All Gilt, No Guilt

House in the Hamptons? Of course. Amex Black? Naturally. Yacht parties in South Beach? A weekly occurrence. For most of us, the only way we can get access to this level of luxury is through 3°+ of separation connections - which is the only way I was able to meet Tameka and Nick.

Despite the downturn in the economy, Tameka is investing her own money into a startup cosmetics company. Her husband flips hot Miami properties. Her kids enjoy the spoils. While speaking on the phone with her, she received a picture message on her iPhone. A friend spotted the cutest little $1,000 jumper by Rosa Chá. Based soley on the photo, Tameka casually mentioned to "pick me one up too." Apparently, this is mere pocket change to Tameka, which leaves this humble-spending blogger wondering, "Is there a $1,000 value menu out there somewhere for these people?"

Tameka and her husband boating in South Beach.
Tameka and friends enjoying a "little weekend retreat" at Sanctuary Spa in Phoenix.
In New York, Nick owns several restaurants on Long Island. He gets his model looks from his Greek ancestry, but his body from his personal trainer whom he pays to see six times a week. While walking with him into his Upper West Side high-rise apartment, Nick asked if we could stop by the front desk to check his mail. Nick is immediately handed several boxes of daily shopping spree. He has a near unquenchable thirst for fashion. And in order to keep up with the trends, he scans a luxury designer website, Gilt, every evening and one-click buys a few items. The concierge didn't even bat an eye at all the packages. I, on the other hand, clicked my tongue knowing all I would have to look forward to from my tiny metal mailslot were MasterCard credit bills and Ikea circulars.

Nick on a recent month-long trip to Greece and posing off his expensive physique.
Gilt: All in a Day's Mail
Though the recession has not yet truly made a dent in either Tameka or Nick's lives, their expression of luxury is no simple case of conspicuous consumption. They've both built up their own empires to enjoy the money for their own sake. They feel they've earned the lifestyles they now have and are determined to live their personal lives outside of the economic downturn as much as they can. In fact, they admit they may even be slightly overcompensating with the stubborn sensibility that,"no economy is going to tell me what I can and can't have." For them, luxury should be guilt-free.

Opportunity: Acknowledge their "I've earned it" attitude and tap into their "no matter what" take on luxury.

For The Person Who Has Everything

A night at chef Thomas Keller’s fabled Per Se restaurant in New York City is every foodie’s dream. With expertly executed food that looks more like a magic show than a meal, this is an expensive experience that attracts powerful and famous clientele.

So it was the ideal setting for last week’s American Express event with select Centurion card holders. The American Express Centurion card, also known as the Black Card, began as an urban legend; rumor had it that there was a secret American Express, the Black Card, that was only for elite members of society and that had no spending limit. Years later, American Express capitalized on the cache and created Centurion-- the invitation-only card with concierge services and elite benefits available to no other Amex cardholders.

The Per Se restaurant event (which cost over $1000 a ticket) began with a cooking lesson from Thomas Keller himself, followed by cocktails, hors d’oeuvres, and an elaborate 7-course meal. Only Centurion members had access to this one-time-only event, which took over the restaurant’s entire dining room.

Over half the cardholders at Per Se flew in for the Per Se dinner. Two of the women are event regulars. They met each other at a Centurion event years ago in Aspen and have been attending events together for years since, despite living in different cities.

But Lisa, who coordinates these elite-access events, says attendance has been down in the recession. “People are doing less these days… even these people,” she said. “Or they’re buying $1000 event tickets instead of $2000.”

Yet despite the economy, Centurion members are still paying to attend these events. Lisa credits the exclusivity of the program. “Centurion offers our members something anyone just can’t buy. We offer them access. We get them box seats at the US Open. We get them prime seats at New York fashion week and introduce them to the designers. You can’t pick that up on a shopping spree or order it on the Internet.”

Amex understands that true luxury lives in exclusive access and priceless experiences.

Opportunity: Give luxury consumers more than product features—earn them access.

Thick Fashion Magazines Are So Last Year

September fashion magazines, traditionally the biggest issues of the year, are looking rather skinny this year. About a third skinnier, actually.

Ad pages in Vogue tumbled 36%, to 429. That’s a far cry from 2007, when Vogue issued its record-setting September issue with 727 ad pages--- and weighing in at 4 pounds, nine ounces.

As they spend less on magazines, fashion companies are gingerly testing a range of lower-cost, often more measurable outlets such as Twitter, YouTube, DailyCandy.com, Style.com and more.

Louis Vuitton North America more than doubled its digital ad spending in 2008. Diane Von Furstenberg boosted its web spending from nothing to $43,000 last year. It doesn’t amount to much yet, but it represents one of the few slices of the industry’s marketing budget that are expanding.

Some brands are entering into the social media space as well. Chanel posted a short film to YouTube, starring French actress Audrey Tautou, and promoted the video with search ads and other ads on the site. Other fashion brands are attracting flocks on Twitter, such as Louis Vuitton, which has more than 26,000 followers.

Aiding this move into the digital world is the increasing quality of online experiences. For advertisers concerned primarily with luxury, style and perfection, the aesthetics of the web are finally getting to a place they’re interested in being.

Just as consumers are reevaluating their luxury purchases these days, luxury brands are reevaluating how they spend their own money.

Challenge: Harness the power of the digital space-- not only for financial appeal, but also to bring the luxury world to life

Source: “Thick Fashion Magazines Are So Last Year.” Wall Street Journal. 8/17/09
http://online.wsj.com/article/SB125046605103135399.html

Passion and Purpose

Dean is Managing Director at a major global bank and a father of two. He refers the recession as a ‘dislocation’ because “things didn’t just recede, they came apart.” Dean is interested in the new popularity of middle-men or mediators in the banking process. His bank is doing a lot of this work – mediating large transactions for a ‘small’ fee.

“The arrogance has been stripped out… people are making an effort to do things right... by the book. And also, more importantly, people don’t want to be blamed if things go belly up. They’re allergic to negative press.”

But he wonders if this will last. “I hope it will, but I think that when people forget this pain the arrogance will slowly come back.”

Like many people in similar positions*, Dean is reconsidering what’s important to him. He believes he’s more honest with himself, but admits that this could be a function of his life stage.

“I’m not a big football fan, but I used to make the effort to stay informed so that I could be a part of those conversations (with other senior executives in finance.) Now I realize it’s not worth it. If you’re not passionate about something it soon becomes very obvious.”

Dean’s true passion is music. He’s in the middle of an Opera phase – he’s been listening to Opera almost exclusively for 3 months. “I’ve been wondering if it has something to do with all this (the financial crisis). I feel a total connection to it.”

“I’ve even been speaking to people about God and the afterlife… almost as a social experiment. I think people are searching for a god. Or for a purpose.” Dean sure doesn’t seem like a religious guy, but he is curious and thoughtful and obviously seeking more from life than another step up the ladder.

*An except from a recent article by Manhattan socialite Tatiana Boncompagni titled “The Party’s Over for the Hedge Fund Wives” describes a new candour amongst super affluent consumer;

'Many even seem relieved to finally be able to drop the bombast and get real… seated next to me was a hedge fund manager who, mid-way through his filet mignon, revealed that he was going through a mid life crisis. “I look back on the last five years and think ‘yes I’ve made good money but what do I have to show for it?”

Truth: Beneath the drive for wealth and success lies a very human need to for meaning and purpose. 

Challenge: Ignite their passions. Go beyond their surface desire for status and achievement.