+The Redefinition of

Luxury

By Pamela Ross & Anya

Gonzales

+

This deck details the trend, “The Redefinition of

Luxury”

It looks at how the concept of luxury has changed for

the middle-class consumer over the years and the

brands that are doing a great job of reaching their

customers in this way.

+Luxury In A Bygone Era

Exclusivity

Craftsmanship

High-quality

High Status

Very, very Expensive

+But Today, Luxury is Different

Why?

Recession

Mass class of wealthy people

Wide range of luxury brands gives choice

Decreasing luxury-brand loyalty

+Biggest Factor = Recession

+The Outcome of the Recession

Income decreased

Retention of budgeting behaviors

Less spending in several key areas like dining out

Less money to spend on big ticket items like vacations

Quitting current luxury habits

Comparing price before purchases

+How Does This Affect Consumer

Behavior?

People still wanted to indulge but with

tighter budgets they started to look for

more innovative ways as adding luxury.

+In 2014

There is bit more confidence in the economy.

BUT

+How Has Luxury Changed?

There is a shift in products & services and sometimes a shift in

brands

+Changes to Luxury as a Category

Trading-down & Trading across

Mass Premium

Massclusivity

Democratization of luxury brands

Affordable luxury

Bridge Brands

+What Do These Changes Mean?

Indulgence at a ‘lower altitude.’

The mini-indulgence concept is relevant.

Successful brands are providing luxuries in small fixes. In

many cases luxury = experience

Consumers will rather trade-down than do without.

+What should the value- and

premium-minded consumer do?

Think small, and think creatively.

“Consumers can have their cake and save

money too – they might just need to opt for a

cupcake instead of a layer cake.”

+Real-World Applications

Clothing

Food & Beverage

Accommodation

Jewelry

Luxury as an extension of the brand

+Clothes — Vera Wang for Kohls

+Clothes — Vera Wang for Kohls

“Simply Vera Wang”

Offers quality clothes with the Vera Wang Brand attached.

“There are so many signature kind of Vera details. Her

[ruching] and beading and appliques, and the netting that

…makes it look really high-end."

+Food & Beverage — Club W

+Food & Beverage — Club W

Ups the experience through profiling your palette.

Customer receives 3 or more bottles of wine each month

If you do not like any wine, you can return it for a different

bottle.

+Accommodation — Hotel 32

+Accommodation — Hotel 32

Has the amenities and experience of $750/night hotel at

$170/night.

No butlers but each floor has its own “Suite Assistant”.

Check-out and check-in times are shorter

“Don’t you just LOVE HOTEL 32?” Of course my answer

was yes.

+Jewelry — “One-Off Jewels”

Re-polishes childhood memories into grown-up accessories.

You don’t have to spend a lot of money to get a piece of

jewelry with meaning.

The luxury of giving yourself a gift; the expectation of waiting

for your jewelry to arrive

Gold or Silver Plated.

+Jewelry — “One-Off Jewels”

+Luxury as a Brand Extension

Applying luxury to any brand.

Any brand can learn to add luxury to their brand.

Any brand can find their core element of differentiation and

repackage that as luxury to their customers.

E.g. David’s Tea and the luxury of having fun with fewer

calories. Birthday Cake Tea anyone?

+David’s Tea — Indulge Without the

Candy Store

+

Thank you

Questions or Comments?