Luxury Events Engage the Affluent - Event Marketer

Luxury Events Engage the Affluent

The luxury sector like mainstream America for the first time in decades has fallen on hard times. Layoffs in banking and finance have slowed sales of diamond-encrusted Swiss watches designer apparel and sleek sports cars sending holiday sales of high-end goods tumbling 27.6 percent in December compared to 2007 according to a report by MasterCard SpendingPulse. Luxury car sales fell 21 percent in 2008 according to sales tracking firm Autodata which predicts another decline this year. Heck even designer Marc Jacobs cancelled this year’s company holiday party an annual bacchanalia of the beautiful that often drew as many as 800 guests. Everyone is feeling the pinch.

And the cycle is just beginning. Although most luxury purveyors faced the holiday season with measured optimism sales have been on a slow skid since September. “Every category that we’ve spoken to—jets yachts jewelry watches—some more than others are all affected negatively ” says Milton Pedraza ceo of New York City-based independent research organization The Luxury Institute. He predicts a “significant” decrease in budgets for luxury events in the months ahead.

Thomas Serrano president of the Luxe Events Division at Euro RSCG New York agrees. “We have seen every scenario you can imagine cancelled events and postponements ” he says. One client replaced high-end events at 10 retailers with product sampling in 100 stores. “The objective in the beginning was an image-driven event but it became sales-driven. This is basically what event marketers are doing right now.”

Many brands are taking a more targeted approach reviewing their list of clients still executing some events but making sure the people who are invited are relevant customers or prospects Serrano says.

Driving the sales declines is the disappearance of the aspirational buyer those young investment bankers and lawyers with incomes of $200 000 to $500 000 whose purchases of $1 500 handbags and $800 shoes have kept the market humming. “They’re gone ” says Greg Furman ceo of the Luxury Council an international membership organization of nearly 3 000 ceos and marketing executives of leading luxury companies. “They’re the hope for the luxury brands and they’re taking a hit for the first time.”

Don’t shed too many crocodile tears for the country club set however. According to the Elite Traveler/Prince & Associates 2008 Luxury Spending Survey the Super Rich (those lucky ducks with a $30 million-plus net worth) will spend more than ever before and just as quickly and easily in key categories such as fashion and accessories jewelry watches spa services and electronics. They will also travel for personal and family reasons and donate to major charities. Their poorer cousins however those with net worth only between $10 and $30 million will pull back slightly in their purchases.

In any event the Super Rich and the plain ol’ rich are still out there waiting for the right invitation the perfect reason to descend their spiral staircases and head out on the town. They’re just being more selective. “Companies understand that in these very delicate times where a lot of consumers don’t want to be seen as consuming in a showy way events that are carefully crafted and selectively put together will be effective ” Pedraza says.

He points to a recent dinner for potential St. Regis Residence Club fractional owners as an example of a well-executed event that was not a hard-sell and incorporated testimonials from clients to show the value of the product. “It was a perfect example of a selling event that didn’t seem like a selling event but rather a great format to educate and enjoy ” he says. And the food and wine were impeccable.

So besides offering great booze and chow just how do you craft an event that will attract those select Park Avenue A-listers?

The formula says the Luxury Council’s Furman is “totally bespoke ” referring to the custom-tailored suits worn by the monied set “and totally cross-referring.” He suggests inviting your best customers like those Neiman Marcus shoppers who spend a quarter of a million dollars a year on apparel and invite their friends too. “The smartest brands are focusing in on best customer marketing and winning greater share of wallet of their current top customers and greater share of referral of customers like them from those best customers ” he says.

In addition make it intimate and experiential something that will generate buzz that people will be likely to talk about. “The way to engage them is through out-of-the-box special special events ” he says.

Like the sit-down lunch hosted by Cunard for 150 Luxury Council members on board the Queen Mary 2 that included a tour of the vessel and a discussion led by author Jonathan Salem Baskin of Branding Only Works On Cattle. Stretch limos took everyone back to the city by 4 p.m.

So you want to make it bespoke cross-referring intimate and experiential? Here are some gold-plated ways to do just that.

1. Inspire. “Events are about uniting people under one roof and trying to inspire them ” Serrano says. “It’s a time when people really need inspiration. It’s a time to experience something new and creative to create a special relationship with a client that is personal that you cannot have through advertising. Events are very efficient in a crisis environment.”

Case in point: An event Euro RSCG organized last summer to tout the launch of daily non-stop Air France and Delta flights between Lyon and New York. “It was a classic elegant party with a French touch ” Serrano says. “Lyon wanted to communicate to business investors in New York the strengths of the town from an economic point of view. It wasn’t about tourism.”

The event featured a sit-down gourmet dinner by celebrity chef Daniel Boulud at the historic Morgan Library in New York for 250 potential investors. The mayor of Lyon and an economic secretary offered welcoming speeches. The general secretary of Interpol headquartered in Lyon talked about the Lyonnais lifestyle and business environment. A French conductor who invited guests to play the piano with him on stage provided entertainment. Throughout the evening images of the city projected onto the white walls and windows enhanced the scene. Delta executives spoke at the end and presented some business-class tickets as prizes and everyone left with aprons signed by Boulud and two additional chefs who prepared the meal.

