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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
- Veröffentlichungsjahr: 2020
Learn about the luxury brand industry from the inside out with this masterful and insightful resource The newly revised Fourth Edition of Luxury Brand Management in Digital and Sustainable Times delivers a timely re-examination of what constitutes the contemporary luxury brand landscape and the current trends that shape the sector. Distinguished experts and authors Michel Chevalier and Gerald Mazzalovo provide readers with a comprehensive treatment of the macro- and micro-economic aspects of management, communication, distribution, logistics, and creation in the luxury industry. Readers will learn about the growing importance of authenticity and sustainability in the management of fashion, perfume, cosmetics, spirits, hotels and hospitality, jewelry, and other luxury brands, as well as the strategic issues facing the companies featured in the book. The new edition offers: * A new chapter on the "Luxury of Tomorrow," with a particular focus on authenticity and durable development * A completely revised chapter on "Communication in Digital Times," which takes into account the digital dimension of brand identity and its implications on customer engagement activities and where the concept of Customer Journey is introduced as a key marketing tool * A rewritten chapter on "Luxury Clients" that considers the geographical changes in luxury consumption * Considerations on the emerging notion of "New Luxury" * Major updates to the data and industry figures contained within the book and a new section dedicated to the hospitality industry * New semiotic analytical tools developed from the authors' contemporary brand management experiences Perfect for MA and MBA students, Luxury Brand Management also belongs on the bookshelves of marketing, branding, and advertising professionals who hope to increase their understanding of the major trends and drivers of success in this sector.
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Table of Contents
Cover
Title Page
Copyright
Introduction
Chapter 1: The Concept of Luxury
A Problematic Definition
Chronicle of a Semantic Evolution
Classification of Existing Definitions
Luxury Values
True Luxury, Intermediate Luxury
Luxury, Being and Appearing
Five Sources of Legitimacy
New Luxury
Conclusion on the Notion of Luxury
Notes
Chapter 2: Specificities of the Luxury Industry
What Is So Different About the Luxury Industry?
Financial Characteristics
Time Frame
The Key to Success in Luxury Goods
The Major Operators
Note
Chapter 3A: Major Luxury Sectors
Ready-to-Wear Activities
Perfumes and Cosmetics
The Leather Goods Market
Note
Chapter 3B: Major Luxury Sectors
Wines and Spirits
The Watch and Jewelry Market
The World of Hotels and Hospitality
Conclusion on the Major Luxury Sectors
Notes
Chapter 4: The Power of the Luxury Brand
The Value of a Brand
The Characteristics of the Brand
The Brand and Its Signs
The Legal Aspects and the Defense of a Brand
Fighting Counterfeit Activities
Notes
Chapter 5: The Luxury Client
Who Is the Luxury Client?
The New Client
Customer Attitudes by Product Category and Nationality
The Analysis of Clients by Nationality
Conclusion
Notes
Chapter 6: Brand Identity: Concepts and Analytical Semiotic Tools
Brand Identity
The Brand Hinge: Ethics and Aesthetics
Brand Ethics Analytical Process: Some Practical Clues
Brand Aesthetics Analytical Process: Some Practical Clues
The EST-ET
©
Diagram
Brand Identity Strategic and Operational Implications
General Considerations on the Brand Identity Concept
Other Approaches to Brand Management
Notes
Chapter 7: Additional Brand Analytical Tools
Brand Life Cycle
The Identity Prism
The Rosewindow
The Semiotic Square
Semiotic Mapping
The Narrative Scheme
The Semionarrative Scheme
A Few Words on Semiotics
Notes
Chapter 8: Creation and Merchandising
Merchandising
Creation
Brand Aesthetics
Art and Brands
Notes
Chapter 9: Communication in Digital Times
Digital Times
Communication
Specificities of Digital Communication
Not Forgetting “Traditional Communication”
Conclusion
Notes
Chapter 10: Managing a Global Brand
International Distribution Systems
Dealing with Online Operators
Licensing Activities
The Special Case of Duty-Free Operations
The Parallel Market: Reasons and Consequences
Chapter 11: Retail Management
Why Is Retailing So Important Today?
The Present Retail Situation for Luxury Brands
Basic Retail Management Concepts
Store Location
Budget, Planning, and Control
Staffing, Training, and Evaluation
The Store as a Communication Tool
The Challenge of the Seamless Online, Offline Process
The Future of Luxury Retailing
Notes
Chapter 12: Sustainability and Authenticity
Sustainability
Brand Authenticities
Overall Conclusion
Notes
Appendix A: Applying Brand Identity Analytical Tools
Sasin Brand Ethics
Sasin Brand Aesthetics
Note
Appendix B: Glossary of Digital-Related Terms
App
CC
Cookie
Engagement rate
Facebook Ads
GAFAM
Google Ads
HTML
http
https
Influencer
Internet
Lead
Meme
MMS
Pagerank
SEO
SMS
The Web
Troll
URL
Webinar
Wiki
Note
Index
End User License Agreement
List of Tables
Chapter 2
Table 2.1 Fashion Cycle for a Fall–Winter Collection
Table 2.2 The Paradox of Luxury-Goods Marketing
Table 2.3 Bain's Estimates of Business Size, 2018 (€ billion)
Table 2.4 Our Estimates of Basic Luxury Products Business Sales, 2019 (€ bill...
Table 2.5 Estimates of the Respective Contributions of French and Italian Com...
Table 2.6 Major Luxury Operators, 2019 (or 2018/2019) (€ million)
Table 2.7 LVMH: Sales and Results, 2009 and 2019
Table 2.8 Scorecard of LVMH Results (€ million)
Table 2.9 LVMH Geographical Split, 2019
Table 2.10 Kering Historical Sales and Results (€ million)
Table 2.11 Richemont Historical Sales and Profit (€ million)
Table 2.12 Richemont Performance by Product Lines, 2005–2019 (€ million)
Chapter 3A
Table 3.1 The Fashion Mega-Brands (Sales above €1 billion)
Table 3.2 Second-Tier Fashion Brands (Sales of €100–1 billion)
Table 3.3 Cost of Making a Woman's Suit in France (€)
Table 3.4 Examples of Niche Collections for Major Perfume housesa
Table 3.5 Comparison of Cost Structures for a Product Sold in Different Count...
