Luxury Sector Research Articles

Innovative in-store ICT marketing solutions for an enhanced luxury shopping-experience

Over the last few years, the luxury retail sector has undergone a profound change. This can largely be linked to the relationship between new technologies and purchasing behaviour. The sector has moved from its elitist and aristocratic perception to the creation of innovative and digital experiences.The new challenge facing the luxury sector is how to reconcile the potential offered by technology while preserving the sense of exclusivity in brand names. In the meantime, however, it has a unique opportunity of forming new and lasting relationships with clients by focusing not only on the product but also on an in-store shopping experience making client participation ever more dynamic.This outlook makes it fundamentally important to create an immersive and satisfying in-store shopping experience. Digital innovations redefine interaction models between clients and brands. Buying a product is not enough; clients wish to engage in unique and immersive experiences that are authentic, exclusive - and easily shared online.This conceptual upheaval has seen the development of new solutions blending design, technology and storytelling into a revolutionary experience. It has become a combination of exclusivity and playful sharing, both in-store and at temporary installations.Some relevant case studies about digital experiences are described, related to brands Bulgari (multimedia fittings at New Curiosity Shop in Rome, Mirror Cube Experience at 2018 Design Week in Milan) and Acqua di Parma (interactive mirror in Milan and Rome stores).JEL codes: M30, M31

Founder succession and firm performance in the luxury industry

Top management succession may be a real threat to the long-term profitability of companies, in particular when it involves the founder whose name also identifies their brand and their products. This is extremely important in the luxury sector where loyalty, trust and the image of brands in consumers’ minds may be affected by the succession process, especially when the founder has no direct heir to ensure continuity of the family firm. Through an analysis of three case studies, as well as a questionnaire distributed to active consumers of luxury products, this study aims to understand whether and how a brand can successfully survive after the death of its founder and whether the purchasing behaviour of customers changes after a founder succession takes place. Our findings reveal that the lack of a clear and structured succession plan may significantly threaten the survival of companies. In addition, our evidence indicates that the purchasing intention of luxury consumers is linked more to the bond and the values that they share with the founder than to the quality of the goods purchased. Accordingly, our results provide insights and suggestions concerning the optimal approach to follow when companies with heirless founders are planning a succession and highlights that the success and the survival of such entities is linked to consumers’ perceptions of the extent to which there are continuity and alignment between the values of the founder and those of their successors.

A study on Indian fashion luxury retail market

The international luxury retail market is growing at a rapid pace in India. There is a massive amount of international brands, vying to introduce, develop and provide the luxury retail goods to the consumers in India. For this, they are attempting to develop effective and efficient distribution channels as well as marketing strategies to attract customers are not familiar with the luxury goods. The objectives of the study are firstly to evaluate the current performance of the luxury market in India. Secondly it aims to identify the opportunities available as well as the future scope of the luxury market. And lastly, the impact of GST and other government policies on the luxury retail market. The paper provides an understanding that there are enormous and untapped opportunities in the market and they are available only for the ones that are able to visualize the future trends and are able to re invent themselves in order to tackle the challenges. The study also brings out significant implications for both researchers and marketers. The rise of a confident consumer class, which is starting to experience premium and luxury brands, has become a symbol of an increasingly dynamic and vibrant luxury market that transcends India's ‘old money’. The luxury market in India is a market from Maharajas to Masses. They find the opulence of shops in five-star hotels and English speaking salespersons intimidating. Although the Indian Government's recent FDI policy for single brand retail is a step forward to develop the luxury sector, additionally fine modifications considering welfare of every stakeholder on fingers, is desired to facilitate the fluent entry of foreign luxury tags in India.

Applying machine learning to market analysis: Knowing your luxury consumer

Chinese consumer research in the luxury sector is the emphasis in the business research field. However, it can be cost-intensive or time-consuming to interpret big data from any research conducted in the field. In this paper, the researchers created a machine-learning model to help minimize those research barriers.This study analyzed Chinese luxury consumption behavior, while the Chinese contributed 33% of the global luxury market in 2018 and play as a growth engine in the luxury market (Bain & Company. 2019. https://www.bain.com/insights/whats-powering-chinas-market-for-luxury-goods/). The researchers interpreted this analysis using machine-learning algorithms through different sets of conditions and then proposed an understandable and highly accurate machine-learning model.Unlike traditional statistical methods, which rely on domain experts to create hand-crafted features, this paper proposes an unsupervised end-to-end model that can directly and accurately process questionnaire data without human intervention. This paper also demonstrates how to practically apply an automatic unsupervised analysis method (PCA) to find inferences in the big data, and helps interpret the implied meaning to the questions.

