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Luxury Is Ready for Lift-Off

By Nancy Jeffries, Contributing Editor | May 7, 2013

so say FGI panelists.

Prestige beauty brands continue to distinguish themselves in an increasingly competitive landscape, with best products and the most engaging experiences attracting today’s consumer. The key ways to sustain the relevance, cachet, and appeal of these brands was the subject of The Fashion Group International’s presentation, Beauty’s Luxury Lift-Off, held April 24, 2013, at New York’s Hilton Hotel.
Caroline Pieper-Vogt, board member, The Fashion Group International, Inc., introduced the theme of the event, thanking presenters and panelists, Greg Furman, president, Luxury Marketing Council, panel moderator; Laura McEwen, vice president and publisher, Self; Nancy Feetham, VP-sales, La Mer; Frederic Fekkai, brand architect/founder, Fekkai; Veronique Gabai-Pinsky, global brand president, Aramis and Designer Fragrances, Beauty Bank and IdeaBank, The Estée Lauder Companies Inc.; and Ava Huang, senior VP-fragrance and skin care marketing, Chanel. The event was sponsored by Self and The Estée Lauder Companies.
The Power of Beauty
Citing Cleopatra’s oils, Queen Esther’s myrrh and today’s arbiter of royal style, Kate Middleton, McEwen noted that beauty and in particular, luxury, are now poised to reach new heights.
“Whatever the culture, throughout history, women have gone to extraordinary lengths for their beauty,” she observed.
When consumers are ready for luxury, marketers will find a willing audience. There are 45 million Gen Xers with $125 billion in buying power, and 80 million Millennials, with $200 billion in buying power, who are leading the market forward.
“Children of affluent boomers and millennial college students are part of the millennial force. They want Dior mascara, hair done by Fekkai, and are generally eager for luxury products and treatments. They’re paying attention to their appearance constantly,” said McEwen, further noting that this includes beauty, makeup, eyelash extensions, exercise and going to the gym.
“While Millennials want to look their best, they are also buying mass, and they are not elitists, with all open to buying less expensive products. However, it’s all about the experience for them, which should be fun and consumer-centric,” she added. “Sephora is an example of how well it’s working, where there’s agnostic sales support, no pressure to buy specific brands, and the ability to try products,” noted McEwen.
Other influences key to spending for Millennials, are technology and social media.
“This generation is in tune with their devices, and they’re ‘showrooming,’ that is, they’re shopping in store and then going online to scout out the best deals,” said McEwen.
Although she noted that magazines are still No. 1 to get ideas for beauty, friends and social media, including Pinterest, are becoming a new retail channel.
“When individuals can pin and share images, it’s also a great channel for marketers.” She concluded, “Digital divas mesmerize millions, with all feeding the Millennial engine,” said McEwen, adding that technology will no doubt, continue to feed this process.
Luxury Lift-Off Takes Heart
According to Greg Furman, president, The Luxury Marketing Council, the sweet spot is really “working class” folks.
“That is the community the industry is talking about,” he insisted.
Furman that the strategy is more about referral from the customers, noting that if brands agree to collaborate, share and delight, consumers will respond.
“It’s from the heart first, then communicate and collaborate. This can be a way to refer and have consumers spend more. The ultimate client is redefining and becoming a partner in how to impact the growth of a brand,” said Furman.
He highlighted the themes to be addressed by the panel, including the definition of luxury, best brand success scenarios, the impact of global influence, thinking globally and acting globally, and the impact of social media.
Finding Customers
“The customer is extremely savvy today, so defining luxury is really about guiding the customer, being genuine with your customer to really help them feel and look beautiful is key,” said Frederic Fekkai.
He noted that the first Fekkai Day Spa and first beauty bar they created, new to the industry at the time, featured Bobbi Brown, as their makeup artist.
“We had a café as well,” said Fekkai, asking, “How does that translate today? Today we want to have a customer put a sensual, good-smelling product in her hair,” said Fekkai, highlighting the importance of the original message.
Furman agreed, noting, “One of the key things is authenticity, high touch.”
He cited a book, called Hug Your Customers, by Jack Mitchell, saying that it is important to be in touch with and delight your customers.
Gabai-Pinsky expanded on the concept of luxury, noting that the term must be defined.
“We refer to luxury as having the ‘Three C’ components; that is, craft, creativity, and culture. These letters epitomize what luxury is all about. It’s about offering the best to your customer, owning this craft, and then providing the creativity, which must answer the needs of the customer. You always have to surprise and delight,” she said.
According to Gabai-Pinsky, the culture of luxury has depth. She insisted that America invented lifestyle, and culture and patrimony are fundamental.
“Together, they are about experience, best service. If you’re not hugging and loving your customer all the time, you’re not going to get there,” she said
Ava Huang, Chanel, observed that luxury is constantly evolving everyone defines it in her own way.
She quoted Coco Chanel, adding, “Luxury is a necessity that starts where necessity ends,” and “Luxury is not the opposite of poverty, it’s the opposite of vulgarity.”
Huang insisted that it’s all very discrete.
“At Chanel, we very much believe in the patrimony of the brand,” she explained. “That’s where you create an emotional connection. For example, you feel the pleasure every day, when you pull that Chanel bag out of your closet.”
Furman concurred, noting, “The architecture of real value behind the product is key.”
Undeniable talent is at the heart of luxury, according to Feetham, who noted that a good company founder, such as Fekkai or Coco Chanel, creates a place where the brand created is always evolving. She insisted that amazing brands continue through time because they’ve been brave enough to incorporate change. This quality and sustainability are key.
“There was a time when bling was big, that has changed,” she insisted. “Then the home became more important. Then e-commerce emerged, became stronger, and engaged the consumer. This gave them permission to do their own homework, as well as gave them access to those famous red silk shoes that they couldn’t have before.”
Brand Stories
Fekkai related a scenario in which Fekkai had partnered with Saks to create a program in which customers could come to Saks and swap their shampoo for a Fekkai shampoo.