Table 3.6 Brands with Sales Above €300 Million
Table 3.7 Second-Tier Brands (Sales €100–300 million)
Table 3.8 Performance (€ million) of the Major Luxury Perfumes and Cosmetics ...
Table 3.9 Major Leather Goods Manufacturers (2019)
Chapter 3B
Table 3.10 Breakdown of Major Rum Brands (in million cases of nine liters)
Table 3.11 The World's Most Powerful Spirits, 2018*
Table 3.12 Number of Top 30 Brands Sold by Different Operators
Table 3.13 Performance (€ million) of the Top Nine Operators (2019/2020)
Table 3.14 Estimated Sales (including watches) of Major Jewelry Operators, 20...
Table 3.15 Estimated Sales of Complication/Upscale Watch Operators
Table 3.16 Estimated Sales of Jewelry and Specialty Watch Operators 2019
Table 3.17 Estimated Sales for Fashion and Mood and Watch Operators, 2019
Table 3.18 The Major Hotel Groups
Table 3.19 Top Luxury Hotel Brands
Chapter 4
Table 4.1 The Place of Luxury in the Global Brand Picture (2019)
Table 4.2 Interbrand's Top Luxury Brands (2019)
Table 4.3 Brand Value Changes Between 2001 and 2019 (€ million)
Table 4.4 Brand Registration Categories
Chapter 5
Table 5.1 Nationality of the Millionaires (in thousands)
Table 5.2 Nationality of Billionaires
Table 5.3 Breakdown of Luxury Clients in Developed Countries
Table 5.4 Why Are People Buying Luxury Items by Age?
Table 5.5 Household Income and Household Expenditures by Age in the United St...
Table 5.6 Purchases of Luxury Goods by Geographical Groups
Table 5.7 Expectations of Luxury for Different Nationalities
Table 5.8 Number of Chinese Luxury Consumers and Total Spending by Age Group ...
Table 5.9 Reasons for Buying Luxury Products
Table 5.10 Preferred Brands for Gift-Giving in China
Table 5.11 Advertising Spending in America in 2019
Chapter 6
Table 6.1 Jim Thompson Brand Ethic (2017)
Table 6.2 Jim Thompson Brand Aesthetics (2017)
Table 6.3 Brand Aesthetics Analytical Grid
Table 6.4 Brand Aesthetics Analytical Grid Applied to Jim Thompson (2015) Syn...
Table 6.5 Three Purposes of Aesthetic Treatments
Chapter 8
Table 8.1 Detailed Merchandising Briefs for Each Subcategory of Suits
Table 8.2 Collection Plan for Thomas Brand Menswear SS 2019
Table 8.3 Theoretical Price Structure for Luxury Ready-to-Wear and Leather Ac...
Table 8.4 Minimum Number of Final Prototypes to Be Produced Every Season for ...
Table 8.5 Performance Indicators for Product Empowerment Teams
Chapter 9
Table 9.1 Effects of Digital Technology on Society, Brands, and Consumers
Table 9.2 Brand Historical Evolution (note that the dates are approximate as ...
Table 9.3 Comprehensive Media Plan
Table 9.4 Comparative Analysis of Retail and E-commerce KPIs
Table 9.5 Cardon's Typology of Social Networks
Chapter 10
Table 10.1 Pricing in Different Zones (Perfumes and Cosmetics)
Table 10.2 Cost Structures for Europe (Perfumes and Cosmetics)
Table 10.3 Cost Structures for Japan and Mexico (Perfumes and Cosmetics)
Table 10.4 Clients' Online Research Before Buying
Table 10.5 Perfumes Brands Under License or Developed Internally: The Situati...
Table 10.6 Breakdown of Sales of Japanese License Activities by Product Categ...
Table 10.7 Estimates of Duty-Free Activities at Major International Air/Ferry...
Table 10.8 Duty-Free Pricing System
Table 10.9 Price Structure for the Duty-Free Operator
Chapter 11
Table 11.1 Stores and Sales History of a Selection of Brands
Table 11.2 Mix of Distribution Systems for Three Brands with Different Econom...
Table 11.3 Number of Online and Offline Contacts Before and During a Purchase
Table 11.4 Percent of Sales of a Fashion Luxury Brand According to Different ...
Chapter 12
Table 12.1 Medium-Term Luxury Market Trends
Table 12.2 External Sources of Brand Authenticity
Table 12.3 Internal Sources of Authenticity
Table 12.4 Evolution of the Sources of Authenticity
Appendix A
Table A.1 Sasin School of Management Brand Ethics (2020)
Table A.2 Sasin School of Management Brand Aesthetics (2020)
List of Illustrations
Chapter 1
Figure 1.1 Analytical Scheme of the Definitions of Luxury
Figure 1.2 Positioning of Some Authors on the Analytical Scheme of the Defin...
Figure 1.3 History of the Semantic Evolution of the Definitions of the Notio...
Figure 1.4 Positioning of the Definition of Luxury Given by Consumers
Figure 1.5 Semiotic Square of Consumption Values
Figure 1.6 Semiotic Square of Veracity
Figure 1.7 Evolution from Traditional to New Luxury
Figure 1.8 Semiotic Square on Different Types of Luxury
Chapter 4
Figure 4.1 Interbrand Brand-Value Management Model.
Chapter 6
Figure 6.1 The Brand Hinge. Analytical levels of a brand universe
Figure 6.2 The Hinge Applied to Pininfarina Brand Identity
Figure 6.3 Brand Manifestations, Identity, and Strategies
Figure 6.4 The EST-ET© Diagram Applied to Some Pininfarina Cars
Figure 6.5 Applying the Brand Identity to All the Brand Manifestations (Jim ...
Figure 6.6 Place of Brand Identity in Company Functional Strategies
Chapter 7
Figure 7.1 The Brand Life Cycle
Figure 7.2 Gucci Turnover, 1991–2019 (in € millions)
Figure 7.3 Saint Laurent and Bottega Veneta Turnover, 2012–2019 (in € millio...
