Tagged 'luxury'

Chrysler 200′s Super Bowl ad posits Detroit as luxury hub

When you think “luxury,” you likely think of anything but Detroit. Chrysler’s Super Bowl commercial assumes as much, with the narrator asking, “What does a town that’s been to hell and back know about ‘the finer things in life?’” The two-minute ad answers that by showcasing the Chrysler 200 as a car rendered luxurious by Motor City’s “hard work, conviction and the know-how that runs generations deep.”

The ad does a great job of burnishing the image of Detroit, considered one of the most miserable cities in America but also one of our “Things to Watch in 2011,” based on excitement around the city’s progress toward remaking itself as a smaller and more efficient town and the influx of creative entrepreneurs. The spot taps into the hope many Americans feel for the struggling town, which is almost a metaphor for the country itself (the ad contrasts Detroit with the more glamorous America, saying “We’re from America, but this isn’t New York City, or the Windy City, or Sin City”).

While one might feel proud to drive a car built by the people of Detroit, the message is a bit of a stretch. Detroit is still down and out, and it’s not quite convincing that a city’s toughness and resolution translate to an ability to manufacture luxury, especially if “it’s as much about where it’s from as who it’s for,” as the spot proclaims. By contrast, in Levi’s “Go Forthcampaign, we see the people of working-class Braddock, Pa., going to work in their Levi’s jeans. We’re not so sure many more Detroiters other than Eminem (who stars in the spot) will be driving Chrysler 200s around town anytime soon.

Acura rationalizes luxury with ‘Excuses’ campaign

We’ve noted how drastically the luxury category changed with the recession. Ostentation is out, practicality is in. And while recent research from Harrison Group found that affluent consumers are less likely to feel guilty about buying luxury goods today than they did a year ago, that doesn’t mean a return to the days of freewheeling spending.

Luxury automaker Acura does an excellent job tapping into today’s practicality ethos with a campaign promoting its spring sales event, dubbed “Driven by Reason.” Six spots feature affluent shoppers making bogus justifications for eccentric luxury purchases. In one spot, a man confidently describes the virtues of his Damascus steel watch—which features a “perpetual calendar with leap year” and over 680 handmade moving parts—and in another ad, the proud owner of a tube amp owner throws around phrases such as “crossover croaxial” but shruggingly admits he doesn’t know much about how it works.

These characters may be wealthy, but they are fools. A voiceover at the end of each spot explains, “There are excuses for spending money on luxury, and then there are reasons,” giving the target consumer permission to find sound justification for buying a new Acura. The spots are funny and should resonate with affluent shoppers, who are increasingly rethinking their frugal habits post-recession.

Video Credit: http://adsoftheworld.com/media/tv/acura_excuses_tube_amp

BMW gets touchy-feely with ‘Joy’

BMW’s recent shift away from its longtime tagline “The ultimate driving machine” to “Joy is BMW” looks like a savvy way for the luxury brand to remain relevant to post-recession consumers. In a release, BMW marketing VP Jack Pitney explained: “All of our efforts in engineering, design and technology are about one thing, which is creating moments of joy” and said the campaign focuses on “sharing those moments in an upbeat, humanized and refreshing fashion.” In other words, a cool car isn’t an end in itself. The visuals reinforce this, with ads showing more people (real BMW owners) than vehicles.

The North American campaign, emphasizing that “what you make people feel is just as important as what you make,” is at the opposite end of the emotional spectrum from one focused on performance and engineering. Which is about right, considering that “People now want to lead a richer life, rather than a life of riches,” as Madelyn Hochstein of DYG, a market research firm working with BMW, told The Wall Street Journal. Still, consumers may see touchy-feely as too much of a stretch for BMW; “Germans? Joy? Hahahaha,” remarked one commenter on the auto blog Jalopnik.

Tailoring a new message for luxury

louis-vuittonLouis Vuitton ads have long been synonymous with flash, featuring bold colors, images and celebrities like Madonna and Keith Richards. In what appears to be a step away from this tack, the luxury brand launched a campaign that is bold in its understated approach. At first glance, the print ad looks like a delicate Vermeer painting. It features a demure, angelic young woman in a darkened room, her hands and face lit in halos of light, hand-sewing a red leather wallet. Opposite the elegant image is copy that draws on the impeccable finesse that is executed by Louis Vuitton’s “craftsmen.” It goes on to say that details, like “five tiny folds,” make its products timeless and long-lasting.

