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Luxury Trends for 2011: The Latest From The Luxury Institute via [luxist]

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by Susan Kime
The Luxury Institute conducts independent research with wealthy consumers about their behaviors and attitudes on customer experience best practices. Their white papers on luxury trends and consumer attitude change emerge consistently throughout the year. The most recent was published on October 10, 2011, on emerging luxury trends for 2011..

The Institute states, ” As the luxury industry enters the last quarter of 2010 and prepares for 2011, executives are grateful for what could have been a worse year considering the state of the world’s economy. The truly global top-tier luxury brands are surging in China, while holding their own in the US, Japan, and Europe. Leading public companies have done much better than privately-owned brands by using their heritage, innovation, and resources to gain market share. Many family-owned European brands, rich with history but lacking innovation, have suffered and are desperately looking for capital. Overall, the industry has seen tepid growth; this trend is likely to continue for the next three years unless some unforeseen, and highly unlikely, positive event occurs and saves the global economy.”According to the Luxury Institute, here are some trends that have emerged in 2010 and should continue in 2011:

1. A Deepening Focus on Brand Values and Service Values
In his recent book on luxury strategy, Jean-Noel Kapferer stated that unlike mass consumer brands, luxury firms don’t need a brand positioning (e.g. Hertz: #1 in Rent-a- Car , Avis: We try Harder), but they do need an identity. The Luxury Institute states, “Brands must create their identities not only by the name, personality and style of the founder, but also through values by which they should be known and publicly judged. They can be one comprehensive set of brand values that establish the company personality while also acting as service values which define the customer experience.” Brands can also choose to develop two distinct but related sets of brand values and service values. In a recent Luxury Institute LCRMA (Luxury CRM Association) survey, 90% of luxury executives agreed that luxury culture and values are directly linked to positive financial results. .

2. Luxury Brands Purge its Out-of-Touch, Arrogant Staffs
“As top-tier luxury CEOs and their Boards discover the importance of a benevolent culture and values,” the Luxury Alliance states, ” they are also beginning to realize that the people who manage and deliver customer experiences must fit the new customer culture In the sales and customer-facing ranks, people will soon be selected on their abilities to be brand and product experts, earn trust and build lasting customer relationships. Lone Ranger, toxic sales professionals who are currently tolerated will soon be out of fashion. Ritz-Carlton, Mandarin Oriental, Four Seasons, Lexus and Nordstrom have been doing this for years, but even they will have to move to a higher level of cultural relevance and practice, as companies like Zappos prove that there is far higher ground to reach in terms of selecting customer-centric people, living the values and transparency.”

3. Websites!
One senior luxury executive recently told the Luxury Institute that “It’s a dark day for luxury when Zappos delivers a far better luxury experience than any luxury brand”. As luxury retailers learn to leverage the Internet for e-commerce, they are also learning that one thing affluent consumers expect from their online experience, if the need arises, is the availability and opportunity for quick, easy and immediate direct communication. In a recent Luxury Institute WealthSurvey, 62% of affluent consumers stated that when shopping online they feel more comfortable if they can call someone directly for assistance, and 60% said they are likely to abandon their online purchase if they cannot find quick answers to their questions on the website. In addition, 45% expect an obvious phone number to speak with a live sales or customer service representative. While luxury struggles with the answer, Zappos has beat them to it and gained the high ground. The secret that Zappos has learned is that only a small percentage of people need this call service very often. Look for most luxury brands to understand the connection between the call center and online channels and create a far better experience for customers in 2011.

4. Clienteling Goes from a Hobby to a Discipline
In a recent Luxury CRM Association Clienteling survey, only 25% of affluent consumers reported that they have a relationship with a sales associate at a luxury brand. That was actually a high water mark, as other surveys that Luxury Institute partners have conducted indicate that only 8-15% of customers report having a relationship with a sales associate at top luxury retailers. Why is this important? Because this small group of luxury consumers give a retailer almost twice as much in wallet share. They also are likely to continue buying more over time if they have a relationship with a dedicated sales professional.

5. Luxury Mobile Applications Come of Age
Top luxury brands now well into a few years of e-commerce, and having finally ventured into social media, are determined not to miss the soon-to-explode mobile device shopping party. Luxury Institute research on the wealthy consumer use of mobile devices shows that 76% compare prices via mobile devices, while a rapidly growing 27% have purchased via a mobile device. In addition, 21% report that they use mobile devices to look up respective product information while shopping in stores. We are near a tipping point where mobile devices will replace the laptop for many activities and transactions and luxury brands are racing to be a step ahead for a change. Tiffany‘s recently-launched mobile application for finding your perfect engagement ring is a good example of a simple and practical innovation that seeks to serve its customers.

