Luxury buying is driven by a three-letter word: EGO

Ego is very tricky. It can make you, it can break you. Sometimes you may also like to say like John Lennon: “Part of me suspects that I'm a loser, and the other part of me thinks I'm God Almighty.” Just like with people, brands also have to be careful in dealing with ego.

Ego creates brands, makes them reach heights that they could have never reached with humility.

My dear Watson, said Sherlock Holmes, I cannot agree with those who rank modesty among the virtues.

However, some other times it pulls them down and crushes them. Your brand has to be worth its ego.

A luxury car brand once run an ad where the car did not have a fuel tank. The arrogant tagline said: “A car that runs on reputation”.

It is all about being special or exclusive, to be someone who is not ordinary. Of being able to dazzle or “luxe”. Of being able to stand out in the crowd. This razzle-dazzle industry thrives on ego.

To idea that a marketer sells is that this luxury brand is exclusive and it will make you exclusive as well, youwill belong to an elite club that you will be ableto flaunt such as a Lamborghini Club. “Money can’t buy happiness. But, somehow, it is more comfortable to cry in a Lamborghini than on a bicycle”, Lamborghini Gallardo slogan quite captures the ethos.

The arrogance that a brand exudes, mostly using prohibitive pricing to crowd out clients, will make it aspirational. So the users will get an elevated feeling that he is part of an exclusive club. When Rolex says “Live for greatness” it is not talking about the product, or the patented perpetual movement, or the oyster casing, or the brilliant design, it is a life that the watch brand is giving you. It is making you part of a legacy of great people, of JFK or of Martin Luther King Jr stature. Rolex has always been a very masculine brand. The male ego that Rolex has been able to develop and nurture over decades has proved instrumental for the company’s success and it is still revelling in that glory. So Rolex is selling a legacy, a life of greatness, a masculine ego that craves for being distinguished.

Another example is Louis Vuitton. “There are journeys that turn into legends,” when LV used this tagline for Sean Connery during its core values campaign, it was not selling the classic keepall travel bag. It was selling legacy, the legacy of travel, of a great legendary travel, and that too with a legend. It is the club that you join for again, greatness, to become part of a legacy. It is never about the product, but the legacy, the greatness, the extra-ordinariness.

http://retail.economictimes.indiatimes.com/re-tales/Luxury-buying-is-driven-by-a-three-letter-word-EGO/336

The hunger to leave a legacy or become a part of it is what the brands sell. The art is in not only selling the inclusion but more so selling the exclusion.

India’s noted graphic novelist and my friend Sarnath Banerjee (author of Corridor and Harappa Files) in a story, has captured the essence of this “exclusion principle”, albeit in his own comic panache. There are customers who walk in and quickly check a few models and close the buy. However, there are others who come down to check out a an expensive car like a Rolls Royce or a Jaguar, but is not sure whether it is worth that premium and almost certain that it is not worth the value. He is a person who will go for a more economical car with a better mileage but is also greatly intrigued by the legacy of the car. The car salesman just senses that and tells him what he is exactly feeling like. So he is confused why isn’t the salesman hardselling the car? And thereby hangs a tale. The salesman very cleverly says that these luxury cars are not for “people like you and I” who will prefer more value for their money and not invest in such “esoteric and intangible” notions of legacy. After four-five such examples of “people like you are I” the salesman closes the deal. The customer buys into the legacy story just to prove he does not belong to class of “people like you and I”. He is different and definitely is part of the legacy. 

So this is how the “exclusion principle” works. You are in a queue, waiting eagerly, to be treated as special.

This is a strategy that luxury brands use in tapping into the potential customers who have the money but are not convinced about the value for their buck that such luxury product will bring to their lives. They are, however, also intrigued to see how people who are part of the existing esteem clientele are treated a little differently by the boutique managers. Not that the potential clients are ignored but they are subtly sent the message that “you also can become a part of this elite treatment and legacy if you use your cash or card a little more generously”. The exclusion principle makes these clients intrigued and they, in spite of having the means, feel dejected. This is where “greatness” and “legacy” comes to the rescue. So when that aspect is taken into consideration, the deal is no more only value for money but also “totally worth it”. 

And “for people like you and I” who doesn’t have the means, keep aspiring and writing about the legacy.

Your legacy is just a swipe away.

