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Welcome to Can the Marketing Podcast.
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I'm Ben from Human Digital, the B2B marketing agency.
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And I'm Steph from Q Marketing, making brands shine since ages ago.
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This week we're talking about luxury, where it came from, why it works, and why some of the biggest luxury brands in the world might be losing their shine.
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So whether you're dreaming of a Birkin, a pair of RM William boots, or just wondering why a plain black coat from the row costs five grand, this one's for you.
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Remember, we release a new episode every week, so make sure you hit that subscribe button.
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Happy Wednesday, Steph.
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Happy Wednesday, Ben.
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How's it going?
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Good, good.
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It is we're full swing into the year.
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I I think, you know, everyone is telling me that they're busy, which is great.
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Um, so yes, the year, the year is off if it wasn't already.
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Uh, what have you been doing this week?
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You're back in Auckland?
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Yeah, I was just thinking about that actually.
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One of the things that really seems to have ramped up in the last seven days for me is I've just noticed all of the networking events are happening now.
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So it's like people have come out of that um that quiet period in the end of January, they've come back from their holidays, they've kind of cleared the decks, and all of a sudden March is filling up.
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I'm seeing so many like marketing opportunities, business meetups, etc., all happening in March.
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So yeah, that I mean it just hit the ground running, right?
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I love it.
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And I'm loving this power suit you've got on today.
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This is really it's really cute.
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It matches my power pants that I bought at Sarah when I was overseas in Australia.
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I love it.
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It's such a good look.
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There we go.
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Um, so what have I been doing?
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I came back from Australia really late on Thursday and um promptly did nothing for the rest of the weekend, just kind of enjoyed the last of the summer sun and went up to Tafra Nui and hang out at the beach.
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But unfortunately, I think all of that travel made me sick, and so that knocked me for six.
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So I'm feeling all right now, but it was a pretty rough three days this week.
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So, you know, that's that's so it's been pretty, pretty quiet at my end.
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Um, I am on that that topic of networking.
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I'm heading off to my first actually inspired by you then.
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Uh yeah.
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My first LinkedIn local event tonight.
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Nice.
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What can I expect?
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Uh brilliant.
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It it's such a great event.
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It is basically Imagine LinkedIn but in person.
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Which is hence the power suit, right?
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I'm like, right.
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Exactly.
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I love it.
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I'm gonna look like my profile photo.
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So yes, yeah.
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Well, I should have worn my stripy top, but anyway.
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Um, yeah, so that'll be exciting.
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Um, I'm looking forward to to going.
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It's a three-hour event, which is actually a long time to make contact with people.
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Well, you don't have to be there for the whole thing.
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But they sir they have a great uh range of wine, like the ticket price is worth it, you know.
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Great wine, great food.
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Yeah, and all of the people that jump into your comments are there in person.
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I think it's just such a good com such a good format.
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Really good.
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And and a speaker as well.
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The speaker will be really good.
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It's Alicia McKay, and I don't know if you're familiar with her, but she's awesome.
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She's got such she's a wonderful writer.
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I follow her Substack actually.
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I'm really and that's one of the reasons I'm going.
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I'm really interested to hear what she has to say.
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But um, I was on.
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Maybe get her on the pod.
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No, yeah, we could.
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Um I was overheard this afternoon as I was deep in GL coding and spreadsheets going, I really feel like a glass of rose in the sun.
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So maybe this is my opportunity.
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Yeah, I don't think there'll be any sun because it's inside, but there I did have a delicious rose last time.
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So I think you're in luck.
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Brilliant.
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Okay, now what's happening in Bensfield?
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You have not had a quiet week.
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No, uh, so I was in Sydney over the weekend uh visiting a friend who was visiting from London uh and did Mardi Gras, which was amazing.
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Uh, I've done many Mardi Gras.
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This one was good.
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Didn't actually physically go to the parade, but we watched it from the TV in the hotel room.
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You must be getting old, surely.
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I am old.
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I am old.
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And uh but the highlight was definitely I went to a uh a party and Mel C from the Spice Girls was the DJ.
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Oh my god, that's amazing.
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Did you fanboy over her?
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How did you yeah?
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Fan boy girls.
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Uh they themed all over Mel C.
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It was it was really good.
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It was a lot of fun.
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Uh yeah, so that was good.
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I also did a little bit of culture over the weekend, so I went to the Museum of New South Wales and saw the Ron Muick exhibit.
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So Ron is a he's Australian artist.
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Um so he was born in uh 1958 in Melbourne, and he's based now in the UK.
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But he essentially makes hyper-realistic sculptures of people and animals with amazing detail like skin, hair, pores, like it's but his work also uh alters scale, so figures are either much larger larger or much smaller.
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Uh and it his themes explore human emotion and experience, so birth, death, vulnerability, isolation, relationships.
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Um deep if you're deep after Mardi Gras.
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It is.
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I mean I mean it was a good juxtaposition.
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But if you're in Sydney, definitely check it out.
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I think it's on for a little while.
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Okay.
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Um there's uh so he has that hyper-realistic kind of people sculptures, but then he also has these massive collection of fighting dogs that are probably like four times the size of a person, uh, really confronting it.
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So definitely, definitely check that out if you're in Sydney.
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And yeah, and uh what's in the news?
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Oh, I do have a show and tell as well.
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So part of the research for our last episode on nostalgia, I did go into McDonald's uh to get one of the friends boxes.
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So this is this is the little package that comes inside.
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It's not a blind box because I was looking at I was actually trying to figure out who that who that was.
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Yeah, but it's not immediately obvious, is it?
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Like it's it's not uh in fact, none of them are really that obvious.
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I mean, they all kind of look very generic.
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They're a bit um miffy kind of style.
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They are they're cute, they're cutesy.
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Um but yeah, plastic, fantastic, and so this is um the Rachel, which I think I mean, she's definitely my favourite female friends character.
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I mean, I I do uh I relate to all of the friends characters.
