Understanding the new Indian luxury consumer and capturing the luxury rupee

Gaurav Bhatia, Founder & CEO Gaurav Bhatia– A Luxury Advisory Cell

Let us end the commoditisation of jewellery, said Gaurav Bhatia, cutting right to the chase. Consumer perceptions and the retail landscape have evolved over the last 10 years, he pointed out. It is time now for retailers to focus on building their brand, if they wish to appeal to consumer sensibilities. If retailers are to command the prices they feel they deserve, they must shed the habit of presentating unparalleled artisanship in merely material terms.

Crystal-clear advice like this, from the founder & CEO of Gaurav Bhatia–A Luxury Advisory Cell, sharpened the impact of this presentation, titled “India’s Luxury Decade: Understanding the New Indian Luxury Consumer and Capturing the Luxury Rupee”. Bhatia’s talk brought out a number of little-known but useful aspects of effective luxury branding and communication strategies.

“Developing a meaningful luxury brand that is capable of redefining lifestyle is always a good investment,” he said. “Today’s customers are influenced by international fashion trends, and they swear by brands like Fendi, Cartier, Cristiano Roberto and Jimmy Choo. They will find it extremely difficult to connect with the image of the local family jeweller. The age of jewellers and quasi-jewellery brands is over. You need to build a full-fledged luxury brand to command the premium.”

These shifts in the market and consumer behaviour call for a fundamental change in attitude among jewellers. “Despite having a huge tradition of craftsmanship, we jewellers are more worried about selling,” said Bhatia. “We don’t have the patience to create a brand. Winning over the tradition of offering [price] breakup would be the real victory for us and a definite step towards creating a brand.” The audience applauded enthusiastically. Jewellers are not unwilling to adjust their mindset — and Bhatia kept them avidly engaged from first to last.

 

If everybody could afford a BMW, who would want one?
Few people are better qualified than Bhatia to speak of luxury and the market — he was marketing director at Moët Hennessy India, a subsidiary of LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury conglomerate. He has worked in advertising with Young & Rubicam, where his clients included world-leading names like Sony, Kraft, AT&T, the Singapore Tourism Board and the Taj Group of Hotels.
In his speech at RJIF 2016 he explained aspects of true luxury is by means of quips built on actual examples. For instance: “People don’t buy fur from Fendi to keep themselves warm.” “If Beluga caviar were cheap, who would eat it?” “If Dom Perignon (champagne) were drunk by everyone, who would drink it?”

With a quite appropriate degree of lyricism he defined luxury in terms of what it means and what it does. “Luxury is beauty, heritage, handcrafted and bespoke. It is the indulgence of the senses, regardless of the cost. Luxury products push all limits of perfection, craftsmanship and decadence. Luxury products possess distinctive tradition and unparalleled quality. They are more perfect than perfect. Making luxury is an art, but it’s also a science.”
And this is more than a definition; it is a checklist of virtues for a true luxury brand.
“Luxury is about emotion,” he said. “A luxury brand should be able to establish an emotional connect with its customers. [If you do that,] You will be able to command a premium. Luxury is essentially timeless; it’s a quest for perfection.”

Luxury brands should know how to evoke emotion with engaging stories. Jewellers in India have enough ingredients to weave such stories around their products, Bhatia said. “Have you ever been proud of those stories?” he asked. “Are you willing to tell them? There are people who will listen, provided you package the stories well.”
To show what he meant, Bhatia told the story of the Kelly Bag from Hermès, a Paris-based high-end accessory brand. In 1956, paparazzi captured the former Hollywood actress and newly married Princess Grace (Kelly) of Monaco using an Hermès handbag to hide a pregnancy bump. This fairly innocuous act by an A-lister, caught on camera, gave a huge impetus to the luxury accessories brand, and the bag became a bestseller despite its price.
There is a momentous next chapter to this story, and Bhatia narrated it. Jane Birkin, an English actress who lived in France, happened to meet Hermès owner Kenneth Hermès and took the opportunity to complain to him about the lack of space inside a Kelly bag. That feedback led to the Birkin bag, which was more spacious — and is today one of the true “It” bags.