Let your quest for luxury continue.

http://retail.economictimes.indiatimes.com/re-tales/Luxury-buying-is-driven-by-a-three-letter-word-EGO/336My ET Retail story

The world of luxury counterfeits just a click away

I have a soft corner for watches and I had apparently almost twisted the arm of my former boss Mr Sanjiv Goenka, Chairman of RP-SG group, to see his brand new Breguet (It is a story that he loves to narrate). Mr Goenka knows I am crazy for watches so he is sweet enough to forgive me and let me indulge, even with his IWC. Similarly, Mr TV Narendran , MD, India and SE Asia, Tata Steel, very kindly also lets me admire his black Chopard while I narrate to him the details of the making. However, I broke the heart of a close friend with this habit. 

Very recently, a close friend of mine was sporting a Rolex day date white gold. I did the same thing with her and to my shock realised it was a fake. It was lighter than even my steel Rolex, the identification number was missing, among other details. She very confidently told me it isnt as there was a certification of authenticity given by the company and the portal that she bought it from. The price she had shelled out was a fraction of the original price, but significantly more than of a first copy. The news that she has been duped by an e-commerce firm broke her heart. 

On Facebook you might encounter a page where they are selling luxury products at a tempting discount all round the year. The product ranges from shoes to watches to handbags of the luxury brands like Rolex, Louis Vuitton, Gucci, Mont Blanc and what have you. Tempting! So I decided to check them out and to my dismay found they were counterfeits. And some were not even on the catalogues. But to an untrained eye, it will lure you and you will fall in its trap just like my friend. I was happy when I came to know that LV and Mont Blanc have noticed as well and have filed a lawsuit against Chandigarh-based ecommerce firm Digaaz in Delhi High Court.

The counterfeit market statistics
Let me give you a sense of the size of the market with some statistics. Growing at a compounded annual growth rate of almost 40-45 per cent, the counterfeit luxury products market in India is likely to more than double to Rs 5,600 crore from the current level of about Rs 2,500 crore. 

A reason why the fakes luxury market is growing at such a fast pace is the advent of e-commerce platforms selling them at lucrative prices. An Assocham report says that the web shopping portals account for over 25 per cent of the fake luxury goods market in India. For instance, first copies of these premium brands are easily available on c2coffer.com, an online portal, within a week of official launch of the original collection. Even other platforms like Quikr and OLX offer replicas. While Quikr has a replica Hermes belt for Rs 350, Watchlo.com or the Facebook page watchmaniaforyou stocks first copies of around 20 brands, including TAG Heuer, Omega, Rado, Patek Phillipe, Chopard and Bvlgari. These are just a few of the numerous options from which you may choose from and all from the comfort of your home with a doorstep delivery and cash on delivery provision.

The size of counterfeit luxury industry in India is currently about five per cent of the overall market size of Indias luxury industry which currently is worth over $8 billion. With a share of about seven per cent, fake luxury products account for over $22 billion of the global luxury industry worth about $320 billion.

Luxury counterfeits are not a new phenomenon, but with technological advances and sophisticated new ways to reach consumers, the business is increasing rapidly. 

In the past, luxury counterfeits were often shipped in large cargo containers and passed through numerous middlemen before reaching consumers on the streets. Now counterfeit sellers set up online presences on auction or marketplace sites and ship luxury counterfeits directly to consumers. They also use the Internet and social media tools to generate web traffic and to divert consumers to rogue e-commerce websites selling their goods which often have the same look and feel as the brand owners site. Compared to the purchase of a fake handbag on the street, the purchase of a bag online makes it harder for a consumer to tell whether the product is genuine. An online ad for a Gucci bag could show a photo of a genuine Gucci bag, but the purchaser would actually receive a fake one. The counterfeit seller may create pseudo product reviews, blog entries and rogue social media profiles to enhance its legitimacy. Susceptible consumers may fall for this fake content. 

According to a report by Anna Maria Lagerqvist and Hanna Bruck in Valea International, in 2009 Eurobarometer statistics, 22% of EU citizens have unknowingly bought counterfeit goods. As shopping online is considered entirely legitimate, online counterfeit products may attract consumers who would never purchase a Louis Vuitton handbag in a dark alley. The Internet creates a situation where the marketplaces for counterfeit products and for the genuine article are suddenly the same.

Further, online shops give the buyer a sense of anonymity and impunity. Given the seemingly boundless scope of the Internet, luxury brand owners come across anonymous online counterfeit sellers every day.

Over 80% of the imitation luxury products being sold in India comes from China, says D S Rawat, Secretary General of Assocham in the report, adding, Most of these comprise of handbags, watches, shoes, clothes, hats, sunglasses, perfumes and jewellery.
According to a 2012 report on the luxury retail market by Cognizant, brands such as Kate Spade and LV typically hire private investigators to find where counterfeits are sold. On the other hand, Indian stores like Kitsch, offering high-end labels inform the head offices of brands when they come to know about an individual or a store selling copies.

