The Road to Luxury

Discover the meaning of the latest trends in the luxury industry with this resource from leading voices in the field

The thoroughly revised Second Edition of The Road to Luxury: The New Frontiers in Luxury Brand Management delivers a comprehensive overview of the foundations of, and new developments in, luxury brands. The book discusses a new wave of mergers and acquisitions, the rise of Gucci, the growth of Balenciaga, a variety of new collaborations between different companies, a growing support for sustainability, and the COVID-19 pandemic.

Readers will also benefit from the inclusion of:

• An insightful analysis of the impact and meaning of the COVID-19 for the luxury industry, particularly for market growth in China
• The creation of savoir faire and business plan competitions in the luxury industry
• LVMH's sponsoring of Viva Technology

Perfect for students in MBA programs or taking degrees or courses in Luxury Brand Management, The Road to Luxury will also earn a place in the libraries of executives and managers in the luxury business, marketing, branding, and advertising professionals and companies, and entrepreneurs interested in the workings of the luxury industry.

Acknowledgments xi

About the Authors xv

Prologue xvii

Part I: Understanding the Luxury Business 1

Chapter 1: Introduction— Definition and Crisis of Luxury 2

Issues of Defining Luxury 3

Crisis 5

The Luxury Industry 7

Reaction to the Crisis of Global Markets 9

The Effect of a Crisis on the Luxury Industry 17

Strategic Response to Crisis 19

Conclusion 25

Chapter 2: Evolution of the Global Luxury Market 27

Evolution 30

How Has It Changed? 36

Luxury Industry Trends 39

Conclusion 48

Chapter 3: Who’s Who of Luxury 49

The Consumers 50

The Actors 52

Conclusion 94

Chapter 4: Branding 97

Market Saturation 98

Luxury Marketing: Highly Creative and Selective 101

The Nine Ps of Luxury Brand Marketing for the Nomad of Tomorrow 111

Discussion 134

Conclusion 134

Chapter 5: Brand Identity, Ethos, Clients 137

Brand Identity 138

Ethos 144

Clients 149

Discussion 154

Pricing of Luxury Goods 155

Conclusion 160

Part II: Luxury Management and Markets 161

Chapter 6: Family- Run Houses, Corporatization, and New Entrants 162

What Is a Family- Run Business? 165

Family- Run Business During a Crisis 183

Family- Run Businesses of the Future: Corporatization 184

Changes During the Transition from a Family- Run Business Model to That of a Corporation 190

Entrepreneurs and New Entrants into Existing Markets 194

Trends and Discussion 198

Conclusion 202

Chapter 7: Management Styles in the Luxury Industry 203

Path Dependency and Its Influence on Management Styles 205

Managing Paradoxes 210

Examples of Styles 218

Analysis 237

Conclusion 240

Chapter 8: Skills 244

Craftsmanship Through History 248

Entrepreneurial Designers 253

The Sales Team 253

Professional Managers 257

Perspective of the Conglomerates 259

Managing Talent 262

Conclusion 275

Chapter 9: Managing Operations and Supply Chain in the Luxury Business 279

The Challenge 282

The Global and the Local Supply Chain 285

Customer Relationship Management and Customer Experience 295

Conclusion 300

Chapter 10: Services: The Point of Sale 304

Issues at Point of Sale 307

The Customer Experience Dimension 311

The Service Dimension 316

The Phygital Dimension 319

Conclusion 327

Part III: Contemporary Issues and the New Frontiers 331

Chapter 11: Digitalization of Retail— E- commerce, Platforms, and Omnichannel 332

Introduction 332

Evolution of Distribution and Retailing 335

Conclusion 381

Chapter 12: Sustainability, Circularity, and the New Era of Luxury 384

Introduction 384

Definitional Issue and “the Right Strategy” 385

Social, Environmental, and Economic Challenges 387

The Social Challenge 388

The Environmental Challenge 389

The Economic Challenge 394

The Three Challenges 395

Forces Shaping the Sustainability Model for Luxury Business 396

Sustainable Business Model Best Practice for the Luxury Business 410

Conclusion 416

Chapter 13: New Markets and the Future 419

A Consolidated Industry 420

The Frontier Markets 421

The Pandemic Aftermath 433

The Future 440

The New Frontier 443

Chapter 14: Epilogue: How to Create a Luxury Brand 449

Case Studies on Luxury Entrepreneurship 451

Revisiting the 9Ps as the Essentials of Building a Luxury Brand 465

Expanding into International Markets as a Way of Growth for Emerging Brands in Frontier Markets 471

Research Design, Methodology, and Data Collection 475

Index 481

ASHOK SOM is Professor of the Management Department at ESSEC Business School. He is one of the pioneering thought leaders in designing organizations and an expert in global strategy. He is author of more than 110 cases, articles and books. He mentors start-ups and holds a PhD in Business Administration from the Indian Institute of Management in Ahmedabad, India.

