[dropcap]O[/dropcap]ver 400 guests gathered at the Financial Times Luxury Business from May 30June 1, 2012 at the Four Seasons Hotel in Marrakech. There was a massive concentration of luxury executives, business consultants, brand experts, sales analysts. The summit’s theme this year was “The Lifestyle Revolution”. Previous summits were held in Las Vegas, Lausanne, Los Angeles, Monte Carlo, Shanghai, Tokyo and Venice. This eighth edition of the conference was chaired by FT editor Lionel Barber and brought together some of the biggest names in luxury to share their thoughts on the state of the luxury industry and forecasts for the future.
Speeches and discussions focused on the definition of lifestyle in terms of luxury, the effect of emerging markets on the brand extension, and global macroeconomic outlook. Lionel Barber, editor of the Financial Times, said: “The group of high-level speakers at the” FT Business of Luxury Summit “in Marrakech has made the event a huge success, and public reaction has been extremely positive. The role of new markets, electronic commerce and brand extensions, here are the questions that occupy most of the luxury business.
The guests enjoyed the luxurious surroundings of the Four Seasons Hotel during the welcome reception and the conference. The whole was followed by a reception and gala dinner at the newly built, Marrakech Selman.
Opening Keynote François-Henri Pinault: Where does Luxury end & Lifestyle begin?
Lifestyle evolution is underway in industry, fuelled by growth of emerging markets and exit of an elitist atmosphere.
1 of 3 key myths about lifestyle brands: they are not of 1 market segment and extend outside
A lifestyle brand is capable of embodying lifestyle relative to specific values of a community or tribe
This is not as natural for luxury brands to claim they are “lifestyle” as those from the sports sector
Luxury today is more a style than status symbol – for masses & the classes
Lifestyle is not always a criterion when it comes to PPR’s portfolio strategy – distinctive identity is more important
Lifestyle dimensions to brands open avenues for expansion, growth & product development
Lifestyle is an opportunity, although not necessarily for every brand
Post China, Indonesia, India and Brazil being eyed up as key growth sectors
Panel: Defining Lifestyle in Luxury Terms
Vanessa Friedman: Fashion Editor, Financial Times
Frédéric De Narp: President & CEO of Harry Winston Inc
Kevin Kleinmann: Advisor to Universal Music International and Professor of Arts Management & Cultural Policy at Sorbonne University
Gian Giacomo Ferraris: CEO Gianni Versace SpA
Aerin Lauder: Chairman & Creative Director Aerin and Style & Image Directors
Manfredi Ricca: Author and Managing Director Interbrand, Italy
Lifestyle goes way beyond a trend; why are we witnessing this ground breaking change in the industry asks Vanessa Friedman
Lifestyle is a euphemism for steering away from luxury – making a compromise as fashion becomes more democratized
Luxury has always been unique & at the centre of power – it is tribal. Lifestyle is a new tribe, but it destabilizes core values
Aerin Lauder says consumers want more from a brand than one dimensional product lines: «lifestyle is a modern way to shop”
“Exclusivity, engagement, emotion, and experience: the 4 E’s that define luxury & fuel relationship with music” says Kevin Kleinmann
Aerin saw huge gap in market for a personality centred around an individual’s lifestyle
“Social media is a key component to the online strategy of a lifestyle luxury brand” says Aerin
Kevin Kleinmann of Universal says that “Logos are outdated; luxury brands must diversify their use of mediums in this digital era”
64% of luxury consumers in Brazil are newcomers. 45 % in India. Surprise new market with growth potential? Canada is a surprising new market with 42% of growth potential.
Brazilians spend 78% of their contribution to luxury sector outside Brazil – mainly in New York, Miami and London.
Case studies in media and merchandising
Martha Stewart: Founder of Martha Stewart Living, Omni media
Ron Johnson: CEO of JC Penney.
“Lifestyle is a limitless and attractive business model” says Martha Stewart
Ron Johnson “We built Apple flagships because we had a big vision; but we also had to educate on how to integrate product into lifestyle”
Ron Johnson: “Market research will always lead you to the same conclusions; you have to think outside the box to flourish”
Media leads and merchandising follows says Martha Stewart
An experience will always be deeper than a transaction; says Ron Johnson “You need to make people feel they belong.”
Ron Johnson: “Retail experience shouldn’t focus on entertaining – should focus on engagement”
The Investment Cost of Lifestyle
Achim Berg: Partner at McKinsey & Company (expert in Apparel, Fashion, and Luxury Group).
Remo Ruffini : Chairman of Moncler
Sagra Maceira De Rosen: Investment Adviser, and Author “The Towering World of Jimmy Choo”
Christian Liaigre : Founder of Christian Liaigre Inc
Price point of your brand, regarding lifestyle integration, matters less than customer interaction, says Moncler, CEO Remo Ruffini
“Make your product the most functional and useful it can be” says Ruffini. Diversion from this results in much higher risks.