6.Luxury Equips Sales Professionals with In-Store Mobile Devices
Luxury is about to begin testing equipping its sales professionals with mobile devices such as iPads and iPhones in its stores. They can also be used to take customers through rich sales presentations that include video and audio enhancers. They can be used to search out-of-stock inventory anywhere in the retail system, conduct an online transaction, and arrange for delivery in real time. As customers opt in to having their own mobile devices announce their arrival at the store, sales professionals can be alerted to greet customers by name with custom offers ready, or at minimum be aware of what offers have already been sent to them. These applications are only the beginning of the use of mobile in stores as a customer experience enhancer for the sales professional as well as the customer. Mobile devices combine personalization efficiency and effectiveness with an unprecedented touch of caring and nurturing that are the Holy Grail of a true luxury experience.

A Recap: 6 Trends That Defined Luxury in 2010

By Michael Martin

BEVERLY HILLS, Calif. (TheStreet) — Despite being on the tail end of the worst recession in modern history, 2010 proved a winner for a few select hotels, restaurants and nightclubs whose business models and practices allowed them to rise to the occasion.

Microchain boutique hotels
After beginning as a hipster-granola hotel concept in the Pacific Northwest, Ace Hotels has spread across the United States with a celebrity-studded outpost in New York and destination resort in the California desert.

The bathrooms on Emirates’ 15 Airbus A380s go beyond luxurious in first class. The airline has become the first and only to offer in-flight showers.

The realization that artists on a budget need stylish and comfortable rooms too has evolved into bohemian enclaves that in New York include a Michelin one-star eatery by the creators of the Spotted Pig. Their gastropub eatery is just as popular with city folk as it is with hotel visitors.

In Palm Springs, Ace has brought a Dash Snow sensibility to the destination pool party, with celebrity jam sessions and indie DJs recruited from LA to spin lazy Sunday afternoons by a pool stewing with tattooed rock stars and models on winter break from the Milan-Paris-Tokyo-Ibiza circuit.

Membership clubs
They’ve been a staple of London social life since the advent of the Groucho Club and Soho House, the latter migrating through Berlin and New York before sweeping across the United States this year. The membership club concept thrives most notably in Los Angeles, where Nick Jones’ Soho House has essentially a monopoly on celebrity dining and nightlife from its penthouse West Hollywood location along the Sunset Strip.

Potential members scour their circle of friends for sponsors only to line up for a multimonth waiting list from which only a connected few at a time are selected to join.

November saw the opening of Soho Beach House in Miami, which includes a hotel that was the party site du jour at Art Basel 2010. Meanwhile, Miami’s perennial Casa Tua was set to expand to Aspen, where the Caribou Club has long had a stranglehold on the billionaire and ski bunny set.

Are you a friend of Andre Saraiva?
He seems to be everywhere these days. In Paris his Le Baron nightclub is the fashion stalwart of local nightlife, while the Hotel Amour he co-owns has become the most fashionable address for one-name artists and celebrity designers. Ditto for Japan, where Le Baron is the hottest club in Tokyo.

In United States, Saraiva has the Boom Boom Room and Le Bain atop the Standard New York and plans for a nightclub in Chinatown. Pop-up installments of Saraiva’s nightclubs are the “it” events at the Cannes Film Festival and Art Basel, where he was essentially handed the keys to Delano’s famous Florida Room for the past two year.

In St. Tropez he’s transformed the once derelict Hotel Ermitage into a bastion of cool on the scale of LA’s Chateau Marmont, but with a French accent.

Saraiva, only 38 and already the new Ian Schrager, is the man of the moment, the coolest guy in town — any town.

Let’s make a deal
It wasn’t long ago that the name Gilt Groupe was barely pronounceable to the average Internet consumers, let alone recognized as a discount retailer specializing in deals for high-fashion goods for subscribers. This year Gilt launched its JetSetter travel deals, offering cut rates at selected hotels that range from quirky boutiques to the best luxury addresses in Paris.

The formula has brought competition from such players as Tablet Hotels, Design Hotels and Leading Hotels of the World that now allows even the high end of the travel market to scout out a deal without embarrassment. Drawbacks include a not always stellar selection with prenegotiated availability and, often, required prepayments. The endless emails for affiliated and launching products also detract from the experience of a once exclusive membership now open to pretty much anyone.

Shower before landing
The advent of the French Airbus A380 has allowed a creative interpretation of the traditional first class flying experience, and Emirates, with its impressive 15 of the craft, offers the most luxurious and over-the-top configuration: It has become the first and only airline in operation to offer in-flight showers.

Emirates’ Private Suites, touted by Carrie Bradshaw in Sex and the City 2, are equipped with sliding doors and minibars of almost full-size premium goodies. There’s also two shower spas at the front of the first-class area — complete with Bulgari bath products and fluffy Italian linens — offering a burlwood boudoir that’s become the hottest amenity in the aviation industry.

