Bespoke is the new luxury – Again.
Many consider Chanel the height of luxury. So it is telling to hear Chanel marketers talk about ‘bespoke’ as the ultimate form of luxury today. They are not the only ones to recognize the need and opportunity to serve those who feel Russian or Chinese tourists have invaded their favorite luxe label flagship stores and carry bag-loads of items out to distribute among their friends and family – as if these were supermarkets, as if these were ‘normal items!? In reaction, Louis Vuitton is reported to scale back its assortment, its store expansions and to lift prices in an attempt to fight brand dilution2. At the same time, LV has expanded its much less conspicuous and definitely more pricy “Special Orders Department” in what it labels the “original workshop” in Asnière, just outside Paris4. Here you can order a custom-made, monogrammed bag for your tennis racket or for your poodle made, like in the old days, under the watchful eyes of a Vuitton family member – Patrick-Louis Vuitton… And so the stories go as reported in fashion blogs and magazines3. “Haute Maroquinerie Consultants” (= high leather goods’, note the ‘language creation) in the VIP sections of select boutiques help customers work through eighty thousand theoretic design options for the bespoke handbag line. And you are welcome to come to Asnière for a tour of the atelier and to pick up what costs as much – and sometimes looks eerily close to a high-end Hermēs bag from the saddler a few miles away. That is likely no coincidence, but a consequence of LVMH CEO Bernard Arnaud taking more than a page from his coveted competitor’s top end luxury strategy that puts bespoke craftsmanship at the very core of their brand. True aficionados, might consider these creations modular manufacturing rather than the ‘real’ one-of-a-kind. For them the next level of prestige might rather lie in a pair of glasses tailor-made by luxury lunetterie Maison Bonnet through three counseling and fitting sessions and up to 30 hours of labor. Or they might escape the crowds at the Guerlain flagship store and on the Champs Elysées and escape to the second floor where they can embark on an olfactory journey of having their very personal perfume created from scratch – and hand delivered to them three months later (together with a $15-45,000 bill).
But why this quest for the unique in the first place? Why this willingness to pay premium, sometimes astronomic prices?
Designing an Identity.
The things we own, wear and consume are part of what defines us as individuals. They can identify us as belonging to a certain group (eg. ‘banker uniforms’) and/or as following a certain group (eg. football fans in uniforms) or they can make us stand out as different versus others or even as unique. Having something few others have can be a source of admiration and respect – as long as there is agreement that the unique item is of value and truly rare. Not many may care much about an oddly shaped stone – unless it is a black diamond on one of those “extreme high jewelry pieces” by De Grisogono, of course. You might not know about De Grisogono or know how special and expensive their pieces are. That is where PR, awareness creation and the storytelling come in, from legend-telling to store presence and -experience to carrying that special shopping bag through the streets and others looking on jealously. And – most importantly – these brands are arming the new owner with a story about the very special provenance of their eccentric Pink Pig Sapphire ring (made of 367 sapphires – and black diamond nostrils to be precise). If that does not suffice to impress, hint to the ‘six digit’ price point or wiggle the pigs head and legs5 … – the ‘uhhs’ and ‘aahs’ are priceless
But not everyone has the budget or the courage to stand out as conspicuously and that limits the size and growth this segment can yield.
Scale in customization.
This is where some brands make good money by mastering the balance between offering a feeling of craftsmanship, individualization and sophistication while keeping the time, mind and money investment manageable. They hit a sweet-spot in the area between “bespoke” and “mass customization”. Or they cover the entire range, like Giorgio Armani who started in the ready-to-wear middle, then tiered down to Collezione and AX to capture the masses and finally tiered all the way up to Armani Privé (note the ‘accent’), the tailor-made label. Ralph Lauren did the sale adding his made-to-measure Purple Label.
But even when customization is being scaled up, brands can extract premiums that significantly exceed the cost of giving customers more choices. Again, they do it by making the options part of creating a ‘brand legend’
More than ‘choices’ – Legend Making.
