The World Luxury Congress, an annual gathering of luxury and fashion executives from around the world, was held in London earlier this week and I was able to attend due to a kind invitation from Milton Pedraza, CEO of The Luxury Institute, who moderated a panel I participated in earlier this year. A formidable roster of speakers and panelists implored participants to take heed of three themes that came up time and time again during the conference: the need engage with customers as human beings, the lightening speed of luxury development in emerging markets, and the missed opportunity for luxury on Internet.
The conference had its ups and downs, but one of my personal highlights was the inspiring presentation given by Guy Salter, Deputy Chairman of the Walpole Group. He kicked-off the 2-day conference with an insightful look into the future of the luxury goods industry as we approach 2008. He, in particular, highlighted the industry’s failure to grasp the potential of the Internet, both as a tool to grow the top-line, but also to engage with customers in a conversation.
Guy then passed the Internet baton to Dee Salomon of Condenet, who ably demonstrated how Web 2.0 technologies can provide a conduit for that conversation to happen. This took on even more importance when Dee opened the participants’ eyes to a whole new world of powerful influencers on the Web, such as The Sartorialist. Your best customer, she said, might not be the one who buys the most, but rather the one who is the most influential. I guess this also means that your worst customer could also be the same person, depending on what they think of your brand. (Have a look at this article from the Wall Street Journal on the rise of influencer marketing at Nike — and you’ll know exactly how powerful these influencers can be.)
Later, Radha Chadha, a leading expert on the Asian luxury customer, wowed participants with a rapid-fire summary of her fascinating book, The Cult of the Luxury Brand. As she deftly switched from China to India to Japan, we learned about the differing motivations, desires and social psychologies of Asian consumers who already account for more than 50% of the world’s luxury market.
For example, did you know that at posh Indian weddings, one of the key drivers of luxury spending in India, it is de rigueur to use Louis Vuitton trunks to carry the bride’s trousseau? Or, that a large part of China’s luxury business relies on the gifts that International businessmen provide to their local Chinese mistresses?
The London Bureau Chief of China’s Phoenix Television, Celia Li, explained that reaching Chinese customers may be all the harder. Due to government restrictions, luxury advertising is not permitted on the television network.
This explains the extravagant runway show held by Fendi, part of LVMH, over the weekend at the Great Wall of China. While LVMH has been basking in the stellar results it posted for the third quarter of 2007, the company clearly has its eyes on the ball as the pole of luxury consumerism continues to shift Eastwards. According to Ms. Chadha, by 2014, China will be the world’s largest luxury goods market, outpacing Japan and the USA , who are number one and two today.