4_Concluding remarks

The commodification of luxury has left the upper class frustrated, realizing that their old status markers have lost part of their appeal. Therefore marketing to this social elite has to take into account their desire to feel special, to feel exclusive, and to be separated from the crowd of mass luxury consumers. This kind of “super-elitization” will make brands target the upper classes with exquisite handcrafted pieces and individualized versions made in limited numbers—“hand-made artisanal value” for the “genuinely affluent and genuinely educated” (Joanne Ooim, creative director of Shanghai Tang, printed in Chadha and Husband 2006: 284)—that again allow the social elite to distance themselves from the consumer rich who are buying the lower segment versions of their favorite brands and products. Also, a selection of sophisticated shoppers who are bored by the standardized offerings of mass luxury are now looking for the excitement of discovering something out of the ordinary. “A lot of people want to go to places where there are nicer little finds. Now it [existing retail] is so predictable ... it has lost the spark, it's anaesthetized” (Chadha and Husband 2006: 284).
Luxury companies have to bring back its “spark”, the aesthetic component of shopping. They need to realize that channels are different in the premium market, more exclusive, and sometimes even blocked from direct access. The higher the consumer level, the more sophisticated the approach has to be. The needed market intelligence can often only be provided by third-party companies who have made extensive connections within social networks and offer databases of HNWIs, as well as creative solutions to reach them indirectly. The services introduced in section 3.3 do not necessarily exclude each other. All of the solutions offered points to gaining access to HNWI customers, but by using different channels and reaching different customer segments.
Interviews conducted with each of the companies' CEOs revealed one common fact upon which all of them could agree: there is still a huge potential in the market for HNWIs in Japan, that can be tapped by both foreign and Japanese luxury companies (Interview were conducted with Andreas Dannenberg, CEO of AdComm [28.03.2008], Takaoka Soichiro, CEO of Abraham-Holdings [01.04.2008], Yamada Yu, CEO of Ypsilon Group [17.03.2008] and Tsuchiya from KT Marketing [25.03.2008]). The key lies in entering the social networks of HNWIs. By accessing opinion leaders specific to their own product category luxury companies can become more sensitive to future trends and faster than the competitors to react to social changes. Communication with the most important customers can prove to be an invaluable tool for customer segmentation, profiling, networking, and “influencing the patronage behavior of dozens, hundreds, even thousands of affluent prospects” (Stanley 1993: 1).
For luxury companies the advice should be: See the connection between your own customers and possible prospects and understand the complexity of word of mouth as it is spreading through networks. The 'satisfied customer' and the 'influential professional' who experienced an innovative event today, could turn into your brand advocates at the dinner party tomorrow, even if they are not your customers yet. Go where your customer target groups are, make your presence known, become part of their lives, and create "conversations" about your products. Accept the fact that brand equity builds up over time through the authenticity of your communication, which is constantly evaluated within social networks. And most importantly: communicate with luxury consumers. Try to listen to their conversations—about your brand, your competitors, and your product category.
Yamada Yu, CEO from the Ypsilon Group offers wealthy customers what they want: a better life, more time, amusement, and a social environment where they can demonstrate their sophistication and taste. Added value is the keyword, but it does not necessarily have to come from inside the company. Instead, it can be achieved by collaborations with service partners, and the association with people from other fields such as within arts and culture, within nightlife, and other social networks—in short: influential people who “produce” the cultural setting of today's complex scene of professional and private interactions. Studies about these “cultural creatives” or the “creative class” and the socioeconomics of metropolises are the subject of many recent studies, including Currid (2007), Scott (2008), and Chadha and Husband (2006), the latter describing how to create “the spin” (buzz) and “the cult” of a luxury brand. Marketers start to realize that culture is more than a mere by-product of economic activity, but is strongly inter-connected with market forces in the premium segment, and that understanding these dynamics can prove invaluable. This and the recent emergence of CSR and SRC (social responsible consumption) are not only current trends that will pass within a few years. They are a look into the future of marketing where “relevance, simplicity, and humanity—not technology” are the distinguishing elements of brands in the future (Bedbury 2002: 183). Stanley (1993: ix) gives a good summary: “[...] where do you and your offerings rank in the eyes of important patronage opinion leaders? Encourage these leaders to rank you high. Cultivate their endorsements. Become a vital part of their influence networks. Without their support, you may be assigned a small piece of the affluent market.”
Being a young market, there are no empirical studies available on the effectiveness of HNWI marketing strategies, probably due to the difficulty in acquiring exact data on HNWI customers. Research should continue in these areas to produce relevant and reliable knowledge for marketers involved in the field of HNWI research. Topics could include: How is the information transferred within HNWI networks, and who are the opinion leaders? It would also be interesting to find out which networks have the most influence in specific industries, how the flow of information is transferred, and what relation exists between event marketing and the spread of product information. Investing into research for creative solutions on how this flow of information can be influenced and controlled should become a central issue for luxury companies.

LOHAS and CSR

A major trend is to see luxury as an enrichment of life, a means to deliver new experiences, and satisfy the consumer's curiosity for adventure and exoticism. Experiences are seen as the real luxury—exotic holidays, authenticity, environmental consciousness, in general a trend toward informed consumption (Silverstein and Fiske 2005: 45, 47). Corporate social responsibility (CSR) is gaining importance in purchasing decisions. This change in preferences demands know-how, intelligence, and education and underwrites the above mentioned change in social status markers. Japanese consumers are aiming for a return to a natural and simple lifestyle, with time for taking care of oneself and the family. Eating well, natural and organic food, spas and wellness holidays are no longer only for the elite and superrich.
The trend is to seek eco-friendly and slower lives. The health care market is expanding rapidly, with a trend towards preventive health care (Naikakuhu [Cabinet Office of the Japanese Government] 2005. For an estimated size of the health care market see METI [Ministry of Economy, Trade and Industry] 2005). The idea of LOHAS (lifestyle of health and sustainability) has become a buzz word, and represents a 540 billion global market. It is linked with so-called “cultural creatives”—people who are starting to value health, social issues, and other aspects of life that aren't directly linked with past patterns of materialistic consumption. The concept is going mainstream in a much bigger way in Japan than in the U.S. As Peter D. Pedersen of E-Square Inc., a company that offers consulting on the concept of LOHAS in Japan, puts it, the timing was right: ”People who lost after the burst of the bubble were looking for an alternative that went beyond the power of money, [...]” something that offers them emotional engagement. For people who do not want to consume emotionally empty goods, socially responsible consumption (SRC), LOHAS and CSR are serving as a psychological antidote for an increasingly stressful world (Japan Times, June 6th, 2006: Gentler ecological lifestyle, products catching on in Japan; Ray 2001; Silverstein and Fiske 2005: 30; Nikkei Weekly, October 15th, 2007: 26). With the number of scandals of big companies increasing, integrating CSR into corporate strategies is becoming more important and represents a powerful tool for corporate image building for firms, showing that they are an integral part of the social and economic world in which they operate (Ota 2006: 17; Japan Close-Up 2006: 11, 19; Ishiwata 2006: 8.; The Nikkei Weekly, November 26th, 2007: 28; Kotler and Lee 2004; The Nikkei Weekly 2007: Fair trade reaches out to Japanese consumers, 26.02.2007: 31; Kotler and Pfoertsch 2006: 302).