The 123Time website and brand lets you create “your own swiss watch” from a seemingly endless choice of functions, cases, materials and straps. But to many, the end-product does not feel as special and valuable as a Freitag bag, for example, which is also chosen from thousands of possible combinations and made in Switzerland. Freitag creates significantly more buzz (just google it) and extracts significantly higher relative prices – and that for a ‘recycled’ product. – Or rather BECAUSE it is a recycled product!7 Choosing from a menu of options for your new Toyota Corolla is a great way to serve your needs and personalize your experience. But, again, it seems not quite to live up to being able to pick a Union Jack roof for your Mini Cooper S complete with Monte Carlo Rally stripes. – That’s a one-in-a-thousand and certain people pay big car prices for what is essentially a very compact (and not very practical) one. But that is exactly the point. The choices are not (only) about functionality, aesthetic or comfort but also about making a social statement, about telling your story, helping you create your own legend.
Let’s take a closer look at a few other brands and how they extract shared value by letting you take part take in legend-telling – even in scaled-up ways compared to the bespoke sophistication of the ‘grandes maisons.’
Starbucks – Concoctions that makes you feel like special
The Starbucks story is legend, by now. Howard Schulz had experienced that unique feel of an Italian espresso bar a place of encounter and escape, at the same time, around a particularly addictive concoction. He imagined such a place in a US context, a perceive urban and cosmopolitan feel. A relaxed place where ‘the barrista’ knows your name – or at least calls it out from your cup of hand-crafted your very own and very special concoction. How about a ‘skinny, venti caramel Frappucino with two shots’? There are many webpages dedicated to how to order just the right coffee for you8. Starbucks became that “Third Place” – between home and office – people started flocking to daily to nurse on their very special drinks – at a very special price, too. A price many multiples above anything they had paid for brewing a cup at home or getting one in any restaurant. And the custom making ritual is a major driver of this willingness to spend. Dunkin’ Donuts has been proven a blind-test taste winner but no alternative –despite the lower price9. And most Starbucks aficionados would find the real coffee served at an authentic Italian Espresso Bar “too bitter” and foreign, as Howard Schulz learned the hard way, when he started out with his own ‘Il Giornale’ bar in 1984.
Nespresso – Of colorful pods, Clubs and feeling sophisticated
Nespresso proves that a coffee can also make you feel special with ‘real’ coffee and a concept of customization and sophistication made simple. Actually Nespresso and Starbucks launched almost concurrently but it took Nespresso a bit longer to grow into a multi-billion dollar colossus of a brand, as well. Maybe in part because it needed Starbucks to create interest in coffees in markets like the North America and Asia (it failed in Japan before Starbucks succeeded) but also as a foil. For many Nespresso drinkers will consider themselves more sophisticated and demanding of specific coffee aromas to make do with what they might rather describe as a coffee-flavored hot- or frozen milk drink at Starbucks or the watery brew that comes out of the average home coffee maker.
Nespresso helps an ever growing segment of consumers to graduate from coffee barbarians to connoisseurs at the push of a button.
After all, it is the chic little Nespresso machines and coffee pods that you feed into them that do the trick. The color coded and exotic labeled coffee pods make ‘exploring’ playfully easy. Each color represents a specific aroma, preparation (simplified to size of cup and addition of milk/not) and provenance story. There are 22 original ‘Grand Crus’ flavors ranging from the popular Arpeggio, a mix of South and Central American Arabicas to the Pure Origin Bukela Ka from Ethiopian. Beyond these permanent Grand Crus, Nespresso regularly launches limited editions – which might end up becoming permanent, if popular. Nespresso has a special tray so people can credential their hand-picked selection to guests, like fine chocolates or cigars. … and we are not even talking about the three dozen choices of machines, yet.
