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Understanding Luxury Business-Industry Insight Series IV

May 16-2013   



On April 2, Langrun Garden, former CEO of Giorgio Armani (France) and COO of Ralph Lauren (Europe), Professor Denis Morisset gave a lecture to the BiMBA community on “Understanding Luxury Business and Its Cultural Foundations”. This was the second time he gave presentation at BiMBA after the 2012 Luxury Brand Tour Kick-off Lesson. Dr. Lee Zhang, Associate Dean of National School of Development and BiMBA, hosted the event.

Prof. Morisset began his lecture by tracing back the etymology of luxury, saying the term came from the Greek word Luxus, which was evocative of excess, profusion and extravaganza and deviated from the norm. Throughout history, luxury had become epitome of embellishment and progress but, on the other hand, also was deeply associated with decadency. The ambivalence of luxury had laid foundation for obstacles to its future development.

Different from real luxury products, the brands had transformed from the anecdotic to an established industry sector in less than 30 years. It was all because of the absorption of marketing and brand management into luxury brands to regain control of their international distribution integration and develop internal retail culture. The transformation of Jimmy Choo from a hand-made shoe store to a luxury brand best illustrated the evolution. “The industry is also undertaking new changes,” said he, who then elaborated four new trends he found in the luxury sector in recent few years.

“First trend is an accelerated shift from ownership to experience. “ According to a BCG report, experiential luxury section grows by 50 percent more than traditional luxury set in China. “We are moving from a world of owning to a world of being,” he said. Thus, the luxury industry was redefined by this shift to experience: Louis Vuitton remodeled the first cinema in Rome to associate itself with Roman history and memory, and is now building a modern mansion on an isolated island in Singapore.

The second trend was to return to absolute luxury and authenticity by highlighting the elite status and unique heritages.

The third trend was the shift of consumer values. Luxury values have been transforming from the “show-off” to values linked to pleasure, family, sharing and sense of purpose, especially for those born after the 1980s. “By owning luxury items, the younger generation is aspired to become connoisseurs. “

The fourth trend was the emerging luxury market. However, no matter what change the luxury industry undergo, the industry’s essence would not change—luxury brands cater to dreams and desires rather than needs.

Prof. Morisset continued to lecture on the differences between luxury brand management and FMCG brand management. They lied on the uniqueness and DNA/codes of luxury brands. Instead of positioning and comparison, luxury brands were more interested in emphasizing their unique brand identity and enforcing their specific codes. DNA, which decided the uniqueness and carries the heritage of luxury brands, would not cater to the consumers’ needs and neither be driven by their perception. In order to reinforce its unique image, luxury brands need to adopt its brand codes and adapt to socio-cultural evolutions. Seasons, ribbon, trees, orange suitcase? If the first term pop into your mind is Hermes, then its brand management must be successful, even if leaving out the important horse element.

From its origin, many were not born to be luxury brands in the first place, but has been influenced and shaped by the socio-cultural environment. Luxury brands could be said to be the witness and active involver in Europe between the 18th and 20th century. The French Revolution in 1789 started the democratization of the western societies as well as luxury. Luxury also started playing an important role in recreating social stratification. The Industrial Revolution and international trade greatly motivated people to travel, and suitcases became to boom. Women’s liberation movement and the emergence of individualism promoted innovations in the field of fashion. Consequently, the socio-political changes in Europe laid a firm foundation for the development of luxury.

After reviewing the luxury journey in Europe, the discussion moved back to Asian market. Luxury brands sales to Asia increased these years much faster than anywhere else and mainland Chinese consumers had been leading Asian luxury consumption. Wealthy Chinese tourists shopped abroad more and more looking for “luxury lifestyle experience and initiation”. They understood more about the brand history and the meaning, and paid attention to not only Western but also local luxury brands. Everyone smiled and agreed on this while the picture of Chinese President Xi and his wife appeared on the screen.

Followed was a hit discussion and Q&A part of the event, students and alumni interacted with professor and learned much. At the end of the lecture, Prof. Lee Zhang, on behalf of BiMBA, thanked the guest with BiMBA souvenir for his splendid speech.

