From the book The Luxury Strategy. I am posting the full laws and some quotes from the book here for reference as I am using this book as the basis for Dispatch #002 on Mercury’s Playbook.
- Forget about positioning; luxury is not comparative: Luxury brands should focus on their unique identity rather than comparing themselves to competitors. Being distinctive and memorable is more important than following a specific market position.
- Ensure your product has enough flaws to give it soul: Imperfections and idiosyncrasies in luxury products or services can make them more desirable, adding character and charm that distinguish them from mass-produced alternatives.
- Dominate the client: Luxury brands should lead and guide their clients, presenting themselves as the ultimate authority in their field.
- Make it difficult for clients to buy: Creating an air of exclusivity and scarcity can enhance a luxury brand’s appeal. Limiting availability or implementing a waiting list can make the product or service more desirable, create exclusive collections, and bespoke one-of-a-kind products to maximize the desire and passion about being the first and only one that has that product.
- Protect clients from non-clients, the big from the small: Ensuring that luxury clients receive exclusive treatment and are separated from non-luxury clients helps maintain an atmosphere of exclusivity.
- The role of advertising is not to sell: Luxury advertising should focus on building a brand story and creating an emotional connection with the audience, rather than aggressively selling products or services.
- Communicate to those whom you are not targeting: Luxury brands can generate interest and desire by reaching out to a broader audience, even if they are not the primary target market.
- The presumed price should always seem higher than the actual price: A higher perceived value can make luxury products or services more attractive to clients, who may feel they are getting a good deal.
- Luxury sets the price; price does not set luxury: Luxury brands should determine their pricing based on their unique offering and brand identity, rather than following industry trends or competitor pricing.
- Raise your prices as time goes on, in order to increase demand: Gradually increasing prices can enhance the perception of exclusivity and desirability while maintaining an air of unattainability.
- Keep raising the average price of the product range: Continuously elevating the average price of the services provided not only increases the perception of exclusivity but also helps attract clients who seek premium offerings.
- Keep stars out of your advertising: Luxury brands should focus on their unique selling points rather than relying on celebrity endorsements.
- Cultivate closeness to the arts for the initiate: Integrating artistic elements into marketing campaigns can create a sense of refinement and sophistication.
- Don’t pander to your customers’ wishes: Luxury brands should not be driven solely by consumer demands. Maintaining a unique brand identity means staying true to values and vision, even if it means not fulfilling every customer’s expectations.
- Don’t respond to rising demand: Instead of overextending to meet growing demand, luxury brands can focus on maintaining exclusivity by deliberately limiting their client base.
- Do not sell: Luxury brands should focus on creating an aura of desirability rather than aggressively selling their services, using the right digital marketing channels can be a huge difference in that case, how and where to market your brand.
- Do not relocate your factories: Staying true to the brand’s origins can reinforce its authenticity and story.
- Do not hire consultants: Relying on in-house expertise can strengthen the brand’s identity and authenticity.
- Do not test: Luxury brands should prioritize creativity and innovation over market research.
- Do not look for consensus: Encourage individuality and creative thinking, allowing for bold, distinctive ideas to take shape without being constrained by the need for unanimous approval.
- Do not look after group synergies: Focusing on individual strengths and expertise can lead to a more diverse, innovative approach to luxury marketing.
- Do not look for cost reduction: Cutting corners can compromise the quality and exclusivity of luxury products or services. Instead, luxury brands should focus on maintaining high standards and delivering exceptional experiences.
- Do not sell openly on the Internet: While having a digital presence is essential, luxury brands should carefully curate their online image and maintain an air of exclusivity by not selling their products or services openly on the internet.
- Keep non-enthusiasts out: Luxury brands should target and engage with a select audience that appreciates their unique offerings and values. By focusing on this niche market, brands can ensure that their message resonates with the right people and maintains exclusivity.
Select Quotes:
1 – Luxury is a culture, which means you have to understand it to be able to practise it with flair and spontaneity.
7 – The religious roots are still latent today: luxury is about elevation.
9 – Liberalism (Adam Smith) was very favorable to trade and to luxury as the driver of economic growth, and provided the first true economic rationale for luxury as the means to creating wealth for all.
David Hume (his essay ‘Of Luxury’ was published in 1752)…
We have already seen that it was the pacifist, feminized societies that most readily and completely accepted luxury.
