Luxury World: The Past, Present and Future of Luxury Brands

by Tungate, Mark

  The trend began in the 1990s, around the same time that the internet, e-mail and mobile phones started eating large chunks of our personal time. But the technology that caused the problem also helped to enable the solution. Credit cards began providing concierge services for time-poor customers with large credit limits. American Express is closely associated with the phenomenon, having launched a concierge service for its Centurion and Platinum cardholders. The idea has since been adopted by other, more accessible credit cards like Visa’s Signature and Mastercard’s World Elite. These have far lower annual fees than the Amex products.

  Soon, personal concierge services began cropping up in more unusual contexts. We’ve already discussed the emergence of concierges in department stores as an extension of personal shopping services. Vertu, the Nokia-owned maker of jewel-like, outrageously expensive mobile phones, also provides a concierge service to its customers. This is accessible via a dedicated button on the side of the phone – a perfect example of marketing by design.

  And of course there are stand-alone concierge services launched by entrepreneurs. US-based VIPdesk started out as Capitol Concierge in 1987, when founder and CEO Mary Naylor began installing corporate concierge services in offices in Washington, DC to organize the lives of harassed workers. Building on the success of the concept, Naylor created VIPdesk in 1997 as a virtual concierge service using a network of ‘home office’-based assistants. This trend, known as ‘home-shoring’, is an alternative to overseas call centres. Among its first clients were MasterCard and Citibank.

  Another US success story is Circles, started in 1987 by Janet Kraus and Kathy Sherbrooke. Today it bills itself as ‘a concierge, events and experiences company’. ‘Besides garden-variety perks like Super Bowl or World Series tickets, Circles can arrange for celebrities to show up at your cocktail party, get you a flight in a jet fighter or even land you a bit part on a TV show’ (‘My concierge will call your concierge’, The New York Times, 21 February 2006). It also provides concierge services to companies that want to make their employees’ lives easier – or at least enable them to work more efficiently. But it means that instead of marketing its services to individuals, Circles now has a network of client companies that are paying its fees and promoting its services to customers and employees.

  In order to retain a sense of exclusivity and avoid being swamped by callers, concierge services tend to rely on word of mouth and press coverage rather than advertising. Indeed, some are accessible by invitation only. One of the most famous is Quintessentially, the UK-based ‘private members’ club and 24-hour concierge service’. One of its founders was ‘movie-star handsome Ben Elliot, whose aunt just happens to be Camilla Parker-Bowles’ (‘Beyond the black card’, Forbes, 26 February 2003). Elliot told Forbes: ‘Yes, we can charter yachts and jets, but we can also find you the best tea in town for 10 bucks. We do not try to offer the most expensive, but the very best.’

  Although it’s not very time-consuming to reserve a place for dinner, good concierge services have the connections and clout that encourages ‘fully booked’ restaurants to conjure tables out of the ether. In order to find out how some of the world’s most demanding customers use concierge services, I spoke with Anna Isaeva, director of travel services at Primeconcept in Russia. This invitation-only lifestyle club charges an annual membership fee of US $5,000, which includes a credit card and a special mobile phone tariff. Members receive a magazine called Prime Traveller, which is packed with ads for Bentley, Aston Martin, Cartier and dozens of other luxury brands.

  Primeconcept describes its 500 or so clients as ‘the Russian business, political and cultural elite’. Getting them a table for dinner is the least of its problems. ‘One guy wanted a pink elephant for his birthday,’ Isaeva recalls, with a chuckle. ‘We had to borrow one from the zoo and paint it.’ Another client was organizing a party in Dubai when he discovered that the singer had left a vital playback CD in Moscow, so Primeconcept arranged to courier it to him within 10 hours. And when yet another client wanted to send flowers to his girlfriend – a model who happened to live in Irkutsk in Siberia – he also required a photograph of her expression when she received them.