Figure 7.4 Hermès Turnover, 1988–2018 (in € millions)
Figure 7.5 Salvatore Ferragamo Turnover, 1988–2019 (in € millions)
Figure 7.6 Roger Vivier Turnover (in € Millions
Figure 7.7 Reviving Sleeping Beauties
Figure 7.8 Typology of Targeted Companies by a Private Equity Fund: Emerging...
Figure 7.9 Brand Identity prism applied to Hermès (2020)
Figure 7.10 The Rosewindow (Marie-Claude Sicard)
Figure 7.11 Semiotic Square of Consumption Values (J.-M. Floch)
Figure 7.12 Salvatore Ferragamo (1992–2020)
Figure 7.13 Two Basic Brand Positionings
Figure 7.14 Two Strategic Options: Market-Centered or Self-Centered Brands
Figure 7.15 Authenticity and Gratuitous Design Brand Strategies
Figure 7.16 Examples of Brand Strategies on the Authenticity versus Gratuito...
Figure 7.17 Structuration on a Semiotic Square of Baudrillard's Thesis on th...
Figure 7.18 Semiotic Mapping of Consumer Values (Andrea Semprini)
Figure 7.19 Positioning Brands on the Semiotic Map
Figure 7.20 The Narrative Scheme (Jean-Marie Floch)
Figure 7.21 The Semionarrative Scheme Applied to the RATP Logo
Chapter 8
Figure 8.1 Luxury Products Business Process
Figure 8.2 Organization by Competencies
Figure 8.3 Don Juan Suits Competitors Price/Fashion Map
Figure 8.4 Don Juan Suit Collection Structure
Figure 8.5 Overall Proportions of Thomas Brand Menswear Subcategories for SS...
Figure 8.6 Strategic Collection Plan for Thomas Brand's Necktie Category
Figure 8.7 Sales of Thomas Brand's Necktie Category between 2015 and 2018 an...
Figure 8.8 Collection Calendar of an A/W Ladies' Shoe Collection
Figure 8.9 Collection Calendar of Ladies' Ready-to-Wear and Home Furnishing ...
Figure 8.10 Inputs and Constraints Applying to the Creative Department
Figure 8.11 Bally Example of Design and Development Department Organization ...
Figure 8.12 Brand Identity Manifestations—Different Competencies
Figure 8.13 Application of YSL style definition to his creations
Figure 8.14 Pininfarina Creative Sequence
Chapter 9
Figure 9.1 Basic and Mediatized Manifestations
Figure 9.2 The Communication Chain
Figure 9.3 The Consumer Decision Journey
Figure 9.4 Example of Thomas Brand's Digital Dashboard (2018)
Figure 9.5 The World's Most-Used Social Media.
Figure 9.6 Initial Organization of Thomas E-commerce Activities
Chapter 10
Figure 10.1 The Brand's Worldwide Presence
Chapter 11
Figure 11.1 The Store as the Most Complete Experience for Virtual and Real B...
Chapter 12
Figure 12.1 Four Types of Consumer Attitudes with Respect to Sustainability....
Figure 12.2 Components of Brand Authenticity as the Quality of a Relationshi...
Appendix A
Figure A.1 Sasin Two Logos
Figure A.2 The Nonagon Structuring Sasin's Brand Ethics
Figure A.3 The Nonagon Structuring Sasin's Brand Ethics (details)
Guide
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Luxury Brand Managementin Digital and Sustainable Times
FOURTH EDITION
Michel Chevalier
Gérald Mazzalovo
This edition first published 2021
© 2021 John Wiley & Sons, Ltd. All rights reserved.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by law. Advice on how to obtain permission to reuse material from this title is available at http://www.wiley.com/go/permissions.
The right of Michel Chevalier and Gérald Mazzalovo to be identified as the authors of the editorial material in this work has been asserted in accordance with law.
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While the publisher and authors have used their best efforts in preparing this work, they make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives, written sales materials or promotional statements for this work. The fact that an organization, website, or product is referred to in this work as a citation and/or potential source of further information does not mean that the publisher and authors endorse the information or services the organization, website, or product may provide or recommendations it may make. This work is sold with the understanding that the publisher is not engaged in rendering professional services. The advice and strategies contained herein may not be suitable for your situation. You should consult with a specialist where appropriate. Further, readers should be aware that websites listed in this work may have changed or disappeared between when this work was written and when it is read. Neither the publisher nor authors shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
ibrary of Congress Cataloging-in-Publication
DataNames: Chevalier, Michel, 1943- author. | Mazzalovo, Gerald, author.
Title: Luxury brand management in digital and sustainable times : a new world of privilege / Michel Chevalier, Gerald Mazzalovo.
Description: Fourth Edition. | Hoboken : Wiley, 2021. | Revised edition.
Identifiers: LCCN 2020029296 (print) | LCCN 2020029297 (ebook) | ISBN 9781119706281 (hardcover) | ISBN 9781119706298 (adobe pdf) | ISBN 9781119706304 (epub)
Subjects: LCSH: Brand name products--Management. | Luxury goods industry. | Luxuries--Marketing. | Branding (Marketing)
Classification: LCC HD69.B7 C476 2021 (print) | LCC HD69.B7 (ebook) | DDC 658.8/27--dc23
LC record available at https://lccn.loc.gov/2020029296
LC ebook record available at https://lccn.loc.gov/2020029297
Cover Design: Wiley
Cover Image: ©Akintevs/Getty Images
Introduction
Why write a fourth edition of a book that was initially published in 2008?
Five reasons justify the effort:
Luxury is changing.
