What Is Luxury?

by seanlow on June 20, 2017

I have recently returned from Engage! 17: Grand Cayman, THE conference for luxury wedding professionals. At this point, if you consider yourself in the luxury wedding business and have not attended an Engage!, you are doing yourself, your art and your wedding business an incredible disservice.  I have also just completed my second post for The BBC Collective on Client Management where we are going to tackle the Mindy Weiss lawsuit on our conference call this week (see you there?). Then I read this morning an op-ed in the New York Times speculating about why Amazon might be buying Whole Foods while every other brick-and-mortar luxury retailer is in a death spiral.

The common theme: luxury is ill-defined and currently identifies a spectrum that makes niche unintelligible. Translation: we treat all luxury the same at our own peril. For interior designers, a $1 million project is not a $250,000 project. Same thing for weddings and fashion and all other creative endeavors. Yet, for the most part, the underlying business model for each is EXACTLY the same. Tweaks on a model (i.e., higher or lower percentage, higher or lower deposit, etc.) are not different models, just permutations on the same value proposition.  Yes, this sucks and is not nearly good enough.

As the NY Times op-ed surmises, Amazon might be buying Apple so that it can segment its client base to treat affluent clients differently. Create the Apple store experiences that Amazon simply cannot do online where anyone can access their site.

The luxury experience is always a big theme at Engage!. How brides and grooms are treated, their guests and what it takes to improve on the luxury wedding experience. Clearly and obviously, creating better experiences for those involved in a wedding, interior design project, video project is critical. Just as critical though, but receiving far less scrutiny and hard-thinking, is what the underlying business propositions and models are that serve each segment of the luxury market. An incredibly powerful example of what I am talking about is this awesome article in Racked.com about weddings for the 0.01 percent featuring Marcy Blum, Sarah Haywood, and Preston Bailey among others. When you read it (if you have not already), notice the various business models employed – flat fee, percentage, combinations of both and the variations in what an ultra-luxury wedding is – Marcy says $1,500/pp and up, Preston $5,000/pp and up. The debate is not who is right, it is an understanding of who we are talking about and more important what that luxury client typically seeks (i.e., what is valuable to them).

Nobody buys from Apple because they are a value play in terms of price. You can always get a technically superior product from someone else for less. Apple does not care about processor speed nearly as much as it cares about customer delight (yes, it might be waning but they are light years ahead of everyone else).

We are past the point of recognizing the influence of The Long Tail. We need to power creative business to appreciate segmented value propositions for each level of luxury and build business models accordingly. If the top 0.01 percent care about originality and creativity above all else, quit making your business about what each part of IT costs before you create what IT is. To make it real, if you are an interior designer working at the $135/psf level and above (i.e., @$400,000 for a 3,000sf house) you are forbidden from providing line item costs until you are done designing, Same for wedding planners/designers working with budgets of $2,500/pp and above (sorry Marcy, $1,500/pp is not in this category). And please oh please, if you are getting paid for your creativity, get paid for it and it alone. At this level, the “get out of bed fee” has to be $100,000 and up, JUST TO CREATE, not produce.  Here’s why?  If your creativity is not worth at least that much, how will those coming below your level ever justify the value of theirs?

Here is the issue, if creative businesses do not do a better job of segmenting what luxury market they are actually in, they cannot create business models that best serve THAT market. Each creative business then has an obligation to say – YOU are my client whoever that may be. From there, everything about your creative business – your price, how many projects you take, how you go about creating your art, how you finish – has to be about THAT client. Will clients that do not fit THE model come along? Sure. Who cares. These clients are going to have to accept the model as for who it was intended, not the other way around.  Abandoning niche for the outlier is a fools errand if there ever was one.

My opinion is this – all creative business is luxury. Luxury is something no one needs but wants. That is creative business to a tee. So do not shirk your responsibility here if you are at a lower level on the luxury scale. Value is value. Ultra luxury might do 5 projects a year, your creative business might do 50. What makes you and most importantly your creative business’ process compelling there beyond anyone else?

The time has long come for creative business to accept the gradations of luxury and meet the challenges that niche demands. Accept that you can only surprise and delight those you and your art most care about. Go all in there with how your creative business runs. This means that you MUST get paid for what you care about most. Not just because you can, but because you have to. Let us not go the way of traditional brick-and-mortar retail (i.e., dying a slow, excruciatingly painful death). Instead, let us all evolve because it is better for all of us if we do. Niche demands specific value delivery and payment for that value. Niche is only going to grow. Let us all agree that a one-size-fits-all business model across the entire luxury creative business spectrum is a zombie about to become a vampire and choose to go another way.  Into the light.

{ 1 comment }

1 Richard Aaron July 15, 2017 at 12:26 pm

As a professor of Event Mgt and Marketing I look forward for obyoyr insight

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