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There's a bit of every character in me.
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I've got questions.
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This it doesn't even look like any of the friends characters.
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So have they collaborated with an artist or something?
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There's got to be something behind this where there's they've collaborated.
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It's in the case.
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Let me look at this small print.
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It says uh it's made in China, no surprises there.
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Um Yeah, no.
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Uh maybe maybe we need to look into it.
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I did like kind of like they they wrap it in the little burger wrapper, which is quite cute.
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That is a cute yeah.
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I mean, no one would ever accuse us of being investigative journalists, I have to say.
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And and the I love this box.
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They've got a little central perk thing and little duckies and monkeys.
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I I think it's I think it's cute.
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That it wasn't obvious who this character was, but um, yeah, it is.
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I I did some research and I found it is Um Just very quickly, what did you have to buy to qualify to get?
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Was it like was it like a combo?
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Yeah, so there's two combos.
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I wasn't really in the mood for a Big Mac, so I got the um McNugget meal.
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So it was McDougats uh with uh fries and a drink and a character, and it was from memory about just over$15.
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Okay.
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All right.
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Yep, cool.
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I mean look, I'm pleased, I'm so pleased that you've I mean you've quite good at this picking up one for the team and really.
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I do love it.
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You do follow through on a purchase, actually, I have to say.
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I do like it.
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And also our uh our podcast editor, Bruna, also purchased one and she commented on the LinkedIn post already.
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Um so she got Chandler.
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Uh so yeah.
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Uh very fun, very fun little bit of um nostalgia there.
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Nice.
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Well well done, Ben.
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Okay, and okay, let's go to the news segment.
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What have we got today?
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Yeah, what's happening in the news?
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What's happening in your news?
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Well, my I like to report on what I see out in the market, and I is actually really nice segue leading on from the McDonald's chat.
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So I don't know if this is just a LinkedIn echo chamber as as the world that we live in, but this new McDonald's campaign that has come out that it doesn't have the logo and just has nuggets and just has the word word as like the it's have you seen it?
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It's out of home.
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Oh, it's amazing.
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So it's just it's just literally a red uh out of home screen with the words chicken nuggets, and then that's it, and that's literally in the McDonald's colours, and there's no logo.
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And so that is the epitome, it's a bit like you must have done the Snickers case study at some stage around distinctive brand assets and how you can take the Snickers logo away and people will still recognise it.
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But this was this is the epitome of anyone who's doing large-scale advertising where you don't even need your logo and and people get the message.
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So it's and it's all in my feed, and like and then I partly wonder if the normal normal people in the public actually care, but um I thought it was really exciting.
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I think they do.
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I I I love when logos are excluded and you can still realise the brand.
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That that is a key sign that your brand is strong.
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Absolutely.
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Obviously, it's chicken mick nuggets, so you've still got the the mic in there.
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I mean I'm paraphrasing.
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You know what I mean?
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It's brilliant.
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And then another campaign news.
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Um outward bound have got had an again, motion sickness do it again, Ben.
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So it's we're gonna we're going into award season.
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Motion sickness have created a brand new campaign for outward bound.
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Now, it's really interesting.
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It's um I can't remember the tagline, I'll have to bring it up.
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Something around unless your weapon it's become a weapon.
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Ah, weapon.
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Yeah.
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I I saw that and I was like, oh, in this day and age, but hey.
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It's really interesting because I looked at it and I and it's immediately impactful, but I tell you what, it's not necessarily is it doesn't immediately look like outward bound.
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Now outward bound's previous advertising is all very much, you know, obviously in the outdoors and and it's located in the Malk Sounds and it's a beautiful location.
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This is so different.
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And I actually I sort of commented on Sam's post and said, I'm really interested to understand what the brief for that was because it is we've just gone from McDonald's being consistently distinctive and using their assets.
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Outward bound has gone what appears to be really campaign driven and not remotely like the experience that you will have.
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So I think that's it looks quite urban.
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It it when I say it, I think like urban jungle kind of yeah.
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I mean, there's people with I think I've seen face paint on them, or like kind of they're kind of like almost like in a in a military type setting.
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I understand the idea I'm gonna say that I think the idea behind this is you become the best version of yourself, like you become a weapon at whatever, you know, at certain things as a result of doing outward bound, as you say, interesting territory.
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Yeah, especially in in the the time that we're in at the moment.
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Yeah, exactly.
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But it's making an impact and it's and it's having a conversation.
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So we're we're chatting about it, you know, New Zealand's most most listened to new marketing podcast.
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Yes, we are.
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Okay, give us the actual news.
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Is is do we have anything in AI today?
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Well, the I don't have any AI news, but uh heart off the heels of the Australian Open, we have the next big event for Australia, which is the F1 in Melbourne, which is happening this weekend uh and or last weekend, if you're you're listening to this when it goes live.
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So the Melbourne F1 race draws hundreds of thousands of spectators over about four days.
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Um, half a million uh are they thus saying is the audience.
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Um and why it matters for brands, I mean, high concentration, global customers, strong international TV and streaming.
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You know, the there's a lot of brand activations.
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So so many opportunities.
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So you've got experiential marketing and on-site activations.
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Um, you know, it's kind of like that whole festival in the park thing with food and entertainment and interactive zones around Albert Park.
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You've got inter immersive brand experiences, so lifestyle lounges, car displays, gaming arenas.
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Um, you've got premium hospitality and B2B networking.
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So there's a lot of corporate boxes there, VIP suites, paddock club access, branded lounges, executive guests experiences.
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You've got broadcaster media integration, uh, you've got a lot of big Australian and global advertisers, you've got track side and event branding, you've got team and driver partnerships, you've got cultural and influencer marketing, you've got citywide brand activation, you've got content and social media, technology and innovation, and you know, it is a smorgasbord of marketing.
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And a lot of money.
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Like that there is some serious cash.
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Serious cash.
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And I would actually say that the F1 is probably more accessible potentially than the AO.