Quality difference among fakes
There is a world of difference between replica, first copy and fake. There are huge qualitative differences between counterfeits. In my recent visit to Bangkok, I was exploring the counterfeit market. The two brands that dominate the world of replicas are Rolex and LV.
Take for example a Rolex watch. I was checking out a Rolex all gold Day Date counterfeit across quality standards. The difference in prices between a first copy and a fake is 75%. The first copy was heavier, the steel quality was superior, the plating was much neat and there was even an identification number! While the fakes even had models that never made it to the catalogues of Rolex, the first copies were sold with the original catalogue by their side. Very impressive indeed.

Similarly, was with the replicas of LV. Even to a trained eye the monogram or damier ebene will be hard to decipher. 

On the online platform however, the fakes dominate. The first copies and replicas (in the true sense) cant make a mark as on the online platform, no customer will be ready to give the premium. While a Rolex fake may be available at Rs 5,999, a first copy will cost at least double that, for difference that are not visible to untrained eyes, especially while comparing online.

In defence of counterfeits 
Sometimes I tend to question whether these brands have a legitimate justification for charging such a prohibitive premium for their brands. 

A few counterfeit watch dealers have showed me copies of complicated watches and how their watchmen were able to replicate to the very details of the original. The cost of their labour? Well, just a fraction of the cost of the labour of a legitimate watchmaker with a luxury brand. When I see the detailing my heart goes out to them, but not to the dealers. 

The counterfeit market is eating into not only the pie of the luxury brands but also into pie of the premium brands. Say if someone can afford a Tissot and aspires to wear an Omega Seamaster, gets a Rolex first copy at Rs 5999 online. Tissot and Omega both lost in the battle, for no fault of theirs.

From the buyers perspective, understand this, the difference between the cost of making a Gucci or LV handbag and the MRP is significant and that is the brand value. The buyer is getting a cheap quality leather handbag but along with that perceived brand quotient in a fake at an affordable price and at their door steps.

It is just a click away.  

To conclude, let me quote the bard: A fake is a fake is a fake is a fake. 

Let your quest for luxury continue. 
http://retail.economictimes.indiatimes.com/re-tales/The-world-of-luxury-counterfeits-just-a-click-away/184

The theory of relativity

Luxury is not universal. Luxury, as my readers will know by now, has come from the word luxe which means dazzle. Now the luxe factor is fundamentally relative. What dazzles one need not dazzle another. The second layer of difference lies in the degree of dazzle.


image courtesy: Flickr

Let me elaborate with a few Indian examples the degree to which the razzle-dazzle differs. I drool over a Cartiers Panthere ring, or a Louis Vuitton hot-stamped trunk, or a Harley Davidson Fatboy. So, for me, that is luxury. Now let me compare apples to apples. Let us see now to bring in the luxe factor what the Richie Riches of our poor nation had done: In 1926, the Maharaja of Patiala gave Cartier its largest commission till date the remodelling of his crown jewels, which included the 234.69 carat De Beers diamond. The result was the Patiala necklace weighing 962.25 carats with 2930 diamonds. In 1928, the Maharaja of Jammu and Kashmir placed 30 orders in six months for trunks from luggage maker Louis Vuitton. Not to mention that a certain Nizam had procured 50 Harley Davidsons for his postmen to deliver his messages. (Read: Democratisation of luxury)

That is a key differentiator that every luxury brands need to study understand very clearly. In luxury branding one size fits all just doesnt work. It is a space for bespoke, for customisation, for making every customer feel special and justify the brand premium in pricing.

The greatest challenge that a luxury brand faces is in mixing the right portion of snob-value. It cant be so much that you alienate others but it cant be so less that the clients dont feel the exclusivity. The magic potion lies in the right portion. It is both the presence and the absence of snob quotient, both co-existing, side by side.

You need to have the low-hanging accessories like sun glasses or perfumes or key chains or coin purses or scarfs or what have you. They will not only lure a genre of clients who are heavy spenders in premium brand space and are yet to turn big spenders in luxury space as they are not sure the return on investment or RoI as we call it in the corporate parlance. For them, these low-hanging fruits are only value-for-label. So they just pay for the logo and are happy as they spend it within their budget and not frivolous but smart. They think of these spends as it is a deal man to own an LV for such a price, the product may be a key chain or a coin purse but who cares. Logo rules!

With time, a certain segment of this class realises the efficacy of the entire experience of luxury shopping, it is just not the product, it is the experience that you pay the premium for. Again to some it is worth the buck, to others it isnt. Everythings relative.

