Luxury Institute Trends - 2008 and Beyond
By: Milton Pedraza, CEO - www.LuxuryInstitute.com

1.) Old Guard of Luxury Passes the Baton to a New Generation. Are They Ready for a Flat World?
Throughout Luxurydom the founders, family members and their trusted lieutenants who built the grand luxury behemoths and boutiques alike have begun to retire, to sell, and consider family legacy and philanthropy. The new generation of leaders who will inherit these brands must not seek to merely replicate old business models...

2.) Luxury Rediscovers Great Service as a Differentiator
As economic slowdown in the U. S impacts the luxury industry, particularly those who sell to the affluent masses, luxury firms will rediscover or perhaps discover, that mainstream millionaire consumers, not just celebrities and heirs, require great service to earn their loyalty...

3.) The Luxury Access Revolution, Phase Three
A few years ago, the Luxury Institute was the first to predict the advent of the "Luxury Access Revolution," an accelerating phenomenon at every price point on the luxury-spend spectrum. Jets, yachts, vacation homes, autos, vineyards, golf clubs, even typically less pricey items such as handbags, jewelry, and watches, were embracing membership - selling variety, convenience and utility, without the hassles of ownership...

4.) Beyond Concierge Services
It seems that these days everyone provides concierge services, along with their product or service. From credit card companies to private banks, concierge services are the rage. Well, expect these commoditized, low-margin services to begin to morph into high-fee, high-value consulting services, worthy of the name...

5.) Philanthropy Industry Shakeout-Phase Two
Bill Gates and Warren Buffet's entry into big-league philanthropy did not just create the "alms race" we predicted. Their participation, and the trend they started, have brought with them great media attention, and a level of accountability, that has lifted the veil to expose the incompetence and, sometimes dishonesty, that plagues a large segment of this tax-sheltered industry...

6.) Luxury Brands Will Embrace Communities of Raving Fans
If any brands have truly devoted, emotionally invested fans, it is Luxury brands. However, luxury firms, many of which are trapped in traditional media, have failed to listen to, engage, and create a community dialogue among their most ardent fans (read: customers; current and future). Could it be because when you inspire fans to have a sincere dialogue online, and make it transparent and public, you lose control...

7.) Luxury Discovers Mass Scalability is Hard When You Leave Out the Customer Service Experience
Oops. Looks like all those luxury brands racing to transform themselves into affordable luxury (a contradiction in terms) by making deals with mass retailers, forgot the business model is not just about stamping out more luxury widgets. Quality production (never mind the quality of raw materials, that's a detail) may be scalable when you serve the masses, but has anyone noticed that part of the experience of luxury is great, over-the-top, personalized service...

8.) Luxury Retailers Eliminate Marginal Brands
Top luxury retailers -Nordstrom, Neiman Marcus, Barney's, Bergdorf's, and Saks - have long prided themselves on being expert guides to luxury for their wealthy customers. But brands such as Vivre have created inroads by becoming curators, delivering connoisseurship, and a higher level of consistently unique and exclusive offerings. Now look for retailers to go up-market and start to eliminate marginally luxurious product lines as they embrace and experiment with unique, new designers who wish to remain bespoke. Luxury retailers will earn their curatorial stripes with their wealthy customers once again...

THE CASE FOR DESIGN EFFECTIVENESS
Courtesy of Dylan Watkins, Pearlfisher

Well known fact 1: When all else is equal in terms of product quality and price, it is better design that creates the competitive business advantage.

Well known fact 2: We are living in an age of media revolution, which has diluted the power of traditional advertising, the costs and relevance of huge advertising spends?

Well known fact 3: In a world of shorter attention spans for the over-choiced consumer, it is mould breaking, forward thinking design that meets evolving human needs, which stands out.

All of these things add up to a very compelling argument; the power of design can be directly related to the commercial effectiveness of a product or service and the overall success of the brand.

U.S. Web ad revenue in the third quarter continued its record growth, hitting $5.2 billion, a 25% gain over the same period last year, according to a report from IAB and PricewaterhouseCoopers.

"The continued robust growth of the industry indicates that marketers increasingly understand and appreciate the benefits of interactive advertising," IAB President-CEO Randall Rothenberg said in a statement.

Editor's note: Below is a study conducted by the BBMG in conjunction with Global Strategy Group and Bagatto. The results confirm that consumers have a growing concern for the environment and desire to purchase products from companies that have commitments to sustainability. Consumers are more likely to buy (if products are of equal quality and price) from companies that:

· Manufacture energy efficient products (90%)
· Promote health and safety benefits (88%)
· Support fair labor and trade practices (87%)
· Commit to environmentally-friendly practices (87%)

Raphael Bemporad, founding partner of BBMG, says "... conscious consumers expect companies to do more than make eco-friendly claims. They demand transparency and accountability across every level of business practice... "

The above article and more can be found at The Center for Media Research online. This free online publication helps to acquire, organize, analyze and present the necessary statistical and qualitative information to support or direct strategic decisions... and make those decisions fast and accurately.