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Controversially, I think more so the AO, I think, skews to more your your super high-end, where car racing is a little bit more, let's say, blue collar, but a little bit more wider.
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Like I I think there's part of Australia that just think the tennis is not not for them.
00:13:10.639 --> 00:13:14.080
So yeah, you're you're skewing it into a different audience uh as well.
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I like your take on that.
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That's very that's thought provoking.
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I wouldn't have thought about it like that, but I like your take on it.
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Um I have a an incredibly random and unrelated fact about the F1 and Albanies, which will come as no surprise.
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Would you like to hear that?
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Oh yeah?
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Let us let us have it.
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One of the um one of my team members lives in Albert Park.
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She's locked in for five days, can't leave, can't get out of her, can't get out of her apartment.
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Oh my god.
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Wow.
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That's what I'm saying.
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She must be able to walk out, but she can't drive.
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I imagine she I imagine she I actually didn't ask, but she's like, I'm not coming into the office, I can't leave the apartment for five days.
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Because I get I mean it kind of makes sense, right?
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Because it's on actual roads and so they build you out.
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So um, there you go.
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That's my f fun random patch.
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Brilliant.
00:13:55.360 --> 00:14:01.919
So speaking of lots of brands advertising at high-end events, this week, what are we talking about?
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Oh, this is this I mean, I feel like this is your time to shine.
00:14:04.799 --> 00:14:05.759
Luxury marketing.
00:14:06.320 --> 00:14:08.639
This is I mean, this is so up your alley.
00:14:08.720 --> 00:14:10.879
I'm very excited to hear what you have to say about this.
00:14:11.200 --> 00:14:16.639
Yes, so so luxury I think let's let's take everyone back.
00:14:17.279 --> 00:14:20.720
So luxury, let's talk about the origin of luxury.
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What is it?
00:14:21.679 --> 00:14:22.080
Luxury.
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It actually didn't begin with logos, it began with power.
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So historically, luxury goods were reserved for royalty and uh the aristocrats, and there were laws in Europe that regulated who could even wear certain fabrics or colours.
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So silk, fur, gold, embroidery, they were symbols of social hierarchy.
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And modern luxury as we know it today emerged in the 19th century in France and Italy, which is why a lot of these mainstay brands are French and Italian.
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I think Louis Vuitton, Gucci, etc., where craftsmanship became commercialized.
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And Louis Vuitton began as a trunk maker for the Parisian elites.
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And Hermès started with saddlery for European nobility.
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And so the brands were built on craft mastery, like actually making really high quality products, scarcity, social signalling, and heritage.
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So luxury has always been about distinction.
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Uh, it's simply not expensive, it's exclusive, cultural, and symbolic.
00:15:31.759 --> 00:15:40.240
And this is really interesting, and you're right, about the um I I think a lot of luxury brands, what they have in common is the ability to they've got heritage.
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And so truly luxurious brands have got a very strong heritage that they lean into, which leads into, I mean, it's in doing the research for this episode, it's a really interesting one because harder for more modern brands to they can be premium, but not necessarily luxury, you know.
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Like I feel like there's a there's a just it's I it would be hard you can build a luxury brand, but it will take time because you've got to have that, like you say, that that exclusivity element to it.
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It does take time, but you can build in exclusivity.
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And I think one example of a modern luxury brand is the Row.
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Um so the Row is uh a clothing brand, essentially, and it is created on the basis of Scarcity, and it was created by uh Kate, uh Mary Kate and Ashley Olsen in 2006.
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Oh yeah.
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It it looks like the opposite of modern fashion marketing, no logos, no big influencer campaigns, no obvious branding.
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So it's kind of like you have to be in the in-crowd to know what it is because you know and that's how they drive that that core philosophy of luxury.
00:16:51.919 --> 00:16:55.759
So it's it's it's so essentially it's exceptional materials.
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I mean, that that's kind of questionable, restrained design and extreme attention to detail.
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Yeah, and also and the fact that you just can't get it.
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So by its very nature, so I mean, I this is such the that's the complete opposite end of the scale to FMCG, whereby um it's you uh you're very much holding back your supply to create the excess demand and people going on wait lists.
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So the so your marketing strategy and your go-to-market strategy is completely different.
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It's exclusive, it's so yeah, high touch and invitation.
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So it breaks the traditional economic model.
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So if we go back to economics and supply and demand, most products follow a normal demand curve.
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So as price increases, demand decreases, not with luxury.
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So luxury behaves differently.
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So as the price increases, desirability can actually increase, and the price itself signals that status.
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Um, so the the economics of luxury are built on high margins.
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So gross margins in luxury fashion can exceed 70%.
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However, though a lot of budget then is spent on marketing, and that that's why I think luxury is such a a great place for marketers, because you get these big, big budgets, you get celebrities, you get, you know, these luxury shoots, you know, and in exotic places.
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Um the other uh foundations of luxury marketing is controlled distribution.
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So limited availability, maintaining that pricing power.
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I mean, I'm sure you've heard the stories of um luxury brands that that will burn and shred clothes rather than selling them at a discount.
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Absolutely.
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And that's exactly right.
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They just take them out, take them out of the market um so that they absolutely so they're not giving the wrong perception.
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I yeah, it's it's horrific from a sustainability perspective, but I can absolutely understand why.
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Yeah.
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The next one is brand equity over product utility.
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So obviously it it the foundation was that utility, but you're not buying the leather, you're buying that belonging, that aspiration, and that identity and that artificial scarcity.
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I mean, the the classic is the Birkham bag.
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So Urmaz doesn't simply sell a Birkham bag it w with all the bigger.
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You have to be chosen.
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You have to be chosen, you ja have to jump through hoops.
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Yeah.
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So the model only works if desire consistently exceeds availability.
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And so it doesn't you can't just go into the market and you know launch a$50,000 bag.
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You know, you you actually have to have that desire first.
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So that's a hard thing.
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And that's why it's hard for new brands to to launch into luxury.