The ease with which they migrate may differ but the migration is destined. You are no longer satisfied by the key chain, you need to flaunt the wallet, shoe, handbag, specs, pens, ties, what have you. This is just stage 2. The more you rise the stages the stickiness increases with the brands. Stage 3 is when you are a regular user of luxury brands and you have made a complete migration from super-premium to luxury, even in your articles of daily use to daily wears. You are so used to luxury shopping experience that you start feeling uncomfortable if you shop anywhere else -- there is a little unease, out of place feeling. You are officially a luxury man or woman -- it is a part of your life. And you embark on the big tickets buys. Congratulations, you are now a member of the world of dazzle, not a guest. So the LV key chain that used to dazzle you some time back seems relatively less prominent amidst the Cartier wallet, Bulgari frame, Bottega Veneta bag, Salvatore Ferragamo shoes, Gucci belt, an LV briefcase and a Rolex. You are no longer dazzled by these but you become a luxury who inspires others, just the way a member invites guests to an exclusive high-brow club.

The critical part remains for the brand in handling clients of all Stages-- from 1 through 3 -- in the luxury world so that the ever-changing dazzle-quotient remains intact. That quotient is their bread and butter, no luxury brand should ever forget that. 

Let me give you an example of the Cartier store. My friend, the boutique manager, tells me that every client is important, no matter whether he/she is here for a wallet, a watch, or a Trinity. However, there is a subtle difference in the degree of engagement among all the three segments. Clients in every segment needs to feel special but they must also feel a little left out in terms of the treatment that is meted out to big-ticket buyers. This aspiration keeps the store running. There is a room in the store, beautifully decorated where hi-value deals are made. It is beautifully decorated with a touch of the history of Cartier and its India connect. The special Trinity and Panthere are on display, which are no longer crafted or sold, they are for your eyes only. So for the watch buyer, an entry into that coveted room is an aspiration and that brings them back. Relativity rules and makes big bucks for these brands.

The mortal crime for any boutique assistant or manager is to judge a client by his or her clothes or the capability to talk in English. This deserves a capital punishment. This kind of exclusion will end up shutting that store. My friend, who is pretty rich and has a great collection of luxury-branded handbags, including Burberry, visited the Burberry store in Kolkatas Quest mall. She was wearing a torn jeans, a white tee and flip-flops. The boutique assistant was to her surprise, not clean shaven and had a day-old stubble, which was criminal as it shows how callous you are and how you are not bothered about grooming, and so how unfit you are for a luxury boutique. When she asked him to show a particular bag, he first told her its price and looked at her. She immediately left the store and swore not to visit it again. A permanent loss of a potential client and a lot of bad publicity, the latter is lethal for a newly launched boutique, just for a wrong judgement.

This is how a mix of snobbery and relativity can make or break the reputation of your boutique and thus brand. It is all in the soft skills and presence of mind as to how to lure clients and nothing to do with the quality or design of the luxury product.

It is all about the theory of relativity -- sometimes special, sometimes general.

Let your quest for luxury continue.http://retail.economictimes.indiatimes.com/re-tales/The-theory-of-relativity/253

Working Title: Seven Ages of Brand

All the world's a stage,

And all the men and women merely players.
They have their exits and their entrances,
And one man in his time plays many parts,
His acts being seven ages.

Just like the Seven Ages of Man described by William Shakespeare, a Brand also has Seven Ages. The book aims to capture these stages of a Brand – from conception till death and rebirth. Just like a man, a brand also goes through the motions of life and has its share of ups and downs and it also eveolves with time and maturity.   

Chapter 1: The infant

At first the infant,
Mewling and puking in the nurse's arms.

1A: Conception:

Conveiving a brand by accident or by planning.

Why the brand? Raison d’etre.

Some anecdotes of brand conception.

1B: Birth

Determining the Brand Gender: Brands inherently have a gender. Say a Rolex or Old Spice are msculine brands whereas Chanel or Dior are feminine.

So based on the gender of the brand the entire life journey is planned.

This will cover the facets of brand gender.

Whether incubation is needed: If the brand is launched prematurely, there is a need for immediate incubation, just like with babies. The incubation saves the brand and makes it stronger to face the world. The parents realise that the brand is too fragile to withstand competition and will die prematurely. So this forces the parents to strenthen the brand and make it fot for survival.

Chapter 2: The whining schoolboy

Then, the whining school-boy with his satchel
And shining morning face, creeping like a snail
Unwillingly to school.

2A: The early years: This is the time of doubts, the irritation of failure, the sweetness of initial success. The exposure to criticism. The is the time when you realise the strengths and weaknesses, the areas that need nourishment.

