The limits of luxury

Today’s top-end goods are increasingly accessible and yet remain aspirational.  Patrick Schmitt explains

I WAS TOLD a staggering fact the other day.  Apparently, over 20% of Japanese women own a Louis Vuitton handbag.  Now, I know over a third of British females are meant to be sporting Marks and Spencer underwear but, aside from the fact you’d never know, it’s not quite the same.

The supermarket hardly has cool or classy connotations – or rather, its products are meant to be ordinary, everyday items.  Louis Vuitton, on the other hand, is considered a luxury brand.

The products bearing its name are expensive, desirable and, one would have thought, select.  But evidently, they are not the latter.  This serves as a good example of a modern phenomenon, one called by some the massification, or democratisation of luxury.

We seem to be living in a time when anyone can play at Edina or Patsy in Absolutely Fabulous – although perhaps without the drugs – because brands such as Vuitton, as well as Burberry, Bollinger, Antinori or Armani, despite being considered aspirational, are actually fairly accessible.  They often sound, as well as look, glamorous, but they are not exactly exclusive. 

And for this reason, some are questioning whether such increased availability is in fact undermining the image of indulgence these famous names have worked so hard to build?Are we in a situation of opulence overload?

Or, on the other hand, is it possible to retain an elite impression while simultaneously driving volume? Well, although there are brands guilty of sacrificing class through increased distribution, Calvin Klein is one that springs to mind, Pierre Cardin perhaps another, (and in drinks, many would cite Rosemount Estate), there are also ones that have experienced surging sales while retaining a premium positioning.

For instance, let us take Mercedes, which has cars commanding little more than Mondeo money but as a brand would surely never be called common.  This is because a top-end image is consistently marketed, while the cars come in different categories.

There has been expansion, but it has been managed in a disciplined way.  And such an approach, in which the lines are carefully tiered, creates a pyramid structure, with scarce and expensive goods at the top end, supported by a base of more widely available and cheaper items.

Few manage to reach the pinnacle, but it provides an overall image of exclusivity.  Johnny Walker is a clear example of this, as it is a brand with products ranging from a base Red Label to a super-premium Blue Label – a price difference of around £150.

It is, perhaps unsurprisingly, the bottom rung that sells the most, but the top one that maintains the quality image, and therefore the high margins for all the whiskies.  Another illustration of this is Penfolds.

It may be famed for its Grange, but the majority of its turnover comes from Rawson’s Retreat, a £5.99 wine.  As James Ogilvy, publisher of The Luxury Briefing, remarks, "The lower end benefits rub off from the higher end products."

Product prowess

However, for such a halo effect to remain successful, the product must have "craftmanship and design, something that cannot be easily replicated by other brands", according to Vincent Gillet, brand manager, Moët and Chandon. In other words, a top-end image ain’t plucked from the air.

The product is key, and it must have heritage, or at least something special about it. So, with Johnny Walker a unique and top-end positioning comes from the quality of the barley, the particular blends and the lengthy ageing process.

In Champagne it comes from the selection of grapes, the blending too, and the unique terroir of the region.  In expensive vodkas, on the other hand, it seems to come increasingly from the distillation process – the spirit must be as smooth as possible.

And of course any top-end brand must stay ahead of the competition, which means innovating.  This is particularly key to high fashion, in which the leading names are continuously launching new designs quite simply because the "product is king – you show it on the catwalk", according to Rita Clifton, chairman of Interbrands.

In renowned sporting brands inventiveness is also vital.  Hence the massive spend on R&D by a company like Callaway, yielding breakthroughs in golf, such as the two-ball putter, and justifying the premium prices demanded for its products.

Wrapping it up

Of course in drinks, if you’ve got a classic product, the perfect blend, a unique taste, it would be unwise to mess with it. 

However, luxury liquids must still update their image, and the best way to do this is with packaging. Hence Pol Roger’s relatively recent redesign, which has made the brand "simpler and smarter" according to James Samson, marketing manager.

And when revising a look there are certain cues premium products must get right in their packaging if they are to communicate class to the consumer. "80% of the information we receive is visual and there are very strong visual codes for luxury brands," says Mary Lewis of brand designers and strategists Lewis Moberly, so it’s vital upmarket goods look the part.

Simplicity, it seems, is the surest sign of expense. For instance, the priciest wines have the plainest labels.  Think of bottles from a top Bordeaux Château or a brand like Penfolds, which mimics the look of the former, and for that reason speaks quality.

"No designer’s hand shows, there are no concessions made to designer-speak – it is a serious, clear message in a very crowded marketplace," says Lewis about Penfolds.

Bollinger is another example which not only has a remarkably unfussy look, but actually has a design that becomes progressively simpler as one moves up through the range.

