Marketing & Strategy Innovation Blog

Bart Suichies: Luxury comes from exclusivity. Individualism equals exclusivity. So by definition, every time a brand gives room to consumers to express their individualism, it becomes an exclusive, luxurious good. This will lead to a future of consumers using their self-expression to get the luxury into pretty much any brand in their brandsphere.

Christian Briggs: If this is the case, then the current weak version of experience co-creation (which is still more like mass configuration at this point, despite its own protestations to the contrary) may give way to what I have been calling "deep co-creation," in which customers not only co-create the experience and some of the value, but the business itself (and, by extension the brand). And they will of course do this as a large, interconnected community. So in this changed world, a big part of people's meaning might come from co-creating a business and seeing it thrive.

Thanks everyone for these are great insights. So we all agreed that the very idea of 'luxury" has changed. What you buy is more important than what you earn. Luxury is not a goal anymore. For many, it has become a necessity, part of our daily experiences. Although the purchases are the same, motivations are different. While consumers are always eager to rationalize their luxury purchases, today they do so based on different value systems. Today's luxury drivers are rooted much more firmly in personal well-being and self-satisfaction while purchases such as jewelry, watches and handbags continue to satisfy the desire and to indulge one-self and one's loved ones.

Here are some further insights into luxury goods purchase behavior:

Real vs. Imaginary- Consumption sometimes operates at a level of the imaginary, but it also has real effects in facilitating the construction of self-identity. While luxury shoppers are led by rational desire to purchase items of high value and craftsmanship, eight of the ten top purchase motivators are emotionally driven. Marketers must tap into consumers' desires for well-being, self-concept and indulgence. The consumption of symbolic meaning, reinforced through advertising, provides the individual with the opportunity to construct, maintain and communicate identity and social meanings. Victoria Secrets is a great example of a marketer using the unobtainable, imaginary dreams of its consumers to drive sales. Beautiful and perfectly proportioned models strut down the runway and grace glitzy catalog pages to convey the notion that the company's products can enhance--or even instill such glamour. If Victoria's Secret products are worn by the beautiful, does the inverse also hold true? Will wearing them make one beautiful? Women scoop up the product for themselves and dazzling elegance will rub off the wearer. Ask this important question: What are your key target segments' wildest imaginations?

Material vs. the Symbolic After a product fulfills its ability to satisfy a physical need, we enter the realm of the symbolic, and it is symbolic meaning that is used in the search for the meaning of existence. We become consumers of "illusions". De Beers' slogan "A diamond is forever" has been so successful in creating the illusion of "love and eternity" that a diamond is the material symbol of love and marriage. For many, the gift of a diamond symbolizes eternal love, which in itself is an elusive concept (ok not all agree). Now marketers are trying to do the same with platinum. Ask this question: What illusions does your product help consumers to create or maintain?

Marketing of luxury goods is in the middle of a transformation. The individual must experience consumption as part of the journey towards personal development, achievement and self-creation. They are content to map their lives on a marketer's segmentation chart. Marketing of luxury goods is evolving away from a top-down approach towards one that provides or facilitates innovations for new ideas and meanings- empowered by Web 2.0. The co-creation of brand meanings through social networks and virtual interactions has become the basis for value. This, in fact, challenges the convention view of product-centric innovation. 

Some examples include a social networking site targeting affluent consumers under 35 years old launched a weeks ago. Squa.re, is a members-only site offering internet protocol TV and a focus on luxury. The company behind the start-up, Square Media Ventures, which describes itself as a Web 2.0 internet broadcaster, says Squa.re "aims to bridge the online gap in the luxury sector and the affluent 18 - 35-year-old professionals market". The founders Olivier Bassil and Jeremy Genin say that the site will "move one step beyond the MySpace and YouTube generation" and will go up against other select sites, such as aSmallWorld. Bassil adds: "Leveraging social networks is a powerful sales and marketing tool. We want to help luxury brands increase their awareness among an engaged and highly influential audience." They allow members to create their own online TV channels and showcase their lifestyles with like-minded individuals with user-generated and professional video content. See you guys there in your Dolce Gabana purple jacket!

Original Post:  http://mootee.typepad.com/innovation_playground/2007/09/the-transformat.html