The speedy transition from emergence to maturity by many international luxury markets has prompted many international luxury brands from the most diverse sectors to accelerate product development and marketing activities. The debate over developing products that incorporate features favored by the local target as well as advertising campaigns tailor made for these markets has generated an ongoing wave of controversy, on the one hand with major luxury brands such as Hermes or Prada that would categorically rule out such specifically designed products and on the other hand with luxury brands which are acquiescing to this trend in a silent manner.

But why would luxury brands go to such lengths to adapt their product development and communications strategies to these markets? While few would admit, they seek establishing market share by creating desirability through the aspirational factor, especially the desire of consumers in these markets to stand out and differentiate themselves socially.

In this respect, China and Russia are the best examples for the illustration of how fast luxury consumer target segments have evolved from bling and log0-driven products to products which sport a design that is easily recognizable. One of the luxury sectors most confronted by this trend is watches, very often consumers in these markets being motivated to purchase a particular watch because of how recognizable the aesthetics of a watch model are, without almost no knowledge of these consumers about craftsmanship, mechanisms, finishes or even the difference between the precious materials used.

But at the same time, how can such brands create awareness and speed up the educational process? Or better to say, should they ”run after” these aspirational clients? My view is that established luxury watch brands with a deeply rooted heritage in the crafts and ultimate quality standards can benefit from a slower paced creation of awareness, through subtle communications and social media driven by specialists and connoisseurs who, by word of mouth, can win over long term clients. Other brands which are more marketing driven should fine tune their communications strategies in such a way to create an identity which is easily recognizable through pricing and extravagance of design and materials used.

In the case of fashion and accessories luxury brands, the past three years have demonstrated that luxury consumers in these markets, much like in the long term established mature ones, are increasingly driven by the experience factor and this encompasses customer service, interior design and most important product selection and range. Would a Brazilian luxury consumer prefer to shop at one of the 4 luxury malls in Sao Paolo or would rather shop in a flagship store on Via Montenapoleone in Milan or New Bond Street in London?

Besides the experience factor, luxury brands need to understand that consumers in these markets are seeking authenticity in their interaction with a luxury brand, whether it is a physical one, in a store, online or through advertising. I guess the past years have clearly shown that neither Chinese or Indian consumers would aspire or better to say look up to local celebrities.

As for local consumers in mature markets such as the U.S., Japan, France or Germany, they are equally motivated by authenticity, however, perceived from a different angle. The young generation in these markets are increasingly exposed to social factors which influence the way they perceive luxury brands and that is why, in some countries, especially the U.S. and Germany, there is a growing anti-luxury sentiment. In Japan the younger generation has been growing up with a ”shame factor”, a negative interpretation of showing off luxury branded goods.

In these established mature markets pop culture has also been changing drastically in the past 3 years. From the glamour of ”Sex and the City” to the down to earth, every day looks of ”Girls”, the new series on HBO. It is no longer about Manolo Blahnik and Jimmy Choo shoes and extravagant attires, but more about how each character is rooted in reality. The contemporary art scene in major cities such as New York, Hong Kong or London is mostly driven by 60′s and 70s nostalgia, not to mention the irony which exhibitions and art installations display towards luxury brands.

What about luxury hotels? The past three years have been increasingly showing a trend towards authenticity through ever growing expectations. By raising expectations of a luxury positioning at a chain level, internationally, inconsistency has been surfacing, especially in the case of hoteliers which mostly operate third party owned properties. What would a luxury traveler nowadays be more attracted by the reputation and prestige of a hotel (remember those customer survey questions ”it matters to be to stay at X hotel” ?),versus a non-affiliated chain hotel with a fresh product boasting the latest technology and enhancements, with no compromise on the quality of materials and finishes….

Oliver Petcu
cpp-luxury.com