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Which which is why the power of and so like let's let's take that lens of in like the use of an influencer, right?
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So particularly in the one, I think a lot of when we talk about luxury marketing, a lot of that does fall into fashion, although there is there are luxury cars, etc.
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as well.
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But you're very much your positioning play.
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So you can't it's almost like you can't be the one to tell everyone how amazing your brand is.
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You actually need other people's endorsement because it's the it's the pe it's the the level of influence with the right people wearing your product or driving your car or wearing your watch, um, sends a message to everybody else.
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You know, so I think that that's I mean, I'm I'm sort of laughing at the moment thinking about um royalty and how they used to be hugely.
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Well, they were they are the original influencers.
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Like if you think about it, influencer marketing is not new, you know.
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No royal royalty used to be the influencers, then it was movie stars, then it was, you know, sports people.
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So like a lot of things that have happened in the world, the celebrity has been democratized through social media and and the internet.
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And again, so this is where things can go really, really wrong.
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You choose the like uh nowadays, luxury houses would be distancing themselves from certain members of the royal family, for example, because it switched the other way.
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Like they've become you know, the economic conditions and um society's expectations have changed.
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So you it's constantly reimagining and reimagining where that influence is going to come from over time because the people who may have been influential and aspirational 30 years ago with and if I'm a luxury brand, I need to be thinking about where where am I going next?
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Who am I speaking to?
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And so I thought it would be fun to apply the four P's, uh, because this is a great way to explain it.
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Uh and since we recently did the four Ps.
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So let's quickly run through how the four P's apply to luxury.
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Okay.
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So they they still apply, uh and and I would argue it's feasible.
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So for and for product, this is is kind of the obvious one.
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So the product isn't just the product, it is the product uh being the story.
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So it's story plus craftsmanship.
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And so it must signal quality without explanation.
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It's details, it's materials, it's uh provenance.
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So luxury products often timeless rather than trend led.
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So, you know, you've got your your key luxury staples, it's meticulously finished and it's backed.
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By heritage narratives.
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So, you know, we were worn by worn by French royalty.
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Well, the Queen, we were chosen by the Queen.
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You know, you've got the whole thing of that seal of, you know, we supplied the the British monarchy, etc.
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Exclusively.
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And yeah, and uh an artisan made, you know, by the same family in Italy and uh yeah, it's all of the storytelling.
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But but today we're seeing a tension now.
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So some of these luxury houses have overstanded, overextended themselves into entry-level products, so perfumes, key rings, canvas lines, where everything is branded, and that is actually weakening their brand.
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Michael Cause is a good example of this, right?
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Because I feel like at one stage Michael Cause was extremely premium and the overlicensing of that brand and the advent of large outlet stores, and let's not forget about counterfeiting, which we can get to.
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But you know, that it's almost like you're you're right, you've you've broken the code of luxury, which is don't make yourself so readily available and I would say Michael Cause was never luxury.
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I think they they tried to be, yeah, definitely premium.
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Um and and there is uh there is a pyramid uh which is your brand pyramid that has the different layers of luxury.
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Um I think m um you know the top is like Urmes and L V, and there's some other ones, but yeah, we'll we'll see if we can share it.
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But the next P is price, uh, and luxury pricing is essentially strategic theatre.
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So the price reinforces positioning, discounting destroys the mystique.
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And one of my favorite uh ab fab scenes is where uh they run that fashion shop and basically um harass people if they ask for the price and and shoe them out of the store.
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So that and and there have been a lot of influencers doing um campaigns where they will dress in a certain way and get turned away from the luxury store, kind of like um uh Julia Roberts uh in Oh Pretty Woman.
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Pretty woman.
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So that the kind of playing out that thing and that you know they get turned away from Louis Vuitton and then they come back dressed, you know, head to toe in designer clothes and walk in.
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And I'm like, I'm not of course.
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You know, what do you expect?
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And so, you know, brands like there are some modern luxury brands.
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I would I would say RM Williams, maybe not luxury, but definitely premium.
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They don't discount, you know, they protect their long-term brand equity.
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You know, the boots, the boots basically stay the same.
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Um, you know, they're not bringing out they they do bring out seasonal and different leathers, and I think they've done some crocodile things, but you know, the the problem now is this pricing fatigue and post-pandemic price hikes have outpaced the perceived value and customers are asking harder questions.
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And when quality doesn't rise with that price, yeah, people get they they get resentment against these brands.
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And rightly so.
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And I think, you know, and often what you'll see in in luxury marketing is this there is no price displayed or it's price on application.
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It very much is by invitation only.
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Yeah.
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So let's talk about prior uh place.
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So distribution is discipline, and luxury historically relied on flagship stores and prestigious locations.
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So Fifth Ev, uh, yeah, we know where they are.
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These are high-ticket real estate.
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Uh they are premium, they are showrooms, and direct control is critical.
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So no wholesaling and no outlet stores.
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Uh, but now we're seeing attention here too, because digital is democratizing access.
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It's giving price transparency, which we just talked about, and luxury is available online, on resale platforms, on Instagram, and accessibility accessibility drives volume, but it erodes that exclusivity.
00:25:58.480 --> 00:26:07.119
Just as a side note to that, and this is not a luxury brand that I've got in mind here, but the um it's a New Zealand brand called Ruby in fashion, and so it's not luxury, but a similar concept.
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They discovered that there are a lot of their loyal customers, which of which luxury um brands would have, reselling.
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There was a this really hot market for people to resell Ruby clothing online, and so it's and which is unusual in a fashion brand because you know, often once you wear it, you don't like a seasonally it might be out of fashion.
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But they've just since they there was so much groundswell in the community of people selling secondhand Ruby clothing that they've now created that they've they've gone and did an official re and that you can actually buy in their store not only new products but re-worn and re-loved.
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And so they've that's amazing.
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Yeah, really.
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I thought that was really cool.
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So it's like kind of the people have spoken and they could see a a need for it.
