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NEWS & FEATURES |
"How Recession Proof is the Luxury Industry" 1ST ANNUAL NEWSMAKERS' PANEL - APRIL 24, 2002
Wednesday April 24th marked the first Newsmakers event organized by the New-York Chapter of the ESSEC Alumni Association. This event was met with much success and its anniversary will be celebrated for years to come. It drew over 200 executives from the luxury goods industry and varied professional fields who came to the Plaza Hotel on that night. This year's topic focused on the perplexing question: "How recession-proof is the luxury goods industry?" The evening's discussion featured luxury industry opinion leaders, each with an expertise in marketing, finance or legal concerns. The prestigious panel included (click name for more info):
This newsworthy event was organized with the mutual cooperation of ESSEC Business School and its Dean, Mr. Pierre Tapie as well as the ESSEC Alumni Task Force, based in New York. Several key corporate sponsors echoed that support by recognizing the timeliness and importance of the topic discussed. They included: Cartier, Coudert Brothers LLP, Du Parc, Lyons & Associates, Estee Lauder, Fairmont, Givenchy Parfums, Moët & Chandon, Pernod Ricard USA and Town & Country. PROGRAM KICK-OFF Anne Stone, President of the ESSEC Business School Alumni Association, USA kicked off the event with a welcome and thanks to all attendees and panelists. She captured the spirit of ESSEC Business School by sharing its four key strengths: innovation, pragmatism, generosity and pride to represent the School. Gary Schweikert, Regional VP & Managing Director of Fairmont Hotel and Resorts (the Plaza Hotel's Managing Group) offered a warm welcome to all attendees and stressed the importance of the partnership between and Fairmont and ESSEC. This relationship is natural due to ESSEC's noteworthy academic reputation, exemplified by the IMHI MBA, a program on the forefront of the hospitality industry. He also reminded the audience of the similar roots of both institutions, the Plaza and ESSEC which were founded in the same year 1907. Dr. Pierre Tapie, Dean of ESSEC Business School has applied his varied talents and vision for the university over the last year. He shared his excitement in hosting this event in New York and welcoming attendees in the ESSEC spirit of intellectual and academic excellence. In his presentation, he touched on the leadership ESSEC in executive education program that boasts 5,000 graduates annually. He stressed the strength of the Grande Ecole System created by Napoleon to train France's future leaders. This tradition has evolved into preparation for business managers to face the challenges of today's global economy. Elyette Roux, ESSEC Prestige LVMH Chair Professor, who forged the Luxury Studies program, offered a special welcome to the panel and insightful presentation into the history and future of luxury. She shed light onto the evolving shifts in luxury image and brand values over the last 30 years. Further she touched on enduring strengths and the future path for successful luxury brands. Topics that will be further illuminated in her collaborative book with Gilles Lipovetsky due to be released this September. The panel discussion's moderator was, Antoine Treuille, Executive Managing Director, Mercantile Capital Partners, who boasts over 20 years investment experience in the merchandising sector including Tommy Bahama and Sun Glass Hut. He is an active member of several corporate boards including BIC and previously served as the President of ESSEC Business School in the US. His experience offered him the insight to appropriately present each panelist and manage a constant flow of conversation and debate.
PANEL DISCUSSION HIGHLIGHTS RECESSIONARY INFLUENCES Noted experts in the world of fashion and beauty retail, Mr. Traub, Mr. Bousquet-Chavanne and Ms McDonald tackled the question of the recession's effects on luxury, which were manifested differently than in other industries. After September 11th, the slow down in luxury spending was heightened. The decrease of domestic and international travel was marked by a more drastic drop in duty-free and travel purchases, a major source of luxury activity and revenue.
CONSUMER SHIFTS The panel explored a key challenge facing the future of the luxury industry, the generational shift of consumers. Clearly, how consumers interact and identify with a brand has everything to do with their generation's mindset and values. Several panelists including, Ms. Fiori and Ms. McDonald, explained the social and behavioral diversity amongst different demographic groups. Baby-boomers now in their 50's and 60's have renewed interest in buying durable goods such as luxury real estate and home furnishing rather than perfumes and clothes. However, younger age segments comprised of Gen X and Gen Y consumers have different expectations from luxury products. They look for modernity and the convenience of finding luxury items in their local store or on the web in an approachable way.
From left: Marvin Traub, Anne Stone, Philip Miller, Patrick Bousquet-Chavanne, Antoine Treuille, Elyette Roux, Camille McDonald, Alain Viot, Pamela Fiori, Antoine Colonna, Anthony Kahn and Pierre Tapie. THE DEBATE An important debate ensued about who should be the primary target client for luxury communication. A wealthy baby boomer with more discretionary income or a younger consumer who will be investing in luxury brands more over time? Ms. Fiori emphasized the importance of concentrating on core clients, older affluent clients who make the majority of luxury purchases. In her estimation, many designers and brands estrange this group with hyper-trendy campaigns and styles targeted to a younger, less affluent consumer. Several panelists agreed with this position but emphasized that the future of luxury is about redefinition. According to Phillip B. Miller and Anthony Kahn, one needs to create, evolve and innovate with new designs and products to fulfill the dreams of a new generation. ENDURING VALUE
In regards to other concerns, different-sized brands are not created equal. As Antoine Colonna remarked, in times of recession, major brands like Cartier take market share from smaller brands and from the non-branded market. Major brands will never be seriously threatened by a recession. Why is that? The conjecture is that a strong brand has more established value. Most consumers are less willing to experiment with unknown brands for their luxury purchases. This factor makes brand select less elastic than other industries.
Mr. Kahn introduced the concept of rarity in valuing luxury product. They appeal to an elite population whose spending power doesn't rely on economic context but rather their careful selection. The notion of having an item or style becoming too ubiquitous decreases their attraction to it. Mr. Viot touched on another thoughtful definition of luxury. He described the love bond grown between the client and the brand, a relationship developed carefully that endures over time. The consistent values of quality, creativity and service must be demonstrated and surpassed by the luxury brand itself. The careful refurbishment of Cartier's 5th Avenue store in respect to modernity and tradition reflects this commitment of honoring the relationship between brand and client HONOR AWARDS Anne Stone concluded the debate by presenting each panelist with " La Medaille des Anciens ", an award conferred on auspicious events, organized by ESSEC Alumni to recognize individuals of exceptional caliber. This tradition has spanned the last forty years and is highly redeemed in academia and in the business industry. Panelists (Non-ESSEC alumni) received this symbol of appreciation that reflects their extensive contribution to our First Annual Newsmakers Panel. The event concluded with a celebratory, cocktail reception in the Plaza's Baroque Room. Essec Business School Alumni Website: www.essecusa.comMore information about the Essec Business School
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