The real value of luxury: an interview with Dr. Daniel Langer
This post is also available in: Bulgarian
Today’s post, dedicated the real value of luxury is an interview with an inspiring interlocutor I met via le Salon du luxe, Paris – Dr. Daniel Langer.
Dr. Daniel Langer is founder and CEO of Équité, a leading global brand development firm where he elevates luxury, lifestyle and consumer brands to accelerate their growth, profitability and brand valuation. He works with brands in many categories like beauty, hospitality, fashion & apparel or automotive including iconic luxury brands like Ferrari, Maserati or Hollywood celebrity stylist’s Iles Formula luxury hair care. He holds a PhD in luxury marketing, is a major contributor to the advancement of luxury science and is author of several top-rated books on luxury management in English and Chinese. He is also a sought after keynote speaker, coach to the top management of luxury companies, expert on leading with millennials and commentator by the media. His luxury leadership trainings are booked all over the world including Japan. He held several top management positions in USA, Japan and Europe, where he developed multiple triple digit million dollar brands from scratch and managed billion dollar businesses. He lives in USA, works all around the world, speaks seven languages and enjoys yoga.
What is the emotional value of luxury?
Dr. Daniel Langer: When people buy a luxury product they don’t pay for the product as such, but for certain factors that are intangible and provide the tremendous value which is reflected in the high price points. Experience is part of it. But not just a everyday experience. Luxury at its best provides a once-in-a-lifetime experience, a moment people do not forget. But luxury also is a head-turner, adds to self-esteem and makes people feel special. We could show that in extensive research.
In one of your interviews you say many luxury items are too cheap. Why?
Yes. While this may sound surprising at first glance, we found through our pricing tools that many luxury brands are too cheap. A good example is the Porsche 911R. In the US it was priced around 140,000 dollars, limited to 911 units. So why could that car be too cheap? First, the entire edition was sold out immediately which indicates that customers saw a very high value in that particular car. Second, now, two years after the edition has sold out, used 911Rs are sold for about 500,000 dollars. Porsche could have sold the car significantly more expensive, or in other words: it was too cheap. In luxury, pricing is still made often using gut feeling instead of tools. This can lead to expensive mistakes. Instead, we use proprietary luxury pricing tools for our clients, allowing them to have more precision when they take pricing decisions.
What do you think of the term accessible luxury (luxe accessible)?
Many brands expand, offering more affordable products. Just because many brands do it, it does not mean that it is right. While the temptation to have more accessible products is high, there is a dramatic risk to the health of a brand. Many luxury brands that lost their luster and declined sharply did so because they weakened the positioning with cheaper offers that devaluated the brand over time.
Luxury is fundamentally different than mass market. It requires a different thinking and a different mindset. If a luxury brand is treated like a mass brand, getting too accessible and too broad, irreversible damage is very likely.
Luxury and sustainability: why making luxury more sustainable is a challenge?
Sustainability is at the top on the agenda of almost any luxury brand. But lip service is not sufficient anymore. Consumer expectations shift and especially millennials care much more how products are produced, which materials are used and what is the ecological impact. For luxury brands being truly sustainable is challenging, since luxuries are extreme by definition. And many traditional companies struggle since they are locked into an existing business setup. On the other hand it is exciting to see that many luxury startups embrace sustainability and create sustainable business models that have the potential to disrupt the luxury market.
Can you share an inspiring example from fashion industry and the new way of thinking luxury via customer experience?
I just spoke yesterday with a top manager of one of the most prestigious luxury brands in the world. For him, experience was the name of the game and I could not agree more. In fashion, what comes to my mind, is the most personal treatment I get when I buy a suit at Ermenegildo Zegna in New York. I am attended in a separate room, get a glass of champagne while choosing fabrics and discussing the tailoring with the team in the store, in total privacy, in a highly professional, convenient, totally personalized way. While I shop I am pampered and taken care of. Everyone will do their best to give me the most incredible service, experience at its best. In contrary, when I recently went to a shop of another luxury fashion brand (I won’t reveal the name), I felt like in a cheap car dealership, with sales people stalking me and being arrogant. With millennials voting with their wallets, the time where luxury fashion stores are intimating is over.
During FashionTech conference in Berlin it was said luxury market used to center on Paris, Milan and New York, but the future luxury centers will be Berlin, Seoul and L.A. What is your opinion on that?
Luxury needs creativity to stay surprising and relevant. This is why creative hotspots like LA or Berlin will have a much bigger influence on luxury.
Is it possible, for smaller countries, with no particular history in luxury, to position themselves on this market?
Yes. One of my clients is a super cool rebellious luxury brand that was born not so long ago in Singapore. Brand relevance is much more important than origin.
What is your biggest luxury?
I love authentic experiences. One of them is driving a 1965 Cobra on a highway in sunny weather. Feeling the sheer raw and unfiltered power of an unapologetic car made for nothing else than fast driving is a rare moment of experiential luxury.