  But Isaeva points out that it’s just as tricky to find a last-minute hotel room in Courchevel at peak season or one in Paris during fashion week. The travel department has a full-time staff of 12 people who handle everything from tickets to visas and accommodation. ‘One of the reasons for using a service like ours is that we know all the best rooms in all the best hotels.’ The favoured travel destinations remain timeless: Dubai for the shopping, Courchevel or St Mortiz for the skiing and the Côte d’Azur for the good life.

  Hasn’t the financial crisis left Russia’s rich a little chastened? ‘They continue to spend, but there’s a trend towards a more “modest” Russian lifestyle,’ says Isaeva. ‘The image of the Russian with loud, flashy and obviously expensive items is becoming a cliché.’

  One of the benefits being touted by lifestyle clubs is that, although they charge a fee at the outset, they might actually end up saving you money: the assistants can often negotiate upgrades and preferential rates. And the general trend of the concierge market is downwards, as a wider range of brands experiment with add-ons to please their customers. Hence the theory that – like many luxuries – concierge services are for those who aspire to status rather than those who’ve made it. One marketing consultant told The Times: ‘Most successful business people already have people to organize their social lives... They don’t need help getting tickets for this and that or getting a table at a restaurant’ (‘Dinner for six at Claridge’s tonight? Certainly’, 14 February 2006).

  For the truly elite, then, it’s back to the butler.

  20

  Sustainable luxury

  * * *

  ‘It’s about taking the time to do something well, using excellent ingredients – and then savouring the results.’

  Given the increasing keenness of brands to convince us that they are helping to save the planet rather than contributing to its ruin, it was inevitable that a certain segment of the luxury industry would get in on the act. As mass luxury brands are also fashion brands – with an obligation to constantly update their offering – they are doomed to scurry after trends. I couldn’t help smiling when Louis Vuitton announced that it was backing a foundation dedicated to the preservation of Easter Island. Louis Vuitton had read the writing on the wall, as well as on the glyphic stone tablets. Consumer attitudes had changed, and corporate ones with them. In the summer of 2008 I was surprised to see an article headlined ‘Farewell to consumerism’ in Campaign magazine: the advertising industry heralding the end of the consumer society. The article centred on a quote from Sir Martin Sorrell, CEO of the giant marketing communications group WPP, which owns advertising agencies JWT and Ogilvy & Mather.

  ‘All of our instincts as clients, agencies and media owners are to encourage people to consume more – super-consumption,’ he said. This had given rise to consumer demand for bigger cars, more jet travel and bigger or multiple houses. ‘Our view, counter to what you expect our industry to argue, is that conspicuous consumption is not productive, and should be discouraged.’ Sorrell cast doubt on the flimsy efforts made by companies to slow global warming. ‘It is increasingly common for companies to have targets to reduce their carbon footprint – but look closely, almost all of these are ex-growth... In other words, they will reduce the impact per unit of sales, or on the basis of like-for-like operations. Businesses that feel they know how to de-couple growth from increased climate impact are few indeed’ (11 July 2008).

  The equation is starkly simple: in order to make more money, companies must produce more. But are people still buying? The article spoke of a ‘profound change’ in consumer habits provoked by the ‘perfect storm’ of climate change, a resurgent sense of social responsibility and the democratizing force of the internet.

  Paradoxically, luxury brands may have an advantage in this new con
sumer landscape. Beyond opportunistic one-off marketing ploys, they could – and do – argue that they offer an alternative to mass consumption. As we’ve established, in the 1990s many luxury companies transformed themselves into fashion brands in order to create more product lines and fuel demand for their goods. Now they must decouple from the fashion industry and insist that they offer products of rare and lasting quality.

  This discourse was heavily apparent at a Sustainable Luxury conference organized by the International Herald Tribune in New Delhi in March 2009. Henri-François Pinault, chairman and chief executive of the luxury group PPR, said: ‘Today, more than ever, people want a return to genuine values, such as timelessness, sincerity and exemplary standards... And these are all qualities which – as we have seen – are inherent in sustainable luxury.’