10–13
The drivers of change
The two fundamental sociological trump cards that luxury have today are female emancipation and world peace.
Democratization
Everyone has access to the world of luxury… Having said that, clearly this fabulous opportunity for luxury carries with it a major risk: that of vulgarization.
Staying in the realms of the metaphysical, here is an example of complete democratization without any vulgarization whatsoever: while democratizing the idea of eternal life for everybody, Christianity has nevertheless avoided vulgarizing the concept of the individual soul; it is not because everyone has a soul that mine or yours is no longer worth anything.
Luxury, the offspring of the transcendent stratification of society, does not die just because this stratification has disappeared; instead, it has become its creator and driver.
Luxury may lead to social stratification, but it also encourages humanity, something that is often lacking in modern cities.
Architecture, a particularly social and ostentatious form of art, quite clearly has very much to do with luxury… The more or less free access to luxury, which we can readily see from architecture, is a measure of democracy.
Increase in spending power.
Globalization.
A luxury product is rooted in culture.
By remaining faithful to its origins, the luxury product offers an anchor point in a world of cultural drift, trivialization, and deracination.
A product whose production centre has been relocated loses its right to be called a luxury product.
And there we have another major difference between a luxury product and a premium product: it is perfectly legitimate for a premium product to seek out the most suitable and most economical manufacturing location possible, so long as quality and service levels can be maintained.
It is better to have a small nucleus of clients in every country—because there is every chance that it will grow—than a large nucleus in just one country, which could disappear overnight. That’s the law of globalization.
Communications
The non-return effect
The non-return effect, or ratchet effect, is the counterpart of the nonlinear increase: once people have tasted luxury in whatever area, it is very difficult for them to turn away from it—to come back to earth.
After decades of monochrome existence, Chinese women at last had the chance to wear bright colours without being immediately rebuked and condemned. To deprive them of nail varnish would be to deprive them of a symbol of what was for them a quite new and very important freedom, and that would have been far more dangerous for the powers of the day than abandoning a number of sick people to their fate.
18 – Clearly luxury is a market, which is why there is such need for brands.
With luxury recreating some degree of social stratification, people in a democracy are therefore free—within the limit of their financial means—to use any of its components to define themselves socially as they wish. What we have here is democratic luxury—a luxury item that extraordinary people would consider ordinary, is at the same time an extraordinary item to ordinary people.
The codes of luxury are cultural, inasmuch as the luxury brand lies at the confluence between culture and social success. The elite classes should (or are supposed to) appreciate the luxury for themselves, even if snobs consume in imitation without actually enjoying or understanding for that matter.
Luxury objects are a symbolic desire to belong to a superior class.
19 – Luxury is an access to pleasure: it should have a very strong personal and hedonistic component, otherwise it is no longer a luxury but simple snobbery and we quickly fall into the trap of provocation…
Although snobs do constitute a not inconsiderable proportion of a luxury brand’s clientele, they could never be its bedrock; a luxury brand relies on as large as possible a core of faithful clients thoroughly imbued with the brand’s culture and appreciating its world, its identity, and its philosophy.
Luxury is qualitative and not quantitative: the number of diamonds in a necklace is an indication of its opulence but says nothing about the taste of the wearer.
When it comes to luxury, hedonism takes precedence over functionality. The materials used in haute couture that may be very elegant but not always pleasant to wear, designer furniture that’s uncomfortable, the discomfort and noise of a Ferrari; these are all part and parcel of a luxury product.
Products without any defects and without a soul are for ‘those who don’t know any better.’
20 – Luxury has to be multisensory. Luxury, whether an object or a service, must have a strong human content, be of human origin…
“Dream potential”
The feeling of having one’s social standing reinforced through the brand, the feeling of being a special person.
21 – One should never say ‘This is luxury and that isn’t’ without prefacing the remark with ‘For Me,’ ‘in my opinion,’ or ‘considering my revenues,’ just as one should never say this is beautiful or this is ugly without prefacing it with “I find that.” There again luxury and art are closely related, and success in both can never be absolute.
In this social game of luxury, it is absolutely vital to remain ethical, both with respect to others by avoiding provocation, and with respect to oneself by avoiding addiction.
The aim of ‘positive luxury’—the only kind that interests us here—is to elevate somebody socially by raising one’s own esteem in the eyes of others and not by crushing them.