CHRISTIAN BLANCKAERT is Senior Advisor of EPI group, Eurazeo, Vilebrequin and Furla. He is a board member of the Yves Rocher Group. He has previously served as Chairman and CEO of Hermès Sellier and Executive Vice President of Hermès International.

The Road to Luxury, Second Edition serves as a comprehensive research-driven book on what the luxury industry had been, is and will be during and after the COVID-19 pandemic, and remains the definitive insider’s guide to every essential aspect of the luxury sector. Broad in depth and scope, this book delivers a comprehensive overview of the foundations of and new developments in luxury brands. Clearly written chapters analyze the evolution of the industry and the luxury phenomenon through academic frameworks as applied to practical examples and cover topics such as digitalization and the rise of platforms, singularity, new wave of mergers and acquisitions, collaborations between companies, the growing support for sustainability, China as the growth engine, hyper-localization and the COVID-19 pandemic.

In this new edition, two of the field’s leading voices review the luxury industry’s ongoing transformation, beginning with an introduction of the luxury concept and the leaders in the luxury business and then delving into the different traditional personal luxury goods sectors and their extensions into the luxury business to explain their backgrounds and where they stand as of today in terms of business attractiveness and appropriateness. The authors also touch on the counter-intuitive nature of the luxury industry, its clients and their values and present the who’s who of the luxury industry.

Thoroughly revised and updated throughout, the text identifies the essential qualities of the staff, service attributes and customer experience that the entire luxury experience should guarantee. It also tackles topics on Operations such as the supply chain, sustainability, and synergy for the long-term luxury strategy, supplementing the discussion with an exhaustive coverage of the phygital distribution and e-commerce strategies and challenges. It also addresses the topic around China as a growth market in the luxury industry, leading the way in terms of sheer size of market growth over the next two decades. The concluding chapters give particular focus on the future and provide readers a tool kit on how to develop a New Luxury Brand.

This second edition is an ideal resource not only for the academically-inclined, the newage luxury managers and the aspiring luxury entrepreneurs, but also a practical reference for the ever-growing world of luxury.

PRAISE FOR THE ROAD TO LUXURY

"The Road to Luxury is a very complete view on the luxury industry. It’s a must-read book for those who would like to understand and learn this universe and the steps to be followed to be part of it. Students, participants and/or professionals will find very accurate, useful and insightful information helping those executives in the industry to challenge and enrich themselves in their approach to build and manage luxury brands."
—MARGARETH HENRIQUEZ, CEO, Krug

"I enjoyed reading this 360-degree overview of the luxury world and I think it could become a sort of a ‘Bible’ for everyone belonging to or studying to enter this challenging world. Besides providing a deep analysis on the evolution of this sector, such as the who’s who, branding, retail, operations and emerging markets, I think everyone involved in this world will be able to find answers to every question which may arise or needs clarification. The reading is easily comprehensible and dotted with amusing stories like ‘The pink bag’ or the description of the perfect store manager. . . . all this makes a wonderful ‘package’ full of passion without which anyone would not be able to enter or survive in the luxury world."
—GIOVANNA FURLANETTO, President, Furla

"The Road to Luxury is a must-read for luxury brand owners aiming to grow internationally. The book offers a deep understanding of the concept of ‘luxury’ and lays a comprehensive analysis of how luxury brands behave during different international crisis. The analysis is rich in real examples with an update on recent practices and a forecast for some good few years to come. As an owner manager of a family-run hospitality brand strongly affected by the international market, I found the book very instructive, inspiring and motivating to continue the journey."
—KAZUSHIGE KANAI, 16th generation owner of Ryokan Tocen Goshoboh (since 1191),Arima Onsen, Japan

"A thorough and enlightening guide to luxury brand management, exploring emerging trends as well aswell-established market dynamics. The Road to Luxury is a reference book for anyone working in Luxury or interested in learning about it."
—MARC CHAYA, CEO & Co-founder, Maison Francis Kurkdjian - Group LVMH

“ The Road to Luxury is a brilliantly insightful map of global luxury. The book walks you through the evolution of luxury maisons, the key markets and the talents that drive it. It also provides a view on the impact of COVID pandemic, future shifts in the business model and innovations to come. This book is a must-read for all luxury executives and students."
—GRACE NIDA, Managing Director, Global Luxury Sector, Korn Ferry

"This book gives a global view on the luxury industry. It has a comprehensive approach which makes it relevant to all audiences. The mix between academic research and real-world examples makes it a comprehensive tool and gives the reader a great amount of knowledge about the vibrant world of luxury. I encourage everyone to read it whether you are a student, a professional or just curious to learn about the exciting world of luxury."
—PATRICK CHALHOUB, Co-CEO, Chalhoub Group