The Strategic Evolution of Fashion Flagship Stores

About thirty-five years ago the trend of investing in flagship stores in the fashion and luxury sectors started, and has not stopped even since the last economic crisis. Recently, flagship stores have expanded into new sectors. There is an increased interest in flagship stores; but until now, they have received little attention in academic research. Published papers are mainly related to the fields of luxury shopping and internationalization studies. 
 
 Nowadays, the term “flagship store” is ambiguous; it has different meanings. A flagship brand store is, in general terms, the most important, expensive, and representative store of the brand. It has to show the full range of products and services offered. Usually it is the largest store, in the most prestigious location, and adopts original store design solutions; they offer new facilities, and a very high service level. Moreover, flagship designers are famous and prestigious architects; (“Signature” architects, or “Archistars”) and the aim is to create iconic buildings. 
 
 The store design solutions are different from other mono-brand stores or franchisee outlets of the company. 
 
 Academic research until recent years has overlooked studying the trend of the main luxury and fashion international companies opening flagship stores; which are the most expensive type of retail stores to own, nevertheless a number of questions remain. The purposes of this paper are (1) to consider the evolution of the role of the main types of  flagship stores, (2) to establish whether flagship stores constitute a marketing innovation, (3) to discuss factors pushing firms to develop flagship stores and finally, (4) to assess implications for management. In order to answer to our research questions, the study adopts a qualitative approach, in the belief that this type of research is consistent with the research questions. Particularly, we adopted two research methods: interviews and cases studies. We collected interviews with store designers and entrepreneurs. Finally, some information was also collected from secondary sources such as web sites or company news. Our study provides relevant information for marketing managers considering the cost of investing in flagship stores. Vertical branding and new flagship brand stores are becoming increasingly widespread among different firms and sectors, and are bringing to the forefront a requirement for new skills. Particularly in the store design phase, where firms need to be able to take part in constructive dialogue with a wide variety of professional profiles like architects, internal designers, and visual merchandisers. They need a new approach to decoding and displaying the primary values of a brand through innovative store design solutions and sales points, which should be inspired by the communication and entertainment industries. Flagship brand stores should be designed and run to be unique unrepeatable places, able to enhance brand image and provide animation and entertainment value to the brand. Furthermore, flagship store success depends on the firm’s ability to integrate interdisciplinary issues and commercial and artistic-creative communication.

Consumers’ Attitude Toward Socially Responsible Consumerism in the Sustainable Fashion Market

The fashion industry is one of the most toxic industries, which has led luxury brands to get involved in their efforts to build a more sustainable fashion future. Although the current fashion industry has put efforts into introducing ethical and sustainable consumption, customers have displayed contradictory attitudes toward green products in the luxury sector. Specifically, customers have generally shown an interest in environmentally friendly apparel while many customers are also shown to be reluctant in purchasing sustainable fashion clothing. This study was aimed at analyzing key variables in regards to attitude towards sustainable fashion advertising for luxury brands. The results showed three statistically significant regression coefficients: Interdependent-self, independent-self, and perceived personal relevancy. In light of the previous discussion, this study also sheds more light into the construal-level influence based on the notion of self-construals on attitude toward sustainable fashion advertisement. Therefore, the results of this study provides empirical evidence for luxury fashion brands seeking to influence and increase green purchase behavior and this gives more insight into the decision making for luxury brand advertisement strategy.

Sustainable Luxury Marketing: A Synthesis and Research Agenda

AbstractSustainability has become a pervasive issue for the luxury sector, gaining traction with brand managers, scholars, policy‐makers, the media, and academia. The purpose of this paper is to examine the state of sustainable luxury research in marketing and consumer behaviour by critically reviewing and synthesizing the growing but fragmented body of scholarly work on sustainable‐luxury marketing. The paper critically assesses where, how and by whom research on sustainable luxury is being conducted, and it identifies gaps for future investigation. The paper reviews research published between 2007 and 2018 within major peer‐reviewed English‐language scholarly publications in business, marketing, ethics, fashion, food and tourism journals. The research is identified using the keywords sustainable luxury, green luxury, eco‐luxury and organic luxury. Three core themes emerge from this review: (1) consumer concerns and practices; (2) organizational concerns and practices; and (3) international and cross‐cultural issues. The review confirms that research on sustainable luxury is significantly underdeveloped. This paper provides the first critical and comprehensive assessment and categorization of the emergent literature streams on sustainable luxury. The authors argue for a broader, deeper and more critical research agenda on the relationship between sustainability and luxury. Potential avenues for future research on sustainable luxury are proposed, with calls for theoretical and cross‐cultural reflections that tackle broader systemic and institutional issues within the field.