Celebrity chefs
Celebrity chefs, the latest must-have amenity for new hotels, are a sure-fire way to keep guest dollars in house as well as a burgeoning business for hoteliers looking to divest real estate during tough times. This year has seen the debut of Daniel Boloud’s DB Bistro Modern at the new JW Marriott Marquis Miami, J&G Steakhouse by Jean-George Vongerichten at St. Regis Deer Valley, the highly touted WP24 by Wolfgang Puck at the Ritz Carlton at LA Live and Michelle Bernstein at the Omphoy in Palm Beach.

Pierre Gagnaire seems to be in front of the trend, conquering the globe with a new Reflets eatery in Dubai, a two-star Michelin-rated restaurant at Les Airelles in Courchevel and an outpost at the Mandarin Oriental in Las Vegas. With no shortage of celebrity chefs, Vegas is also welcoming Scott Contant’s Scarpetta and Jose Andres’ Jaleo, which just opened at the Cosmopolitan Las Vegas.

Look for even bigger chef names to debut next year. The world’s most heralded chef, Heston Blumenthal of Fat Duck, given three stars by Michelin, will debut a concept eatery at the Mandarin Oriental Hyde Park in London that already has its own Bar Boulud in the basement.


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Why Are the Top Luxury Websites Incompatible With Apple iPad? via [psfk.com]

Top 10 Luxury Brands’ Sites Fail To Work On iPad

A review by the team at PSFK shows that most luxury brands are
unprepared to leverage the changes in web use that products like
Apple’s iPad and iPhone are driving. Out of the top 10 luxury brands
ranked by Forbes in 2009, none of their websites worked
sufficiently to match their desktop-web-experience. Only Gucci seems to have
created a site that can handle the technology requirements that Apple has placed on its
mobile devices.

The key issue is that all the key luxury brands have designed their
sites to use Adobe’s Flash. Flash offers an animated but
controlled web-design experience but Apple’s Steve jobs has said
that the iPad
and iPhone
will not use Flash software partly because of the drain it puts onto
battery life.

Apple has sold an estimated 1 million iPads in the first month. The
world’s luxury brands seem to be failing to keep up with a gadget
loving shopper who will spend between $500 and $1,000 on what may
consider as a supplemental device for a user. Later this month Apple
will start taking orders for the iPad from key luxury markets like
Japan. Apple has already cornered 46% of the smartphone market in Japan
and the world’s most mobile web savvy audience are bound to lap up
Apple’s new tablet.

When viewed through the iPad, many of the luxury brands’ websites
simply fail to load and instead ask the user to download Flash – a
request which is not an option for the device’s owner. Three brands of
the top 10 offer a store locator but the Chanel’s offering is
so poorly designed (read: not even contemplated) that it looks like it
was created for the worldwide web of 1993.

Brands need to realize that the iPad offers a different experience.
While some have invested in Apps to overcome the iPhone’s limitation –
the fairly light iPad with its 9 inch screen brings some focus back to
the browser driven web. Several commentators have suggested that the
change the way people will consume entertainment in the home but
research that the PSFK
consultancy team
has conducted for leading corporations has shown
that the device will fuel online retail too.

Unlike the cumbersome laptop, the iPad is a device that can used
while the user simultaneously enjoys other entertainment options like
watching TV. Brands and retailers need to create tablet friendly
electronic catalogs that allow people to browse as they’re curled up on a
sofa with the TV flickering in the background.

PSFK Review Of Top 10 Luxury Brands On The iPad:


Prada

Prada On The iPad

Nothing. Just a Flash logo.

Fendi

Fendi On The iPad

Fails to load. A message requests users to download Flash – an option
that is not available for iPad users.

Moet & Chandon

moet

Fails to load. A message requests users to download Flash – an option
that is not available for iPad users.

Cartier

cartier site doesn't load on the ipad

Nothing.

Hennessy

hennessy site doesnt load on the ipad

Fails to load. A message in various languages requests users to
download Flash – an option that is not available for iPad users.

Rolex

rolex site does not load on the ipad

Fails to load. A message in various languages requests users to
download Flash – an option that is not available for iPad users.


Channel

IMG_0010

IMG_0011

IMG_0013

Main page fails to function. The store listings have no design
element.


Gucci

Gucci On The iPad1

Gucci On The iPad1

Gucci On The iPad1

Gucci On The iPad1

Gucci On The iPad1

The store appears to function well and purchases can be made. Videos
are not viewable as they are currently served by Flash.


Hermes

Hermes On The iPad1

Hermes On The iPad1

Hermes On The iPad1

The brand messaging and store locator sections of the site fail to
load. The ecommerce store operates but images of the products fail to
appear.

Louis
Vuitton

Louis Vuitton On The iPad1

Louis Vuitton On The iPad1

Louis Vuitton On The iPad
A
basic site is offered with warning messages throughout asking the user
to download Flash. The catalog works but there is no purchase option.



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