Discovering business opportunities

  Mr. Joffrey Chartier is a top professional with more than seven years of experience in the strategic management of premium and luxury brands. He set-up successfully new business directions and he managed to maximize the results on highly mature market of the premium cosmetics on the North America.

Thank you, Joffrey, for sharing your knowledge!

1. What will be the future of the luxury brands upon you? How they are evolving with the years?
 
I foresee certainly very bright future for the luxury brands for several reasons:
 
There are lots of developing countries that are aspiring to luxury. In countries such as Russia and China there is already a well-defined elite segment. In Russia and China the luxury consumption is a way higher than in the Western European countries or even in the USA. These consumers of premium brands inspire the rest of the population (lower segments),  whose purchasing power is getting gradually stronger with the years. As a consequence- the market segment of potential luxury consumers is growing bigger everyday in these countries and thus, worldwide.
 
In the countries with stronger economics, it’s the growth of niche brands that will be feeding the expansion of the luxury market, naturally followed by the trend of the differentiation: “I want something luxury, but I don’t want the same thing as my neighbor”.
In these countries, there’s also need for higher level of service with distinctive luxury appeal (such as travel, spas, concierge service…). This will additionally feed the growth of the luxury market.
 
And finally, the boom of the ultra luxury market will be another relay of growth in the years to come. The ultra rich are getting richer and more and more numerous, regardless of the crisis, and they need to find new outlets for their consumption behavior.

For example:
-         The standard of the high luxury yacht was around 60ft about 7 years ago. Today, it’s more in the vicinity of the 105ft (about the double) with an ongoing growth of the market of the super yacht (more than 300ft)
-         In private aviation, the high end used to be a Dassault or a Learjet while today, it’s not surprising to see private Boeing 737, 757 or even 747
-         In the car industry, 10 years ago, a “dream car” used to cost around 150K$ while today, it would be around 240K$
I feel pretty confident that all these elements combined together will definitely be a good base for a strong growth in the years to come.

2. How the customer-luxury brand relationship is changing?
 
It really depends on the country of the consumer: in developing countries, luxury consumers are still looking for the brands with the most well known appeal (such as Louis Vuitton accessories), while in countries with developed industries, consumers are into more exclusivity (Gossard bags).
 
The luxury consumers are getting upset when they see their new handbag at every street corner (not only because of the wider base of luxury consumption, but also providing the fact that there are a lot of imitations out there…)
This general tendency is observed: people are getting more interested in the personalized luxury as long as it makes their belonging more exclusive. 
 
3. The luxury brand image and “how I feel about” are they still the strongest sales tools?
 
There’s definitely a very strong link between the image, the status, and the appeal of the product.
 
Nevertheless, this could gradually work against some of the luxury brands if they get too massive while trying to make their brand more appealing to more people (Masstige= massive + prestige).
 
Obviously, this would mainly hurt a little percentage of the customer base, but they are also the base with the highest purchasing power…
 
4. Are the customers of luxury brands more loyal to them, compared to customers of middle and low priced brands?
 
Loyalty is key in the luxury market and it’s also part of the strategy of the luxury brands.
 
Thanks to a higher margin than the one of the low priced brands, the luxury brands can use a substantial part of their budget in building this loyalty, by constantly improving the CRM tools for example.
 
It’s a common belief that it’s more expensive to attract a customer than to keep one… Luxury brands are no exception to this rule and this is also why loyalty is so important in this market where margin allow them to “pamper” their customers so that they don’t go to another brand.
 
5. How do the model’s or actress’ personality impacts the luxury brand they advertise? (f.ex. Nicole Kidman for Channel No5, etc.) Why there are so many advertising with actresses nowadays?
 
The luxury market is inspirational per se.
 
Luxury buyers are not only looking for the beauty but also for the values that the possession of the object would convey.
 
In a highly competitive advertising business, an advertising page gets less and less seconds of attention from the reader who’s flipping thru the pages of magazines.
 
Advertising with actresses has the double advantage to:
-         Create the surprise of a well known face in an unusual environment, and then create a window of “attention opportunity”
-         Convey values: Indeed, while a model can be beautiful, an actress is known for something else than her beauty (her art, but also, her life values thanks to the ever growing interest that consumers have for people magazines and tabloids)
 
Therefore, electing the right actress for a TV or press campaign is a very efficient way both to attract attention and to rapidly transfer values, and preferably the ones of the brands we’re dealing with.

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