wealthy got that way by being good stewards of a business and of a dollar. Respect their respect for money.”
    In other words, if you price it high, deliver high value.

    3. Use Their Personal Networks: Word of mouth is the real driver of sales among the rich, Mr. Sacks says. “The power of personal networks can be far more important than advertising,” he says, adding (and this is the most-important point of all) “give your customers a good experience with things they can talk about and they will.”
    So in other words, if you want to sell to the rich, deliver true luxury. Just don’t use the word.
  2. what is with all this hally-boo boo about luxury and appealing to only the elite?

    do you think the rich folks really care that much if susie-Jane and bobby are buying Louis Vuitton? They have ways to stand out from the crowd!!!

    now, if the middle class was purchasing and flying private jets....then there can be cause for concern.

    but some jewelry and a damn handbag? come on people!! lets get out of the dark ages with this "upper crust" mentality!! lol

    -my two cents
  3. WSJ articles can be viewed thru subscription only. Whenever I have tried to post them here the threads have always been closed. It will be interesting to see if that happens again.
  4. These are actually articles from the WSJ blogs, which are open (no matter what to date) to everyone. So hopefully they won't be closed! Being a subscriber is unnecessary to view blogs.
  5. I think the reason WSJ is writing so much about mass luxury verses luxury-luxury is because the mass luxury brands are not faring well. If luxury brands are to survive, they need to market to the ultra wealthy people who have not slowed down spending.
  6. I've heard you say this many times, sonya, and consider you an expert on the subject of luxury. I always have a nagging voice, however, that disagrees with you for some reason. I guess it's because I see more and more middle class people getting into luxury goods... I feel like it's really them that's floating this luxury market: after all, why else are perfume and handbags and shoes a fashion house's biggest money makers? Because they're the ones most easily attained by the middle class.

    Maybe I underestimate how much rich people truly buy. The super wealthy I know buy huge things that don't necessarily relate to the "luxury industry" per se... I mean, a jet, for example. But they don't seem to be blowing money at La Perla left and right -- then again, I don't know many Russians. ;)
  7. I agree with your point indeed. Contrary to the sterotype (and the socialites on television) wealthy individuals are not waking up every morning wondering what handbag or shoe to buy next. Its usually those in the middle class (who are responsible for most of the profits in high end luxury houses) who are opening their purses