“This was a very popular program,” he said, adding, “Not only did the customers swap, but they were buying Fekkai products as well.”
Gabai-Pinsky described the success of Cashmere Mist, the Donna Karan fragrance, noting that they had put their resources into a sampling campaign, offered hand massages at point of sale, and saw the product grow from a top 30 fragrance to a top five.
Huang discussed the success of Coco Noir, the most recent Chanel launch. To elevate and create passion around the brand, she described how Chanel slowly revealed the notes of the scent, the packaging, the history, and the complete storytelling.
“We also installed a black box at Bloomingdale’s, where customers were taken through the journey of the scent, from its origins to the final product, where they could smell the fragrance at the journey’s conclusion.”
For Chanel No 5, they created a Chanel No 5 trolley in San Francisco, and featured historical elements of the product on the ride. Passengers got a ticket to ride the trolley, which they could redeem for a sample of Chanel.
“Every brand has to make a decision about its direction,” said Feetham, who described the introduction of the company’s La Mer Moisturizing Soft Cream, with a lighter texture than the original Crème de La Mer. “Did we want a product that could compete against Crème de la Mer? We decided to go ahead and launch the lighter-textured product,” she added, which has been successful for the brand.
Part of the brand’s success comes with its position in the market. La Mer cultivated cult followers, and partnered with Bergdorf, Saks, and Neiman’s to reach their customers, along with the beauty press.
“We took editors to Istanbul to learn about the journey, ingredient production, and the product,” she recalled. “Without the retail partnerships we wouldn’t have gotten the impact we got.”
Retailers made sure that the moisturizing soft cream was given key positioning in the stores and that was important to La Mer.
“The luxury customer likes nothing more than high touch. If the customer has the luxury of being listened to, that’s key,” concluded Feetham.
Thinking Globally
Going global can be amazing, but Fekkai warned that it is important to remain true to your brand in each market.
“For us, to develop a star product in each region is key,” she recalled. “For example, Scandinavian like shampoo and Western Europeans love treatment and in Hong Kong, we created a special protective product for anti-pollution.”
Regardless of geographic location, every message has to be key in each market, because the discourse is different everywhere.
“It’s important to show you understand your customer, to be genuine and not calculated, but sincere about bringing the best you can to each customer,” she warned. “Trust is most important. It’s what luxury is all about.”
Furman noted that the luxury experience involves careful consideration for customers. “Luxury is listening to the customer and being curatorial,” he said. Gabai-Pinsky added, “You are who you are. If you’re short with curly, dark hair you’re not going to turn yourself into a Swedish girl overnight.” There are differences that must be understood in all locales. She explained, “In Asia, it’s skin care. In Brazil, it’s fragrance and hair. In Asia, for example, in skin care, you have to understand physiological differences.”
Estée Lauder, for example, created Osiao, specifically for Asia. The skin care line, which contains ginseng, pennywort, and other Chinese herbs, is designed to promote natural radiance for the skin.
Chanel’s Huang agreed that local nuances and cultural differences are key.
“The skin care category in Asia poses different skin care needs. However, the important point is creating a cohesive voice, so the orchestration of the cohesive communication piece is critical,” said Huang.
Feetham noted that distribution plays a key role in the process. “Select distribution in luxury always goes hand in hand, and simple is always the best. But, simple is always the most difficult,” she said.
Brand Communication and the Internet
Fekkai stressed the role of the Internet in communication today.
“Social media is the most magic tool we have today. It’s also a way of thinking out of the box to have customers discover your brand, to share your world with them. When you have customers asking questions about their hair and beauty, we are able to provide a library of ideas for them to explore,” he said.
“Print, TV, and digital are all important, and you have to set that conversation,” said Gabai-Pinsky.  “Little by little the conversation grows between the customer and the brand. We offer a place to share that conversation,” she added. Furman added, “More brands and people are becoming more sensitive to the ways they are being solicited.”
Huang said, “The process has changed over time. It used to be about coming into the store. Today, 70% of customers do a search to learn about the brand and the product they are seeking. For true luxury, it is about scarcity and exclusivity, so it becomes, what information do you want to give to the masses? The reality of that dream isn’t for everyone, so you need to look at that.”
 “At Chanel, we developed a series of videos that tell the history of Chanel. It’s a beautiful story and it reinforces our brand. We have one video of Marilyn Monroe, who when asked what she wore to bed, replied, ‘No 5.’ There’s also a video of the little black jacket from Chanel,” said Huang, who noted that organic views of the Marilyn video were over five million.
“When you talk about your brand, it’s one thing, but, when consumers talk about and engage with your brand it’s fantastic,” said Feetham.
Furman agreed, “I love the fact that it’s a note of optimism on trusting your brand and customers on line.”
Strategizing and leveraging social events are also key to communication. Fekkai noted the role of customer participation in events held at the Fekkai salons. “More and more brands are leveraging locations, adding to the experiential understanding of the brand,” said Furman. Gabai-Pinsky added, “Events should give an experience and an education that really builds the equity of the brand; what really makes it special. The other thing an event does is celebrate a point in the life cycle of the brand.”
Huang concurred, “Event strategies are important. It’s an experience you are offering. As a color brand, we have events all the time. It’s an extension of the brand image. The quality of our events continues to improve and we convey the brand with the best makeup artists and presentation to convey the brand’s luxury. So, orchestration and flawless execution are also key.”
To sum up the symposium, Fuhrman noted that the luxury concept is sustainable, emotional and emphasizes craft, creativity, and culture, a cohesive voice and necessitates the inclusion of trust.

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