What jewelers can learn from luxury giants

Harakh Mehta

 Top brands have shown it’s possible to shed the commodity tag.

LVMH head Bernard Arnault famously said that “luxury goods are the only area in which it is possible to make luxury margins.” But what does it actually take to shed the commodity tag and position a product firmly as luxury? More importantly, how can we apply this to the diamond and jewelry industry?

I recently traveled to Paris to complete an invitation-only course on luxury, in which several representatives of major brands shared their expertise. I learned that beneath the glamorous imagery and stunning showcases of this sector is a robust ecosystem rooted in the pursuit of excellence and quality.

For select members only

“There is nothing better in the luxury world than to create something that you cannot have,” says Philip Vergeylen, one of the course’s speakers and the man credited with launching the American Express Black Card. This card began its existence as a rumor in the US press, which declared it a mythical item and the closest thing to a fairy godmother. But after years of research and painstaking efforts, American Express turned it into a reality.

When it finally offered the invitation-only card in the late 1990s, the company was inundated with telephone calls from across the globe requesting applications for invitations. It hardly had to do any marketing; news about the card and its benefits, especially the concierge service, spread like wildfire through word of mouth. To this day, membership is tightly controlled through a process shrouded in secrecy. Needless to say, the Black Card remains a highly coveted object.

Vergeylen attributes his success at the company to a “deep understanding and appreciation of the premium and the super-premium market.” When Christian Dior started his store in the late 1940s, he knew every single one of his customers personally. Well before the internet became ubiquitous, brands were making significant investments in tracking customer behavior, tastes, preferences and spending habits. They analyzed their findings in detail and laid out plans to create the exact experiences that would speak to their clients. Whether it was to make customers feel a sense of belonging or accomplishment, or simply to boost their self-esteem, the brands implemented both micro- and macro-level strategies, collecting feedback and acting on it. As a result, they were able to make accurate predictions of what truly motivated and inspired the various consumer segments.

Fellow course speaker Leslie Serrero — managing director for France and Monaco at Fendi — sums it up in one line: “Luxury is the ability to make people dream.”

Quality, quality, quality

High-fashion house Hermès has a legacy of creating products that can withstand the test of time.

My grandfather, Robert Dumas, who at the time was the chairman, proudly stated, ‘A luxury object is an object that can be repaired,’” relates Guillaume de Seynes, a sixth-generation member of the family that runs the maison. In addition to its distinctive designs, the company’s rigid insistence on the use of high-quality materials and superior craftsmanship techniques lends a sense of authenticity to the brand.

With little to no dependence on outsourcing — the house controls the vast majority of its own production — Hermès has developed several proprietary methods, all with a single goal: to make the product as long-lasting and durable as possible. A man ahead of his time, Dumas understood and inculcated sustainability long before it became an anthem for all things luxury.

Beyond storytelling: building icons

A luxury house’s management needs “to nourish and modernize the value and storytelling of the house,” according to Bertrand Stalla-Bourdillon, group vice president for retail development at LVMH.

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Source Rapaport

Takeaways from the top brands

• Jewelers and diamantaires get overly fixated on the inherent value of metals and stones. Other industries have built equally luxurious products with non-precious materials, focusing entirely on design, quality and craftsmanship. Try shifting the focus toward these attributes.

• Pick your customer segments and target their specific needs. Trying to please as many people as possible is a mistake our industry often makes. Nothing could be more mass-market than falling for the trap of mass appeal. Having a narrowly defined set of clients and catering to their tastes will build greater loyalty and a stronger following.

• Less is more. Focus on a few different, well-made products rather than a huge offering. Allow just a few points of distribution, but make sure they’re the right fit. This will contribute to the exclusivity that a luxury consumer desires.

• Time and time again, I have heard that selling jewelry is like selling ice to Eskimo. The luxury brands have proven that even this is possible, as long as the Eskimos are convinced they want to be part of the story the ice brings with it. Invest heavily in genuine, heartfelt storytelling. Motivate your staff, team and associates. Make them feel proud to be associated with your company, and with the diamond and jewelry industry in general. There is no end to what a small and passionate team with a shared mission can achieve.

• Harness the powers of technology. Our industry is notoriously — and self-confessedly — behind in keeping pace with the latest advancements. Use technology not only to make your business more efficient, but also to increase the rate of return on your invested resources.

Fourth-generation diamantaire Harakh Mehta is the founder and creative director of New York-based jewelry brand Harakh.

Article from the Rapaport Magazine – September 2022. To subscribe click here.

Photo Artisan des Lumières, high jewelry collection © Hermès, courtesy of the brand