Luxury Brand Management in Digital and Sustainable Times. Michel Chevalier

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.

      In addition to private sales, luxury brands are often interested in developing more affordable collections or products, capitalizing on their notoriety. It is an obviously perilous exercise because of the risk of disrepute. However, some brands have been very successful at it. For the past 10 years, the Ferrari brand has been developing license agreements for all kinds of derivative products in areas that are carefully kept away from its core business: watches, clothes, perfumes, computer equipment, entertainment parks in the Persian Gulf and China, and so on. Ferrari manages the unusual feat of flooding the market with caps or keychains bearing its name and color without altering its true luxury image.

More significant, perhaps, is the current trend that sees middle-market brands, born in general on the left side of the semiotic square of consumption values, developing to the right side, using the codes of behavior of traditional luxury brands in terms of communication, creation, and coherence in the management of brand identity (re)oriented toward luxury. It is a typical movement of mid-range leather-goods brands such as Furla, Longchamp, Coach, Lancel, and so on. Lew Frankfurt, former CEO of the American brand Coach, used to define his brand as “a democratized luxury brand.”¹⁸

      Certainly, today, to remain competitive, all brands must excel on all four vertices of the square of consumption values. But intermediate luxury is distinguished from true luxury by its presence on the economic vertex, that is, how it positions itself within the logic of interest. Where the real luxury is not afraid of its relative expensiveness, intermediary luxury seeks minimum cost and affordable prices.

True Luxury, Intermediate Luxury

      Historical and current definitions of luxury have been classified according to their receptive and productive dimensions; this has also been applied to the most common representations of consumers on luxury. Finally, some analytical instruments have been introduced.

      We have seen that mass brands have learned to manage their operations by adopting the rules of traditional luxury: they seek to be present on the four vertices of the semiotic square of consumption values.

      Therefore, what may differentiate a true luxury brand, in the sense that was intended 50 years ago, from a new entrant with a proper strategic understanding of the luxury industry and the talent to run an intermediate luxury positioning? One could mention longevity (the tradition, the legacy), but these criteria do not appear to have been taken into account, at least consciously, by the consumers interviewed for the study of the three scales. Are there other differentiating factors? How to distinguish, for example, Hermès from Bottega Veneta or Fendi?

We can invoke what Jean-Marie Floch calls “the refusal of an overall economic hegemony,”¹⁹ a brand attitude focusing on other values than the pure logic of profit. In other words, where intermediate luxury is seeking affordability, true luxury is going to position itself not as unaffordable but as foreign to the issue: the left side of the consumption square seems deserted. The stakes are elsewhere.

      Very high luxury brands cultivate this type of signal to their consumers when they guarantee their products for life (as Bally was still doing in 2000 for the men's shoe model Scribe that it was repairing when sent back to headquarters), or even when they try to suggest that there is no preferential treatment—that all their customers receive the same (exceptional) attention to service, regardless of their volume of purchases. Some very selective brands can even promote sales models based on cooptation, where purchasing power seem irrelevant, in appearance, at least. This is a way of saying “our demand for quality puts us above mercantile considerations.” This confirms the differentiating role of the critical/economy vertex of the consumption square for true luxury brands (Figure 1.5).

      In strict business logic, it is an irrational behavior and in fact it will naturally find its limits. But it is interesting to see that the brand claims it as a posture, that it makes it one of the keys of its identity. This is a major point of differentiation between true luxury and intermediate luxury: the latter cannot afford indifference, or even a hint of indifference, to economic imperatives. One can see also, in this somehow unnatural posture of a true luxury brand, a deviation that brings us back to the etymological sources of the word luxury. Luxury is an excess, a gap, a discontinuity, an eccentricity. It involves a shift from a norm, from a position retained as normal.

       Eccentric Luxury

      Let's position luxury as a differential with respect to a standard. Can the conditions of this eccentricity be specified? What norms or standards will real luxury brands break from?

      For Jean-Marie Floch, the foil is the natural mercantile attitude seeking the optimization of profits in the short term. In fact, anything that is driven by logics of mass markets should remain outside of the realm of luxury: Is the consumer not seeking there, precisely, signs of distinction?

A definition from Jean-Louis Dumas-Hermès (late chairman of Hermès), reported by Lallement, goes in the same direction: “luxury brand is one that manages to meet three conditions: designing beautiful objects; choosing the consumer as the best vector of communication; and finally, deciding freely.”²⁰ What a great formula! Beauty; clients as heralds of the brand; and, finally, freedom, where we meet again with the refusal of the overall economic logics.

      Designing beautiful objects is not the exclusive domain of luxury anymore (think of the design of Ikea, Conran, etc.), and the concept of beauty is subjective. Choosing