BW Confidential - Issue #3 - September 2010 - (Page 32)

Insight: Luxury Return to quality Luxe redux How beauty brands can put the luxury back into their products and services he recession may mean that brands will have to try a little harder to put the luxury back into their brands. It may also make them see some of the corners they cut when times were good in terms of product development, service and the exclusivity they once claimed to offer. “Brands have been created to serve as labels of quality, but it is very tempting to stop investing in your label and to keep selling products at the same price as if they were of the same quality. However, this wave has been surfed enough and now more people are looking for quality instead of the so-called well-established brands,” says France-based distribution company Différentes Latitudes co-founder David Frossard. Returning to luxury is obviously about providing good quality packaging and juice. Attention to detail was one of the reasons Paco Rabanne (Puig) made a comeback with its 1 Million fragrance (the gold ingot-like bottle was seen as an object of real value by consumers). This focus on quality is also why many niche fragrances are doing well. Frossard says consumers are buying its Frapin fragrance, even if they never heard of the brand and that the “commercial fragrance industry” is continuing to lose consumers to the niche sector. Improving CRM Quality is also needed in communication and service. “The industry has sought to bring back the magic that is missing in their products—which it perhaps lost in part due to a massified retail platform— through the use of celebrities,” states International Luxury Business Association founder Catherine Jubin. However, this often results in a standardized image of the product. Jubin notes that it was one of the most basic of the consumer goods industries—soap—that was the first to make use of celebrities in their ads. 32 credit: stock.xchng T For US-based Luxury Institute ceo Milton Pedraza, rather than pursue this route, brands need to get back to more one-to-one marketing and a closer connection with consumers: “The beauty industry has been very massrelationship oriented and this needs to change. They need a more customer-centric approach and should pay more attention to “ The beauty industry has been very mass relationship oriented and this needs to change. They need a more customer-centric approach and should pay more attention to CRM programs Luxury Institute ceo Milton Pedraza CRM programs.” In many companies these programs are often poor, with outdated data, badly organized or with information that is simply not used. In addition, clienteling by BAs is frequently low on the priority list. Improving the use of data could enable brands to create a more personal relationship with their customers and better segment and profile their clients. Building a stronger relationship with the ” customer should also extend to the point-ofsale. Better training and remuneration of the BAs would encourage more engagement and interaction with the shopper. One expert points out that the paradox in the beauty industry is that less time and money is spent on customer-facing personnel than on other staff. “People will pay for customer experience and pay a premium for it. Look at Apple, despite the problems they had with their latest model of their iPhone, people are still lining up to buy it,” says Pedraza. He also cites e-tailer Zappos for its ‘customer comes first policy’ and its focus on service and convenience. The company allows users to order items and send back those it doesn’t want at no extra cost. The site may not be the least expensive, but its ease of use and informative staff that can be easily reached by phone make people want to go there. Service does not necessarily mean long conversations at the point-of-sale. It can also include add-ons, such as allowing customers to bring back packaging for recycling and be rewarded for it or offering product refills. Offering a more personal and original service will differentiate luxury brands a lot more than product benefits (of which many have become similar from one product to the next in the consumer’s mind) and makes for a more exclusive shopping experience. With consumers still tightening their purse strings it’s a way of being more relevant than just offering another product. As Pedraza says:“People are looking for silver bullets, but making luxury attractive in this economy is really about fine tuning the simple things”. n September 2010 - N°3 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #3 - September 2010

Cover
Contents
Comment
Update
- Brand & retail news recap
- Digital digest
- Companies on the move
Take note
- Market facts, figures & trends
Best of BW
- Highlights from our e-publication
Launches
- The latest in fragrance, skincare & make-up
Interview
- O Boticário president Artur Grynbaum
Insight: luxury
- Category overview
- Pricing
- The internet
- Return to quality
Wellness
- The spa consumer
- Spa case studies
Retail
- New store concepts
Travel retail
- Inflight sales
Market watch: US
- Country overview
- Industry roundtable
- Retailing analysis
- Emerging retail channels
Radar
- Six up-and-coming beauty brands
Packaging trends
- Make-up innovations
Last word
- Inspiration&Creation founder Leïla Rochet-Podvin

BW Confidential - Issue #3 - September 2010