Luxury: Luxury, Live and Online

TEXTOO: ALEJANDRA RODRÍGUEZ | ILUSTRACIONES: JAVIER MARTÍNEZ
CATEGORIES: Business Life, Guides, Lifestyle, Luxury Guide

The 2008 economic crisis was undoubtedly the most significant obstacle faced by the luxury market in 30 years. But the major brands displayed an amazing ability to thrive in the midst of the global downturn. For instance, the LVMH group (Moët Hennessy – Louis Vuitton) enjoyed sales totaling US$3.3 billion in 2010. This feat was in no small part due to a boom in emerging markets, where the demand for premium products shows no sign of slowing, with 85% growth in China, 65% in India, 35% in Eastern Europe and 15% in Latin America, according to the latest studies. In addition, as the traditional luxury consumers became more cautious, luxury demographics crossed the divide from multi-millionaires to reach an aspirational middle class, which spent as much as US$127 billion on upscale products in 2010 alone.

Around the world, a new consumer profile has emerged, one more rational and globalized, thanks to the Internet. Our continent was no exception. “Today we see a Latin American consumer connected to social media, who is beginning to demand access to special products and services,” explains Diego Schvartzman, from the Maison du Luxe consulting firm. In this era of premium services, boutique hotels, spas, gourmet dining and high-tone real estate ventures, luxury is no longer defined by extravagant material goods. According to the Argentinean expert, this new wave promotes the concept of personalization. “The brands understood that they needed to be present in every moment of the consumer’s life, connecting with a wide range of areas, like Armani did by developing hotels, cafés, spas and basic clothing lines.”

And now, thanks to the Internet, luxury is available online. There are Websites where you can buy US$20,000 Alexander McQueen dresses and US$1,800 Valentino handbags (net-a-porter.com); private shopping clubs that offer discontinued items from top brands (geelbe.com); and, more » recently, virtual trunk shows, sales for VIP clients organized by designers before their creations hit the stores. According to a study by Microsoft, the “connected” consumer demands an optimal price/quality ratio, seeks out information in order to become an expert before making purchases and relies on word-of-mouth communication via online forums and feedback, all of which leads to more thoughtful, less impulsive consumption.

Even from its modest, fourth-place position, the growing Latin American market is attracting internationally renowned brands that continue to bring their products to the region’s main urban centers, with annual sales of US$25 billion. Carlos Ferreirinha, president of MCF Consultoria & Conhecimento, a consulting firm specializing in business innovation and management, describes the region as “a diamond in the rough.” He argues that the market must meet the needs of big spenders who are really looking for something more than fine watches, fancy cars and prêt-a-porter fashion. Consumers want to immerse themselves in the luxury experience, he explains, “We’re talking about 100-percent emotional consumption.”

Going well beyond the mere satisfaction of basic needs, the luxury business aims to sate the desires of avid consumers of reliable products that offer guaranteed quality and social prestige. What the recent economic crisis affected most was confidence. “The consumer seeks refuge in the most reliable guarantee,” Schvartzman says. “And the luxury market wins hands down, thanks to its tradition, authenticity and quality.” When you factor in a growing number of people with the earning power to acquire first-class products, as well as the Internet revolution, it looks like the luxury market will continue to expand, not only in response to the demands of multi-millionaires, but also to fulfill the dreams of new, primarily young, consumers anxious to belong to a world of privilege.

ANNUAL CONSUMPTION:
Worldwide 450 BILLION US$
In Latin America 25 BILLION US$
Fuentes: MCF Consultoria & Conhecimento; Maison du Luxe; Bain & Co; El Negocio del Lujo

EVERYBODY TRUMP!
The second half of 2011 will see the inauguration of the Trump Ocean Club® International Hotel & Tower in Panama’s Bahía de Punta Pacífica. At 70 stories, it will be the tallest and largest building in Latin America and will include a private beach, an 18-hole golf course, luxury shopping and one, two and three-room apartments.

INKABOOM
Thanks to Peru’s real estate boom, construction is driving the country’s economy. But now it’s not enough to have a nice place in an elegant neighborhood. The budgets dedicated to interior design – furniture, finishings and applied technology – often equal the value of the properties themselves.

SLIM CENTER
According to Forbes Magazine, Mexico’s Carlos Slim is the richest man in the world. His investments in the Latin market focus on highways, telecommunications and water in Mexico, Brazil, Argentina and Colombia. In addition, via the Grupo Carso (Carso Group), he is building the Luxury Fashion Mall in Villahermosa, Tabasco, Mexico.

40%
of the highest-income Internet users visit luxury pages on Facebook.

MARKET GROWTH IN 2010
Worldwide
9% ENTRE 11%
In Latin America
10% ENTRE 14%
Fuentes: MCF Consultoria & Conhecimento; Maison du Luxe; Bain & Co; El Negocio del Lujo

THE LUXE CLUB
In the spirit of the Comité Colbert (France) and Alta Gama (Italy), Argentina recently saw the launch of the Club de Lujo, the country’s first consortium of premium brands and services. Its goal is to professionalize the strategic management of this sector while promoting competition among local companies in accordance with international standards.

006 THE CARS OF BOND
On August 16, 2010, Aston Martin debuted its first Latin American location in Santiago, Chile. After having sold 19 units last year, the projections are optimistic, with six buyers interested in purchasing the new Vantage V12, which sells for US$250,000.

LE CLICK, C´EST CHIC
In a study that drew information from 23,000 Internet users in 42 countries, the Nielsen consulting firm concluded that Latin America is the world region with the highest propensity towards purchasing luxury items. And, within the region, Mexico is the country with the greatest luxury penetration.

BRAZIL´S NEXT TOP LABELS
There’s more to Brazil than just Daslú. The successful São Paulo Fashion Week and Fashion Rio events introduced the luxurious creations of designers including Alexandre Herchcovitch, Lenny and Rosa Chá. So why not specialize in luxury at a longstanding local institution? The Fundación Armando Alvares Panteado offers a Master’s course in luxury management.

72% of luxury consumers use social media.
Fuentes: MCF Consultoria & Conhecimento; El Negocio del Lujo

INNER BEAUTY
This past April, Milan’s Salone Internazionale del Mobile played host to a number of luxury brands showcasing craftsmanship in fine furniture. Aston Martin presented a chaise longue and a sofa made from carbon, steel, wood and leather (materials used to make their cars), while Hermes featured furniture sets and contemporary textiles in cooperation with Antonio Citterio, Enzo Mari, Jean-Louis Clerc, Hugo Gryckar and others.

PAVED WITH GOLD?
A recent study by the real estate company Colliers International surveyed 127 areas with the most luxurious shopping establishments in the world and ranked the area around Centro Andino in Bogotá, Colombia, as the most expensive in Latin America and the 62nd-most expensive in the world, with an average annual rent of over US$150 per square foot.