But the multi-choice product is only half of the story (and value creator). What makes Nespresso users really feel special are the Nespresso Clubs and flagship stores – the only (legitimate) sources of the pods. Here, they not only know your name, but also when you must have run out of your preferred pods (or when it is time to cleanse your machine). This customized service has created an enormous, dedicated – if somewhat invisible – following. Some key measures to dimensionalize this: In 2013 over $3 billion dollars worth of pods were sold to some 10 million Club members. They are paying around $1 for a single coffee shot– many multiples the average cost of homemade coffee. And yet several ten thousand log- or call into the club at any given day and more than 50% of those members got introduced by other member. There are over 3 million Nespresso Facebook fans as of February 2014 and over 60,000 of them actively engaged in discussions ranging from recipes for coffee at the Nespresso gourmet school Google Hangout to pods artfully smashed into flat medallions that are made into jewelry.
And the club privileges extend what some considered the ultimate in customization: In 2004 it was the members who got to vote for George Clooney as ‘their’ brand ambassador.
From bottling your own scent to making your own jeans – no boundaries to the hipsters dream.
Le Labo is a Paris meets New York fragrance lab that is slowly opening boutiques around the world behind a simplified, bespoke perfumery concept. The mission: Offer an alternative to the normed and overhyped mass fragrances – while keeping things affordable and manageable. There are 14 scent directions to choose from with the help of your Le Labo assistant. Fragrances range from male to neural, female to ascent – Ambrette 9 – designated as ‘childish’. Each store also has a local exclusive (eg. Gaiac 10 in Tokyo). – It’s personal, but neither too overwhelming, nor time-consuming. Just the way today’s hipster likes it. Your ‘lab assistant’ mixes your personal concoction in front of your eyes and fills it into sleek modern apothecary bottles. A typewritten looking label has your name on it and a personalized message on it that makes you feel special and part of the international hipsterhood, at the same time10.
And just around the corner at 15 Mercer street in SoHo, NY you could have your perfect pair of jeans made at the “3×1” store. The jeans are made “right here”11. Not made in front of your eyes, but you can feel the closeness choosing your own stock, buttons, etc. from large rolls and bags in the store and meeting the people who design and make them. There are some 135 pattern and materials combinations they wear up their sleeves (and make for you for the price of 5-20 times the ‘regular stuff).
But Bespoke is not everything
This is something the Andrē Ross brand learned the hard way. The brand was created in the early 2000s to bring ‘luxury bespoke craftsmanship to a broader but sophistication craving audience’. Andrē Ross seems to have used all the right fine materials (including 23 carat gold plating) and associations (with the Rue Saint Honoré, the epicenter of French fashion and luxury). The brands founders were lauded for taking a strategic approach to branding, marketing and distribution by luxury marketing experts12. But today the brand doesn’t exist anymore and there is hardly any trace beyond what looks like two outdated blog posts by teen fashion groupies who like the bags but also thing they ‘look like LV’13. My assumption is the brand had a short life for lack of life – meaning authenticity.
To see what that means and to see how customization can become a core element that lifts a brand above and beyond the rest, let’s look at one last, great example… in our next post about the Mini Cooper.
Sources and further Reading:
Read more about customization and other strategies that drive the success of Ueberbrands in our book “Rethinking Prestige Branding – Secrets of the Ueberbrands”
2 As reported by Reuters: Louis Vuitton slows down expansion to protect image.
3 Read an example of a review of LV Haute Maroquinerie Services here.
4 Note that most LV products are made outside the atelier, many in factories outside France.
5 In case you want to buy, read more about the De Grisogono pig here
6 Design your own Swiss watch at 121Time here
The Stabucks cup picture is from from the tildasunday Blog
8 Check out the WikiHow on how to order at Starucks here.
9 Read about the Dunkin’ Donuts double blind test win over Starbucks here
11 Book your bespoke appointment session here: http://3×1.us/
12 “Luxury Fashion Branding”, Uche Okonkwo, Pallgrave, 2007, p305-307
13 In case you are into old meaningless fashion blogs, click here.
Read the Mini Cooper case study here.