How to Drive Premium: Adopting a Luxury Mindset These are lessons not just for the Indian luxury market but for all the markets in the world
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
How can we define market evolution in a simple way? If we scan the categories and how they have changed over the decades, we will see one common thread of the value chain. This holds good for consumer businesses as much as for technology sectors. Value additions through product, process and service innovations to create better experiences than before is what underlines most growth drivers. In an environment like this, the traditional businesses are increasingly looking at their brands to pitchfork themselves on the higher echelons of value. The route to it lies quite simply in creating justifiable premiumisation.
It is in this context that the luxury brands become beacons for all categories. Today's global leading-edge luxury brands are raising the bar in brand and business transformation. Now more than ever, an opportunity presents itself for the Indian industry to set transformational standards for its own businesses.
So What is That We Can Learn From The Luxury Brands?
2018 is a milestone year that marks a series of firsts for the best luxury brands in the world. Chanel put its financials into the public arena and holds a commanding position in the top 100 as a new entrant. Two of the top risers in brand value across all sectors are luxury brands: Louis Vuitton at #18 and Gucci at #39. Gucci asserted its growth as one of the top five risers in Brand Value across all sectors and as the Luxury sector's leading riser, growing its brand value by 30 per cent. Hermès has been the luxury brand that sustained a consistent double-digit increase in brand value over the past five years. And most telling of all statistics – the luxury sector asserts its unprecedented presence as the top growing sector of the Best Global Brands 2018.
It's a remarkable year for brands born of a culture of excellence. Gucci has sustained its pivot through a hyper-focus on a culture of creativity and innovation, a commitment to talent and its Culture of Purpose, the brand's 10-year sustainable-impact plan. At Dior, Maria Grazia Chiuri has been clear that "Fashion today should take on the responsibility of being an activist."
The Indian Luxury Market
This is the first lesson to be learnt by the Indian luxury market as also by all businesses trying to drive premium. Brands need to be built around a strong internal culture of excellence. Indeed India is one of the attractive markets in the world due to the potential growth and the possibility of a higher share in the global market over the coming decades. Yet the current drivers are overt and social. The premium consumption in the local scenario is about expression. The categories driving premium are understandably automotive, apparel, handbags and eyewear. The badge is still key whereas in the global context the badge has dissolved into what is popularly known as signature experience built through a design language. The maturing of the customer sensibilities towards subtler forms of expression should be the next point of the curve for the Indian market.
There is also the aspect of how the origin myth and the heritage, one of the four pillars of luxury, needs to be restored as the independent history of the country has seen newer formats of consumption. The legacy and its legitimacy provide opportunities for authentic revivals. The handcraft, the meaningful intricacies of designs with character, the splendour and regal experiences once hallmarks of our preeminence may provide these opportunities.
The other pillars of premium namely focus, craft and purpose will need to be shored up too within the expected value consciousness. Affordable luxury has been the route so far and will need to be emboldened going forward for a justifiable movement up the value chain.
The critical factor that we can learn from the global brands is the emergence of a "luxury mindset'. It means adoption of luxury attitude and behaviours to increase the role of brand and experience even in categories that are not conventionally luxury.
We see that being practised globally and even locally in certain sectors. Borrowing codes and elements of luxury into reality and technology have been successful already and are worth emulating more widely and suitably.
As charted in Meta-luxury, the book that decodes the anatomy of luxury, the origins of leading luxury brands are inherently rooted in the restlessness of their founding pioneers. These are brands born out of a relentless quest to create something better, to do something better. These are lessons not just for the Indian market but for all the markets in the world.