In our trendletter last May on “The Recession and Its Impact on Luxury,” we wrote that, as consumers shy away from conspicuous consumption and ostentation, luxury marketers would play up “craftsmanship, heirloom appeal and the best materials.” This ad is an attempt to do just that, with its message of classic quality, attention to detail and long-lasting value.

However, luxury brands also need to take care in what they claim. As we talked about in Reading the Fine Print, one of our 10 Trends for 2010, consumers are now more than ever doing their homework before purchasing products, calling for transparency. In fact, according to BusinessWeek.com, Louis Vuitton does not make most products by hand, dismissing the aforementioned craftsmen. It may not suffice for consumers to read the concluding copy: “Let’s allow these mysteries to hang in the air. Time will provide the answers.”

Photo Credit: mjs

Bag-borrowing now online for UAE fashionistas as designer-dress rentals launch in U.S.

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Back in April we wrote about a Singapore bag-rental service that mimics an idea that originated with Bag Borrow or Steal in the U.S. Now toujourschic.ae, a site for UAE residents, offers the same designer-handbag deal for fashionistas bit by the recession. Prices start at $79 for a two-day rental.

As in much of the rest of the world, the UAE’s luxury sector has been the hardest hit segment of retail, as consumers save more and focus on necessities. Luxury purchases are now looked at as long-term investments—which makes one question whether today’s price-sensitive consumers will go for short-term emotional satisfaction at a not-so-cheap cost.

Still, as we previous noted, a “rental economy” seems to make sense at a time of prevailing uncertainty, when consumers are cautious about long-term financial commitments and the appeal of ownership is waning. Indeed, Rent the Runway, a new venture in the U.S., is betting that this idea will work with designer dresses. It will be interesting to see if copycats again pop up around the world or if cooperative consumption—as we’ve previously dubbed this business model—has its limits.

Photo Credit: toujourschic.ae

Trying to create a culture of saving in Dubai

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National Bonds Corp. in Dubai has launched a “Save for Life” promotion in an effort to change people’s attitudes toward saving. (NBC, described as the National Saving Scheme of the UAE, is a three-year-old joint stock shareholding company in which the government of Dubai holds a 50 percent stake.) A Mercedes is given away in each weekly drawing—taking place from October through December—for customers with holdings of at least 3,000 AED (about $800); those with 10,000 AED (about $2,700) or more are eligible for a weekly prize of 1 million AED.

At the end of the promotion, a grand prize drawing (open to customers holding at least 25,000 AED) will give away a furnished two-bedroom apartment, a Mercedes and 1 million AED.

It’s hard to imagine that these incentives will ultimately lead to a life-long savings habit or culture. Most people just need to be educated on managing their money. In Dubai, most of the expats are simply there to make money—before the recession, rising rents and the glitz and glamour of the city left them little inclined or able to save, and now they’re even less able to do so. But habits are hard to kick, and those who are accustomed to spending will continue doing so, at least to the extent that they can.

‘Bitches on a Budget’: Money-saving tips for big spenders

picture-7This recession has created a lot of guilt around spending money on things we may want but don’t necessarily need. In her upcoming book Bitches on a Budget, Rosalyn Hoffman, a former fashion buyer and marketing executive, argues that living on a budget need not mean abandoning the fabulous life. “Living well is one trend that will never go out of style, and it doesn’t take oodles of moola to make it happen,” reads promotional copy. Targeting affluent women who now find themselves on a budget, the book (due out Dec. 29) and its accompanying blog offers tips ranging from where to find the most affordable organic honey to a homemade solution for getting stains out of carpet. One tip recommends Shop It to Me, a service that regularly searches the Web for sales on items that match a user’s size and preferred brands.