Luxury is to excessive behaviors what eroticism is to pornography; positive luxury is refinement, nuances, culture, flirtation, pleasure, and not brutality.
22 – At a time when thanks to improved nutrition and advances in medicine we are all living much longer, we have a paradoxical dread of wasting this additional time; we seem obsessed with finding ways of using it instead of enjoying it.
Our society lives under this tyranny of time, having become the society of instant gratification, of the ephemeral, accelerated still further by the modern sources of entertainment, such as the movies and television, imposing their own tempo on the passive viewer, displacing books, which gave us the freedom to make time for reading; expendable starlets and public entertainers have replaced philosophers.
To enjoy luxury you have to devote time to it, and conversely, luxury is an opportunity to enjoy some free time.
Let’s take that a little further: one of the most significant aspects of our society is that not only have we monetized the relationship to time (interest rates), but also created from it a basis for managing it (forecasting return on an investment, discount rates). As time, like money, is a one-dimensional variable—time is no longer ‘the form of the inner sense’ in human experience, as Kant put it, but becomes an objective external variable…
23 – Luxury should stand aloof from time
Finally, as we saw earlier, the role of luxury is to recreate social stratification. However, social stratification has a time dimension; consequently, luxury, in contrast to fashion, should not be the slave of time but stand aloof from time, or at the very least it should not be dominated by it.
Hence the second contradiction of luxury: a luxury item is both timeless and of the here and now. Put another way, a luxury item has to appear both perfectly modern to the society of the day and at the same time laden with history.
Alphonse de Lamartine: ‘O inanimate objects, have you then a soul that attaches itself to our soul and forces it to love?’ The luxury item is a “lived in” product rather than an undistinguished, utilitarian product that we would immediately replace, or rather get rid of, as soon as it starts to fail or is technically superseded.
The luxury object is durable and even increases in value with time—vintage… which is the very opposite of an industrially manufactured object.
The consumer society is a child of the Industrial Revolution and its success is essentially due to mechanization, that is to say the replacement of people by machine. Its ideal, however noble, is a society of robots to relieve people completely from the tasks of production. Conversely, luxury being primarily social in nature, and society being made up of human beings, every luxury product should bear a person’s imprint.
We can cite here the German sociologist Simmel: ‘A product has the less soul, the more people participate in its manufacture.’
If the standard consumer product is a product mass-manufactured by machine and sold in convenience stores and department stores, through catalogues or on the internet, a luxury product, on the other hand, is handmade and sold by one individual to another individual.
The luxury product corresponds to a deep and (relatively) personal and spontaneous desire, whereas the consumer product is the object of a desire created from start to finish, or at least manipulated by advertising.
The key word when it comes to luxury is dream, not envy.
The right time for luxury is the time of celebration, the giving of gifts.
25 – Money is generally the ‘brute force’ of luxury in its ‘public’ or ‘for others’ manifestation…
Regardless of the fact that this is a particularly ephemeral claim—for anyone can always, and perfectly easily, make things ‘more expensive’—these products have never been a financial success.
27 – Money as such does not bring on longing; what brings on longing is not money itself, but what you can get with it. There is nothing luxurious about a banknote, it is only in our dreams that each one of us converts it into a luxury and in this way gives it a concrete meaning.
28 – Money fuels the luxury engine but is not the engine; the engine is the recreation of a vertical hierarchy or social stratification. Luxury converts the raw material that is money into a culturally sophisticated product that is social stratification.
29 – In placing ourselves in the territory of value, so dear to economists, we could say that luxury introduces a new notion of value that goes beyond the classic dialectic of use-value and exchange-value: symbolic value.
The luxury-value of a product is its symbolic value.
But it will have to be higher than the exchange-value (the price of the product) for a large enough number of individuals for there to be a market for the product.
30 – If the importance of luxury in our modern democratic societies comes from its role of social stratification, the equally great importance of fashion derives from the negative consequences for human beings of urbanization—anonymity and an unnatural life. One of the most common collective responses as a way of regaining lost time, or even of creating an illusion of time, is through the frenzied use of fashion.
33 – The fact nevertheless remains that there is still a very wide gulf between luxury and art in this domain: the creators of luxury live off their trade throughout their lifetime, while the artists seek eternal survival through their work.
Luxury has to be selective and cannot be within reach of everyone, unless it is to lose its soul. Art seeks to be universal.