Understanding Luxury Business-Industry Insight Series IV

May 16-2013   



On April 2, Langrun Garden, former CEO of Giorgio Armani (France) and COO of Ralph Lauren (Europe), Professor Denis Morisset gave a lecture to the BiMBA community on “Understanding Luxury Business and Its Cultural Foundations”. This was the second time he gave presentation at BiMBA after the 2012 Luxury Brand Tour Kick-off Lesson. Dr. Lee Zhang, Associate Dean of National School of Development and BiMBA, hosted the event.

Prof. Morisset began his lecture by tracing back the etymology of luxury, saying the term came from the Greek word Luxus, which was evocative of excess, profusion and extravaganza and deviated from the norm. Throughout history, luxury had become epitome of embellishment and progress but, on the other hand, also was deeply associated with decadency. The ambivalence of luxury had laid foundation for obstacles to its future development.

Different from real luxury products, the brands had transformed from the anecdotic to an established industry sector in less than 30 years. It was all because of the absorption of marketing and brand management into luxury brands to regain control of their international distribution integration and develop internal retail culture. The transformation of Jimmy Choo from a hand-made shoe store to a luxury brand best illustrated the evolution. “The industry is also undertaking new changes,” said he, who then elaborated four new trends he found in the luxury sector in recent few years.

“First trend is an accelerated shift from ownership to experience. “ According to a BCG report, experiential luxury section grows by 50 percent more than traditional luxury set in China. “We are moving from a world of owning to a world of being,” he said. Thus, the luxury industry was redefined by this shift to experience: Louis Vuitton remodeled the first cinema in Rome to associate itself with Roman history and memory, and is now building a modern mansion on an isolated island in Singapore.

The second trend was to return to absolute luxury and authenticity by highlighting the elite status and unique heritages.

The third trend was the shift of consumer values. Luxury values have been transforming from the “show-off” to values linked to pleasure, family, sharing and sense of purpose, especially for those born after the 1980s. “By owning luxury items, the younger generation is aspired to become connoisseurs. “

The fourth trend was the emerging luxury market. However, no matter what change the luxury industry undergo, the industry’s essence would not change—luxury brands cater to dreams and desires rather than needs.

Prof. Morisset continued to lecture on the differences between luxury brand management and FMCG brand management. They lied on the uniqueness and DNA/codes of luxury brands. Instead of positioning and comparison, luxury brands were more interested in emphasizing their unique brand identity and enforcing their specific codes. DNA, which decided the uniqueness and carries the heritage of luxury brands, would not cater to the consumers’ needs and neither be driven by their perception. In order to reinforce its unique image, luxury brands need to adopt its brand codes and adapt to socio-cultural evolutions. Seasons, ribbon, trees, orange suitcase? If the first term pop into your mind is Hermes, then its brand management must be successful, even if leaving out the important horse element.

From its origin, many were not born to be luxury brands in the first place, but has been influenced and shaped by the socio-cultural environment. Luxury brands could be said to be the witness and active involver in Europe between the 18th and 20th century. The French Revolution in 1789 started the democratization of the western societies as well as luxury. Luxury also started playing an important role in recreating social stratification. The Industrial Revolution and international trade greatly motivated people to travel, and suitcases became to boom. Women’s liberation movement and the emergence of individualism promoted innovations in the field of fashion. Consequently, the socio-political changes in Europe laid a firm foundation for the development of luxury.

After reviewing the luxury journey in Europe, the discussion moved back to Asian market. Luxury brands sales to Asia increased these years much faster than anywhere else and mainland Chinese consumers had been leading Asian luxury consumption. Wealthy Chinese tourists shopped abroad more and more looking for “luxury lifestyle experience and initiation”. They understood more about the brand history and the meaning, and paid attention to not only Western but also local luxury brands. Everyone smiled and agreed on this while the picture of Chinese President Xi and his wife appeared on the screen.

Followed was a hit discussion and Q&A part of the event, students and alumni interacted with professor and learned much. At the end of the lecture, Prof. Lee Zhang, on behalf of BiMBA, thanked the guest with BiMBA souvenir for his splendid speech.