Vision is key to luxury, even in a crisis
Luxury is probably one term you least associate with this country at present, yet a group of professionals active in the local and international luxury industry recently managed to share a few thoughts on Greece as a luxury destination, Greek luxury clients and the development of local premium products.
The occasion was the 1st Business of Luxury Conference organized by Boussias Communications at the Hotel Grande Bretagne in Athens on February 14.
Discussing issues of luxury in a severely recession-hit city whose most recent physical injuries were on view just a few blocks away from the landmark Syntagma Square hotel no doubt left some participants with bittersweet feelings. But crises are also times of opportunity and the overall sense was that the show must go on — possibly in an improved version.
Definitions of luxury tend to differ from one individual to the next and participants heard several points of views: luxury is an experience, something which involves all five senses, a notion that requires a certain level of knowledge and appreciation. The need for luxury, said one speaker, is part of human nature.
Luxury is also a 1-trillion-euro business encompassing fashion, automobiles and technology, for instance, according to figures presented by Annia Spiliopoulos Eliades, managing partner of the Greek branch of Quintessentially, the world?s largest private members club. Spiliopoulos Eliades highlighted the sector?s shift from ?abstract to something more measurable,? explaining that luxury costumers are now more discerning and in search of more value for money. She also noted the importance of emerging markets for luxury consumption, such as Russia, Brazil, India and China.
?What is the made-in-Greece platform for luxury?? asked Tim Jackson, professor of luxury brand management and fashion retailing at the London College of Fashion. Luxury, said Jackson is about a story and how this evolves, citing the case of Gucci founder Guccio Gucci, still a prominent feature on the Italian brand?s digital flagship. ?Take something which has history and make it relevant,? said Jackson, as he talked about the house of Balenciaga, whose founder Cristobal Balenciaga?s design codes are nowadays incorporated in the brand?s fragrances, for instance.
?Nothing affects profitability more than pricing,? said Austrian pricing expert Dr Andreas Hinterhuber, who gave an insightful and practical talk on how pricing can make or break a brand. He noted how the idea of luxury has in the last few years gone from the product to the experience and is now increasingly about the journey. Hinterhuber explained that the middle market for luxury is shrinking, a fact which has profound implications on strategy and pricing worldwide. The way to arrive at the right price, said Hinterhuber, is through a price-setting and price-getting chart method which involves quantifying the value that consumers perceive in luxury brands.
A panel discussion featuring Nikos Vichos, president and CEO of the Vichos Group, Georges Papalexis, CEO of Zolotas jewelers, and Larry Sakellariou, managing director of Shiseido Hellas, offered insight into the harsh current climate.
Vichos, whose Vichos Group specializes in high-end watches, referred to the local stock market boom which led to a sharp rise in the demand for luxury products in Greece. The situation is very different these days, noted Vichos, though he also expressed his certainty that the middle class will ultimately survive. Above all, said Vichos, ?Luxury should accompany consumers, not the other way round.?
Known for revamping the local jewelry industry in the 1970s, the house of Zolotas has always been guided by its sense of Greekness. Zolotas CEO Papalexis said that the company is adjusting to the current financial situation through special collections while maintaining its efforts to develop abroad. Papalexis also noted that while many local companies had the necessary talent, they lacked good branding strategies.
Sakellariou noted that both the Greek subsidiary and mother company Shiseido were keeping an eye on competitors (and whether other companies remained in Greece for business). Sakellariou said that while easy credit had allowed for high consumption in the recent past, the market is now adjusting to the new reality.
British investment banker William Plane of Savigny Partners gave an overall view of the industry in the 21st century, speaking of ?a period of unprecedented growth and turmoil,? and recounting how the golden period of 2003-07 was replaced by the credit crunch in 2008. ?The near future lies in the hands of China,? noted Plane, who added that the country was the second-largest market for luxury in 2010.