2B: The teen/adolescent/puberty: You start realising the changes (hormonal) that a brand is undergoing. This is a critical time when you need to be patient as even a well thought through plan may go haywire and this is when the brand starts developing character.

Chapter 3: The lover

And then the lover,
Sighing like furnace, with a woeful ballad
Made to his mistress' eyebrow.

A confident young brand that falls hopelessly in love with itself. It just sees how beautiful it is and keeps admiring the story of its birth and growth. This is a time when “Brand Ego” takes birth.

Chapter 4: A soldier

Then, a soldier,
Full of strange oaths, and bearded like the pard,
Jealous in honour, sudden, and quick in quarrel,
Seeking the bubble reputation
Even in the cannon's mouth.

The dominance of Brand Ego: This is dedicated to the facets of Brand Ego. “A car that runs of reputation” is one such example. Rolex, LV, Rolls Royce.

This segment will explain what is meant by brand ego and what defines it in details.

Chapter 5:  The justice

And then, the justice,
In fair round belly, with a good capon lined,
With eyes severe, and beard of formal cut,
Full of wise saws, and modern instances,
And so he plays his part.

The maturing brand: Ego grows, wisdom grows. The brand now has more clarity of its clients/TG and even about its strngths and weaknesses. But ego still plays a significant role.

Chapter 6:  Into lean and slippered pantaloon

The sixth age shifts
Into the lean and slippered pantaloon,
With spectacles on nose and pouch on side,
His youthful hose, well saved, a world too wide
For his shrunk shank, and his big manly voice,
Turning again toward childish treble, pipes
And whistles in his sound.

This is a time when the brand starts to show signs of fading. This is when there is the conception of a revamp. The idea that the brand is nearing death looms large. So the custodian/parent looks at ways to save the brand or rebuild the brand or even the birth of a new brand.

Chapter 7: Second childishness

Last scene of all,
That ends this strange eventful history,
Is second childishness and mere oblivion,
Sans teeth, sans eyes, sans taste, sans everything.^[7]

The death of the old brand. The birth of a new brand. The second life of the brand.

Appendix:

Chapter A:

Brand perception: The consumer behaviour and classification. This will capture is details how the different categories of customers perceive brands differently. A special reference to consumers of luxury brands.

Chapter B:

The brand for te 3Ps: Personality branding/Professional branding/Product branding. How to brand your reputation, how to brand your profession, how to brand your product: aspects, what it means, dimensions. 

The Great Indian Middle Class Dream

All the major luxury brands owe their existence to one class of buyers: The Great Indian Middle Class (GIMC). The New Maharajas, before you raise your brows, let me explain it to you as to why you do not drive the luxury market in my motherland. The fun part is dear New Maharajas that not only yours truly but the brand custodians of the luxury products who are trying to either make their mark in this country or are trying to expand their pie will also silently agree. 

There is one big purchase of a hotstamped monogram LV trunk, and then, simultaneously, hundreds of monogram belts, monogram small wallet scarfs, bracelets, and the likes are sold. LV reaches one New Maharajas household, may be for the nth time, but it also reaches hundreds of households of The Great Indian Aspiring Middle Class for the first time.

Wikipedia defines masstige as a marketing term meaning downward extension of a brand. The word is portmanteau of the words mass and prestige and has been described the prestige of the masses.

It is luxury or premium but surely attainable.

Masstige is all about feeding into the aspiration of millions. The biggest challenge, however, is how to keep the aspiration alive. What if the brand loses its exclusivity and elitism in trying to just dip into the mass market? But at the same time the raked up moolah is hard to ignore.

To sell or not to sell (to the masses)? That is the big question that all luxury brands face.

Most of them have been able to strike a balance. The key lies in pricing. But the entire process has a few elaborate steps, a luxury brand manager had once patiently explained to me:

1.Identify the products that are your signature and add a signature premium to their prices. They are not for GIMC to buy, but they are their aspirations. These products will always be displayed on the boutiques, mostly their pictures, as signature products are always out of stock and a fresh stock is always on its way from Germany or France. They make the GIMC keep coming back.

2.Identify the products that you want the New Maharajas to buy. Special edition pieces, hand crafted. These should be there for display so that they can feel it and then take it home. These have a premium attached to them due to their exclusivity. 

3.And then there are products that are masstige, they are to whet the appetite of the GIMC, so that they can flaunt that they own a logo of the brand they always aspired to buy.

The most interesting part about point 3 is that these companies never advertise to this class, so there is no brand dilution. This class, however, advertises and brands these products to the other target audience in the same class, all for free. So the companies generate strong brand pull with this segment, most importantly, the aspiration lives on and grows.