The dark side of salesperson brand identification in the luxury sector: When brand orientation generates management issues and negative customer perception

While there is extensive literature on the positive impact of salesperson brand identification, we have little understanding about its negative effects in the luxury context where brand aura can generate deviant behavior. To investigate the negative consequences of salesperson brand identification in the luxury sector, we conducted qualitative studies, including observations and interviews with retail managers, salespeople and consumers. On the one hand and according to managers, salespeople with brand identification present high resistance to change and generate brand distortion. On the other hand, salespeople with brand identification, in particular those with low self-confidence or low brand seniority, develop a selling approach with strong brand centricity but little customer orientation. Regarding consumers, salespeople with brand identification may generate negative perceptions, particularly for those customers with brand and product expertise and those engaging in exclusive brand relationships.

The French Competition Authority Holds That Platform Bans Outside the Luxury Sector May Not Breach Competition

The decision handed down by the French Competition Authority in the Stihl case is one of the first online sale restraint cases decided by national competition authorities of EU Member States after the judgment the Court of Justice of the EU rendered in Coty Germany. Stihl is noteworthy because it clarifies some issues that were left unsettled by Coty Germany. Importantly, the French Competition Authority has ruled that the principles set out in Coty Germany as for the competition assessment of online sales ban applies beyond the luxury sector. It also held that, under certain circumstances, a supplier can legitimately prohibit distributors admitted to its selective distribution network from selling its products from third parties’ e-commerce platforms (platform bans).

Re-Thinking Luxury in the Museum Fashion Exhibition

Despite the ever-growing profit margins of the luxury sector, market saturation and the fashion cycle make it difficult for consumers to determine the value of, and for producers to imbue value in, luxurious fashions. However, there is a space where the individual can appraise the surplus value of rarefied and spectacular fashions without the ‘noise’ of commercial discourse. Under the right curatorial conditions, the museum exhibition shelters luxury fashion from the reification of the mercantile and allows the visitor to engage personally with the garments on display to create an anthropologically enriching experience, in the words of the contemporary German philosopher Lambert Wiesing. By engaging with the curatorial decisions in a number of recent fashion exhibitions at the Royal Ontario Museum, in Toronto, Canada; at the Metropolitan Museum of Art and the Whitney Museum, both in New York City; Fashion Space Gallery, in London, England; and the Musée Galliera, in Paris, France, this article proposes to analyse successful and unsuccessful experiences of museum fashion that allow the visitor to rethink luxury at a more personal and personally enriching level.

Peace of mind: The quintessential luxury

Abstract Phoenix-like the luxury sector renews itself, whether by innovation in design, or in response to social changes and consumer psychographics. It is an intriguing anomaly: enacting sustainability methodologies and practices like ‘slow make’ (production), low waste and careful garment care. But it excludes potential customers due to the price and availability of the product, which could be perceived as opposite to the perceived holistic inclusive tenets underpinning sustainability. International luxury fashion corporations and labels like Kering who own Gucci, Bottega Veneta, Saint Laurent, Alexander McQueen, Balenciaga, Brioni and Prada, have begun to refocus their priorities, and lead change with their published sustainability goals via reports and websites. Inherently luxury references the highest quality fabrication, design, make and service. Yet across the fashion industry, consumers are experiencing unease or cognitive dissonance, fuelled by media reporting ethical dilemmas. In the luxury end of the market understandably the client/customer will desire both the luxury product and the confidence of an ethical supply chain. Logically, with their established resources the luxury sectors’ interpretation of sustainability, responsibility and ethics could offer to their clients the quintessential luxury: peace of mind. In the past the sustainability discourse has been predominately located around fast fashion in middle and lower markets. Whether a recent addition, or a deeply embedded (previously unmarketed) inherent value, the ethical intent of a sustainable supply chain presents a strategic facet of future luxury. This article is a speculative analysis and overview of both the relationship and proximity of luxury and sustainability focusing on ethics. Specifically, applied ethics within the luxury sector (examined in 2016 and 2018) are one of the highly desirable outcomes: the peace of mind of their clients will be discussed. In the light of the Paris Agreement (2015) from COP 21 and the UK Modern Slavery Bill (2015), ethics are no longer only the playing field of the enlightened. It is timely, as there are changes to be mapped and lessons to be applied and methodologies to be modelled and shared. Undoubtedly, there is a potentiality for courageous concepts of ethics within luxury; thus it is vital to speculate and reflect on the future of ethics in the luxury sector.

