By Mikèle Landry, Head of Luxury Brand Strategy specialisation at Glion Institute of Higher Education.
There is no business quite like the business of luxury. It is not just the glamour, or the rarified service levels, it is also the unique psychology of the customer-brand relationship and the influence this has on brand strategy.
I have always been fascinated by the level of service excellence demanded within the luxury sector. It stems from my time working in hospitality at an operational level, where I saw the impact of delivering the ultimate level of customer satisfaction, and how this helps fulfil the brand promise that is inherent to the luxury segment.
It is this customer-oriented vision which I try to bring to the curriculum and teaching of the Luxury Brand Strategy specialisation at Glion Institute of Higher Education. We really dig deep into who the customers are, going beyond the classical segmentation models such as demographic, geographic and others. Then we look at the value which is created through the various interactions between brands and their customers. The psychology of luxury and the conscious – sometimes unconscious – reactions of customers is another topic the students of the specialisation get to explore, led by myself and my colleague Dr Evrim De Groot.
My PhD studies, at the University of Fribourg, are nearing their conclusion. My work is focused on value co-creation frameworks across the broader ecosystem of services, with a particular focus on wellbeing. Here I am not referring to ‘wellbeing’ in the sense of physical wellness; more around the impacts of service interactions on areas such as psychological wellbeing, self-accomplishment, plus the wellbeing of the wider community. My research embraces not just hospitality but also other sectors where there are high levels of service interactions.
Turbulent times
Provoking plenty of interest from an academic and research standpoint, the past year has seen the luxury sector experience a relatively rare phenomenon: market – and organisational – turbulence.
There has certainly been some impact at an organisational level, with numerous changes to senior leadership teams. That has included bringing in expertise from other business sectors. I am curious to see how this will play out for the brands that have gone down this pathway. At the same time, market turbulence is not affecting all parts of the industry: the ultra-luxe segment is still performing very strongly, plus we have also seen continued growth in high-end hospitality.
In fashion and accessories, the brands which have been less impacted have tended to be those which are confident in their positioning and pathway – Hermès being a good example. And that is an important message I try to get across to my students: that in luxury it is not always about following popular trends; it is about having a more strategic approach and always trying to ensure that decisions are informed by the brand’s consistency and authenticity.
Spot the difference
Another important class for students – and one that occurs quite early in the specialisation – ensures they understand the difference between brand identity and brand image; at the same time developing an appreciation of why the two should be aligned.
We begin by explaining brand identity and how it concerns elements such as the logo and the messaging the brand conveys to consumers. Then we contrast this with brand image, which relates to how consumers perceive a brand. There should be alignment between these two elements, but often we see discrepancies between them.
It is useful to explore these differences because very often they can enable a brand to understand more about where the market is going, as well as helping to uncover structural issues that need to be addressed.
Their generation
As representatives of Gen Z, the current crop of Glion Bachelor students exemplify another major talking point for the luxury sector: generational change.
Luxury brands are undoubtedly interacting more with the younger generation of consumers, adapting to the fact that Gen Zs typically come to that relationship more informed than any previous generations, due to the prevalence of online communication and social media. They know about the brand, they know what the brand is doing, and they have conversations about the brand to which the brand itself is not necessarily invited.
There is also this notion of seeking a higher purpose which we often associate with millennials and Gen Zs. That is a really interesting topic to explore, because what exactly is this higher purpose? We can link it to sustainability perhaps; but I feel we have a genuine research opportunity to delve deeper into what the consumer really wants from their brand interactions. This takes us into the realms of storytelling and how to put across a brand’s values in a compelling manner.
Embracing contemporary luxury
If you follow Glion, you will have spotted a recent communication relating to the school’s embrace of contemporary luxury as both an educational ethos and a mode of behaviour on and off campus.
But what is contemporary luxury? It is a very interesting question, and one that will definitely become a discussion point in the specialisation, given the different ways such a concept can be interpreted and understood. Luxury is not something you can just put in a specific box – we can use criteria to help us define and frame when we are experiencing true luxury, and when we are not. But these criteria may be evolving to reflect new aspects of contemporary luxury, and that would be interesting to observe.
As the business of luxury evolves, the eternal values of craftsmanship, expertise and savoir-faire should never be sacrificed in favour of short-term gain from pursuing trends. At Glion, we give our students the skills and knowledge that will help them to be agile in the way they manage and develop brands, adapting to the changing needs and behaviors of consumers but at the same time making responsible choices which are aligned to the consistency of the brand. We must not forget that these core brand values have often been built up over decades and sometimes centuries.
The research imperative
Having launched the Glion Research & Innovation Center (GRIC) in 2024, our research capability has also been augmented recently.
What I love about applied research is we can start from a problem or challenge observed in the real world, either on the business side or the consumer side, and build from there. As we grow our understanding of the problem and consider potential solutions, it gives us this wonderful opportunity to disseminate that knowledge through our teaching in class and to interact with the businesses directly impacted to get their perspective.
As a researcher, I am personally fascinated by the notion of ethics and what it means to be an ethical brand in luxury; also what consumers expect from an ethical brand. It comes back to that sense of higher purpose I mentioned earlier, and I am really looking forward to exploring this topic more within my research activities at Glion.
Predictions for the luxury sector
Returning to this notion of consistency, I am confident that the brands that remain at the top in 10 years will be those that have mastered a consistent, authentic approach. But at the same time, brands will have to understand how to incorporate innovation – and here I am thinking about AI notably – in a relevant way that supports this consistency and authenticity.
The brands on top will also be those who are able to actively participate in this kind of broader cultural movement we see happening; trying to find a way to contribute to that instead of just being a follower. Luxury brands face the challenge to predict which markets are going to prevail, or which new markets are going to emerge from cultural shifts or technological advancements. Moreover, the ways brands communicate and serve customers are constantly evolving. It may well be possible for brands to reach different consumer segments with which they have not previously been involved – and that would certainly be interesting to see.
Ultimately, though, I would say that long-term success is a matter of ensuring your strategic choices align with both the brand DNA and core audiences, and that comes from talking with them and understanding what makes sense for them. Sometimes surprises are a good thing, but sometimes listening is also good.
