Despite the current economic climate, the luxury industry reported strong sales and impressive results for 2011. In July, the luxury segment announced a remarkable 11.6 per cent increase over the previous year. What constitutes this resilience of the luxury industry? Some experts claim luxury consumers never stopped buying; they just keep quiet about it, because they don't want to be seen to spend money at a time when other people are losing their jobs. Others think that consumers consider luxury products to be of a quality that lasts and is worth investing in.
La Prairie is among the luxury brands reporting strong sales, with an increase of 7.5 per cent in 2010. Nadia Miller joined the cosmetics company in 1991, and in her current role as Vice President of La Prairie International, is responsible for brand development and international marketing. She offers her theories about the luxury business after the crisis.
How would you explain the strong results of the luxury industry last year?
According to Simon Cooper, Chairman of the Ritz Carlton, luxury has become the most used word in the English language, but the idea of luxury has changed a lot over the years. Today, luxury products have become accessible to more people and have turned into a mark of status, especially for new markets like Asia. Yves Carcelle, Chairman and Chief Executive of Louis Vuitton, thinks that the modern customer is much more intelligent than we imagine and is aware that there is a limited number of luxury houses respecting the rules of luxury, including higher standards of craftsmanship, innovative design, a selective distribution policy, and a strict control of discounts and pricing. I like this definition, but I think both are right and this is why the luxury industry keeps on growing.
In other words, despite luxury being more accessible, it still means rarity, high standards and high prices. So how does luxury survive in a world troubled by financial difficulties?
Luxury is not only surviving, it is positively thriving. As Chris Moody said, "for every person losing millions, there is someone else on the other side of the deal, making a fortune." So let's not forget that the wealthy are still hanging on to their money, while those who continue to make money cannot resist spending [it]. They support the economic downturn. On the other hand, there are the newcomers with impressive potential: Russia, Asia, India, Ukraine, Qatar, Poland, and the United Arab Emirates-these countries are among the fastest growing areas of luxury customers. Luxury must continue to make us dream: the rare, the beautiful, and the products that are created with care and love. Luxury is here to stay for the lucky few that can afford it, but they are increasing in number.
How does luxury keep redefining itself?
I believe that luxury brands are watching how their customers change, especially in times of economic slowdown. We try our best to satisfy their changing needs and attitudes. The luxury customers say they used to buy with their heart, and now they buy with their head, calculating once and checking twice. They ensure there is added value to what they spend their money on, such as service and guaranteed quality. They also demand something we call 'perkonomics' [perks with purchases]. The new luxury customer wants to be informed about what they buy, before they buy it, even when picking a vacation spot. They feel empowered to make choices. Let's also not forget about men, who buy a lot more luxury today than ever before.
La Prairie was founded in 1978 and has become one of the most popular luxury cosmetic brands. What has been the key to long-lived success for the brand?
The longevity of the brand's success is thanks to our image as a luxury brand that creates products the customer perceives as being the best. We cultivate and protect our image, we care about our distribution and we are consistent in our pricing. What is really important as well is that we never stop innovating.
Why do you think people are still happy to pay such high prices for La Prairie creams?
Our customers tell us that, to them, La Prairie is not a luxury, but a necessity. They need our products, and prefer to skimp on food or clothes, but not skincare products.
You have worked for many luxury brands including Sanofi Beaute, Hermes and Cartier, and have now been with La Prairie for ten years. What sets La Prairie apart from the others?
La Prairie is copied more than any other cosmetics brand, particularly the silver lining on the package, the blue jar, the names caviar and cellular, and the technology of our products. But our key selling point is the combination of ingredients, texture, packaging, and botanical fragrances. We don't limit our research, new technologies, or specialists. When we look for ingredients we are prepared to go into the deepest jungles of South America, and we cooperate with universities and laboratories around the world. Everything is important, from the ingredients, research and development to the end product.
How does La Prairie plan to meet the changing needs of the global marketplace?
We plan to create, and already have created, regional teams, to keep in touch with our customers and inform them about our products and company. We don't have many clients and therefore have the luxury of knowing them. This is important because clients differ from region to region. Europe has seasons, but imagine living in Hong Kong or Singapore. There you battle constant humidity and dry air-conditioned buildings.
Which are your biggest markets? Why do you think La Prairie is so popular within these markets particularly?
The biggest market for us remains the USA, because of its retail infrastructure. Second comes Germany. German women really pay attention to their skin and invest in luxury skincare. Last year China became our third biggest market. Women there take care of their skin from a very young age.
What is your definition for brand success?
A brand is successful if customers keep returning for more.
A history of La Prairie
Laboratoires La Prairie was founded in 1978 as a range of skincare products based on Clinique La Prairie's expertise in cellular revitalisation. Clinique La Prairie opened in 1931 in Montreux, Switzerland and quickly became popular thanks to Professor Niehans' discovery of the CLP Extract, which is used to slow the aging process. Laboratoires La Prairie was the first company to take a biological cellular approach to skincare, replicating the skin's own regenerative system. Today, the company offers more than 70 products.
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|Title Annotation:||lifestyle: insider|
|Date:||Apr 1, 2012|
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