Shopping malls in order to lure the GIMC towards luxury and to give them its taste are mixing luxury, super premium and premium in the same shopping mall. The Palladium in Mumbai or The Quest in Kolkata has a mix of all three segments: all under the same roof.

It is this aspiration that has led to the exponential rise of the market of knock offs and first copies. This is an aspect that I will dwell in details in a later post but for the time being let me briefly help you understand the rationale behind spending hard earned money in low quality fakes.

Well readers, it is aspiration, yet again. Not always is it possible for GIMC to say, buy a scarf 30k, when with that money he could have bought jewellery. And what are the chances of that scarf surviving the washing machine or the domestic helps onslaught? At the end of the day it is a piece of cloth.

This is where the knock off market comes handy. You get a similar scarf for Rs 500 and only a trained eye will be able to tell you the difference. If it is torn, you will just get another brand this time, for the same price. It is a perfect arrangement. The same is true for belts, small leather good, coin purses, and the likes. The most luring part is that you can even aim for a big product, a decent copy, at a price which is just a fraction of the price of the original, but more importantly, the GIMC could have never owned it. The two most faked brands are perhaps the two most-aspired brands: Louis Vuitton and Rolex. 

Coming back to the tale of the low-hanging affordable fruits of the luxury tree, the Great Indian Middle Class will go out of their way to own a piece of that brand, sleep with it and dream about the bigger signature pieces in the larger-than-life posters at the boutiques that always tease them, lure them like a seductress. 

May your quest for luxury continue.

http://retail.economictimes.indiatimes.com/blog/The-Great-Indian-Middle-Class-Dream/157

Democratisation of luxury

Branded luxury is not new to Elite India. There was a time in the 1920s, when 20% of Rolls Royce's global sales were from Elite India. In 1926, the Maharaja of Patiala gave Cartier its largest commission till date the remodelling of his crown jewels, which included the 234.69 carat De Beers diamond. The result was the Patiala necklace weighing 962.25 carats with 2930 diamonds. In 1928, the Maharaja of Jammu and Kashmir placed 30 orders in six months for trunks from luggage maker Louis Vuitton. Not to mention that a certain Nizam had procured 50 Harley Davidsons for his postmen to deliver his messages. (Read: The mechanics of luxury retailing)

In have coined the term “Elite India” to capture the India that belongs to the Aristocrats and the Blue Bloods. Luxury was contained exclusively within this elite coterie for generations.

The democratisation process started happening in the West first, where wealthy businessmen got the taste of luxury and the rest is history. Luxury was no longer only for the select few, it was for anyone and everyone who can afford, irrespective of the colour of their blood.

In India, in the past decade we saw a rapid rise of the new Maharajas. Industrialists, entrepreneurs, professionals, and the rural rich started blatantly adoring all things luxurious.

Today, even the luxury of Royalty is available for a price. How does it matter if you are not born in a Jaipur palace, today Royal Weddings have become commonplace. Perhaps the opening up of palaces for hotels is the biggest step towards democratisation of exclusivity of royalty. You will be treated like a king, if you have the moolah. Life is just that simple.

Now let us look at the rise of the so-called “masses”. These new customers—luxury-rich but asset-poor—are both an opportunity and a threat to the traditional luxury-goods producers. As consumers, they are more demanding, more selective, and show less brand loyalty than the “high net worth individuals” who were the archetypal consumers of the old luxury. They are willing to pay high prices, but they expect commensurate quality; old luxury was never so fussed.

And they want the hottest, trendiest designs, which increasingly have to be marketed in creative (and expensive) ways—including product placements on TV sitcoms.

Economist claims that this democratisation of luxury is eating into the profits of the luxury-goods manufacturers. To maintain quality and to withstand the tightening of their margins that it implies, they must have the capacity and resources to change designs frequently and to get new products into the shops rapidly. That means money, discipline and clout. Design and creativity are the bedrock of any luxury brand. But the access to financial resources and thorough execution that are part of any professional management really come into their own when times are tough. The vulnerability of small trophy companies becomes more obvious during a downturn.

Let’s now consider the more interesting segment of the masses. To explain this first let me introduce a term: masstige. The word is a portmanteau of the words mass and prestige and has been described as "prestige for the masses."

The term was popularized by Michael Silverstein and Neil Fiske in their book Trading Up and Harvard Business Review article "Luxury for the Masses." Masstige products are defined as "premium but attainable," and there are two key tenets: (1) They are considered luxury or premium products and 2. They have price points that fill the gap between mid-market and super premium.