Are Millennials a Global Cohort? Evidence from the Luxury Goods Sector

Abstract Objective: to investigate whether Millennials are internally consistent and distinguished cohort in terms of the perception of luxury Methodology: mixed: the international e-survey results, conducted in 5 different countries (Poland, Portugal, Turkey, Germany and Saudi Arabia, 1193 responses) and 4 FGI, conducted in the groups of younger and older Millennials in Poland and Portugal. Findings: Millennials demonstrate strong country–specific differences in evaluating luxury value drivers; from avowed hedonic status-seekers (mainly Saudi Arabians), through moderately enthusiastic luxury products admirers (Portuguese, Turkish, Polish) to stand-outs, individualists who contest the overall CVPL as represented mostly by Germans. The evaluation of luxury is not cohort specific but rather a matter of the family and material status strengthened by socio-cultural pressure. Value Added: Global consumption behavioral patterns regarding luxury are permeated by local cultural influences, but are not global cohorts’ specific, due to their internal cultural, age, income and family status diversity. Recommendations: Communication strategies in a luxury sector should be adjusted more to the country-specific and less to the specific needs of global cohorts.

The paradox of odd-even price in fashion luxury sector: Empirical evidence from an international direct observation of luxury stores

ABSTRACTPrice has always had a key role in the luxury fashion market, because high prices are linked to the uniqueness and the prestige of luxury products and brands. Because of this direct contribution of price to the luxury essence, scholars have partially neglected the possible existence of unintuitive and controversial pricing strategies followed by luxury firms. This article deals with this literature gap, particularly analyzing a specific pricing strategy that seems to be in contrast with the nature of luxury pricing: the odd-even price (OEP). With the direct observation of physical and digital store windows of 20 luxury brands, this research investigates the role of OEP in the fashion luxury sector. Particularly, this work examines the relationship between the OEP strategy and the luxury level of fashion brands considering both offline and online channels.

Maison Maille: making mustard aspirational to younger consumers

Synopsis This case introduces students to the heritage brand Maille. Dating back to 1747, this brand has managed to elevate the image of mustard from commodity to premium product, capitalizing on brand authenticity and adopting the codes and strategies of luxury brands. Present in supermarkets with a premium price positioning, Maille develops its image through creating an elaborate customer experience in its boutiques, as well as through a communication strategy based on storytelling. Yet, the core base of customers who identify as gourmets is aging. To sustain its development, Maille needs to gain appeal among younger generations of consumers, without betraying its identity. Research methodology The Maille brand manager was interviewed in relation to the case. Participant observation was conducted in the boutiques in Paris (both Place de la Madeleine and Caroussel du Louvre) and in London, followed by discussions with Maille sommeliers. Data were also gathered through secondary sources. The question “How to seduce younger consumers with mustard” was proposed by Unilever. Relevant courses and levels This case has been effectively used with MBA and MSc Marketing students in Brand Management classes to demonstrate how brands draw inspiration from the luxury sector to become aspirational, enhance their social prestige and position themselves at higher price points. Students must reflect on how to build on the brand’s current strengths in order to protect it from a decline in consumption and competitive threats. Based on this analysis of the current situation, students must decide on the value of Maille differentiation strategy to younger consumers and on which segments to target without harming the brand’s identity. The rejuvenation of heritage brands (or gaining appeal to younger generations of customers) is a major issue in many sectors, from luxury, to wine and spirits, to food. Theoretical bases The case fosters discussions on core marketing concepts such as heritage branding and brand authenticity as well as differentiation and premiumisation strategies, all concepts that should be developed when answering the assignment questions. Furthermore, students should choose between a segmentation based on demographics (age, generations), and a segmentation based on lifestyle and attitude toward food.