“Mirror of how society is working; collaboration is everywhere, hence rise in brand partnerships”, says Sagra Maciera de Rosen
“Post 2008, Luxury brands can gain from the losses of others in terms of commercial property and Market share”, says de Rosen
The Democratization of Luxury: A View from Emerging Market Economies
Richie Notar : CEO Nobu
Brett Gregory-Peake: Head of Strategic Services Adoreum Partners
Adil Douiri: Chairman Fenyadi
Saad Benabdallah: Managing Director The Moroccan Center for Trade Promotion
Lachen Haddad: Minister of Tourism Morocco
Tamara Mellon: President TMellon Enterprises
Armando Branchini: Executive Director Fondazione Altagamma
“Emerging markets are no longer the BRIC’s” says Vanessa Friedman, we need to look further afield – Africa& Indonesia new hotspots
Obstacles to emerging markets include high duty tariffs, locals buying elsewhere & education of craftsmen, says head of Altagamma
Tamara Mellon says education of the consumer is key; hard to build brand distinction. At jimmy choo she set up pop-up museums
Could the way forward be partnerships between Western luxury brands and local brands to create the right associations?
Non-traditional Luxury and Lifestyle
Luca Cordero Di Montezemelo, chairman of Ferrari
“Behind fantastic product there are fantastic people; your employees are key to success in the luxury industry” says Montezemolo
Ferrari has to be like a good looking woman – you see one and you are astonished! Montezemelo has charmen his audience.
I am not trying to sell you a car; I am selling you a dream – F1 is after all where we pioneer all our technology
“Fashion is not about trends, rather personality” says Montezemelo – we are seeing a shift away from red & yellow cars in favor of bespoke
Passion in Ferrari, innovation with his private equity group, risk with his train dream : Montezemelo has a true luxury visionary
Luca Cordero Di Montezemolo is sending his best young employees to Silicon Valley to go to Stanford/Google/Apple to see what people are up to elsewhere in other businesses.
Di Montezemolo created with his son a private equity fund specialized in investing in medium luxury companies (home + fashion).
He bought Poltrona frau : famous classic home furniture., Cassina modern home furniture and Cappellini Contemporary home furniture and created the Poltrona Frau Group. All these brands give particular attention to creativity, design and quality.
With the Ceo of Tod’s they created a fast train company on Italy: Italo.
25 modern trains painted in red Ferrari.
Luxury services, special attention to tourists: train tickets = Museum ticket, workers on the train speaks more than 2 languages.
18 million Euro spent on employees training.
The Emerging Market Effect
Tory Burch: CEO & Designer of Tory Burch
Thomas Tochtermann: Director at McKinsey & Company, where leads Apparel Fashion & Luxury Group.
Caroline Reyl: Senior Investment Manager, Pictet Asset Management
Perry Oosting: President of Vertu
Tochtermann: “Don’t rush into lifestyle. A brand must be ready. Make sure there is consistency in your communications across markets”.
Tory Burch : “I started with a vision of a global brand, not just a US brand with international stores. This has paid dividends”.
Tory Burch Spent 2 years studying the Chinese market before entering; decided against a partner. explosive sales of 100%
Tory Burch ”we have built our entire brand on our digital media strategy, be it Twitter, Facebook or e-commerce”
Fund manager Caroline Reyl: growth pace of overall industry depends on emerging market consumers & tourists.100M Chinese travelers by 2020
Tochtermann: 600 cities worldwide hold 50% of global GDP – cities will soon be counted as a luxury market unto themselves
Tory Burch, a latecomer to China was inevitable; in Brazil we are ahead of the game, particularly in securing real estate
Panel: Stocking the Market, from E-Commerce to the Flagship
Vanessa Friedman, Fashion Editor, Financial Times
Rodrigo Bazan: President of Alexander Wang
Claudio Del Vecchio: Chairman & CEO Brooks Brothers Group Inc
Hélène Dubrule: Managing Director, Hermés Maison & Ceo, Puiforcat
Ulrik Garde Due: President & CEO Georg Jensen.
Hélène Dubrule: “we keep our name as a single standing word rather than extra descriptive for our lifestyle brands. We are one label”.
Del Vecchio: “We may not be the most famous brand but we have a core club and following who come back again and again”.
Claudio Del Vecchio: “We see online as the department store space of the future”.
“Limited editions are becoming more and more important” says Georg Jensen CEO, Taps into demand for personalization
If you expand too quickly online, you increase risks to brand by putting pressure on supply chains, says Alexander Wang, CEO
Square footage must depend on the size & needs of the market. “There is no right size for a luxury store” says Claudio Del Vecchio.
Sidney Toledano, CEO of Dior for the closing speech.
“Luxury is a consequence of human potential; the result of performance beyond the ordinary, hence it’s resilience”, says Dior CEO
“When hiring executives at Dior I take applicants to the atelier and watch their eyes and reaction. If they aren’t excited then I won’t hire .We have built the Dior Academy where every salesperson goes to learn about our history and sales techniques”
“Without constraints &rules there can be no freedom for creativity”. Words of Christian Dior that Toledano looked to for guidance
“For all customers, if they come once a day or once a year, our approach is the same – each wants and will receive the best”.
You can watch all the conferences and keynotes on the Financial Time Website : https://www.ft-live.com/ft-events/ft-business-of-luxury-summit-2012/