  At the same conference, Jem Bendell, an environmentalist who has advised luxury brands on corporate responsibility, warned that ‘luxury brands are promoting consumerism in countries at a time when we need to reduce consumption in order to avert a climate catastrophe.’ But he offered them a potential get-out clause. ‘The shirts on our backs each took a few thousand litres of water to create. If we cherished them more, we would use less water... The great thing about luxury brands is that the way consumers relate to them actually prefigures the way we need consumers to relate to all their products. To look after them, to repair them, to see them as becoming vintage not garbage.’ In other words, he concluded: ‘Luxury brands have the margin and the mandate to create the most environmentally responsible products.’

  The brands got the message and changed their tunes accordingly. Expensive items were no longer delicious treats, but ‘investments’. When luxury bag maker Smythson of Bond Street advertised its £775 Enid handbag, it described it as ‘this season’s investment accessory of choice’. Pam Danziger of Unity Marketing was quick to scoff at this new positioning. ‘The idea that any of these consumer goods are going to grow in value is just ridiculous. They’re like cars: the minute you take them out of the store, they lose half their value’ (‘Luxury as an investment?’, Reuters, 6 May 2009).

  Although there’s clearly no such thing as a ‘seasonal investment’, there is something to be said for saving up your cash until you can afford the good stuff. I’m thinking of my great uncle, who had a small collection of highly polished and seemingly indestructible bespoke shoes. The secret is being able to spot when the quality claim is real, and when it’s just advertising mystique.

  The return to a more profound, thoughtful version of luxury has given rise to the phrase ‘slow fashion’. Just as Italy’s ‘slow food’ movement promotes honest cuisine over burgers, slow fashion requires products that are handcrafted to last – preferably by artisanal, family-run concerns. I came across one of them in Paris. Appropriately enough, it’s called Slowear.

  SLOW FASHION

  Slowear is an unusual concept in lots of ways. For a start, it is an umbrella label embracing four different Italian brands: Incotex, which makes only trousers, Zanone, which specializes in knitwear, Montedoro, which makes rainwear and jackets, and Glanshirt, which as its name suggests makes only shirts. The brand has done very little marketing, but it attracted the attention of Tyler Brûlé, the founder of Monocle magazine, which has run articles about it. This has given Slowear something of a cult following. When the brand opened a new store – its second permanent location in the world after Milan – in rue Royale, Paris, I found myself at the launch party chatting to Massimo Gambaro, its marketing and communications director.

  ‘The first thing you must understand is that Slowear is not really a brand in the conventional sense,’ he told me. ‘It’s more like a curator, a selector of high-quality products. Slowear is a portfolio of brands that meet, debate and complement one another, so that when we put all the collections under one roof there is a coherence.’

  He stresses that each brand is a specialist. ‘They’re the exact opposite of brands that over-extend. These companies do one thing and they do it extremely well. We were looking for a kind of perfection in each domain.’

  The first brand in the portfolio was Incotex, which has its roots in a 1951 company founded by Carlo Campagno. Initially it made trousers and uniforms, but later it concentrated on trousers under the brand name Industrie Confezioni Tessili. In 1981, Carlo’s sons Roberto and Marzio inherited Incotex. At the end of the 1990s, they decided to expand the business not by moving into other areas of fashion, but by acquiring brands that placed a similar emphasis on quality and performance. Montedoro joined the group in 2001, followed by Zanone in 2003 and Glanshirt the following year. They are considered Italian ‘heritage’ brands: Marcello Mastroianni and Federico Fellini are both said to have favoured Glanshirt’s products. The Slowear umbrella brand was created in 2007, but the brands continue to operate as separate units.

  Slowear is not really a fashion company. In fact it provides classic apparel. The look is timeless and unfussy: pristine button-down shirts in cotton or Oxford weave, V-neck pullovers, slim-cut trousers in cotton or wool, discreet windcheaters and raincoats that might have been made any time over the last 40 years. Gambaro calls it ‘basic chic’. He adds: ‘Quality is not necessarily something that makes you go “wow”. It’s all about the detail and the finishing. Sometimes you have to look closer in order to recognize it. Our target customer has a certain amount of knowledge and they can see what sets our clothes apart.’

