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Business of luxury: emerging markets but modern consumers have An artist’s less patience for such games. New impression of the technologies and social media are partly exclusive new responsible for this trend, as they make Louis Vuitton it easier for consumers to share their foating store at the Marina thoughts and feelings on brands in real Bay Sands luxury time. While these new communication development in channels can bring substantial benefits, Singapore luxury brands should take great care not to discard the role that ‘distance’ can play as part of the essence of luxury. The recent opening of the Floating Louis Vuitton Store at Marina bay Sands in Singapore (a spectacular ‘floating island’ on the water next to what is billed as the world’s most expensive stand-alone casino property) perfectly responds to this duality of needs: while easily accessible and connected to the following a change in values partly due to The fur industry’s comeback provides surrounding shopping areas, it signals its the rise of animal rights groups. a great example of the power of such distance by occupying a unique position Interestingly, after a few difficult an approach. Luxury brand managers in on an artificial island. decades, global fur sales rose again by Asian and other emerging markets need How do brands respond to the about 70% between 2000 and 2011 to learn how to use it to maximum effect. Separation frontier? Obviously not every and now reach almost US$15-billion per business has the means to do what year in value. Why? because the fashion The future of luxury Louis Vuitton has done. It should also be industry took a concerted effort to reframe Overall, what is the watchword for the highlighted that all luxury brands need – or fur as natural and sustainable, which are future of luxury? Measure, measure will need – to address this frontier across values of rising importance today. and measure again! There are a wide communication channels. In Asian countries, luxury managers variety of indicators – micro and macro For most organisations, dealing with will also need to understand how to – that can reliably predict any change of the Separation frontier will entail carefully manage evolving societal concerns. nature or scope in these three frontiers, engaging with social media. While some For instance, with the current wave of and empower managers to seize new brands aim to keep a certain distance corruption investigations against highly opportunities. In all cases, deciphering from their consumers, others such as ranked officials in China, the acceptability the ‘3S’ frontiers will be part of the burberry have decided to open up to them of ‘gifts’ like luxury watches may come fundamentals of establishing tomorrow’s and share at least part of the dream. under pressure. Put differently, the luxury luxury brands. watch industry might be facing a moving evolving moral judgements societal acceptability frontier in China with The third and final frontier, the Societal the current anti-corruption drive. frontier, is about moral judgments: those How should brands respond to this of the luxury consumer herself, the group frontier? emerging societal issues that she belongs to and the ‘others’ she is can influence public opinion need to signalling to. Importantly, societal values be viewed as more than PR challenges evolve with time. Consider the decline of that should be minimised and dealt with David Dubois is Assistant Professor of fur consumption in the 1990s, for example, as quickly as possible. Instead, such Marketing at INSEAD Business School, challenges often present substantial based in France. He holds a PhD in strategic threats and opportunities. Marketing from Northwestern University’s The first step is to establish a Kellogg School of Management in the US. The new elite are systematic process to discover emerging This article is adapted and republished PHOTOS: ISTOCKPHOTO, SUPLLIED courtesy of INSEAD Knowledge (http:// debates and issues, as well as the more focused on potential players involved. Management knowledge.insead.edu). Copyright showing status can then devise strategies to mitigate the INSEAD 2013. A version of this article was threats and, perhaps most importantly, to originally published in the South China identify the hidden opportunities. Morning Post newspaper, Hong Kong. 16 strategicmarketingafrica Second quarter 2014 Fourth quarter 2013 strategicmarketingafrica 27