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And instead of just letting that go, they've turned that into another space in their store and they're managing um secondhand, you know, how amazing is that.
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I would love to see more brands doing that to do and and you know, tastefully restoring like if RM's had, you know, pre-love boots, you know.
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I'm sure people will be all over that.
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And it's a great opportunity for them for to earn margin twice on a product and not send stuff to landfill.
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Brilliant.
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Absolutely.
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And and the other thing too, if you think about luxury handbags in particular, there's a huge ongoing market for that.
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Like sometimes the the brands live, they do, they've they they live on for far longer outside of that single sale.
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Um, and there's instances Birkin's a really great example where an old style, an a pre-loved old style of a of a luxury item is sometimes more valuable than a new one.
00:27:34.079 --> 00:27:35.039
So 100%.
00:27:36.720 --> 00:27:39.279
So then finally, final P is promotion.
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So luxury marketing, surprise, surprise, is not performance marketing.
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It is storytelling slash myth building.
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So it uses cultural association, celebrity and influence, art direction over product demonstration, and long-term brand storytelling.
00:27:56.880 --> 00:28:00.480
So it it it averts it avoids overt selling.
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So it's you know, it's not about you know, buy it now, buy now buttons.
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It's it's like it it dangles it in front of you.
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Yeah, and and it's so and the the channels are so different, right?
00:28:12.319 --> 00:28:23.359
Because you're you're you're really investing in like if you are somebody who is a regular purchaser of a loo of Louis Vuitton, like if you if you are a high value customer, you get customized attention.
00:28:23.519 --> 00:28:30.720
You get sent flowers on your birthday, you get handwritten notes, you get invited to special, unique individual experiences.
00:28:30.960 --> 00:28:32.880
Probably get invited to the F1 event.
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Mm-hmm.
00:28:33.680 --> 00:28:34.400
Exactly.
00:28:34.640 --> 00:28:42.559
But um I think, however, many luxury brands have embraced social media and influencer saturation.
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And again, it's diluting that whole mystique and exclusivity.
00:28:48.799 --> 00:28:51.759
So luxury brands are actually struggling.
00:28:51.920 --> 00:28:54.160
So many luxury houses are under pressure.
00:28:54.319 --> 00:28:55.759
There there is a few key factors.
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Number one is overexpansion.
00:28:57.920 --> 00:29:05.119
So a lot of them grew really hard in China and the US, and they led aggressive store rollouts and price inflation.
00:29:05.279 --> 00:29:14.960
Um, there's been a slowdown in aspirational consumers, so that middle-tier luxury buyer is pulling back amongst the continued cost of living pressures.
00:29:15.920 --> 00:29:21.039
Overexposure, oh my God, logos everywhere and products became too common.
00:29:21.680 --> 00:29:39.599
Fair to say, Ben, wasn't there a huge expansion for some of these brands with as as as China, China's wealth grew, so exponentially did their desire to have so a sign, a sign of um uh uh you know, external validation of wealth was to have own a luxury brand.
00:29:39.680 --> 00:29:49.359
And that there was a period of time there where China was it was still it was booming, but it as it was exponentially growing and more and more people were becoming wealthy, they were investing in luxury brands.
00:29:49.519 --> 00:29:55.359
Um but are you saying that that that maybe that growth has slowed down now and that's that's because it was definitely slowed down.
00:29:55.599 --> 00:29:55.920
Yeah.
00:29:56.160 --> 00:29:56.480
Yeah.
00:29:56.640 --> 00:29:58.559
And then you've got resale transparency.
00:29:58.720 --> 00:30:03.599
So um platforms like the Real Real um expose the true market value.
00:30:03.680 --> 00:30:08.079
And when when resale prices drop, perceived value drops as well.
00:30:08.240 --> 00:30:18.160
So again, if you've got that oversaturated resale market, people look because uh some people buy these items to actually resell them or kind of buy them as assets.
00:30:18.240 --> 00:30:20.160
They like never actually use them.
00:30:20.240 --> 00:30:24.960
Uh they just keep them on the shelf and then you know resell them at some later time.
00:30:25.599 --> 00:30:27.680
Um, and then you've got a generational shift.
00:30:27.759 --> 00:30:35.759
So Gen Z values experiences, individuality, sustainability, and flashy status symbols are much less appealing.
00:30:36.000 --> 00:30:41.440
And some brands are seeing declining sales, rising inventory, and discounting creeping back in.
00:30:41.599 --> 00:30:43.839
So through especially through back channels.
00:30:44.079 --> 00:30:50.480
So yeah, uh, luxury cannot behave like mass to expect and expect to remain luxury.
00:30:50.559 --> 00:30:50.960
It doesn't work.
00:30:51.200 --> 00:31:03.759
I always find this a r really interesting, and I've always wondered, and I don't have the answer to it, is what do you do if you are sitting in the Gucci head office or the Louis Vuitton head office, and you're like, we've I mean, they'll have sales targets just like everybody else.
00:31:03.920 --> 00:31:05.200
And so what do they do?
00:31:05.279 --> 00:31:11.279
Because because normally um in broad mass marketing, it is how do we get light buyers penetration?
00:31:11.359 --> 00:31:14.079
It's like how do we get people, more people to buy our brand?
00:31:14.240 --> 00:31:16.079
Well, but that's not the luxury recipe.
00:31:16.720 --> 00:31:24.880
So the light the luxury the luxury recipe is is a revenue model, yes, but not a not achieved through volume.
00:31:25.119 --> 00:31:26.960
It it's achieved through scarcity.
00:31:27.119 --> 00:31:29.519
And and essentially it isn't the typical model.
00:31:29.599 --> 00:31:34.319
And I think that's the problem that they're facing, is that they're trying to chase this growth.
00:31:34.400 --> 00:31:40.079
And typically that becomes that happens when you sell to a VC firm or someone like that.
00:31:40.319 --> 00:31:46.079
So a lot of these original brands, you know, they came from very wealthy families, they were privately owned.