Let’s take the example of Speedy 30. In Korea, Louis Vuitton’s ‘Speedy 30’ handbag has been nicknamed the ‘3 second’ bag – because it feels like you see one every 3 seconds. It’s just one of many “entry level” products that have been developed to deliver value for money on a smaller, yet perhaps equally indulgent, taste of the brand narrative. So, this is a segment that aims at the entry level products of the luxury brands. The targets: accessories, belts, scarfs, wallets, small purses, and so on. They just need to flaunt the label.

Luxury brands extend downwards with these low-hanging seemingly “affordable” fruits to capture the masses and to whet their appetite.

So, from the Maharaja to the Praja, both now flaunt the same labels. That’s democratisation of luxury. Yes, it has taken decades, but we have made it.

Democratisation, the great leveller.  

Let your quest for luxury continue.

http://retail.economictimes.indiatimes.com/blog/Democratisation-of-Luxury/99

Why the farmer will never get rich

(My first editorial piece for The Economic Times Jan 11, 2007)

Imagine there's no countries. Unwittingly, John Lennon captured the essence of globalisation in this song. It's an engine to integrate markets so a farmer in a remote district of Maharashtra is almost as well off as his counterpart in US. However, the key word is imagine. Why? You'll know soon. Let's ask the farmer whether he understands globalisation or if he has heard of Joseph Stiglitz or Jagdish Bhagwati. No? But, isn't he the one the noted economists are fighting for?

Hardliner Stiglitz takes a softer path — converts his discontents (as evident from his book Globalisation and its Discontents) to a solution in Making Globalisation Work. The solution is easy to implement, but only theoretically. It's actually like the song. To start with, we need to imagine all the countries are at par — there's no first, second or third world. They discuss agreements on agriculture. Let's restrict globalisation to trade and not stretch it to terrorism. As they say, with attacks in foreign countries having no direct relation with the attackers' own country, terrorism has also globalised.

At a WTO meet, unlike the Uruguay round in Marrakesh, they agree to share their markets for agricultural good. They make trade laws, clauses, discuss the little boxes of subsidies and the intellectual property rights. Unfortunately, the green, amber and blue little boxes aren't all the same (as in the song). Because in the real world, they are used by the first world as an instrument to manipulate the quantum of subsidies.

Anyway, for our farmer, the market will no more be his village, it may now be somewhere in Europe. They pay him in euros and give the best deal available globally. Wow! That means our villages will eventually not remain poor. Therefore, being an agro-based country, India can become rich — the so-called first world. Hold on, do I smell a circular logic? Of course, our assumption was there's only one world, that is, we are already rich (or poor) — as rich (or poor) as the US.

But, what if we don't imagine? We realise the world isn't integrated and the first world nations are dictating terms to the third world. Globalisation is used to penetrate the untapped markets of the developing nations. The terms are tailor-made to suit the needs of the haves at the cost of the have-nots. So our farmer remains poor, exploited now by some European agent. India can walk out, deny, but perhaps, can never dictate terms to the developed world. What the hell, it's just a song. We may be the third world, but we can imagine.

You may say that I'm a dreamer But I'm not the only one I hope someday you'll join us And the world will be as one.

http://articles.economictimes.indiatimes.com/2007-01-11/news/27679479_1_globalisation-farmer-countries

Luxury consumers decoded

It is not easy to classify the Great Indian luxury consumers. Though several attempts have been made over the years, somewhere we Indian have been able to confuse these classifiers. A classic example was when I saw a gentleman driving a Mercedes E- Class towards the CNG counter of the petrol pump. Although we need to show off or flaunt our status with luxury we can’t help save every penny that we possibly can. Another classic example was when I saw a friend strapping a limited edition Omega with a Titan because “the Omega strap is very expensive”. This gentleman is a high-flying executive with an MNC.

In a recent CII-IMRB study on the changing face of luxury in India they have classified the luxury consumers in an interesting manner into experientialist, connoisseur, flaunter and aesthete.

However, you must remember that no matter how much you try to classify us Indians, we are a heady mix of all the above and much more than any study could possibly gauge.  

First, the experientialists: 

This consumer typically values new and exciting experiences more than buying products or brands. They spend on the experiences. In their structured lives they seek a getaway and so their spends primarily include five-star hotel stays, fine dining or adventurous/thrilling experiences. Luxury to them brings up images of being suspended in time and space, not having the press of daily life and work responsibilities thrusting into their minds as they enjoy the time away.

An exquisite piece of art or a handcrafted timepiece may also give a similar experience when you are just in a space where you are appreciating the beauty of it. It is a time warp, every time you look at it, you become so mesmerised by the beauty that you forget your meetings and deadlines. The experience is the luxury, the experience is the dazzle or luxe (Read: The Quest for Luxury).
Personalisation of experiences takes luxury to a new level. Personalisation of menus at fine diners is no longer reserved for the elite. Even sometimes the name of the customer is printed on the menu. So yes, this is value for the buck for an experientialist.