First of all, luxury consumption and the industries related to it continue to play an increasingly important role in today's economy, societies, and ways of living, and are an important engine of innovation and fulfillment of basic human desires toward beauty and excellence. The dynamism of the luxury industries' evolution deserves constant observation just to keep up with its nature, mechanisms, and meanings and to be able to share those with our readers. In just the first months of 2020, as we were busy writing the new text, LVMH bought Tiffany's; Neimann Marcus, J.Crew, JC Penney, Brooks Brothers, Muji USA, and Barney's filed for
Chapter 11
; Sonya Rykiel went into liquidation and the brand was bought by two young new investors; Fenty, the new brand managed by Rihanna and co-owned with LVMH, occupied all the windows of Bergdorf Goodman in New York in February. The advent of COVID-19 has also shown numerous solidary initiatives from small and big brands. In this catastrophic pandemic, luxury brands have also shown their resilience, not only on e-commerce but in traditional physical retail, when the conditions allow for reopening.
We know more.
Since the third edition in 2015, both authors have been involved in managing and advising luxury products and services brands in personal goods, perfumery, distribution, and education. The experience garnered by being actively engaged in brand management realities in Asia, the Middle East, and Europe led us to evolve in our understanding of current and future brand management issues. The academic literature has been prolific on luxury subjects and more knowledge has emerged as a result. A lot of the lessons learned are integrated in this book.
We live in digital times.
This is one of the most important factors affecting all businesses in general and luxury brands in particular. The changes brought about by digital technology are affecting the industries, the brand strategies and operations, the consumers' ways of thinking and buying, and more.
Sustainability is becoming our way of living.
This is the second major factor influencing luxury brand management and consumption. Luxury brands have been somewhat late in addressing it, but are now fully on board and very often innovative leaders in the field.
COVID-19 has been a major disruptor.
It will eventually be controlled, but it serves as both a revealer and an accelerator of existing trends. It will have profound effects on geopolitics as well as on everything related to mobility and, therefore, on industrial and commercial processes.
All these conditions have generated the new content that is included in this edition. Most of the examples and financial data have been updated.
Chapter 1, which delves into the notion of luxury, was completed with considerations of new luxury in which exceptionality prevails over exclusivity.
Chapter 2 explains the specificities of the luxury industry, how it can be defined, and what makes it different from other businesses, in particular from the fast-moving consumer goods and the basic fashion industry.
Chapter 3describes the different industry sectors with their sizes and with the major players: fashion, perfumes and cosmetics, leather goods, wines and spirits, and jewelry and watches. In this edition, we have added a complete analysis of the hotel hospitality sector, and we give a size for this market, a description of the major players, and the key management issues.
Chapter 4 indicates the economic value of each luxury brand and how it can be assessed and developed.
Chapter 5 gives a description of the major luxury clients, by country and by level of income and wealth. It also describes how different segments of this population react to the idea of luxury.
Chapters 6 and 7 present brand analytical tools that we currently use. Because the number of them has increased, we split Chapter 6 of the third edition into two parts. In Chapter 6 of this edition, we introduce three tools: the brand hinge, the EST-ET© diagram, and the Brand Aesthetics Analytical Grid, the new tool that we applied to the Thai brand Jim Thompson. We introduce the three ends to any aesthetic treatment and complete the chapter with considerations of the strengths and weaknesses of the brand identity notion and position the brand identity approach within the broader field of other approaches to brand management. Chapter 7 continues with seven analytical instruments, such as the Brand Life Cycle, the prism, and the Rosewindow, and semiotic tools like the semiotic square being applied to different brands and in particular to market-centered or self-centered brands. It ends up with considerations on what constitutes a valid semiotic analysis for luxury brands.
Chapter 8 deals with creation and merchandising and has incorporated numerous new examples drawn from our latest management experiences. Real examples of reports on collection structures and calendars have been added. Considerations are made on style issues, drawing from work done for Yves Saint Laurent and Pininfarina. A whole bibliography is included for those interested in getting deeper into brand aesthetics management. The ever-growing relationship between art and brands has been addressed.
Chapter 9 deals with communication in digital times and has been completely revamped, providing the opportunity for an overall review on how digital is impacting the world, luxury brands, and consumers. The scheme of the communication chain has been updated, as have the communication plan and calendar, to consider the effects of digital media. The key performance indicators of a commercial website have been compared to those of a traditional retail one.
Chapter 10 deals with different ways to develop a worldwide brand. It describes how a brand can become completely international, sometimes through its own subsidiaries, but generally also through local importers and distributors. It also explains how online operators can become a major resource and how one must deal with them. It discusses how brands can also be present and strong in travel retail outlets. It presents pros and cons of developing a brand with licensing activities.
Chapter 11 examines different retail activities in a time of physical and digital resources. It explains how a consumer does not select one or another system of distribution, but considers these two resources as complementary. The more the client spends time with a brand on the Internet, the more likely he is to buy in a physical store, and the more the client has direct contact with a brand in a physical store, the more likely he is to purchase on the Internet. And clients must be seduced and interested and convinced when they visit a store: A client who has a bad impression or who has a negative experience in a store would never buy that brand on the Internet. Brands have to adjust to this phenomenon.
Chapter 12 deals with sustainability and authenticity. It summarizes first the future trends of luxury and then delves deeper into these two basic consumption and civilization trends. Some of the indicators of an increasing sustainability sensibility are highlighted, as well as the initiatives taken by some of the main luxury brands. We defend the complete compatibility of luxury and sustainability and introduce a possible consumer segmentation based on attitudes toward sustainability. Authenticity is considered to be a quality of a relationship between the object considered and certain referents, which can be intrinsic qualities of the object or internal to the brand, like its identity or even belonging to the consumers' mind.
We have also integrated the overall conclusion of the book in this chapter.
Appendix A presents an extract from a brand identity study led by Mazzalovo in 2020 on the Sasin School of Management, the leading Thai business school of Chulalongkorn University (Bangkok, Thailand).
Appendix B is a glossary of some of the most current expressions in the digital vocabulary.
The book, as its preceding editions, is not meant to be read as a novel. It presents a mix of macroeconomic and microeconomic considerations, and its modest ambition is to function as a reference text, where considerations can be found on specific management issues for luxury brand employees and executives, consumers, students, teachers, and anybody interested in our society's evolution, a reflection of which is given through the mirror of luxury brands.
