The michael kors online outlet luxury business model


'Cult of Luxury' is an occasional blog that explores Luxury in all its manifestations, how it's made, who makes it, how luxury is communicated and how we recognize and appreciate Luxury.

Jean noel kapferer has recently published"Kapferer on luxury:How luxury brands can grow yet remain rare" (Koganpage).Kapferer leads seminars on luxury at hec paris, tsinghua university in beijing and the seoul luxury business institute.We recently spoke via skype, and the below reflects an edited version of our conversation.

Kapferer:The trick is that luxury is at least two things:It's a concept [whose meaning] which we cheap michael kors bags can debate and it's a [business] sector which is extremely successful.The problem is that the more successful the sector is becoming, [the further it departs] from the concept.

Tom:You point out that there's a big difference between luxury and fashion.

Kapferer:This is essential.Of course, you could say that luxury is fashionable today.I talk about fashion as a business model where what you sell is very ephemeral and what you sell, in fact, is the ability to be always fashionable in a renewed way;Whereas the business model of luxury is more about cash cows that provide you long term source of cash, and this is why luxury loves iconic products.

Tom:As you say in your book, luxury is a business model.

Kapferer:It is a business model.As soon as it's a bit expensive, it's in premium cities, premium streets, premium stores, on premium websites, [consumers] say,"Wow, it's luxury. "I'm not talking about the consumer perception.I'm saying that you don't manage a company the same way when you want to justify skyrocketing prices, which is the business of luxury, and a fashion house where you sell, in fact, the air.

Tom:Recently we have seen certain luxury brands that were for many years quite demure explode.Louis vuitton being a example of a branded logo that's become ubiquitous.

Kapferer:I was in new york 10 days ago and met with john idol, ceo of michael kors.He was talking about the success of michael kors and he said,"We are the fastest growing luxury brand in the world,"And i told him,"No, you are the fastest growing fashion house in the world. "I [maintain that] the essence of luxury is take time to [create] long term value and if possible don't become too hot, don't become too fashionable because after fashionable becomes less fashionable and non fashionablei admire michael kors and i think it's a fantastic success but i think it's managed more as a fashion house where really the notion of going fast is essential[fashion and luxury are] really two approaches of seducing the consumer.

Tom:In this regard you talk about going from actual scarcity to virtual scarcity.Explain that.

Kapferer:Yes, because actual scarcity is a model which wall street doesn't like too much actual scarcity because they say,"How do you grow? "If you take, for instance, ferrari, ferrari has three sources of profit, as you know.One of them is cars which is not growing because by definition they produce 7, 500 cars.They [also] have the media rights of formula one tournaments.Formula one is like fashion show.It's a way of competing, not as designer but as team.[And finally] There is the licensing of all the accessories and toys and goodies in their shops.It's a model which is hybrid [of luxury and fashion business models] because the car themselves is a limited source of business.There is a point where, michael kors australia in fact [if you want to maintain and expand a luxury business] you have to become singular, unique, and more rare.This is where art comes into play so much.

Tom:In this regard you mention that rolls royce, for example, is actually producing less cars because they discovered that customization is more profitable.

Kapferer:The head of rolls royce europe told me that they would produce one more car next year than this year.I was very amazed.He says,"Because it's much more profitable to fully customize a car than to produce one more car. "In terms of business model it shows that, in fact, by making the car unique, each new car unique, you get [a new] kind of reality by matching the buyer's uniqueness and the product's uniqueness.

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