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 cant 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, its no longer a luxury brand. An article in todays 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 Tiffanys traditional, older, upper-crust buyers turned up their noses. The chain has tried moving back up the luxury ladder, raising prices and boosting quality. Its 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 Frances JAR. If history is any guide, Tiffanys pursuit of the masses may have already cost the company its shine. -------------------- January 17, 2008, 12:42 pm Luxury Isnt 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. Ive 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 dont use the word.