Chapter 1The Concept of Luxury
The word luxury has always been a source of discussion of what it is supposed to mean. This is the reason we added this chapter in the second edition of this book and have kept it since then. Since we are going to write about luxury along with text and diagrams, it only makes sense to explore the intricacies of what is meant by such a popular word. In this fourth edition we have added a section on the meaning of the expression new luxury, whose usage has been growing in the past few years.
A Problematic Definition
What is luxury? At first glance, it seems that we can answer in simple terms and to distinguish between what is luxury and what does not fall into it. But we sense, on reflection, that not everyone will agree on this distinction: luxury to one is not necessarily luxury to another.
The concept of luxury incorporates an aesthetic dimension that refers to a major theme of Western philosophy: How to characterize the notion of beauty?1 In the twentieth century, the philosopher Theodor W. Adorno expressed the problem in these terms: “We cannot define the concept of beautiful nor give up its concept.”2 We believe that it is the same for luxury: without wanting to confuse it with the beautiful, it turns out, upon examination, no less elusive, and, perhaps, not less indispensable.
Therefore, it is probably unrealistic to seek a universal definition of luxury. But this reflection draws our attention to an initial important point: the definition of luxury has varied over time.
A Fluctuating Notion
What we commonly call luxury no longer has much to do with what was meant only a century ago; or, a little further back, in the years before the Industrial Revolution. We are not talking here about objects of luxury. A product like soap, for example, although a real luxury in the Middle Ages, has become largely democratic since then, and it has therefore ceased to be a luxury in our eyes. Today, the word has a very different meaning from how it was used, for example, in the seventeenth century. It connotes for us both positive and negative images; most of the negative images are derived from its historical heritage, while positive images are for the most of a recent introduction.
As we will see, the term has experienced, particularly in the past two centuries, important semantic changes that reflect the construction of our modern consumer society. These transformations are of great interest for our subject: they had direct impact on the progressive segmentation of the global luxury market and on the current positioning of brands claiming this territory.
The Paradox of Contemporary Luxury
Today's luxury market is based on a paradox. On the one hand, luxury operates as a social distinction; it is the sign of a practice reserved for the “happy few” and thus circumvents the masses. At the same time, contemporary luxury is promoted by the brands, and they remain linked to the logics of volume of production and distribution. How, therefore, can we reconcile exclusivity with the industrial and commercial logics of volume? Such is the dilemma for luxury brands, which each brand will try to solve by adjusting its positioning through innovative strategies of creation, communication, and distribution.
Even though it may not necessarily appear as such at first glance, contemporary luxury, in fact, presents an extensive and highly contrasted landscape. In order to grasp this complexity, a step back is needed; this is a historical detour that will allow us to comprehend it.
Chronicle of a Semantic Evolution
Luxury is a keyword whose use is becoming more frequent in our daily lives. We read it more often in all brand communication; we use it more often in our discourses (on the Internet, Google Trends shows that its use has increased by more than 30% on average between 2004 and 2020). There are two reasons for this increase:
Brands have realized that this (sometimes only apparent) positioning adds to their competitiveness.
On the other hand, a majority of consumers have developed a positive attitude toward the products, services, or experiences connoted by this feature.
We live in a world where luxury reigns. But the word itself was not born yesterday—definitions have accumulated for centuries. Since Plato, Epicurus, Veblen, Rousseau, and Voltaire, up to today's opinion leaders, the production and use of signs of wealth have always intrigued the philosophers, sociologists, and observers of their time.
The word luxury, as we understand it today, inherited this accumulation of proposals, sometimes with contradictory meanings. The acceleration of the number of definitions in the past 20 years comes to prove the growing current interest for the question.
Modern Dispersion
In order to measure this abundance of meanings, we may note the growing number of expressions that, today, use it. The term now needs articles and adjectives to clarify its meanings.
Here are a few modern examples: authentic luxury is quite frequent as an expression and we will discuss it further; luxury and grand luxury was advertised by the great car designer Battista Pininfarina (lusso e gran lusso) on a 1931 poster where a car was presented on a pedestal like in a museum. This is an interesting segmentation, where already lies the idea of a form of an affordable luxury suitable for all budgets. More recently, the economist Danielle Allérès extrapolated the common sense of Pininfarina suggesting a distinction between accessible, intermediate, and inaccessible luxuries. Even luxury yogurt is spreading in food marketing. We hear more and more in casual talks and in advertising the expression “my luxury”—which is not yours and has the defect of not constituting a market on its own.
Ostentatious luxury or “bling-bling” has long been present in the media. It may evoke a traditional luxury that is opposed, of course, to the new luxury, and so on. Social or even academic trends regularly provide their lot of new expressions on the subject.
Two relevant points can be detected in this diversity. The first is that to each his own luxury: the concept has ceased to mark a boundary between opulence and economic discomfort—it is now a sign that needs additional specific attributes to perform its function of distinction in a human group. This ability of luxury to indefinitely segment the markets shows us how it has been able to blend, by transforming itself, in our modern civilization of mass consumption.
The second point is that this modern luxury appears to carry rather positive connotations. Obviously, it also has its excesses, its indecency; however, the fact that we can now speak of luxury in positive terms already certifies a remarkable semantic evolution. In order to measure this evolution, we must return to the etymology.
Etymology and Transformations
The word luxury comes from the Latin luxus, which means “grow askew, excess.” Its root is an old Indo-European word that meant “twist.” In the same family, we find “luxuriant” (yielding abundantly) and “luxation” (dislocation). In short, the term originally refers to something of the order of aberration: it is almost devoid of any positive connotation.
We have used the dictionary Le trésor de la langue française informatisé, which offers a brief overview of two centuries of use.
1607: “way of life characterized by large expenditures to make shows of elegance and refinement”
1661: “character of which is expensive, refined,” luxury clothing
1797: “expensive and superfluous object, pleasure”
1801: “excessive quantity,” a luxury of vegetation
1802: “which is superfluous, unnecessary”
Little by little, the notion of guilty excess disappears, while the ideas of distinction and refinement gain in strength. In the Classical Age, luxury is already full of ambiguities: speaking of women's toilette, La Fontaine relates the “instruments of luxury” to everything “which contributes not only to cleanness, but also to delicateness.” This does not prevent him from condemning, moralistically, “these women who have found the secret to become old at twenty years, and seem young at sixty.”3 Around the same time, the grammarian Pierre Nicole wishes that “great people,” by their example, deter us from “luxury, blasphemy, debauchery, gambling, libertinage.”4 In sum, the luxury already connotes sophistication, but it remains morally suspect.