For these consumers, going forward the trend will be to stay in specialty boutique hotels or resorts, luxury spas or private apartments and villas when on a holiday.

Now let’s meet the connoisseurs: 
This segment is passionate in certain areas of interest and makes it a point to be well informed and knowledgeable about it. These categories could be art, scotch, wine, watches, writing instruments, cigars, horses, and the likes. These connoisseurs get together and appreciate the finer aspects of their passion. They form clubs and get together for a quiet appreciate of luxury of the creation. It may be a horology society or a wine club or a scotch club or a cigar group. 

This segment just revels in enjoying what they appreciate the most.  Like in Kolkata there is The Calcutta Malt and Spirits Club and in the capital there is Delhi Single Malt Club where members come together, discuss, study, debate and share their appreciation and experience in high spirits (no pun intended). Similarly, there are elitist clubs of connoisseurs for appreciation of Cuban cigars and timepieces across the country.

They will spend their time and money in pursuit of the collection of personal passion points. They make the pursuit of their area of passion a mission and pursue it with zest. When it comes to limited editions, or handcrafted editions or spirit of the bygone era, these connoisseurs will not bat an eyelid for spending a fortune.

They are unlikely to place value on brands unless it stands for exquisite exclusivity. They tend to prize themselves on the knowledge of esoteric brands that are not widely known.

Luxury to them is purely a matter of the level of craftsmanship, the number of man hours spent, and thus the quality of the products or services that they buy. Niche, but specialised brands across categories will make their mark with these consumers. Their willingness to pay is high. Curated services that brings such products to them will be a great getaway to tap into their need for excellence.

The next segment, I believe is the life force that drives luxury in India. Meet the flaunters: 
A socialite friend who used to swear by a clutch that she used to take to every party had secretly told me that she isn’t that fond of it but only carries it for the LV monogram tag. That's the power of a brand of this genre.

Welcome to the world of flaunters. They tend to value brand name over all other factors. Purchase of a brand is a signal of their status in their society and so visibility of the brand name is important. It is also important for the brand to be aspirational, otherwise, what's the big deal? Badge seekers at the stage where the brand name itself is the biggest status indicator is seen mostly with the newly rich or new money class, especially among their young members. There is a strong desire to prove to the society that they have entered the elitist luxury brand-wagon.

In a survey more such consumers were seen in cities like Ludhiana, where they justify the ownership of brands by stating that they are now in a status or position which makes it de rigueur. The most interesting thing about this class is that brands are on a continuum. They can show off Zara as a daily wear to Prada on special occasions with élan.

As flaunters move up the societal ladder, the badge value is conferred not only by the brand but also by the level of difficulty in obtaining the product or service. Dinner reservation at hard-to-get restaurants, Birkin or Kelly bags for which the wait list is over four years, monogrammed and hot stamped Louis Vuitton bags with their initials, accessories made from exotic leather like of crocodile or snake – the ability to acquire these with relative ease is a reflection of their status.

Well known but exclusive services and products are the way forward for tapping this segment of consumers.

And last but not the least, I present to you the aesthetes:
To this genre, the brand is much less important than the design. Aesthetes are luxury consumers purely because they have arrived at a state of income due to which they can indulge in their love for design among luxury brands or products.     

They will shell out a bomb because the object of desire is hand stitched and not because of the label. They pride themselves for having an eye that picks out the unique and bold in design.

The difference between them and the connoisseur is that the latter has certain passions which they follow with zeal and the quality and craftsmanship are very important. However, for the former category, it is the aesthetic appeal, the look, the intricacies of the design that appeal to their senses. They are also likely to pursue this aesthetic across categories unlike a connoisseur.

It is the creativity and the uniqueness of an item that denotes the value to the aesthetes, and they are willing to shell out if that object catches the eye. It is not about the intrinsic value or brand value, it is about just aesthetics. To tap them, luxury brands need to showcase more distinctive and unique designs.

The most intriguing part is that the experientialist consumer may well be an aesthete when it comes to apparel and accessories, while a connoisseur in art may be a flaunter when it comes to automobiles or his home. Indian luxury consumers are still evolving and many of them are not at a stage where their lives are only dominated by luxury brands.

Built in rationality and conservatism still dominates our minds so one toe may be dipped in luxury, the other may be in a pool of “value for money”.

Yes, it happens only in India.

Let your quest for luxury continue.  

http://retail.economictimes.indiatimes.com/blog/The-Great-Indian-luxury-consumer-decoded/68