the examples and financial data have been updated.
Chapter 1, which delves into the notion of luxury, was completed with considerations of new luxury in which exceptionality prevails over exclusivity.
Chapter 2 explains the specificities of the luxury industry, how it can be defined, and what makes it different from other businesses, in particular from the fast-moving consumer goods and the basic fashion industry.
Chapter 3 describes the different industry sectors with their sizes and with the major players: fashion, perfumes and cosmetics, leather goods, wines and spirits, and jewelry and watches. In this edition, we have added a complete analysis of the hotel hospitality sector, and we give a size for this market, a description of the major players, and the key management issues.
Chapter 4 indicates the economic value of each luxury brand and how it can be assessed and developed.
Chapter 5 gives a description of the major luxury clients, by country and by level of income and wealth. It also describes how different segments of this population react to the idea of luxury.
Chapters 6 and 7 present brand analytical tools that we currently use. Because the number of them has increased, we split Chapter 6 of the third edition into two parts. In Chapter 6 of this edition, we introduce three tools: the brand hinge, the EST-ET© diagram, and the Brand Aesthetics Analytical Grid, the new tool that we applied to the Thai brand Jim Thompson. We introduce the three ends to any aesthetic treatment and complete the chapter with considerations of the strengths and weaknesses of the brand identity notion and position the brand identity approach within the broader field of other approaches to brand management. Chapter 7 continues with seven analytical instruments, such as the Brand Life Cycle, the prism, and the Rosewindow, and semiotic tools like the semiotic square being applied to different brands and in particular to market-centered or self-centered brands. It ends up with considerations on what constitutes a valid semiotic analysis for luxury brands.
Chapter 8 deals with creation and merchandising and has incorporated numerous new examples drawn from our latest management experiences. Real examples of reports on collection structures and calendars have been added. Considerations are made on style issues, drawing from work done for Yves Saint Laurent and Pininfarina. A whole bibliography is included for those interested in getting deeper into brand aesthetics management. The ever-growing relationship between art and brands has been addressed.
Chapter 9 deals with communication in digital times and has been completely revamped, providing the opportunity for an overall review on how digital is impacting the world, luxury brands, and consumers. The scheme of the communication chain has been updated, as have the communication plan and calendar, to consider the effects of digital media. The key performance indicators of a commercial website have been compared to those of a traditional retail one.
Chapter 10 deals with different ways to develop a worldwide brand. It describes how a brand can become completely international, sometimes through its own subsidiaries, but generally also through local importers and distributors. It also explains how online operators can become a major resource and how one must deal with them. It discusses how brands can also be present and strong in travel retail outlets. It presents pros and cons of developing a brand with licensing activities.
Chapter 11 examines different retail activities in a time of physical and digital resources. It explains how a consumer does not select one or another system of distribution, but considers these two resources as complementary. The more the client spends time with a brand on the Internet, the more likely he is to buy in a physical store, and the more the client has direct contact with a brand in a physical store, the more likely he is to purchase on the Internet. And clients must be seduced and interested and convinced when they visit a store: A client who has a bad impression or who has a negative experience in a store would never buy that brand on the Internet. Brands have to adjust to this phenomenon.
Chapter 12 deals with sustainability and authenticity. It summarizes first the future trends of luxury and then delves deeper into these two basic consumption and civilization trends. Some of the indicators of an increasing sustainability sensibility are highlighted, as well as the initiatives taken by some of the main luxury brands. We defend the complete compatibility of luxury and sustainability and introduce a possible consumer segmentation based on attitudes toward sustainability. Authenticity is considered to be a quality of a relationship between the object considered and certain referents, which can be intrinsic qualities of the object or internal to the brand, like its identity or even belonging to the consumers' mind.
We have also integrated the overall conclusion of the book in this chapter.
Appendix A presents an extract from a brand identity study led by Mazzalovo in 2020 on the Sasin School of Management, the leading Thai business school of Chulalongkorn University (Bangkok, Thailand).
Appendix B is a glossary of some of the most current expressions in the digital vocabulary.
The book, as its preceding editions, is not meant to be read as a novel. It presents a mix of macroeconomic and microeconomic considerations, and its modest ambition is to function as a reference text, where considerations can be found on specific management issues for luxury brand employees and executives, consumers, students, teachers, and anybody interested in our society's evolution, a reflection of which is given through the mirror of luxury brands.
Chapter 1 The Concept of Luxury
The word luxury has always been a source of discussion of what it is supposed to mean. This is the reason we added this chapter in the second edition of this book and have kept it since then. Since we are going to write about luxury along with text and diagrams, it only makes sense to explore the intricacies of what is meant by such a popular word. In this fourth edition we have added a section on the meaning of the expression new luxury, whose usage has been growing in the past few years.
A Problematic Definition
What is luxury? At first glance, it seems that we can answer in simple terms and to distinguish between what is luxury and what does not fall into it. But we sense, on reflection, that not everyone will agree on this distinction: luxury to one is not necessarily luxury to another.
The concept of luxury incorporates an aesthetic dimension that refers to a major theme of Western philosophy: How to characterize the notion of beauty?1 In the twentieth century, the philosopher Theodor W. Adorno expressed the problem in these terms: “We cannot define the concept of beautiful nor give up its concept.”2 We believe that it is the same for luxury: without wanting to confuse it with the beautiful, it turns out, upon examination, no less elusive, and, perhaps, not less indispensable.
Therefore, it is probably unrealistic to seek a universal definition of luxury. But this reflection draws our attention to an initial important point: the definition of luxury has varied over time.
A Fluctuating Notion
What we commonly call luxury no longer has much to do with what was meant only a century ago; or, a little further back, in the years before the Industrial Revolution. We are not talking here about objects of luxury. A product like soap, for example,