And, overall, whether it’s a label or logo, small and uncluttered is sophisticated, big and bold is brash.  In the right hands However, while you may have something special – both beautifully crafted and elegantly packaged – to retain a luxury image, especially if volume’s on the up, you must carefully control who the brand is seen with. Or rather, it is vital the product is marketed among and used by the right people.

This is especially true for designer clothes, as few who buy them would ever actually attend a fashion show. Instead, the garments are viewed on television and in magazines, with celebrities as the models.

Whether it’s Gucci or Pucci, it’s best displayed on a famous film star or pouting pop icon.  Furthermore, for top sporting brands, being seen with the right player is key.

Nicknamed the pyramid of influence, prestigious names will ensure their products are only held in the hands of top sportsmen, whatever the category. In golf for instance, Tiger Woods would form the peak of the pyramid, then the top ten golfers followed by European tour players, pros and best amateurs.

As a spokesman for Titleist says, the brand’s image of excellence has been built by "targeting the top half of the triangle – we don’t dip into the lower broader base".  In other words, having the company’s clubs swung by the best golfers in the world helps build an impression of distinction, even if it’s only mid to high handicappers using the products.

And unsurprisingly the same is true for drinks.  For instance, Moët has made sure it’s Champagne bottles are seen among the beautiful and well known through its support of London Fashion Week, and similarly Veuve Clicquot has held onto a refined, if fun feel through its sponsorship of high profile and typically English sporting events, like Cowdray Park’s Polo Gold Cup, where the rich and glamorous sit and sip.

Of course, a luxury brand positioning doesn’t occur overnight. As Vincent Gillet says, "With Moët, they’ve had 270 years of their product being in the hands of the right people, yes it has opened up to a wider audience, but historically it was drunk by the aristocracy and royalty and today, the aristocracy are, I suppose, celebrities."

A sense of place

But, while it’s important the product’s pictured among the right people, it’s also key it’s seen in the right places.  Often, of course, the two go hand in hand, but sponsoring particular events and places can, by association, give a brand a more premium position.

For instance, Bollinger is soon to be promoted as the official Champagne of the English National Opera, while Penfolds is poured at Hampton Court English Heritage Concerts; both events that provide a certain sophistication for the respective brands through affiliation.

Furthermore, place is fundamental when it comes to retailing luxury. In drinks this is seen in the type of bar or restaurant where premium brands choose to house their products.

You won’t find Cristal perched on a wipe-clean table at Pizza Hut for instance, or in a Young’s pub.  Top-end white spirits, for example, ensure they are consumed in style bars, not just because it’s important they are kept and served in the right condition, and with high quality mixers, but also because it’s important they are associated with all things cool.

Belvedere vodka and Yate’s Wine Lodge might make a fatal combination for the former, for instance.  In fact, in any category, over-licencing can cheapen a product’s image.

 "The main asset in the luxury sector is the brand – just the name itself is worth 75% to 80% of the total company value – you must keep it under control," warns Rita Clifton, chairman of Interbrand.

This often involves nurturing an object in its own outlet, seen in drinks with the establishment of branded bars, like Bollinger’s at the Grosvenor House hotel, Park Lane, or in fashion with design houses’ own high-street shops.

Pucci, for example, has just opened a Sloane Street store – the clothing brand’s first in Britain.  And on- or off-trade, the experience of buying can be as important as the item itself.

For instance, John Noble, director of the British Brands Group, cites Levi Strauss to illustrate the point: "Although not necessarily a luxury brand, it controls its sales environment carefully to differentiate the product."

Such an argument might explain for example, Pringle’s decision to close a number of its accounts and concentrate on resort clubs as well as opening its own stores.  Of course, it is also essential to control carefully where a luxury brand is promoted.

As Noble notes, "Often the medium for the message is as important as the message itself."  He uses Calvin Klein as an example, which he believes by advertising on bus sides "has given itself an image of ubiquity".

And it’s an impression of universality that a luxury brand must avoid – at all costs – even if it is far from scarce. 

"The marketeer’s art is to drive volume while never suggesting the brand could be a commodity product," comments Noble.  Take Armani for instance.  It appears in different guises – Emporio Armani, Armani Jeans, Collectione Armani and Armani fragrances. 

 This means there’s a part that’s accessible to everyone, while it gives an excuse to sell at different volumes and prices without cheapening the image.  But while many luxury-goods manufacturers are bringing out ever more accessible ranges, it is interesting to note they are also introducing increasingly elite items.

Top tiers of ultra-exclusive products, including anniversary versions, bespoke ranges and limited editions are not only catering for those craving a sort of super-luxury but they are also providing an image of indulgence driven by scarcity.

It seems the pyramid is getting taller as well as broader.