Albatross at The Mystique of Luxury Brands Conference
Earlier this month, Albatross was delighted to join the emlyon business school and the Curtin Business School for their joint conference on “The Mystique of Luxury Brands”. Albatross appeared on a panel of industry leaders and academic experts discussing how fashion, watch, and jewelry brands can gain deeper insights into the values and desires of elite Chinese consumers.
The wide-ranging conversation began with a matter of definitions. Who are these “VVIP” consumers in China? Primarily they are senior executives or business owners and their families, Albatross said, pointing out that it is important to remember that people do not get and retain that kind of position without being quite sophisticated about their consumption. They get their information on brands from many different sources, but are ultimately quite independent in terms of what they choose to buy. Of course accumulating and communicating social capital is part of that, as it is for any affluent group, but Albatross noted that these consumers also place a lot of value on self-reward and enjoyment of their wealth.
“Increasingly, luxury for this group is about lifestyle and experiences as opposed to ostentation. They seek experiences. Earlier this year HHtravel launched a luxury travel package involving visits to 22 countries over the course of three months, from January 3 to March 22, 2017; all flights on business class. The package costs close to RMB 1.4 million and most of the places were sold within the first few days of the launch. Albatross’s own work reveals that China’s luxury consumers are experienced travellers, holidaying overseas twice or more every year. Closer to home, we can see that VVIPs value exclusivity in their experiences, and some brands have engaged them very effectively with private events and exhibitions.”
Albatross also argued that there is not necessarily a contradiction between using luxury brands to display social status and engaging with them for personal enjoyment. Among the elite, he pointed out, the personal is social and vice-versa. There has indeed been an evolution within the Chinese luxury consumer landscape, but it is not away from using luxury to express status, but rather a shift in how luxury expresses status. “[Today’s VVIP Chinese consumers] want to acquire knowledge about brands. Such knowledge is a social currency, because they love sharing their brand expertise and experience with each other. Hence, this new class of wealth-appreciators seeks to engage with brands personally and looks for meaningful relationships with them, unlike raw status-seekers, for whom possession of the products themselves is enough to symbolize success.”
From here the discussion shifted into how luxury brands can gain insights into these consumers and, critically, how they can tell good insights from bad. The moderator suggested that some of the research that comes out on affluent Chinese consumers is marred by cultural misunderstandings and biases. How can foreign brands seeking to learn about their target consumers ensure that the information they’re getting is accurate?
Here, Albatross reflected that, because buying luxury is driven by largely irrational and emotional considerations—no one chooses a luxury product purely for its functional features—it is important that research on luxury consumers grasp the full lifestyle of its subjects in order to properly situate its findings. “Understanding luxury requires more than simply asking questions,” he said. “It involves spending time with luxury consumers and talking about luxury in context – at the store, at their homes, in the places where they use luxury. Understanding luxury requires an immersive approach and a blend of techniques to ensure the insights extracted are both valid and relevant.”
Additionally, market segmentation is critical. There is no single way to reach Chinese luxury consumers, Albatross stated, because there is no one type of Chinese luxury consumer. “Not all consumers are driven by the same needs and motivations. Luxury brands must be able to identify their target consumers and then focus on that constituency without alienating other prospective groups. This will help luxury brands remain true to their values while also striking a healthy balance between exclusivity and accessibility.”
“Luxury brands need to develop positioning strategies attuned to the needs and motivations driving the Chinese consumers who buy their wares, or who they want to do so. This positioning, then, can inform communications strategies (including the choice of local brand ambassadors), product range decisions, and the scheduling of brand activities according to China’s ‘emotional calendar’.” All of these will differ according to the particular subset of affluent Chinese consumers the brand is targeting, but will make the difference between reaching them and reaching no one.
We would like to thank Klaus Heine and Michael Phan, of the emlyon business school, and Ian Phau and Richard Francis, of the Curtin Business School, for organizing this exciting event, and for inviting Albatross to participate.