35 – Luxury, religion and art are deeply related. In fact, all three aim at elevating people, making them go beyond functionalities, needs and access intangible values, even transcendental ones. Luxury, like art, is about educating taste, at its best.
Luxury is the taste of elites, once religious, then aristocratic, now more mundane. Today there is no more one single elite, but multiple ones. This is why some luxury brands are worshipped by some and hated by others. It is just the sign of the war between elites for the domination of culture.
The difference between fashion and luxury is that only the latter aims at creating the classics of tomorrow.
36 – The majority of the world’s young people today have no other ideal than consumption to build their identity, or uninterrupted communication with all members of their tribe as oxygen of their life.
Elements of Cult:
- They have a creator
- They have a founding myth and legend
- Storytelling will maintain a mystery about them
- There will be a holy land, or a holy palace where it all started
- There will be a chest of symbols (logos, numbers, signs, etc) whose signification is known only by those who have been initiated
- Luxury brands will have icons (products endowed with a sacred history)
- Flagship stores for these brands will be seen as new urban cathedrals
- There will be a regular moments of communion (called community management)
- Sacrifices (to make sacred) will be involved—the most important is price
The ability to buy art signals the cultural capacity to cease thinking exclusively in terms of function or performance.
Here lies the difference between luxury and premium. People buying premium or even super-premium cars like to justify every dollar by a return or investment. Premium means pay more, get more in functional benefits. Luxury is elsewhere. It signals the capacity of the buyer to transcend needs, functions, or objective benefits. This is how luxury brands are different from premium or super-premium brands: beyond the experience they bring creative power, heritage, and social distinction.
Like art, luxury is obsessed with hedonism and creativity.
40 – Traditional marketing stops at luxury.
46 – There is luxury because most people cannot access it. Historically, luxury like art, has been a production for the gods, the kings and later the rich, as a tribute to their power and their taste. Hence its latent social function is to recreate a social stratification, especially needed in countries that cultivate the idea that they are classless societies.
This meaning is linked to notions of excess, beyond mere reason, but also of pleasure and desire.
47 – A brand may look fashionable but in fact enact strictly a luxury strategy.
A very qualitative hedonistic experience or product made to last
Offered at a price that far exceeds what their mere functional value would command
Tied to a heritage, unique know-how and culture attached to the brand
Available in purposefully restricted and controlled distribution
Offered with personalized accompanying services
Representing a social market, making the owner or beneficiary feel special, with a sense of privilege
Luxury instead is non-comparable. The pricing power of luxury rests instead on high intangibles, making the brand singular, unique: first and foremost its culture, heritage, then country of origin, exceptional know-how, fame of its clients, and so on.
Note that no threshold is set for the price of luxury. Pricing is determined by the choice of whom the brand wants to be the dream of.
In luxury, it is the creator who defines the criteria (not consumer), there is a reversal of the relationship to the client. The objective of luxury is thought of and created not according to an order or a request, but according to an inspiration, a challenge to which the media, those modern trumpets of fame, are summoned.
51 – “When I see two Porsche in the same street, I begin to worry.”
There were no more upward innovations.
52 – Comparisons must be avoided at all costs. Measured against the entry levels of prestige brands, the upper range is now brandished with pride, since it proclaims a rational legitimacy, an implicit criticism of luxury.
In order to signal a more clear-cut change in one’s life, it is therefore necessary to change brands.
54 – Each model embodies, reproduces, modernizes or revises a myth, the myth of its brand. This myth is built over time: history makes brand myths.
Luxury goes beyond functionality. Being creative, it takes the risk of not being liked.
65 – Not only are traditional marketing techniques not suited to luxury, they can in fact be positively harmful to it. The truth is that traditional marketing is only concerned with the bottom of the luxury pyramid, where brands are no longer selling luxury products, but products derived from luxury brands.
87 – Admittedly, nowadays a certain fringe clientele asks for more discreet signs from today’s brands, but this is to distinguish themselves from buyers of access products, to signal their distance from those who show off their logos.
This is why the luxury market and its appearances were born: to provide everyone with the means for a provisory, even fictitious elevation, a fleeting pleasure. We can imitate the signs of wealth, without being wealthy: this is the case with clothing in particular, and accessories, if they exhibit the requisite seal, the brand. Thus doing, everyone can look rich!
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