  I asked Gambaro if the company felt a kinship with the promoters of ‘slow food’, a concept that also derived from Italy. ‘We don’t have direct links, but there’s definitely a common thread,’ he said. ‘It’s about taking the time to do something well, using excellent ingredients – and then savouring the results.’

  Slowear is a lifestyle, too. Its stores stock books, objects and furniture. Like the store fittings, the furniture leans towards 1950s Scandinavian: streamlined yet warm. And the brand’s website incorporates a Slowear Journal, a magazine covering ‘art, design and wellness’. ‘It captures the tone of the brand by discussing the things we like,’ says Gambaro. Visitors are invited to contribute articles, adding to the impression that Slowear consumers are part of a small yet savvy club. As the site itself explains, the journal ‘is a way of forging connections and affinities, available to anyone who identifies with the values of excellence’ (www.slowear.com).

  Slowear’s products are not cheap, Gambaro admits, but they do offer value for money. The smartest thing about the brand is that, by subtly implying that it is preserving a small part of Italy’s textile heritage, it bucks the anti-consumerism trend by making you feel good about ‘investing’ in luxury.

  SLOW LIVING

  When you arrive at a Six Senses resort, the first thing they do is take away your shoes. These are placed in a bag and labelled with your name. The message is clear: you can relax now. The concept is sometimes referred to as ‘barefoot luxury’. But Sonu Shivdasani – who founded Six Senses Resorts & Spas with his wife Eva – describes it another way. ‘We call it Slow Life,’ he says. As far as Shivdasani is concerned, the idea comprises a whole range of elements that go far beyond well-being. He has even devised an acronym to explain the proposition. Slow Life stands for Sustainable, Local, Organic, Wholesome, Learning, Inspiring, Fun Experiences. To stay at a Six Senses resort, he says, is to experience a different way of living.

  Sonu and Eva opened their first resort in the Maldives in 1995. They had always loved travelling to the islands, but found the standard of accommodation to be generally low. ‘It was three-star stuff – plastic chairs and white tiled floors,’ says Shivdasani. Resort operators would lease land from the locals, give them a cut of the takings, and then abandon the properties when the profits failed to meet targets. That’s how Sonu and Eva came across the site that would become their first venture. ‘It had been closed for two years. Part of the problem was that it was only accessible by boat from Mali. We organized an air service, which immediately made it more accessible. Toda
y’s travellers want destinations that are at the same time remote and easy to reach.’

  Combining their names, the pair named the resort Soneva Fushi. Beyond the Maldives, Six Senses now has resorts in Thailand, Vietnam, Oman, Fiji, Jordan and Spain. The slow living concept is the connecting theme. ‘You have to bear in mind that the traditional norms of luxury were defined in the 19th and early 20th centuries. Time was less of an issue then. People travelled less often. Homes were larger. Now you have executives who are travelling 300 or 400 hours a year in stuffy aircraft. Time is important to them, as is space. So in our resorts we give you big spaces and plenty of fresh air. The bathrooms are bigger than some of their apartments. And you can shower under the stars.’

  There’s nothing primitive about the surroundings, however. The villas are kitted out with Bose sound systems and the resorts come equipped with skilled chefs and sommeliers, who can recommend European and local wines. ‘Most of our guests enjoy a more local experience. They quickly discover that one of the many great aspects of this new form of luxury is the ability to eat a fresh salad that has been plucked that very morning from an organic garden.’

  Foodstuffs are sourced locally and imported bottled water is banned: most of the resorts have their own desalination and bottling plants. (In an aside that is definitely not for the sceptical, Shivdasani describes how the water is bottled while classical music plays softly in the background. Before the bottling, minerals are added and the water is poured over crystals with healing properties.) Local materials are also used to construct the villas. And local craftsmanship often comes in handy. In Hua Hin, Thailand, local builders constructed the resort walls and a spa using traditional materials, including earth. The spa did not require air conditioning because the design creates a naturally cooling environment.