Luxury Talent Goes Big

Big3This Harvard Business Review post, “Luxury’s Talent Factories,” discusses how large luxury conglomerates such as LVMH, Kering and Richemont actually drive talent performance. Most management research would argue the opposite. It’s generally accepted that companies can increase their financial returns by focusing on core lines of business. Contrary to this evidence, the article states: “Diversification generally does not add value unless there are significant cost savings and operational synergies across units—which isn’t necessarily the case with all luxury groups.”

Diversification generally does not add value unless there are significant cost savings and operational synergies across units—which isn’t necessarily the case with all luxury groups.

According to the article, here are some of the reasons the “Big 3” are able to use their size to their business advantage in developing luxury talent:

Mobility – Diversification of internal brands means that employees who move from subsidiary to subsidiary bring a core set of brand values and skills. They are also better able to build their personal networks across multiple internal brands. The advantage to the enterprise is that they’re able to leverage talent when and where they need it.

Best practices – The organization can identify and transfer best practices across products, and gain the benefit of new perspectives at the same time. In one case, CRM talent from a fashion group was brought in to help build a CRM function for a watch brand.

International Experience – Cross-cultural exposure inspires creativity and provides exposure to a larger pool of manufacturers and suppliers.

Understanding the Global Customer – As technology and social media create a growing international marketplace, it’s imperative that brands understand how luxury customer expectations vary from country to country.

Although Europeans can explain to customers what luxury means, they also must have experience in foreign markets to understand which aspects of luxury the customers there actually care about. For example, in America consumers will buy watches for their functionality or performance, whereas in Asia it’s more about the prestige of the brand.

The three large luxury groups are able to leverage these advantages for the individual as well as for the enterprise. It only works, however, when the group is able to keep its brands relevant and continuously invests in developing premium talent.

Once Upon a Time: Telling Luxury’s Story

story“Only 19 percent of consumers believe sales associates have relevant information,” says Adam Silverman, principal analyst at Forrester Research, San Francisco. “That’s very shocking and that’s clearly an indicator that the sales associate role needs to change.”

One way in which you can change that role is to perfect the art of telling luxury’s story. A good story engages and excites the listener. Stories create emotions and those emotions, in turn, drive desire. We buy luxury items not because we need them, but because we desire them.

Continue reading “Once Upon a Time: Telling Luxury’s Story”

The Rarity of Platinum Service

platinumPlatinum is more expensive than gold because it is rarer. Similarly, a platinum level of service is more precious than the “gold standard” of service offered by most sales professionals. The Golden Rule states: “Treat other people as we would wish to be treated ourselves.” It is the rare sales professional, however, who knows and lives by the Platinum Rule: “Treat other people as they would wish to be treated.” The difference comes down to a small, but meaningful, change in perspective.

Continue reading “The Rarity of Platinum Service”

Finding Luxury Talent

interviewMy last post talked about educational institutions that now offer Luxury MBA degrees. This led to the question—what happens once you have such as degree? Interestingly, I just ran across an article from the Boston Consulting Group titled, “Minding the Talent Gap: Fashion and Luxury’s Greatest Challenge for the Next Decade.” The article reveals that luxury companies are struggling to find the right talent.  What a perfect time to evaluate whether those Luxury MBA programs provide the same skills and knowledge that luxury and fashion brands seek today. For example, needed skills at the executive level are: analytical and creative skills; retail, product, and brand expertise; and international experience. Continue reading “Finding Luxury Talent”

The Value of Luxury

auction-paddle-2Luxury has been defined as something that is pleasant to have or experience, but is not a necessity. The concepts of exclusivity and rarity can also factor into the definition of luxury. Value, on the other hand, is determined by the relation of price to perceived benefit. But if luxury is not a necessity, then how do we determine its value? Continue reading “The Value of Luxury”

Do You Expect the Same Level of Service Shopping a Luxury Brand Online as You Do in the Store?

BalenciaBagIn an article originally written for Retail Week, Martin Newman complains that he does not receive the same level of luxury service when purchasing an expensive Balenciaga handbag online as he would in the store. To be clear, Mr. Newman purchased the bag through fashion etailer Matches Fashion, which guaranteed him next-day delivery within a three-hour window. Mr. Newman wanted the handbag to be delivered within a one-hour window and felt he should be accommodated considering the price he was paying for the handbag. (I’m not sure who quickly he’d have received the bag if he’d purchased it at www.balenciaga.com directly.)

What are your thoughts? Do you feel you receive better service from a luxury brand when you visit the physical store than when you buy online? Please add your comments below.

Make sure your online customers are happy before you try to wow them.

online_shoppingIn Michiel Gasterlaand’s article “The Secret to Winning the Customer Service Battle in eCommerce” in Entrepeneur, he states that only 1% of web store customers feel their expectations are being met. Web stores are missing the opportunity to differentiate themselves through customer service. Gasterlaand writes:

Whether they realize it or not, web stores now are competing primarily on customer service. Apart from offering a great product for a great price, customer service clearly is the new battleground.

Continue reading “Make sure your online customers are happy before you try to wow them.”