00:31:46.240 --> 00:31:47.599
Some of them are still privately owned.
00:31:47.680 --> 00:31:47.839
Yeah.
00:31:48.079 --> 00:31:55.680
And those ones typically will protect the brand at all cost over it hitting some sales target or number.
00:31:55.839 --> 00:32:01.359
As soon as that changes and and you move to a more commercial model, it changes.
00:32:01.440 --> 00:32:06.559
It changes from let's let's remain a heritage luxury brand, and that's number one.
00:32:06.720 --> 00:32:12.559
And it flips to let's uh extract maximum value out of these assets.
00:32:12.880 --> 00:32:15.119
And then you're quickly burning it down to the ground.
00:32:15.359 --> 00:32:21.279
Did you know that Mark Richon was a cons has been a consultant to LMV, L VMH for a period of time?
00:32:21.440 --> 00:32:22.400
Were you aware of that?
00:32:23.039 --> 00:32:34.720
And even brand even these luxury brands, I think, and I think this is this is really interesting because you always assume that that they've got they're there, you know, they've been around for such a long time that they know their market and they know what they're doing.
00:32:35.039 --> 00:32:39.680
And he's often talked about that desire to how do you how do you grow a heritage?
00:32:40.000 --> 00:32:48.319
Sometimes you're whilst uh having that strong heritage is part of your DNA and that is what is making you that have that positioning in the market.
00:32:48.640 --> 00:32:59.920
I think inside the business, he's talked about going, well, that also presents a challenge because how do we take our heritage and and if the market's moving in a certain way, how do we make sure that we're driving relevancy?
00:33:00.000 --> 00:33:04.720
Because it's still about you know, you've still got to recruit people, whether you're a luxury brand or you're a physical brand.
00:33:05.039 --> 00:33:08.000
You still have to get people into the brand and how to do it.
00:33:08.160 --> 00:33:33.279
So I think it's in some cases we've seen some of these brands internationally, not not necessarily LBH, but um really like kind of losing their way a little bit, maybe kind of in the nineties and early 2000s, and like they're pizza you get different designers in particular in fashion, and all of a sudden the brand takes a bit of a sideways turn and and and is completely ignoring its heritage and doing something completely different.
00:33:33.440 --> 00:33:36.240
I think Gucci's gone through some real highs and lows.
00:33:36.559 --> 00:33:37.519
It has, yeah.
00:33:37.759 --> 00:33:41.920
And I think what is happening here is luxury is changing.
00:33:42.160 --> 00:33:44.720
So there it's evolving in several ways.
00:33:44.799 --> 00:33:49.200
So the first one is quiet luxury, and we already already talked about the row.
00:33:49.519 --> 00:33:52.799
So this is kind of like a a logo list refinement.
00:33:53.200 --> 00:33:58.079
You know, the the the wannabe brands plaster their logo everywhere.
00:33:58.480 --> 00:34:04.400
You know, the quiet quiet luxury is you have to be in in in the in group to know.
00:34:04.559 --> 00:34:09.199
And this is understated wealth signaling, so very minimalist.
00:34:09.440 --> 00:34:14.480
Then you've got experience over ownership, and a lot of luxury brands are now leading into experience.
00:34:14.559 --> 00:34:17.840
And I think you know, the F1, the Australian Open is key to this.
00:34:17.920 --> 00:34:25.920
So this is luxury travel, dining, hospitality, these activations where you can buy a Louis Vuitton ice cream.
00:34:26.000 --> 00:34:30.239
You know, it this is some it you have to be there to consume it.
00:34:30.400 --> 00:34:33.360
You share it on social, it might be invite only.
00:34:33.519 --> 00:34:39.760
You know, people want to attend Fashion Week, which used to just be the buyers of these fashion items.
00:34:39.920 --> 00:34:45.840
All of a sudden, Fashion Week, everyone wants to go along and be front row on the fashion show.
00:34:46.079 --> 00:34:49.039
Then the next one is sustainability as status.
00:34:49.119 --> 00:34:57.840
So you've got traceable materials, ethical production, crafts, craftsmanship, longevity, kind of that repairing and reusing.
00:34:57.920 --> 00:35:26.639
Uh, and then finally hyperpersonalization, that bespoke service, uh private clienteling, you know, you're customizing that product so that it you really have uh one of a kind piece from you know either because you're buying actually uh a a custom a custom design, which might cost a lot, or you're adding your own trinkets or embellishments to it and and making it yours and unique.
00:35:26.960 --> 00:35:33.039
So it it's shifting from that visible consumption to more of a insider knowledge.
00:35:33.280 --> 00:35:34.079
Um I love that.
00:35:34.159 --> 00:35:40.960
And I think it is so inherently true in luxury where it is a little bit of you you've got to be in the club to really understand.
00:35:41.039 --> 00:35:54.800
Like it is so like there's a um there was a really great uh scene in um and I can't remember where it was from, but where someone turned up to a party and her and someone sort of side sidelined and said her handbag's too big, she still can't be it.
00:35:55.119 --> 00:36:04.400
Like if you walk into a luxury event and you've got a handbag that can hold everything, you very clearly aren't wealthy because rich people don't need a whole lot of stuff to carry around.
00:36:04.480 --> 00:36:06.000
They have these tiny little handbags.
00:36:06.239 --> 00:36:14.400
And that was the kind of the premise of the skit going, oh you know, we can tell that she doesn't fit in because her handbag's the wrong size, let alone being the right brand.
00:36:14.559 --> 00:36:22.800
So there's some I think there's a whole lot of unwritten rules that you can easily um wander straight into in this in this world of luxury.
00:36:23.119 --> 00:36:26.320
And so Australia and New Zealand do have some great luxury brands.
00:36:26.400 --> 00:36:29.679
I think there's maybe a bit of an argument whether they're luxury or premium.
00:36:30.079 --> 00:36:37.440
Um, but some of the the Australian ones, which we have already talked about, RM Williams, you know, built on heritage and durability.
