• by Karl Greenberg , November 9, 2009

Cindy Gallop -- founder and CEO of IfWeRantheWorld, marketer and consultant for Coca-Cola, Ray-Ban and Polaroid, and frequent speaker at intellectual series like TED -- says that as a consultant, she will "only work with you if you want to find a way to pioneer." Luxury brands, she said, must be elitist, empathetic, immediate, social and youthful in order to succeed.

Speaking at the LuxuryLab Innovation Forum at the Times Center in New York, Gallop argued that the single worst thing that happened to luxury was its democratization.

"Who will want to have a luxury brand if everyone else can have it too?" She argues that luxury brands, if they are to succeed, must be willing to be elitist in nature. They can't dabble in the upper reaches of the mass market. "I think 'new luxury' is a return to true luxury," she said. "It's luxury for the very, very few. It will be shamelessly elitist."

Gallop argued that luxury must also learn to be empathetic to its affluent customers. "Astonishingly, in luxury comes some of the worst customer experience in any sector, especially when you buy super high-worth items. Everything radiates 'look, don't touch'," she says. "I'm astonished by the number of people who can afford to buy the store," she says.

Gallop argues that this kind of supercilious exclusivity at retail will return to haunt those brands. The newly wealthy and self-made "not to the manner born," often from Asian countries, are "enormously uncomfortable in situations where they are trying hard to hold onto the [working-class] values they have always had."

"In Shanghai, a guy comes out of poverty, opens a belt factory and becomes wealthy. He doesn't take friends to the best place in town; he will likely take them to the Shanghai fish market. I don't see many brands offering [retail] experiences where they can walk in and have their values respected," she said.

The single biggest defining aspect of luxury lifestyle, said Gallop, is "being able to do what you want, how you want, when you want and not giving a damn what people think." Unfortunately, she said, luxury brands don't get it -- and often make it hard for customers to do that. "That's what e-commerce is about. Luxury brands are bad at that," she said.

Gallop is not suggesting that luxury brands have to define themselves as digital brands -- she says that instead they must learn to use retail platforms within interactive media to power instant gratification to their audience. "But most luxury brands seem to militate against spontaneous purchase," she said. She also said that luxury brands must understand what it means to be "social" brands. "It doesn't mean they need to be on Facebook, she said. "Facebook is just a demonstration of the social dynamics we buy into as human beings. Those [affluent] people up there want to come together and be connected with people like themselves."

François-Henry Bennahmias, CEO of high-end watchmaker Audemars Piguet's North American business, strongly agreed with her assertions; luxury can water itself down with down-market adventures. He made the point with a slide showing a burger, fries and soft drink in fast-food wrapping branded with the marque of a certain luxury apparel maker.

"Luxury has been so damaged over the past years," he says, adding that the biggest failure in the watch business is lack of creativity. "We are all doing the same thing. And I am bashing our own company, but we suck at it. There is just no more creativity. It may be the most boring world in luxury."

He says that AP -- which had revenue of $30 million on sales of some 600 watches last year -- has to get back to personal contact through intimate events. Bennahmias adds that half the watches AP sold in North America last year were over the phone "to people whom we've never met. That's scary," he said. "Advertising didn't do it. Media buying for us doesn't work; we have to go back to one-on-one."

He says the company, and all luxury watchmakers, must learn how to accept doing sales online. "Not one single luxury watch company today sells on the Internet directly. Nobody wants to take a chance." The company has also been signing brand ambassadors like pro golfer Vijay Singh, Quincy Jones and California governor Arnold Schwarzenegger.

Bennahmias says they don't make money from their endorsements, but are already owners. "We have also a worldwide relationship with Cirque du Soleil -- not to sell watches but to bring customers in small groups and give them an experience money can't buy."