Austin Way Magazine - GreenGale Publishing - There is a place beyond the crowds, beyond the ropes, where dreams are realized and success is celebrated. You are invited.
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always looking for new programs to offer students, just like the craftsmanship program we launched this year, the 10th program in our 10th year. Pamela Baxter: Students need to be exposed to luxury from the very beginning. You can't separate craftsmanship from the brand because it goes back to the beginning of the brand. If you take the Dior brand, it goes back to Christian creating and designing for the brand, and you want students to understand that. Today, when you have Raf Simons designing, he's very involved in the art world so he collaborates with artists to create fabric for dresses—it modernizes and keeps it going in a contemporary way. The 2008 fi nancial crisis had an impact on all market sectors. How has your consumer changed during the past fi ve to seven years? RC: I would say nothing has changed for Hermès. We found that even during the crisis customers were willing to invest in certain items. The 2008 holiday season was an interesting time because we saw loyal clients still wanting to purchase those investment pieces. VO: We learned that we are not recession-proof. Customers weren't shopping at the same level. But here's the thing: For brands like ours—true luxury brands—you don't start manipulating or changing your approach. So we took a little bit of a hit in 2008, but I think we rebounded very quickly because we didn't change our formula. Maz Zouhairi: It was similar with us. In 2010 things turned around, and 2011 and 2012 were better years. I would say that the recession did remind us that we have to be relevant, exciting, and fresh to today's world and time. Luxury is a dream, not a necessity. Millennials, the so-called fi rst generation of "digital natives," are projected to be the biggest generation of spenders since the Baby Boomers. However, millennials are dealing with economic issues Boomers didn't have to—a long-term slow- growth economy, which is postponing their arrival at certain levels of affl uence. They have more debt and less spending power than other generations did at equivalent ages. How are you marketing to them versus how you market to Boomers or their successors, Gen X? PB: If you look at brands like Chanel and Dior, we are seeing new, young couture clients every day. There are always going to be customers who have no price ceiling— they want something that's exclusive to them. RC: Maybe we're not seeing as many millennials as we'd like. And those who we do see are at an entry price point. So it's their fi rst scarf, fi rst tie, fi rst watch. Regardless of age, there is one consistency: People are genuinely interested in quality and craftsmanship. They want something that is well made, that's going to last a long time. But, for example, in the case of ties, a younger customer wants a thinner tie—same quality, just thinner. CONTINUED ON PAGE 90 Celebrating its 10th anniversary this year, the Luxury Education Foundation was established to help students acquire the specialized skills needed to succeed in luxury retail. Since LEF's founding, more than 500 students from Columbia Business School and Parsons the New School of Design have taken courses focusing on the creation and marketing of luxury goods; about half have gone on to work in the sector. The number of executives and brands involved—including Cadillac, Chanel, Cartier, Dior, Hermès, and Louis Vuitton—has grown exponentially over the past decade, just like the global goods market itself (more than $950 billion in 2014). The LEF program offers 10 classes, varying from Corporate Classroom, in which students spend the day at headquarters of luxury brands for a glimpse of day-to-day operations, to a new Luxury Craftsmanship Workshop, established this year, where design students participate in a two-week program with master artisans from LEF brands. HIGHER LEAR NING How the Luxury Education Foundation nourishes emerging talent and tomorrow's leaders. BC: It's less a generational issue than a lifestyle issue. There are certain badges of honor you want to acquire at different stages in your life. For some individuals it might be 10 days at an Amman resort. For other people, it's going to be a Chanel haute couture dress, or handbag, or something from Dior or Lalique. But it's much more individual than it was in the Boomer years, when there was more consistency to "what's your fi rst badge, what's your second badge?" Today it's based more on personality and lifestyle. MZ: It's also about having collaborations that are relevant to a younger audience. All brands are searching for ways to be relevant to the millennials. In terms of being more relevant, I recently visited a Graff store in Vegas and found Beats by Dre headphones with Graff diamonds on them. Henri Barguirdjian: The idea of doing something with Beats by Dre was a cool way to show that we're not old and stodgy, we can also be hip— so there you go. It was a fun collaboration. VO: It's interesting what you did with the Beats product. The heritage of our brands is about product. I don't think it's necessarily generational; it's about the quality and the craftsmanship that each of our brands represents. We have been around for more than 100 years, and everything we do has to be product-focused, then, secondly, it is about how can we communicate that to stimulate [interest from] different generations? What do you think are the priorities for luxury customers today? Have buying patterns changed? "If you look at Chanel and Dior, we are seeing new, young couture clients every day." —PAMELA BAXTER, CEO AND PR ESIDENT, LVMH PER FUMES AND COSMETICS NORTH AMER ICA Dior handbag