Social media marketing in luxury brands

PurposeDigital technologies and social media have improved the connectivity and collaboration between firms and customers in all sectors. However, in the luxury sector, the approach to social media and digital technologies has been slower than in other industries. The purpose of this paper is to review the academic literature on social media marketing in luxury brands to highlight the current state of the art, the addressed key research themes and the implications for management research and practice.Design/methodology/approachA systematic literature review of academic research on social media marketing has been conducted to gather, examine and synthetize studies related to luxury brands. By following a review protocol based on both automatic and manual search on the Scopus database, all relevant studies on luxury brands were identified and analyzed.FindingsA critical conceptualization of social media marketing in luxury brands has been provided and the emerging key research themes have been categorized into four main areas.Originality/valueAcademic literature about social media marketing activities in luxury firms is very limited and existing studies focus only on certain aspects, contexts or single cases. In contrast, the value of this study, for both academics and practitioners, lies in providing, for the first time, a comprehensive and critical systematization of social media marketing academic literature in the field of luxury brands.

To what extent luxury retailing can be smart?

The aim of this paper is to explore how luxury brands use new technologies in the context of smart retailing. Building on qualitative data from multiple cases from the luxury industry, our analysis reveals that this sector is conscious of the benefits of using smart technologies as marketing tools, while the effective use of these innovative systems is still limited. However, studies on innovation forces affecting the retail industry are still limited in luxury sectors. The study provides an empirical contribution to the emerging topic of smart retailing with an emphasis on the luxury sector through its in-depth investigation of the usage of smart technologies by the firms studied.

Snobbish Bandwagoners: Ambiguity of Luxury Goods’ Perception

Purpose: The article explores the grounds of possible interrelations of snob and bandwagon consumers’ inclinations in the luxury fashion sector. The reason to investigate this comes from the growth of inconsistent evidence among analyses of this subject. Consumers’ perception of luxury goods seems not only compound but also quite ambiguous at the same time. One of its reasons may be the wrong assumption that snob and bandwagon inclinations are opposite trends that cannot co-exist among individual motives of luxury purchases.

Digital Marketing Suggestions for Luxury Brands

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Designing a sustainable brand strategy for the fashion industry

Abstract Fashion is widely considered the second most destructive industry to the environment, with a global supply chain employing 58 million people worldwide. During the period of 2000–14, clothing production increased by 50 per cent, as fast-fashion evolved and the luxury sector ascended. Recently, a number of high-profile fashion designers are taking the decision to consciously depart from the constraints of the seasonal fashion calendar, enabling them to reconnect with the creative process, focusing on quality and customer experience. ‘With fashion there is too much fear, not enough time, and not enough love’ (Elbaz 2017). While sustainable fashion has often been considered a consumer-led movement, which brands have been pressured to act upon, it is important that businesses demonstrate social responsibility through a collaborative approach incorporating design, innovation, technology and communication to successfully create desirable sustainable products with integrity. With constant news updates as a result of technology and the overriding competitiveness of social media, brands need to design and launch unique products that attract attention. This article will explore the connection between sustainable design and brand identity in relation to the fashion industry. The article will identify economic and commercial business opportunities, incorporating how combining sustainable design principles with communicative story telling provides additional emotional value for both designer and consumer, and aligning brands with social and environmental issues that are directly related to the products they are selling.

Cross Cultural Consumers Perceptions of Country-of-Origin and Luxury Brands

Understanding consumer behavior in the luxury industry is important. The extant literature suggests that cross-cultural conditions reflect the existence of differences in behavior and perceptions of consumers. This research investigated the way consumers in different countries and cultures perceive the country-of-origin concept in the luxury sector and also their perception about luxury brands itself. The purpose of this research was to investigate how the perception of the country-of-origin concept and the concept of luxury brands differs across nations. The value of this research is to provide empirical evidence describing how the different perceptions of country-of-origin issues and luxury brands contribute in the development of the fashion luxury brands industry. This quantitative research utilized online questionnaires attended by 190 respondents distributed from June 2012 to July 2012. Questionnaires were distributed online to different nation groups. The findings of the research indicate two interesting outcomes. First, for the case of fashion luxury brands, there were no significant differences of perceptions among the nation group perceptions regarding the country-of-origin concept. Second, there were significant differences of perceptions among the different nation group perceptions regarding to the luxury brand concept.