Luxury, like fashion, could be interpreted differently by different individuals. Luxury fundamentally revolves around experiences, and these experiences can be broadly categorized into two sub-heads: 1) an experience that can be facilitated by the wonderfully universal concept of monetization that enables transactions across categories, assets, services etc, and, 2) an experience that is currency-neutral.
Talking about the first, buying an experience originates from two needs. The first is a need to indulge and pamper self with the experiences that makes an individual feel good about self. Buying a expensive Louis Vuitton bag, a Corneliani suit, a special edition Lacoste polo shirt or driving around in a Lamborghini or getting a $1,000 spa treatment is about pampering self with finer things in life.
It’s about reassurance of having arrived and being able to indulge in fine tastes that are nurtured/acquired through constant refinement over time. Ironically, the second need is a psychological need to project an image. It is a need for a statement to associate with certain brands, certain groups and a certain class. To some dining at a certain place, traveling in a certain car or holidaying at a certain location is all about making that statement of belonging to a group.
Coming to the second category, luxury is about being comfortable with what one is and what one has. It is about freedom to do what one wants.
The sources of these diverse experiences could be driven, amongst many, through 1) product 2) services 3) technology 4) perception 5) freedom 6) emotion.
Products are tangible and provide experiences to a consumer to satisfy functional /emotional needs. The need to be seen with brands or with a group gives consumers a sense of indulgence and belongingness to an elite club.
Services are intangible and perishable. They do not have physical dimension to the experience. Services usually originate from the need to pamper self.
Technology is similar to a brand experience which comes not from a brand usage but from the technology that supports the brand. Driving a hi-end automobile – a Mustang or a Ferrari, watching a 4D movie at Disneyland or playing a game in the latest gaming console are all technological enabled experiences.
Product, service, technology and perception usually fall under the experiences money can buy whereas freedom and emotion fall under the experiences without a price tag. Luxury is about these experiences layered or bundled together to provide a cohesive personalised exclusive experience that affects at two levels 1) Sensory level 2) Functional level.
These two form the basis of luxury business and its consumption pattern. An individual gets affected at the sensory level across three parameters: product, environment and service.
For a luxury brand a marginal incremental product benefit comes from an exponentially high cost/investment. Inputs, detailing, processes, embellishments, designs and technology that goes into creating a small benefit is immense and separates the luxury products from the mass marketed ones. These benefits are sometimes difficult to feel at individual enabler level but do create an overall compelling feel.
The connoisseur of luxury products evaluate their purchase decision based on this benefit even though sometimes they are also not able to put a finger on that one enabler that causes the “Feel” because probably there are a few that act in consonance to bring out that feel.
Likewise the environment to sell luxury is different and needs a complete consistency delivered through control on individual detail of the same. Most important factor of the environment is the “Presence” of the point of sale. It is the physical manifestation of brand’s positioning and in the luxury business this is also a paradox: for a niche audience one requires large boutiques at the most prime locations whereas in a mid-size store in the suburbs is good enough for a premium brand.
Functional Level- All luxury products irrespective of their image and positioning stand for functional benefits and those benefits need to deliver a superior level of satisfaction. The functional benefit reassures the individual of his/her buying decision and continues to engage the customer in long term.
With India being the focus for most luxury makers it becomes important for brands to understand how the Indian consumer would react to these brands. Today an Indian consumer is getting introduced to luxury early in life; with overall upswing of economy, awareness & availability of brands and a shift in consumption/savings approach.
Last but rather critical parameter is the service level; for a luxury brand service levels have to be at par with international standards and image; any dissonance can deter brand’s perception and success. Though calibrating product and environment is relatively easy; it is extremely difficult to do the same with service levels.
To conclude this point luxury on sensory is like a quality fragrance and that there are many ingredients but it’s nearly impossible to point out just one.