On Site: Morning Session at Luxury Summit 2010

April 26, 2010 By: Kirk Cassels

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Ed Kelly, CEO of American Express Publishing, opens the Summit

Is there a new luxury? If so, what is it? The American Express Publishing Luxury Summit 2010 answered these questions and more, through a series of presentations and panel discussions, at the Mandarin Oriental, Las Vegas in CityCenter this week. While some speakers looked toward new practices to evolve the selling of luxury, others reminded the audience of the core values that always have, and always will be, essential to the industry.

Ed Kelly, the CEO of American Express Publishing, opened the summit Monday morning, making a call for changes in luxury. "Some call this time the Great Recession, I call it a time for renewal and rejuvenation in luxury," he said. As for what needed to be done to instigate this renewal, Kelly yielded the floor to the guest speakers.

First up was Tony Hsieh, CEO of Zappos. His primary message: There's a science behind many aspects of business (i.e. conversion, the psychology of buying, direct marketing, customer acquisition metrics and repeat consumer behavior), and happiness is a science that should be studied as closely. The source of happiness for Zappos? Company culture and customer service. According to Hsieh, culture remains the company's number one priority. "Your culture is your brand," he said. "Chase the vision, not the money. Be real, and you have nothing to fear. Don't try to be someone you are not. It doesn't matter what your core values are. It only matters how you commit to them."

By keeping Zappos' employees more than satisfied, Hsieh believes their happiness transcends into quality customer service. Considering that 75 percent of the clientele are return customers, his practice is paying off for the company. "We don't want customer service to be one department, we want it to be the entire property."

Vineet Nayar, CEO of HCL Technologies Ltd., addressed the audience via pre-recorded video where he encouaraged companies to make their employees priority number one, with customers as priority number two. "The interface between employees and a customer is the value zone," Nayar said. "Employees are your true value generators."

Of course, you could have the best customer service and employee base in the world but if your product is not desirable enough, how far can the service get you? Enter Cynthia McFarlane, president of Saatchi & Saatchi, Latin America and CEO of Conill, whose message remained that one must deliver the brand at the heart of everything the consumer does. McFarlane bulleted her message in 10 points:

1. Embrace the Challenge- It's a challenge, not a crisis. Feel excitement, not fear.
2. Hold Luxury to True Values- Luxury is rooted in basic human values, and requires a return to craftmanship that evolves aournd personal originality.
3. Rediscover the Beauty of Feeling Human- Move from pampering to personal importance to provide intense personal experiences that help the client define oneself.
4. Remember the Romance of the First Time- The thrill and memory of a first experience is everlasting in its purity, freshness and excitement.
5. Step Into A Better Future- Re-evaluate what is important in life by living in the moment and making the world a better place.
6. Find Luxury in the Real Thing- Remember that luxury exists in the essence of life, providing a moment of peace amidst the chaos.
7. Make an Understatement- Individuality remains core but in subtle and genuine ways.
8. Investing is the New Spending- Sustain what matters and drive for meaning and purpose as "causism" is the new consumerism.
9. The Story Is on the Inside- People are peeling back the layers to look deeper for the story inside what they buy. Embrace stories that build layers of luxury and mystery. Focus on hidden gems and the personalized message.
10. Generate A High Return on Time- Stretch time for your client and get more out of every moment.

Inviting the audience to test themselves on the practices she preached, McFarlane provided three challenges for them to do tomorrow:

1. Put your products, services, websites, business cards and every touch point to a simple test. Stand in your customers' shoes and answer one question: "what are the three things that compel you to say 'I love this'?"
2. Whatever you are investing in digital media or products, double it.
3. Switch stealth wealth to true wealth and inspire everyone in your enterprise to take sustainability seriously.

On the subject of sustainability, Adam Tihany, founder of Tihany Design and designer of the rooms at the Mandarin Oriental Las Vegas, echoed McFarlane's call to take it seriously. Sitting in on a panel discussion with Mike Kowalski, CEO of Tiffany & Company, and Christopher Cowdray, CEO of the Dorchester Collection, he said that true luxury is to be able to extend the shelf life of the planet. Cowdray agreed with Tihany noting that the phenomenal amount of waste that goes in to luxury hotels can still be removed while enriching the client experience.

Sustainability, when it comes to luxury, has been a slippery slope for some, as it begs the question of how much are clients willing to give up for the environment at the cost of a less-thrilling experience. Fortunately, Michel Gutsatz, an advisor for The Scriptorium Company, reminded the audience of the importance in which sustainable practices have in a brand. "Luxury business need to take the leadership in responding to environmental issues, " he said. "We are entering an era of responsibility and, consequently, six new consumer behavioral cornerstones have developed in markets: responsibility, vigilance, resourceful, prioritization, newtorks, and back to basics."

Gutsatz also touched on Hsieh's message about brand and McFarlane's message about basics, developing what would become an ongoing theme at the Summit. "It's time for luxury companies to get back to basics," he said. "Consumers are looking for meaning and value and brands can be a substitute for or embedded in a meaningful life."

In order for advisors to maintain brand integrity as the basis of their reputation, Gutsatz provided four simple Do's and one basic Don't:

Do #1- Brand an identity with goals for it to evolve from a logo to a trademark to an iconic sign.
Do #2- Manage the brand consistently.
Do #3- Have a consistent pricing strategy.
Do #4- Have a responsible strategy.

Don't- Lack a personality.

Before breaking for lunch, which preceded the afternoon session, audience members were already taking the lessons to heart. Some were even seen dialing up their peers on their cellular phones to discuss some of the messages they just heard. And this was just the first session. Luxury Travel Advisor will bring you more on the afternoon session soon. Stay tuned.