00:36:37.519 --> 00:36:43.920
Um the boot is an icon, you know, they have strong control of distribution and protected pricing.
00:36:44.079 --> 00:36:47.679
Um, you've got ASOP, um's design.
00:36:47.840 --> 00:36:48.400
I love it.
00:36:48.559 --> 00:36:52.079
High price point, controlled retail environments, stunning.
00:36:52.159 --> 00:36:55.280
Uh masterclass and premium positioning.
00:36:55.519 --> 00:37:05.119
Uh and Paspali, so they do luxury pearls, uh, heritage storytelling rooted in Australian waters, gorgeous.
00:37:05.360 --> 00:37:09.119
Uh New Zealand has some great ones as well, probably more on the fashion side.
00:37:09.199 --> 00:37:19.440
So we've got Zambezi, uh Avant Garde design, strong creative identity, Karen Walker, uh global recognition, really distinctive.
00:37:19.599 --> 00:37:21.679
Uh Deadly Ponies, which is a new one.
00:37:22.000 --> 00:37:24.000
You can never get Deadly Ponies on special.
00:37:24.159 --> 00:37:26.800
I'll have I'll give you that much, and it's gotten a lot more expensive.
00:37:26.960 --> 00:37:30.639
So, yes, I think that 100% is a status symbol in New Zealand done wonderfully.
00:37:31.119 --> 00:37:33.920
Leather craftsmanship, premium positioning, really good.
00:37:34.079 --> 00:37:40.239
Um, so yeah, you know, the luxury New Zealand and Australian brands often lead into that craftsmanship.
00:37:40.320 --> 00:37:54.400
Uh, the nature side, so obviously both countries known for their beautiful outdoors, uh, and understated confidence, which you would argue is actually the recipe for new luxury uh rather than that overt wealth signaling.
00:37:54.639 --> 00:37:59.760
Um and on top of that, you've also got the fall of the luxury department store.
00:37:59.920 --> 00:38:07.119
And I think you know, we've seen Smith and Chloe's, Smith ⁇ Chowie a great heritage luxury luxury brand.
00:38:07.280 --> 00:38:10.400
These department stores were temples of aspiration.
00:38:10.559 --> 00:38:15.760
So Harrod's Selfridge's David Jones, Smith ⁇ Coey's, like some of them still exist.
00:38:15.920 --> 00:38:27.119
Um, but you know, they curated these press prestige brands under one roof and they controlled that that essentially how those brands show showed up.
00:38:27.280 --> 00:38:32.239
Um I actually recently went to Harrods and they have done a remodel and it is amazing.
00:38:32.480 --> 00:38:32.880
Is it?
00:38:33.039 --> 00:38:33.760
Absolutely amazing.
00:38:34.079 --> 00:38:35.760
But it's very experiential.
00:38:36.239 --> 00:38:42.559
Yeah, they so Harrods kind of used to be a bit, I would say a little bit tacky and a little bit kind of weird.
00:38:42.800 --> 00:38:46.079
Their glow-up, they have spent so much money on that spot.
00:38:46.159 --> 00:38:47.280
It it is gorgeous.
00:38:47.440 --> 00:38:48.960
You have to go if you're in London.
00:38:49.199 --> 00:38:53.119
Um but yeah, they so it and now they they have to level up.
00:38:53.199 --> 00:38:57.440
Like otherwise, because you can get everything now on Instagram or on online.
00:38:57.760 --> 00:39:00.239
So what what do these department stores have?
00:39:00.480 --> 00:39:02.639
Um so they have to become experiences.
00:39:03.039 --> 00:39:03.360
That's right.
00:39:03.440 --> 00:39:09.280
And and that that's and that's how you get people to part with their money, and that's how you build brand love and you know, really engaging with the brand.
00:39:09.360 --> 00:39:18.719
Because you can buy something online, but that's not the tangible experience of going in and smelling the perfume and the you know the one-on-one service and the glass of champagne while you're buying something.
00:39:18.800 --> 00:39:20.559
Aaron Powell And and discovering something new.
00:39:20.719 --> 00:39:24.079
And I like there are several forces that weaken those stores.
00:39:24.239 --> 00:39:32.639
So you've got brand-owned boutiques, so a lot of brands want their own their own store, which with only their products, they control the whole experience.
00:39:32.880 --> 00:39:42.719
E-commerce, bypassing physical retail for that convenience factor, margin pressure from discounting, reduced foot traffic and CBD retail and and those other stores.
00:39:43.119 --> 00:39:44.719
Queen Street and Auckland has suffered from that.
00:39:44.800 --> 00:39:46.400
And I do wonder about some of those sites.
00:39:46.480 --> 00:39:57.920
Like I feel like they are trading potentially off uh, you know, uh cruise ship income because I don't know that there are many New Zealanders or key or Aucklanders walking down Queen Street necessarily.
00:39:58.239 --> 00:40:01.199
So the real question can luxury stay luxury?
00:40:01.280 --> 00:40:17.280
And I think it luxury only works with discipline and it requires restraint over growth in terms of volume growth, control over distribution, confidence in pricing, relentless producting to integrity, and that cultural relevance without ubiquities.
00:40:17.440 --> 00:40:25.679
You know, that many brands are chasing these shareholder expectations and you know, they're just essentially ruining, ruining the brand.
00:40:25.840 --> 00:40:30.400
Um, so yeah, really exciting space uh and to see luxury changing.
00:40:30.559 --> 00:40:39.440
And you know, let's be honest, there there is a lot of money, uh especially behind brands like that uh LVMH collective, big personal fortunes.
00:40:39.599 --> 00:40:43.199
So, you know, it it will be interesting to see how they all play out.
00:40:43.440 --> 00:40:45.920
I imagine it would be an incredibly high pressure environment.