2. Scrutinize. “We’re looking at everything more closely than ever not only for return-on-investment but return-on-objective ” says Lisa Holladay manager-brand experience marketing at Mercedes. “We still see events and experiential marketing as an important piece and in some ways now more than ever. Especially as a luxury brand this isn’t a time where we want to pull back from event marketing but maintain our presence.”

So while Mercedes won’t be pursuing new marketing opportunities in 2009 it will maintain past sponsorships in golf and Fashion Week. And it will continue to reach high-end consumers with events like the one it held at Laguna Seca for the launch of the SL 65 AMG Black Series vehicle that retails just below $300 000. (Agencies: OSK Cologne Germany; Sage Collective Ponte Verde FL.)

3. Give it your best. “In this market we want people who are loyal to us to know as a brand how much we appreciate their business ” Holladay says. So Mercedes snagged 10 of its Black Series cars (only 175 of them will be produced) and invited 120 prospects for a day of driving lessons at the track with professional racecar drivers flown in from Germany. “It’s still important to make sure that the most important clients you have are connected to your brand ” she says.

Mercedes pampered its guests with gourmet food and drinks but it was the ultra-luxury vehicles which had never been seen before coupled with the opportunity to test-drive them on a world-class track that took this event over the top. Staying in a new hotel on the water in Monterey CA wasn’t too shabby either. “When it comes to events it’s all about the details and not letting one thing go neglected whether it is where we are housing our guests what we are feeding them what wine we are pouring all the special touches ” Holladay says.

4. Make it exclusive. What could be more intriguing than a “closed-room concept ” which is what BMW Canada will execute to lure in its best customers and prospects as well as tastemakers and opinion leaders to an exclusive preview of the newest models in its flagship 7 Series. “BMW is known for its sporty and dynamic vehicles ” says Stephen Lester event marketing manager at BMW Canada. “This takes a look at the luxury and opulence that goes along with that.”

Lester was sworn to secrecy about the details but did say that events would take place early this year in Montreal Toronto and Vancouver for small groups of 25 to 30 people who would be treated to an experience that money can’t buy—an opportunity to get up close and personal with the new vehicles before everyone else. Artwork from local artists in each market will give the event a cultural flair (Agency: Eventure Solutions Toronto).


5. Be charitable. Brooks Brothers which executes 100 events each year is best-known for its in-store charity events such as the one in December hosted by Marlo Thomas to benefit St. Jude’s Children’s Hospital. Kids decorated cookies and ornaments and visited with Santa; Wynton Marsalis provided entertainment while parents sipped cocktails and shopped. “It’s a business-driver and since our donation is based on a percentage of sales it is a win for the charity. It’s a win for everyone ” says Arthur Wayne director of communications at Brooks Brothers who handles the events in-house.

Audi’s sponsorship of the Best Buddies Challenge a charity bicycle tour held annually at Hearst Castle in San Simeon CA has all the markings of a full-on luxury experience especially for 10 customers who are also members of the Audi Friendship Fleet (MVP Collaborative Detroit handles). Maria Shriver hosted the 100-mile ride down the Pacific Coastline with celebrities Rob Lowe Clint Eastwood David Hasselhoff and others in attendance. The $114 000 (starting price) Audi R8 followed by the Friendship Fleet fresh off an Audi-sponsored night at the exclusive luxury Quail Lodge resort in Carmel CA led the 1 000 cyclists participating in the ride. The Friendship Fleet also got a private tour of Hearst Castle and attended a victory celebration and post-ride barbecue at Hearst Ranch with a private concert by the BlackEyed Peas. Audi sponsored a similar Best Buddies charity ride in May in Hyannis Port MA that concluded with a New England-style clambake at the Kennedy compound and a concert by the B-52s.

“We partner with organizations such as Best Buddies because this is an exceptional organization that helps the community globally; those kinds of partnerships bring us a strong customer base that is giving up their time and providing financial support to help them ” says Young Hee Wong experiential marketing manager at Audi. “Needless to say they do have a lot of discretionary income.”


6. When all else fails go yachting. SeaFair is the world’s first mega-yacht making it the ideal venue for the über rich. The $40 million 3 200-ton ship is privately owned and features five decks 28 custom-designed galleries a champagne and caviar lounge and an open-air sky deck (Razavi Global Media Venice CA handles).

The yacht kicked off its launch in October 2007 with seven arts and antique events in tony Greenwich CT that included a charity event for the Bruce Museum that brought in Walter Scheib White House executive chef for the Clintons and Bushes for a tasting dinner at $10 000 a couple. In November just before the start of Art Basel Miami Beach a five-day art fair that this year attracted A-listers and reps from 250 galleries and works by 2 000 artists SeaFair staged a Rock the Boat art event while docked across from the Fontainebleau hotel. Festivities included a gourmet dinner with beer and whiskey pairings sponsored by the Florida Luxury Council and Dewar’s Signature. SeaFair’s most recent stop was NFL headquarters at the 2009 Super Bowl in Tampa FL.

“We’re all about giving people a one-on-one experience with a product or a lifestyle that they can take away and say ‘Wasn’t that a great life experience?’” says Lee Ann Lester a former art dealer who now owns SeaFair. “It’s interesting watching the downturn in the economy and many of these models such as Neimans and Saks disintegrating in many ways but the experiential marketing is really booming and expanding.”

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