Bitches on a Budget illustrates how the habits of affluent shoppers are shifting as they figure out how to align their new budgets with their old ways. These consumers are coming up with creative ways to get around budget barriers in maintaining aspects of their pre-recession lifestyles. Brands that represent the luxury lifestyle that consumers miss must work to maintain their status as “worth saving up for,” giving affluent shoppers reason to save on other items in order to make room for an ultimate-goal purchase.

Dubai’s Monarch Hotel asks visitors to ‘Name your price for luxury’

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Dubai’s hotel industry has been hard-hit by the downturn. In the first half of 2009, revenue per available room fell as much as 35 percent compared to the previous year, according to a report from STR Global and Deloitte & Touche Middle East. (By contrast, hotels in the 22 Middle East cities surveyed experienced an overall drop of 17 percent.)

In the midst of Dubai’s hotel price wars, one approach stands out. Taking a cue from Priceline’s “Name your own price” option, the Monarch has launched a “Name your price for luxury” online auction. The process is simple: Just enter the five-star hotel’s Web site and bid on a room, a spa treatment, a meal or the entire package. All bidders get a 5 percent discount at the Mizaan restaurant.

At the least, the tactic is likely to help generate traffic to the Monarch’s spa and restaurants. And, most important, it manages to achieve three things: connect with consumers by engaging them in the auction game; create a memorable experience in contrast to a clutter of bland promotions; and build a database where participants are matched with their preferred hotel experience. Faced with a crisis, it’s always wise to look sideways from time to time.

Luxury apparel: Category in crisis

3337859466_0c00e20479The recession will leave its mark on most categories, but one that’s certain to undergo an evolution is the luxury apparel market. Bain & Co. forecasts a precipitous 15 percent year-over-year decline for luxury apparel in 2009, following an estimated 4 percent drop last year. This compares with a 10 percent overall shrinkage in the luxury market this year, according to Bain, which we noted in The Recession and Its Impact on Luxury.

Watch for luxe apparel brands to invade newer markets in full force. China is an obvious choice—Bain forecasts a 7 percent growth in its luxury market this year—as is India, but Latin America and Africa will also be targets. Gildo Zegna, chief of Ermenegildo Zegna, told The New York Times that the Italian menswear retailer sees potential in Egypt and Morocco and is researching Nigeria, South Africa and Angola. The brand already has 60 stores in China.

Offerings will evolve according to needs in these markets. Since the demographics skew much younger, for example, Zegna has launched a sportier line, Z Zegna.

Watch also for all but the most exclusive brands to offer wider price ranges. “Below the elevated sphere of Hermès International and LVMH Moët Hennessy Louis Vuitton, nearly every apparel retailer is reducing the price of nonsale items,” The Wall Street Journal reports. High-end department stores such as Neiman Marcus and Saks are stocking up on more midpriced goods and asking some vendors and designers to add lower-priced items. Some are already doing so: Domenico Dolce and Stefano Gabbana, for example, recently said they would lower prices 10 to 20 percent for both the Dolce & Gabbana and the D&G lines. Continue reading ‘Luxury apparel: Category in crisis’

Stealth consumption, brought to you by Manduka

2imagephpTime recently reported that high-end yoga mats are bucking today’s frugality trend. These mats—the priciest of which cost about $100—are made by a company called Manduka, whose sales rose 55 percent in the first four months of 2009. Manduka now has a distribution deal with nationwide retailer Dick’s Sporting Goods.

The article points to several reasons why sales are soaring: the continuing popularity of yoga, the “superior traction” and “extra cushioning” of the mat, etc. But I believe the driving reason behind Manduka’s success is outlined in our recent paper “The Recession and Its Impact on Luxury,” in which we discuss the future of luxury and what it means for health and wellness: People are re-evaluating luxury altogether. In some cases, this means redefining it in non-materialistic ways—time with family, doing good, being healthy. It can also mean spending more for products that conform to the highest green standards … or for things that enhance health and well-being.

Manduka’s pricey mats fit perfectly into the new mold of luxury: They allow people to invest in their health and wellness while simultaneously flaunting their wealth to those in the know. Call it stealth consumption rather than conspicuous consumption. Bad news for the Guccis of the world, good news for Manduka.