The Luxury Question: In Conversation With Luxury Industry Expert, Catherine Jubin
10 Oct 2011|Added Value
We recently sat down with Catherine Jubin, Managing Director of The International Luxury Business Association to discuss the issues facing the luxury industry. From defining luxury, to a view on the financial crisis has affected the industry, Catherine shares her insight into this fascinating landscape.
Q– How would you define luxury?
Catherine Jubin – Luxury is complex to define but I like Bruno Remaury’s definition a lot, from which I remember the memorable points:
He makes the difference between the brand and the product. Some luxury products don’t have any brand, like the truffle. Its rarity implies a high price that places it into the luxury category. On the other hand, some brands offer products that are not luxury products intrinsically (lipsticks for example). We can see the complexity and necessity of finding objective criteria.
The luxury product is the expensive one in its segment
Secondly luxury is in the story the brand is telling, the artisanal know-how and the quality of the material used to create the product, the origin, the myth around the founder…
The third criterion is linked to the rarity of the product, little production or very limited distribution.
These three criteria work in a reciprocal way. For example, a product that is in theory accessible to the mass because it has a quite low price can have the status of a luxury product because it is rare and it offers a very rich story…
One of the other specifics about luxury in comparison to other brands is the economic framework they display, i.e. all the activities they engage with that contribute to the visibility of their prestige (communication, flagship stores etc…)
However when you question upper classes in Western countries, you’ll often have as an answer that one of the biggest luxuries is to have time for oneself. We see that there’s definitely not a unique definition but a very personal vision for each person.
Q – What are the key issues for the luxury industry?
CJ – There are three main issues: economical, technical and time-related issues.
The economical issue is immediate. The financial crises that are rapidly following one another are also affecting the luxury market with a mutation of the purchase behavior of occasional consumers and even of regulars ones.
The growth of emerging countries (China, India, Brazil…) partly offsets the crisis that developed markets are facing, but still this growth can be slowed by political and economical reasons, so the investment to conquer these countries is not risk-free.
Digital is a challenge for all sectors as it is modifying the traditional communication and distribution models. After initial resistance, the luxury industry is now adapting. However, digital is quite far from the original culture of this sector, the speed of the evolution of technologies is certainly a challenge for a sector that has a culture of “long time”. All studies show that the historical dimension of brands is important; they are being built throughout time. The time of digital is now. To me the cultural challenge is quite big for luxury.
Q – Beijing has banned communication campaigns around luxury; Italy seems to be into it too… What about the situation in France?
CJ – I think motivations in China are probably more political than social. They won’t solve social problems by crucifying luxury. It is unfortunate that the media are amplifying this kind of news as, for the moment, it is only a reaction to specific circumstance. Nevertheless we have to stay informed around these kind issues so that we are prepared to respond if necessary .
Q – What is the place of premium versus luxury?
CJ – What we have highlighted at the « Premium vs Luxury » event is that there are common analysis grids between countries and nationalities. But the result for individual brands can be quite different and stays quite personal. There are two things to consider:
The category in which we are working. Wines, spirits and the cosmetics are not placed at the same level as yachts, cars and jewelry. The first two categories are considered as affordable, unlike jewelry, yachts, private jets, and hence are less spontaneously linked to luxury. However, this perception is different depending on the countries. In Japan, for example, accessories are quite highly ranked in categories associated to luxury. The level of wealth has its role too: in the USA the lower down you are on the social ladder, the more you dream about yachts and private jets, whereas richer people’s dream wishes are different. Fashion is more aspirational to them. So the perceived luxury of a category depends on the culture, the social level…
The perception you have of a brand. At the “Premium vs. Luxury” meeting, the study on the luxury and the premium markets has highlighted that perception of premium brands was more linked to innovation, to technological exploit, to customer service rather than to experience, which is what luxury brands are offering. Premium brands break the codes and bring service and modernity in categories where you don’t expect it.
To sum up, the debate between luxury and premium is far from being closed!
Q – What is the future of luxury?
CJ – In the long term, there is nothing to worry about. Luxury will exist forever; it is inherent to human nature. We see that efforts to bring egalitarianism have failed and that luxury has always grown, even in communist territories. There will always be a quest for differentiation and beauty. Luxury is a pleasure and at the same time has social role. We will always want to wear and to possess beautiful things, to have them around us.
In the short term, the situation is a bit more worrying because of the financial crisis and the e threat to the growth of middle classes in developed markets. These consumers are often of the key supporters of “access” categories and more occasional purchasers for other categories.
Q – What is the role of your association?
CJ – Whatever segments they are operating in, luxury companies have similar targets and so are facing the same issues. The Association offers them the opportunity to share experiences, ideas and the means to think together about strategic questions they have in common. Therefore it is a place that offers the pooling of some projects as well as a network which allow professionals of the industry to meet regularly and sometimes to create original partnerships.
Q – What are the issues of luxury for the members of your association?
CJ – The International Luxury Business Association is composed of big companies as well as small ones. It is diverse; lots of segments are being represented. Everybody reflects on the same issues: China, digital… It happens that some questions are more specific to a segment, but generally, it is striking to see that questions are mostly the same for everybody at a certain point.
Q – What do your members expect from Marketing and Innovation consultancy agencies like Added Value?
CJ – As luxury is supposedly the only sector in great shape, we’ve seen a rise in the number of people specializing in luxury consulting over the last 10 years. It is complicated for professionals to make the difference between real specialists and those who are not. What reassures our professionals are international and structured groups like Added Value with known and reliable people and experience… and if their consultants come with experience from careers in our sector, even better! Yet, each segment has a different culture. Consequently, consultancies can’t tackle all of them with the same tools and the same methods.
Q – What are your future projects?
CJ – I am organizing the third edition of the Luxury Outlook meeting. It will take place in Paris on the 24th of November 2011 around the topic “Developed Markets, New paths for growth?”. The objective will be to gather a panel of high level executives from the countries studied and to cross their points of view on the US, Germany and Japan, through two formal presentations and three discussions. For more information click here.
About Catherine Jubin:
Catherine Jubin started her career within the Fragrance Division of the L’Oréal Group. She spent seven years in various marketing capacities before becoming SVP International Marketing for Parfums Guy Laroche in 89. After having created her own consulting company “Estampille” in 92, she joined the Yves Rocher Group in 96 as SVP Research and International Marketing for Fragrances, Make-up and Toiletries.
Since 1998 she is working as an independent consultant specializing in international strategy for companies and brands within the luxury industry, with references including Shiseido (Japan), Unilever (GB), Le Club des Créateurs de Beauté, Séphora, ST Dupont, Sonia Rykiel and Roland Berger & Partners.
From the experience she gained as an expatriate and during her studies in the USA, she was able to build, maintain and develop a large international network in the United States, Europe and Asia. This network culture, as well as her in-depth knowledge of a fast moving sector, convinced her that it could be possible to contribute to the development of luxury goods and services companies by offering them an original and dynamic “tool”.
Her determination to set up a body serving companies in this sector led her to found the International Luxury Business Association in 2001.prev next