“Sometimes you need to create a story out of nothing, and that story grows into a bigger story,” said Bhatia. Foreign luxury brands, despite difficult tax structures, are targeting high-net-worth individuals (HNIs) in India with similarly charming stories through advertising, visual merchandising, product design, in-film placement, glamorous in-store events and more. Indian jewellers should wake up and compete for consumer mindspace with the help of more enchanting stories, said Bhatia.

Five Ps to build a luxury brand
There are five tenets a luxury brand needs to follow to create an impact, according to Bhatia.
The first fundamental idea is perfection driven by zero-error quality. For instance, buyers won’t find a single thread missing in a Chanel bag. “Optimum quality assurance backed by discreet heritage creates lust for the product in the consumer mind,” said Bhatia.
The quest for perfection should cover other elements associated with the product as well, including packaging. Consumers take pride in flaunting a branded carry-bag that is as well-made and beautiful as the product it encloses, he explained.
Second, there has to be passion associated with the brand. “A passionate luxury brand evokes a passionate response among its consumers,” said Bhatia. “Passion uplifts the brand experience. It lends uniqueness to a product.” He referred his audience to the positioning statement of Rolls-Royce, the famous car marque. Here is how he described it: “We make sculpture that also happens to provide transportation.”

The message? “Brand owners should think like that to create a brand like that, to be able to charge like that.” At the same time, he reminded the gathering, “a luxury brand doesn’t leverage passion and heritage only. They look at future trends, to innovate and to remain relevant.”
Third, luxury is about privilege. “A luxury brand should offer experiences that are custom-designed for the chosen few,” said Bhatia. “Its offerings have to be bespoke.”

Fourth is prestige, another key factor. “Prestige lies in the consumption of luxury brands and what that consumption signals: wealth and style. Luxury brands should be able to signal consumers’ discernment, their arrival in the big league.” The story as well as the in-store ambience of a brand, said Bhatia, should reflect prestige so effectively that customers wouldn’t dream of demanding a discount.

Promotion, the fifth and final tenet, plays a pivotal role in shaping the consumer’s perception of a luxury brand. “You need innovative thinking in your communication strategy,” he said, “whether advertising, visual merchandising or social media. That is what gives a campaign memorability and lastingness. Advertising communication has to be subtle, tasteful and stylish. It must reflect the core value of the product without pushy product placement. It should seduce, with minimal words. Premier luxury brands have been doing this effectively with celebrity brand-endorsement. PR-led celebrity events are another factor to focus on.”

A luxury brand cannot ignore social media, which must be used innovatively so as to bring the brand into engagement with its consumers. Creating dialogues with the consumers or web-casting gala events often leads to superior consumer traction, Bhatia said.
At the same time, he urged brand owners to expand their communi -cation footprint geographically. “If you don’t communicate with the larger audience, you will remain a regional leader. You need to communicate with HNIs in other parts of the country, or the world for that matter, because that’s how a luxury brand grows.”

Know your consumer, play the winning game
Purchase influencers and dynamics have changed over the years, said Bhatia. “Consumers buy less but pay more for quality. The movement from quantity to quality is changing. Consumers want to buy more beautiful things across categories, and for that they want to compromise on numbers [of purchases]. One beautiful ring or an exceptionally designed lehenga is sufficient for the new-age bride.”
What’s more, he explained, consumers now “want everything with a designer touch. Purchase has become more experiential, and women are having their say thanks to their growing financial independence. Adding a feminine touch to the entire buying experience is a priority for luxury brands. Today’s consumers, especially millennials, want brands to fit in with their lives in a meaningful way.”
The expert marketer concluded with a reference to the government’s Make in India campaign. “The campaign has changed things for Indian brands across categories,” Bhatia said. “It has added equity and prestige to owning products that are made in India. Taxation structures have changed in ways that make it challenging for international luxury brands to expand their business in India. This is an opportunity for Indian brands to grow and prosper. Jewellers should look more seriously at developing luxury brands with a global appeal.”
There’s vision for you — looking through the here and now and far into tomorrow.