On Site: Luxury Summit 2010- The Afternoon Session
April 27, 2010 By: Kirk Cassels
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| Dana Cowin, editor in chief of Food & Wine, leads the panel discussion with Ted Teng, president and CEO of The Leading Hotels of the World, Daniel Lalonde, president and CEO of Louis Vuitton North America, and Stephen Sadove, CEO of Saks Incorporated |
After a morning session packed with topics related to developing the new luxury in the face of the Great Recession, attendees for the AmericanExpress Publishing Luxury Summit 2010 returned in the afternoon with packed bellies from lunch and open minds for more dialogue. The final session of Monday's itinerary focused on the role of community, loyalty and technology in the business of selling luxury, followed by a panel discussion among leaders in retail and travel.
Marian Salzman, president of Euro RSCG Worldwide, North America, was the first to address the audience in the afternoon session. Her most controversial statement was that "populist is the new elitist." However, it was actually her focus on a luxury client's desire to feel a sense of community while he/she travels engaged the audience's attention the most.
"Don't be too folksy," she said. "Clients want a home-stay experience but they don't want to literally stay in a home. They may want a home-cooked meal, but they don't want one that comes with the lack of oversight of cleanliness and nutrition."
Salzman emphasized how community makes clients feel safe; products with a history are less frightening, she added. When that essence of safety and comfort is a part of one's brand, your product is more desirable. "The difference between a luxury brand and a mass-market brand is that people crave quality and will pay more for higher quality goods," she said.
Remaining on the subject of branding, while moving from the aspects of community to loyalty, Pete Maulik, COO of Fahrenheit 212, got the crowd's attention immediately by evoking a famous golfer who has recently experienced more than a bit of a downturn of his own.
But Tiger Woods and turmoil aside, Maulik shared his message through one letter with the four "R's" of loyalty. "True loyalty is based on reciprocity, recognition, respect, and rewarding experiences," he said. "Loyalty leads to a relationship where both parties feel value."
After Salzman and Maulik introduced new concepts on the seasoned elements of community and brand loyalty, Uche Okonkwo, founder of Luxe Corp, educated the audience on the still nascent and emerging element of digital technology. Her most memorable statement was that "luxury is supposed to be ahead and leading consumers in innovation but is currently running behind consumers a little bit like puppies."
Not only do luxury businesses need to catch up, they need to leap ahead and stay there. Okonkwo said it's essential to out-innovate the competition in order to develop operations at their best and to keep your brand fresh. "Digital media is not about codes and web sites," she said. "It's about connecting the front and back of your business across every department."
To close the day, Dana Cowin, editor in chief of Food & Wine, led a panel discussion with Ted Teng, president and CEO of The Leading Hotels of the World, Daniel Lalonde, president and CEO of Louis Vuitton North America, and Stephen Sadove, CEO of Saks Incorporated. As you can imagine, the discussion was filled with gems of information and statements- some of which even contradicted ideas expressed earlier in the day.
The three disagreed with the sentiment that the new reality is redefining luxury. "The values [of the affluent customer] have not changed that much," Teng said. "Personal travel really didn't change that much [during the recession]. The wealth-driven haven't changed their habits that much."
Although the trio felt the recession didn't change the game, they all believed it represented an opportunity. Teng, in particular, encouraged companies to use the recession as a time to renovate and reinvest— take advantage of lower costs and refresh the product so that when the recovery is in full swing you can command the price you want. "Do this instead of thinking about how to discount," he said.
Lalonde focused on core values in branding and marketing, saying the most important words are "heritage" and "craftsmanship," and the most underrated part of the marketing mix is price. "The product is king," he said. "Surprise people by making them realize they need to have your product and then you can price it how you want." Lalonde added, much to the joy of the publishers and editors in the audience, that print moves product.
Sadove didn't necessarily disagree with Lalonde on the importance of price, but he also didn't feel it was as essential as other elements. "People buy in the luxury sector because they want the service proposition in place, whether it's a great relationship with a salesperson or an insider's advantage," he said. "People only buying on price or discounts is a narrow view on the luxury consumer. Ask yourself if you can provide service and product that is differentiated enough to command prices."
Teng concurred, saying that "when you don't have quality, you start using price to attract consumers."
The overall lesson of the panel appeared to be, "don't let the recession go to waste." Indeed, the economic crisis has installed much fear in both consumers and luxury professionals, but not enough to stop what they are doing. With recovery, hopefully, on the horizon, luxury travel advisors still have time to leverage opportunities during this Great Recession to emerge stronger than ever.
Stay tuned this week for more reports from American Express Publishing's Luxury Summit 2010.
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