At the dawn of the Industrial Revolution, the connotation of superfluous—which is not motivated by economic and utilitarian logic—begins consolidating. It becomes more nuanced with the advent of mass consumption and the civilization of leisure. The superfluous is not debauchery; it is beyond the commercial sphere, but it can also mark the promotion of a certain quality of life.
As for the price dimension, it appears very early and remains virtually unchanged over the years: luxury is something that is to be paid for.
From the same French dictionary, we see that current usages of the word “luxury” show evolutionary meanings: the original meanings are enriched by others, introducing the word into the sphere of day-to-day experience (“little luxuries”) while affirming the notion of a pleasure without complex (“innocent luxury”):
Social practice characterized by lavish expenditures, the search for expensive amenities or refined and superfluous goods, often motivated by a taste and desire for the ostentatious and fatuous.
Luxury (as an adjective). Of very high quality, sophisticated and expensive. Article, object, luxury product, grand luxury, semi-luxury, luxury style, luxury animal.
Refers to a thing, a behavior valuable because of the enjoyment it provides. “The toothbrush still plays me tricks and also the tube of toothpaste that always breaks from the bottom. One must sacrifice these small luxuries to the great luxury of time” (Paul Morand).
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Qualify a thing, a behavior valuable because of its rarity and sometimes by the fact that it is devoid of utilitarian function. “The emerging forms of society today are not making the existence of intellectual luxury one of their essential conditions. Probably, the unnecessary cannot nor should interest them” (Paul Valéry).
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The adventures of the word reflect those of the concept. It shows that luxury emerged first as a licit experience—a practice of distinction—and then, when everyone wanted to distinguish himself from everyone, as a common experience. From the etymology of excess or botanical deviation, the meaning extends into excessive or unnecessary, redundant, expensive objects. The previous senses are still present, but they evolve to include scarcity. Soon the meaning attached to the valuable, rare, and expensive object will apply to the lifestyles of their owners and mean wealth, ostentation, and, therefore, power.
With the emergence of the postmodern brand—that is, the appearance of brands communicating in the registry of luxury by offering imaginary worlds associated with luxurious lifestyles, without necessarily offering expensive and certainly not rare objects—new meanings emerge and are superimposed on the previous ones.
The aesthetic treatment of objects, design, and creativity become more relevant. At the social level, luxury gathers additional values of seduction and elitism, not foreign to the values of power and prestige. Hedonism becomes the latest addition to the valences of luxury, a characteristic of our times of postmodern consumerism.
The Advent of Intermediate Luxury
This transformation of meaning is based on a contemporary sociological revolution, a direct consequence of the mass production and especially of the rise of the brands: the advent of intermediate luxury. Truly luxurious lifestyles are present, more than ever, in any modern communication: but they form only part of the equation. Intermediate luxury brands offer countless possibilities for the middle class to take part symbolically, partially, or virtually into this world.
The global luxury chessboard is therefore distributed on two levels, if not more: on the one hand, “true luxury”—which few people can afford—increases its hold on the market. The growth of the number of wealthy or well-to-do consumers (especially in the BRIC countries) combined with a bigger supply—investments in the luxury industries that have been yielding higher returns on investment than ordinary brands—have led to a strong visibility of luxurious lifestyles. The press and the media in general contribute actively by exposing the life of the rich and famous.
On the other hand, intermediate luxury brands, in applying their logic of volume of production and communication, ensure the democratization of luxury. They multiply the opportunities for consumers of the middle classes, to be in contact with the possible imaginary worlds they offer. What is more naturally human than to aspire to signs of social recognition, success, comfort, and prestige? This democratization is rampant. Nervesa, the Italian brand of men's ready-to-wear, does not hesitate to promote “low-cost prestige.” The American brand Terner Jewelry promotes its products in airport shops with broad signs showing “Luxury at €12.”
The ultimate symbol of this democratization could be the recent attention paid to soccer—a popular sport, anti-elitist par excellence—by some brands, much bigger than Terner and Nervesa. The kick-off had taken place in 1998 in Paris, when Yves Saint-Laurent presented a parade of some of his historic fashion models at the opening ceremony of the World Cup at the France Stadium. During the 2010 World Cup in South Africa, Louis Vuitton presented an advertising campaign where the mythical champions Pelé, Maradona, and Zidane competed in table soccer (baby-foot). Parmigiani, the Swiss watchmaker, was “the official watchmaker of the football club Olympique de Marseille” in the 2010s. Its direct competitor Hublot sponsors the soccer clubs Juventus of Torino, Chelsea, and Benfica, as well as Jose Mourinho (coach), Pele (the legendary Brazilian player), and Kylian Mbappé (an international French player at Paris-Saint-Germain). It was also the official timekeeper of the 2018 World Cup. The English Premier League is a favorite target of the luxury watches because of the widespread worldwide coverage it benefits from. Tag Heuer is with Manchester United, Jean Richard with Arsenal, and so on.
Brands are the main factor of the recent transformations of the concept of luxury. The essayist Dana Thomas traces this drift from the notions of exclusivity, quality, and tradition to those of accessibility and aesthetics in the 1960s, with the advent of a generation of young consumers anxious to break social barriers.7 It is nevertheless in the 1990s that the modern connotations of the term luxury expand, as postmodern brands flourish with their multiple representations and proposals of possible worlds.
We see in any case that the concept can boast a rich history as well as a present that has never been more diverse or abundant. But if we have seen how luxury has evolved, it remains, in essence, difficult to identify. Its definitions are essentially subjective: they reflect the professional, social, and cultural trajectories of their users. Depending on whether one is an economist, brand manager, philosopher, sociologist, psychologist, or consumer, the dimensions that someone will retain will be obviously different.