?Greece is a good brand but it doesn?t have good branding,? said Dimitris Tsitouras, founder of the luxury Tsitouras Collection resort on Santorini. An advocate of small tourist units in Greece, Tsitouras spoke about the time when the country was torn between the ?Made in Hellas? and ?Made in Greece? logos, something which did not allow for the optimization of tourism strategies.
Originally a lawyer, Tsitouras had established a guest house on Santorini for private use, but was content to see the residence being rented for the sum of 6 million drachmas for a period of three months back in 1988. The Tsitouras Collection was born a year later with its first-ever guest inquiring about the possibility of purchasing the resort?s towels featuring the unit?s signature wreath logo. This prompted Tsitouras to develop an accompanying collection of products which grew to include scarves, china, glassware and jewelry, among other items. Besides the jewelry pieces, none of the other collections are actually made in Greece, noted Tsitouras, who works with factories in Como, Italy, for silk scarves, and has crystal pieces made in Malta.
?A meaningful experience is perhaps the new luxury,? claimed Simon Leadsford, publishing director of Conde Nast Traveller UK. From ?I want? to ?I need? and from ?aspiration to inspiration,? Leadsford talked about some of the global industry?s novel trends, such as the idea of hotels connecting with their local environment and communities, and how rural values may be incorporated into an urban context.
On the subject of Greece, Leadsford referred to some comments made by Conde Nast Traveller UK editors: ?Greece used to be cheap and cheerful, now it?s more expensive and more grumpy,? quipped one editor, while Leadsford suggested that Greeks specializing in premium travel should ?sell the experience, not just the product.?
It is estimated that by 2020 some 100 million Chinese tourists will be traveling around the globe on an annual basis. ?Greece, are you ready?? Leadsford asked.
?Every cruise customer wants to go to Santorini; if you don?t include it you can?t sell,? said John Tercek, Royal Caribbean Cruises vice president for commercial development. He spoke about the necessity of improved infrastructure in local ports of call and predicted that cruise activity will diminish at the port of Piraeus. Meanwhile, he said that Royal Caribbean Cruises had invested in the Turkish port of Kusadasi developing a pier accompanied by an upscale mall, and that it was currently working on the development of a state-of-the-art pier in Istanbul. Tercek also made a point about passengers of larger cruisers spending more money at ports of call.
Luxury tourism should cover the spectrum of the travel experience, from accommodation to shopping, cultural activities and access to transport, said Giorgos Drakopoulos, managing director of the Association of Greek Tourism Enterprises (SETE), whose presentation included images of foreign visitors arriving at the blocked-by-taxi-strike Iraklio Airport on Crete last summer. ?Some of these people had booked 5-star accommodation; you can be sure that they are not coming back,? said Drakopoulos, who added that Greece is the only EU country which does not allow rent-a-car-and-driver services.
The development of luxury resorts is on the agenda of Dolphin Capital Partners, a real estate investment and development company operating in Greece, Cyprus, Panama, the Dominican Republic and Croatia. Katerina Katopis, the company?s sales and marketing director, offered a glimpse of the Porto Heli Collection, a luxury resort and villa project developed in partnership with Amanresorts, which is expected to open its doors in the Peloponnese in June.
In what he described as his ?colossal, 50-square-meter premises,? Vassilis Bourtsalas makes custom-made garments for a varying clientele. In pre-crisis times, he said, ?people came to us for all the wrong reasons and as soon as the crisis hit, Bespoke went out of fashion overnight, as it was considered something extremely expensive, tied up to excessive wealth.? Nevertheless, ?Bespoke is emotion,? said Bourtsalas, who referred to one of his best clients, a regular guy who came in to place an order for a handmade shirt every two months.
Giorgos Kolliopoulos always thought that olive oil was nothing less than liquid gold. An out-of-the-box thinking entrepreneur, Kolliopoulos spent two years — most of the time working in his flat — developing Lambda, the world?s first ultra-premium virgin olive oil in 2006. How much of his inspiration came from his Greek heritage and local food traditions? ?None whatsoever,? said Kolliopoulos, whose products are currently on sale at select outlets such as Harrods in London.
It appears that strong vision is a key to luxury.
