There are volumes written about the luxury industry these days. It is amusing how an industry where an average Luxe brand posts worldwide revenue of less than 10 Apple stores gets so much attention! Perhaps because so many of them are run by Poets!? Poets, who have successfully managed to push the luxury industry to become one of the most aspirational and most followed in recent times. It is this insight that a recent Wall Street Journal blog uncovers.
According to the blog Professor Charles de Brabant, a China luxury expert and Human Resource Consultant, believes that luxury companies are best run by peasants(mainly Europeans apparently) with a little help from poets and craftsmen. Please see http://blogs.wsj.com/source/2011/04/21/why-luxury-companies-are-best-run-by-peasants-and-europeans
The common perception however is that the industry is built by Poets. You don’t expect peasants to be dressed in their Pradas and Guccis, holding a glass of Dom Perignon at a trendy Members – only club with a group of socialites (READ influencers). It’s a lot of work my dear (like my PR once said) and not one for the toiling peasant!
One look at the CEOs who run the most successful luxury brands would prove that they are all MBAs from reputed management institutes who somewhere along their careers picked up the fine art of crafting poetry and made a habit of it. If you attend any of the 30 and more luxury conferences that are held in any part of the world this month,none of the speakers (largely CEOS and brand executives) will talk business. They will talk about their brand heritage, innovation and creativity of their marketing campaigns and the mausoleums of luxury the Peter Marinos are building – not once will you hear of the challenges they face in running their businesses or breaking even their P & L’s.
I believe that luxury brands (depending on the brands and their culture) need to choose when and where they need the peasants, their craftsmen and their poets.This decision would also depend on the maturity of the markets that the brands operate in. Emerging markets where the industry is in a nascent stage may require the poets to educate the customer about the brand’s heritage, weave the magic and create aspiration. The wining and dining poets are supported by the toiling peasants to manage the customer experience at the moment of truth in the stores – to run the stores, train the teams, replenish the inventory and manage the selling ceremony. Fast growing and mature markets are more poet driven where the brands require creative and innovative ways to stimulate and keep the excitement around the peasant run smooth operations. In most emerging markets there arrives a stage of growth when local peasants are replaced by European poets (luxury canvas being the prerogative of the French and Northern Italians). One quick look at China’s luxury canvas and we see more European General Managers and country managers with the exception of a very few. In markets like India, Vietnam the reverse is true as the market continues struggling through the first stage of the growth cycle – the local managers (read peasants) running from city to city trying to sell that one bag that could make the business seem more meaningful.
Perhaps some brands choose to work with the quick turnaround hero managers or peasants and don’t believe in the value that poets could bring to creating the magic around luxury brands. Their approach is a quick fix of their bottom line and hence don’t feature in the top 15 world’s most valuable luxury brands. They might not because it takes a fine balance of peasants, craftsmen and poets to build a brand whether in luxury , FMCG or technology. Although each has a valuable role to play, it is the poets who eventually add lustre to the brand.
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