However, this proliferation of representations is not devoid of meaning. There is logic to this wealth of definitions that can teach us about the overall economy and the meanings of luxury.
Classification of Existing Definitions
Beyond the tangible aspects of luxury products or services, we need to consider the phenomenon as a whole in terms of production, marketing, and communication. Luxury is a discourse, the assertion of a certain lifestyle. We can therefore distinguish between emission and perception of this discourse.
With this reading, the diversity of the current definitions and analyses of luxury can be divided into two broad categories: those relating to the supply of products or services and those related to the psychological and social implications of these products or services—in other words, consumers' perceptions.
Figure 1.1 Analytical Scheme of the Definitions of Luxury
On the one hand, we therefore find definitions relating to the production of luxury; on the other, definitions relating to its perception (see Figure 1.1). Alternatively, in economic terms we could identify them as the supply and the usefulness logics.
Perceptual Approaches
Sociologists and psychologists are naturally interested in the resonance of luxury in the population—and are, therefore, on the side of the mechanisms of perception.
For some authors, such as Pierre Bourdieu, buying a luxury brand is a way to express a social position: according to him, luxury is essentially defined by its dimension of social communication.8 The American economist Thorstein Veblen and his concept of “conspicuous waste” also belongs in this group.9 According to him, highlighting one's consumption of pricey products is a method of building respectability for the man of leisure. Jean Baudrillard has a similar approach: for him, our objects, torn between their value of use and exchange value “are taken in the fundamental compromise to have to mean, that is to give a social sense.”10 In the same vein, Gilles Lipovetsky recently wrote: “Luxury is seen as perpetuating a form of mythical thinking at the heart of a desacralized commercial culture.”11 In other words, in a society where everything is measured and bought, luxury would reintroduce an almost magical, not strictly quantitative distinction among individuals.
Economists who have reflected upon the phenomenon of luxury are especially attached to integrating the question of its valorization into a global macroeconomic model. They are therefore positioned also on the side of the mechanisms of perception. For instance, the theory on the elasticity of demand for luxury goods is considered to be positive and greater than 1, which means that the demand, paradoxically, will increase when the price increases. This is obviously the symbolic value of the luxury product—its distinctive effect—that is the cause.
Productive Approaches
For this other category, the discourses oriented toward the mechanisms of the production of luxury are made by operational managers, executives concerned with the functioning of their brand and the conditions of production of “the luxury effect.” They also need definitions, but more pragmatic ones.
Consider the case of Patrizio Bertelli, president of Prada: he defines luxury by a convergence of creation and intuition. Another example is the Comité Colbert, an association regrouping 82 French luxury houses in 2020 (plus 16 associated members and 6 European members), which stresses the alliance between tradition and modernity, know-how and creation, international reputation and culture of excellence.
For these approaches, what defines luxury is less its social implications than a set of qualifications embedded in the production of the object or service: quality of materials, technical know-how, and bold and creative talent, whose sustainability is ensured by the transmission of intangible values—tradition, artisanal exigency, quest for perfection.
The great fashion designer Coco Chanel used to define luxury simply as the opposite of vulgarity: a way to evade the question, which refers more to the mechanisms of perception, but which shows us a contrario how the discourses of the actors of the luxury world have become more profound in the postmodern world.
We can already hold on to two universes of clearly distinct representations, whose issues diverge and even conflict. But it is possible to refine this classification further.
Social and Individual Aspects
For psychologists and sociologists focused on the perceptions of luxury, the interest is first on the paradoxical commitment to some object, apparently useless: What are the hidden reasons behind luxury consumption?
The perceptual approach reveals two types of motivations that do not overlap entirely: one can consume luxury (possibly unconsciously) in order to display it or, in a more personal approach, simply to have fun for his own pleasure. This dimension seems often neglected by the sociological discourse but cannot be reduced to the previous one. This is a more private dimension, a dimension of comfort and individual hedonism, as points out, for example, Jean-Paul Sartre in L'Être et le Néant (1943), when he wrote: “the luxury does not designate a quality of the object owned, but a quality of possession.”
It is conceivable, for example, that I buy a luxury soap “because I'm worth it” to identify with the celebrity who makes the claim—in short, for the sake of social representation. But I also buy it because it smells good and its foam is smoother than soap from other brands. These qualities I do not need to show to anyone in order to enjoy them. The soap serves my own hedonism: it pleases me, and if I am no longer convinced that it smells better than the others, I will probably stop buying it, despite the prestige of its brand.
Still, the pleasure born from the consumption of luxury comes also from stories that can be told. Luxury makes us dream and we also can dream alone. How do I know whether my soap feels objectively better or if it is the brand advertising, the reference to a celebrity that convinced me? In this sense, social representation is never far from personal experience. This is what Jean Baudrillard stresses when writing “the private and the social are mutually exclusive only in the daily imagination.”12
Without denying this analysis, one wonders if there is not, among sociologists of luxury, a certain moralist bias that encourages them to ignore the question of hedonism. In their discipline, social experience often overwhelms pure pleasure—or, said differently, the intrinsic qualities of the product. These qualities remain, consumers will agree, constitutive of experience.
The Brand and Its Manifestations
As we just mentioned, discourses about the mechanisms of production of luxury characterize the point of view of operational executives. They are, however, structured by the phenomenon of the brand. It introduced a second and critical dimension in a productive approach to luxury. The brand generates issues that the manager cannot confuse with those of the product itself.
For example, specific qualities are expected from a Hermès scarf, the results of a know-how that can be recognized visually and tactilely and that are the indispensable and defining attributes of Hermès scarves. However, something else is expected: a more intangible supplement, an idea, a prestige that will be called “Hermès”—as a brand or, more precisely, as a brand identity.
There is a sort of “beyond the actual product,” that is the brand and that the product must promote without betrayal. But the product is only one of the possible brand manifestations, making brand management issues even more complex. Advertising, points of sale, store windows, websites, social networks, sponsorships, and so forth are other forms of brand manifestations and not less essential for the promotion of its identity.
