I recently returned from The Luxury Summit. There is something inherently wrong with flying to the annual American Express luxury brand extravaganza wedged in a coach seat next to a guy who resembles Larry the Cable Guy.
The Summit is a two-day meeting of luxury brand executives who are gathering to share, learn, exchange knowledge and act luxuriously. I joined the intimate group of 200 for the first time after being encouraged by Peter Bates to experience it.
But, the work I do, and the life I lead run on different tracks. So by morning I was swinging by McDonald’s in the airport terminal for breakfast and by evening I was strolling through the doors of one of the nicest resorts in Utah.
I gradually fit in with the crowd, but not necessarily in my thinking.
A speaker from McKinsey beat heavily on the “wealthy are now overseas” drum. China! Russia! Brazil! That is where the new rich are and where we should go to sell more expensive stuff. It makes the cynical among us wonder if that is where you turn when your product lifecycle is on the downswing. Can it be that the wealthy in fully developed, mature societies have simply tired of overpriced, poorly manufactured goods that sell at inflated prices due solely to their fading brand glory?
I’ll be the first to call these new markets what they are: where brands go to die. Perhaps it’s time to breathe new life into your brand and make it relevant to today’s new consumer right where they have always been, instead of defaulting to the latest, greatest wealth cluster, wherever the hell that might be.
I appreciated the candor of Lawrence Geller, President, CEO, Director and Founder of Strategic Hotel Capital, which owns a ton of ultra-luxury hotel properties. In effect, Larry followed the McKinsey presentation with a no-nonsense rant on the absurdity of this “emerging wealth in emerging places” strategy. Larry said it straight: why in the world do we want to try to do business in places so unknown that on any given day the leadership of say, Brazil, might just decide to nationalize your holdings?
Thanks Larry, for the reality check. While I agree that there is significant opportunity among the gazillion Chinese who can’t wait for a Gucci bag or a W Hotel, I also know that when a brand loses focus, it leaves a void for new (or lesser known) brands to fill. And that is a good thing.