00:40:46.079 --> 00:41:10.079
Now, I so given so what I'm really interested in, I wanted to take this into another angle slightly to talk about if you were a mid-level marketer and thinking about like if you're really, you know, aspirationally desiring to get into luxury marketing, I thought I'd do a little bit of a um a deep dive into what would be a good one, what what sort of skills do you need and what kind of um where what would you do if you wanted to get into that space?
00:41:10.320 --> 00:41:21.119
Um, interestingly, I think one of the things that I've always thought is you kind of have to, and this this sounds terrible in this day and age, um, but I think there's a there's an element there of looking apart too.
00:41:21.360 --> 00:41:24.320
So you could it's it's devil wears Prada.
00:41:24.559 --> 00:41:29.199
I I think the thing that a lot of people don't realize is a lot of these jobs are very underpaid as well.
00:41:29.360 --> 00:41:34.559
So the the brand the brand is essentially what people aspire to.
00:41:34.639 --> 00:41:44.639
So the same way that you aspire to own Hermes and and L VMH, the same way you aspire to work for them, because then your brand is attached to that brand.
00:41:44.719 --> 00:41:47.840
And and because of that, a lot of these brands don't pay very well.
00:41:48.000 --> 00:42:09.440
So you're you're typically you know, you you essentially kind of need to come from money because yes, you also have to look the part, you know, maybe you're getting your clothes off the rack or at a discount, but you know, if you if you look at Devil Wears Prada and we're we're excited to to see the sequel come out, but you know, it it's not an easy or particularly luxurious life.
00:42:09.519 --> 00:42:24.559
It's a lot of long hours, especially if you're working international, you know, you're having to, you know, be uh at a fashion show, you know, you're clocking in at 5 a.m., you're you're clocking out at 10 p.m., and then you're going on to drinks afterwards.
00:42:24.639 --> 00:42:27.440
So it's like it's a it's a relentless lifestyle.
00:42:27.519 --> 00:42:31.679
It looks glamorous, but it's hard work for not very much money.
00:42:32.000 --> 00:42:36.480
And I look, I think in terms of attributes that you'd want to have, you'd want to be really good at client service.
00:42:36.559 --> 00:42:45.039
So you'd just have it like there's so much high touch involved in luxury marketing that you almost I think there'd be a higher degree of psychographics to some extent.
00:42:45.199 --> 00:42:52.559
So really understanding the psyche of your customer, knowing how to almost anticipate what they were going to ask for and what they were going to need.
00:42:52.880 --> 00:42:55.840
And you you really are, it's so much more one-on-one.
00:42:56.079 --> 00:43:04.320
It's not, and I think from a temperament perspective, you'd want to be able to focus on the long term, not just, you know, it's not just one and done, um, one too many.
00:43:04.400 --> 00:43:13.360
It's very much ongoing personal services, and and you've got to enjoy that as opposed to just going, I want to get an ad out and send it to everyone, and then I'm I'm all sort of.
00:43:13.679 --> 00:43:16.480
Yeah, and and definitely it's not performance marketing.
00:43:16.719 --> 00:43:23.360
So, you know, the skills are looking for it and it it it's definitely, you know, that that ego play.
00:43:23.440 --> 00:43:28.480
You know, these are you know, it's personalities that that work for these brands, you know.
00:43:28.639 --> 00:43:45.599
The to get in, you have to be, and I'm highly generalizing here, you have to be eccentric, you have to be, you know, high performer, look amazing potentially, or at least have, you know, your own personal sense of style and be, you know, you you have to want it.
00:43:45.679 --> 00:43:46.639
I think that's what I'm saying.
00:43:47.039 --> 00:43:52.400
But if you want to be in fashion, hugely competitive, you have to really want it and love it because it's hard.
00:43:52.639 --> 00:43:56.239
Yeah, and I and I th I would imagine, this is this is just my opinion.
00:43:56.320 --> 00:43:59.519
I think you want to be really closely, you need to have a close.
00:44:00.239 --> 00:44:09.840
uh personal values alignment with the brand that you choose to work for because I think that the it the two go much closer hand in hand than they do when you are selling a commodity.
00:44:10.000 --> 00:44:19.920
It's so much more high touch that you want to be more involved and you want that brand to you want to feel like you believe in the mission and the purpose of that brand I think far more than a commodity item.
00:44:20.239 --> 00:44:20.400
Yeah.
00:44:20.559 --> 00:44:22.239
So I'd I say give it a go.
00:44:22.400 --> 00:44:28.480
I mean a a good way to work I'm I'm always a fan of starting from a customer facing role.
00:44:29.039 --> 00:45:12.719
You know I've worked for uh a a number of brands I uh in my career I have worked for Abercrombie and Fitch uh when they were uh on Regent Street in London uh and I've done a bit of work for Selfridges uh and I've worked for a number of fragrance brands um and I loved it it was it was good fun and and a lot of it but is because I was in customer-facing roles and you know getting to talk to customers I I think it's a great place for anyone to start their career is you know in the front of the shop you know and it it's a great way for you to understand the customer the product uh the brand and how at least uh the physical channel of marketing works.
00:45:12.960 --> 00:45:13.679
Yeah, I agree.
00:45:13.760 --> 00:45:26.960
And a a bit of experience and um you know putting on customer experiences and events and things like that and hosting I think on all of that stuff would go wouldn't go astray if you were thinking about getting into any form of premium marketing or luxury marketing.
00:45:27.199 --> 00:45:27.519
Brilliant.
00:45:27.679 --> 00:45:33.679
Well this has been fun uh I hope you've been educated in marketing uh and luxury marketing.
00:45:34.000 --> 00:45:39.519
Luxury marketing Ben Yes but uh have a great rest of the week.
00:45:39.760 --> 00:45:46.239
You too see you later Ben thanks everyone can the Marketing Podcast is brought to you by Human Digital and Q Marketing.
00:45:46.400 --> 00:45:51.440
Our editor is Bruno Barbosa new episodes drop weekly so tell your friends and colleagues.
00:45:51.679 --> 00:46:01.519
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