Monte Carlo, Monaco

MONTE CARLO, Monaco — The global luxury industry has descended on the luxurious and beautiful principality of Monaco to discuss the future of luxury at the Financial Times Business of Luxury Summit at a time when there seem to be far more questions than answers. I am delighted to be representing Luxury Society, which is an official media partner of the conference.

To start off the conference, we heard from Bernard Arnault, Chairman and Chief Executive of LVMH, who sounded an optimistic tone, but acknowledged that the luxury industry will never be the same as it has been in recent boom times. He also touched on the crucial importance of the internet, sustainable development and selective distribution (i.e. the ongoing battle with the EU over distribution of luxury goods online) in the coming years. You can get a taste of Mr. Arnault’s speech from this video on the FT site and this article by the FT’s Vanessa Friedman.

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LONDON, United Kingdom – By now, it is well known that Japan, Western Europe and North America are already well into recessionary mode, but emerging markets have not been spared either. In India, so the wisdom goes, people spend for occasions but during this year’s Diwali Festival, usually brisk sales of diamonds have stalled, as consumers tighten their belts. In China, at a major luxury goods fair in Shanghai, accessibly-priced merchandise moved, but the most pricey items sat on the shelf.

Perhaps more than ever before, luxury businesses need to seize new business opportunities in emerging markets, but the market context there is changing so fast, it is hard to keep up with it all.

James Ogilvy has convened a great set of speakers to provide their perspectives on the opportunities presented by emerging markets against the backdrop of global economic doom and gloom at the annual Luxury Briefing Conference. Sheikh Majed al-Sabah of Villa Moda, Chris Colfer of Dunhill, and Tyler Brule of Monocle are amongst the experts scheduled to speak.

I am honoured to have the opportunity to present my own points of view on “What work’s where?”, focusing on case studies from in India and China.

For tickets to the annual Luxury Briefing Conference, contact Luxury Briefing. For a complete agenda and further information, please click here.

Nokia 7900 Crystal Prism Phone

LONDON, United Kingdom – Something is in the air. Earlier this week, we received a mysterious package in the post from Nokia. Inside, we found a 7900 Crystal Prism phone, complete with a Sapphire crystal and engraved design by French graphic designer Frederique Daubal, who has previously collaborated with Paul Smith and Colette, the iconic Paris fashion concept boutique.

Not only this, the fashion and technology blogosphere has been abuzz about Tag Heuer’s branded mobile phone, priced to compete with the Vertu phones, at 3900 euros (or about $6000). Previously, other fashion brands including Prada, Armani, and Levis have launched mobile phones with much hype and fanfare.

To top it all off, I was recently invited to give a Keynote Speech at the ArcChart Handset Fashion and Style Congress in London later this month on, what else, The Business of Fashion.

So, is all this fashion phone buzz just PR hype, or is it something that fashion brands and mobile phone players should be seriously thinking about?

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Just digest these figures for a moment:

• Coach’s online business now has revenues of over $100m per year — the same as what Gucci’s new flagship on 5th Avenue is expected to sell.  Neiman Marcus has broken the $500m in sales barrier online.
• In the last year alone, wealthy consumers’ use of social networks such as Facebook and MySpace has rocketed from 27% to 60%, a growth rate of more than 120%.
• And, people are snapping up uber-luxe products online — DeBeers regularly sells single diamonds worth more than $25,000 on its ecommerce site and 20ltd.com has sold items worth twice this much.

These were amongst the most interesting tidbits revealed at this week’s Luxury Interactive conference held in London. The eCommerce opportunity has now become abundantly clear. Some quick math would suggest eCommerce is a very profitable channel indeed, especially when compared to a flagship store. The rent alone on the Gucci flagship in New York is estimated to be $23m, when an Internet retail site can still charge a full retail price, but with much lower fixed costs to cover. (However, returns and discounts are higher in the Internet channel.)

As for Web 2.0, finally, we’re beginning to see a shift from a discussion of "if" luxury brands can seize real opportunities for relationship building with their best customers on the Internet, to an exchange on "how" this can be done. Arguably, a brand’s Internet site is now the most important contact point for customers — especially for the customers of the future. One step brands may now take is to set up their own online communities, as we wrote about in a Financial Times article in February.

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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.

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