Two dimensions of brand identity are usually distinguished: the brand ethics, the intelligible part that is made up of its values, its vision of the world, and its idealized representation; and the brand aesthetics, the sensory part that affects its physical and concrete manifestations or all imaginable interfaces between the brand and its consumers. The aesthetic treatments of the sensory part of the brand participate in the sensitive experience of the brand. The emergence of “lifestyle brands” tells us that this experience spread beyond products, in other areas, such as communication, spaces, or behaviors (see Chapter 8 on creation).
Now that we have split the production side into the brand and its manifestations and the perception side into its social and individual parts, we are able to position all the authors' definitions we have mentioned so far (see Figure 1.2).
Figure 1.2 Positioning of Some Authors on the Analytical Scheme of the Definitions of the Notion of Luxury
Figure 1.3 History of the Semantic Evolution of the Definitions of the Notion of Luxury
In order to close the loop, it remains to revert to the semantic history of the term luxury described earlier and insert the meanings identified in our analytical scheme (see Figure 1.3).
The progressive transformation of the concept becomes more noticeable. A number of modern or postmodern values (referring to lifestyle brands) that characterize contemporary luxury like elitism, hedonism, aesthetic creativity, and seduction can be regrouped within clusters. These meanings are mainly concentrated around social luxury perceptions and the positive connotations of its manifestations: it is a symptom of the growing social importance of luxury, especially through the intermediate luxury consumption, but it also reflects the rise of the brand as its main vehicle—without a doubt, the major and structuring phenomenon of this new market.
Luxury Values
Now that luxury is imposing its positive connotations to the contemporary world, how do consumers perceive it? What are the values they identify with luxury?
The Three Scales
An answer can come from a very relevant study, led by de Barnier, Falcy, and Valette-Florence, on a sample of over 500 persons in France. It allows synthesizing the values currently associated with luxury by consumers. This investigation offers the interest to compare three independent scales of value that explored the perception of luxury by consumers done by Kapferer,13 Vigneron and Johnson,14 and finally by Dubois et al.15
The statistical convergence of the three models highlights four main types of values, which we classify by order of intensity. In fact, we may recognize here four essential dimensions that consumers consider to be essential for a brand to belong to the luxury world.
Elitism (“distinction,” “select”) is the dimension most present simultaneously on the three scales. The historical social dimension of luxury still plays its role fully as an indicator of social success—or a simulacrum of that success. The creation of a sense of belonging to a selected group appears as the essential experience dimension. The creation of a feeling of belonging to a chosen group appears to be the essential dimension of the experience.
Unsurprisingly, product quality and high prices are also significant characteristics. The concept of quality can extend to all brand manifestations such as communication, real and virtual places, people, and so on.
In the third position we find personal emotional and affective elements, such as hedonism, but with a weaker correlation. This is the generation of pleasure and emotions, key components of postmodern consumption, which applies here to luxury brands.
Finally, the power of the brand (resulting from past decisions and actions) appears at the side of reputation and uniqueness.
Through this exercise, the consumer himself gives us his own definition of luxury. And although the fundamental intuition of sociologists (distinction) is confirmed, we discover that the consumer is not less attentive to the means of production of the luxury object and brands than to its personal and social impacts (see Figure 1.4). Yet again, luxury cannot be reduced to its sole effects of display.
Other considerations can be drawn from this study.
First, most consumers think and live luxury only in terms of brands. Could luxury be experienced outside of the brand world? We could refer to the imaginary world of two French novels, À Rebours16 and Les Choses17: two portraits of characters, consumers obsessed by luxury. In both cases, the brands are absent from their universe: it is the quality of the products that holds their attention. Today, on the contrary, brands appear as the natural vehicles by which luxury plays its primary role in postmodern consumption.
Secondly, each brand develops its own specific strategies, which do not necessarily cover the four sectors of our analytical scheme.
Figure 1.4 Positioning of the Definition of Luxury Given by Consumers
Finally, the study of de Barnier, Falcy, and Valette-Florence demonstrates the existence of a continuum of luxury with increasing intensity, from mass luxury to unaffordable luxury, via intermediary luxury.
The Semiotic Square of the Consumption Values
We briefly present a tool that will be described in more detail in Chapter 7. We anticipate its use because it can support some reasoning about luxury, especially with regard to the logics of consumer behavior, and thus refine our approach to a general definition of luxury.
This diagram is called a semiotic square. It is a way to present a group of contrary and contradictory concepts focusing on the manner in which they are opposed. These oppositions are dynamic, as the tension between the antagonists produces effects of meaning. (The same way as in an action movie where the opposition between “good” and “evil,” between the hero and his opponent, can be the engine of the plot.)
This is also true for the discourses on the motivations of luxury consumers. The diagram of consumption values was originally developed by Jean-Marie Floch to help in the design of a supermarket layout. It covers the distribution of the definitions we have outlined earlier and allows exploring the motives of consumption luxury.
It distinguishes four types of logic (Figure 1.5), which are some of the motivations of possible purchase and who oppose each other or contradict: the logic of need (“we have no more bread”); the logic of interest (“I already have enough coffee at home, but I want to take advantage of this promotion”); the logic of desire (“an exotic dish is a way to travel”); the logic of pleasure (“I am crazy about chocolate”). It goes without saying that a purchase can perfectly obey several logics at the same time, despite their apparent contradictions: I can choose to buy organic chocolate or premium pasta.
If we seek to classify the values associated with luxury in this distribution, we realize that the logics of desire and pleasure on the right side of the square will be the predominant engines. Hedonism is in the logic of pleasure activated by diversionary/aesthetic values; elitism is located on the top right vertex, with the mythical/utopian values. As we noted, luxury brands, even more than others, must make customers dream of possible worlds and provide experiences intense in emotions, dreams, and pleasure.
Figure 1.5 Semiotic Square of Consumption Values
But it is also possible to speak of “good deal luxury,” sacrificing, partially, the logic of interest. In recent years, websites specializing in “private sales” have been flourishing on the Internet, offering luxury brand products with heavy discounts.
In fact, the economic logics are not identical for true luxury brands and those of intermediate luxury. As its name indicates, intermediate—or accessible—luxury is defined precisely by its affordable price.
