Deeper luxury – serving the high-end goods market

14 April 2015

In today’s luxury goods market, a delicate balance must be struck between fulfilling the need to convey the luxurious look and feel the customer expects, while also meeting the growing requirements for sustainability and guarding against counterfeiters. Absolut’s Anna Schreil and Cartier’s Nawal Ait-Hocine explain some of the ways this can be achieved.

Sustainability and changing customer perceptions are among the factors now influencing luxury packaging designers and producers. There is a move away from the more decorative, overtly 'rich' type of packaging in luxury, making instead way for understated, functional and elegant packaging, featuring muted colours and improved aesthetics, that customers will want to reuse in their home.

This trend is tied into the idea of a unique product; if there is a slight imperfection, it is something that actually adds to the artisan concept rather than being a generic, machine-manufactured product.

Authenticity is a theme - merging materials and 'being honest' with material selection. If you use wood, for instance, it can be combined with wood finish, matte paper, ply packaging and so on in order for the whole end product to maintain the material's message and provide a more honest, holistic result. Well-managed materials brought together can and will enhance the package.

With the ease of access to information on the internet, consumers are now much more informed about and interested in their purchases. In the luxury market, provenance and honesty are incredibly important brand-building and packaging tools; where the product is from, how it was made, and how it was manufactured or processed sets it apart as a luxury item.

By getting answers to these questions, customers can not only feel satisfied that they have bought more than just a brand but that they also own something that itself is special. If the handbag is made on the same assembly line as a generic version, on the same machine or by the same person, and the difference is simply the name on the tag, this devalues the brand and will cause customers to look elsewhere.

Absolutely fabulous

Anna Schreil, director for PDR and R&D at The Absolut Company, agrees: "We are seeing growth in premium, personalised products and the rise of craftsmanship. The challenge is to stay true to your brand identity and values, and, at the same time, to keep evolving and differentiate yourself from the competition in a relevant way. It's a complex task that doesn't have any simple solution.

"Given the artistic and creative personality of the Absolut brand, we are often using the bottle, or the bottle outline, as a canvas for various expressions - often together with collaborators.

"Our Unique and Originality products kept our premium products without sacrificing individuality, craftsmanship and artistic expression," she continues. "The latest large-scale examples of spectacular achievements are the Unique and Originality global editions, where we have brought these traits to a completely new level.

"In the case of Unique, we produced four million individually designed bottles, and in the case of Originality, we infused the glass itself with a streak of colour, again in a quantity of several millions.

"Following decades of globalisation and standardisation, consumers are looking for new forms of authenticity and craftsmanship, and products with a genuine background and history," Schreil maintains. "This led to Elyx, which is a single-estate, handcrafted vodka produced with wheat harvested and distilled within a 15-mile radius in southern Sweden. The result is a product that has already been strongly endorsed by third parties; for example, being named Best Vodka, double gold, at the recent San Francisco World Spirits Competition.

"Another interesting trend is the evolution of hybrid products. Enhanced by the mixology movement, traditional category codes are getting blurred as brands from different categories are borrowing cues from each other. For example, in the US we launched one of our most innovative products, Absolut Tune, which is a sparkling fusion of Absolut vodka and sauvignon blanc. We also launched Absolut Amber, which is Absolut rested in oak barrels.

Protection in every environment

Along with differentiation and maintaining an authentic offering, brand security is also a constant challenge in the premium spirit sector. "We are continuously working to protect our products and prevent illegal copying and refilling," Schreil says. "This is done through tamper-proof pack material, such as a plastic seal over the top of the bottle or non-refillable closures, and with special coding on the bottles.

"Digital and 'Internet of Things' is also a very interesting area, of course. The exciting thing here is not only to provide protection, but also to create clever and engaging solutions that add valuable content to our consumers, beyond just being directed to a company web page."

While consumers are becoming more environmentally aware and continue to be better connected to the global market via social media, sustainability is growing as an area of focus within the luxury sector. Manufacturers are responding with a wide range of materials and processes that are environmentally friendly and aware.

While the FMCG industry has been under pressure to reduce the environmental impact of packaging, luxury brands are now catching up, switching from plastics to paper, achieving sustainable packaging coalition status and addressing a growing trend towards 'responsible luxury'.

Responsible luxury is something that Nawal Ait-Hocine, corporate social responsibility director at Cartier, is very familiar with. One excellent example from the group comes from the printing and packaging materials for its red gift boxes.

To ensure consistency and quality, Cartier manages the printing of its product catalogues and similar materials centrally. Printing is carried out in France, Switzerland and Italy. To reduce the environmental impact of logistics and to avoid unnecessary transhipments, as a general rule, the printed material is shipped directly from the printer to each market, either by road or by sea, depending on the destination. Furthermore, carton packing is optimised to avoid empty space and is reused when possible.

For packaging activities, Cartier engaged a specialist firm to carry out complete life-cycle analyses for two of its iconic packaging products: the Cartier red bag and the Cartier red gift boxes. Both items were selected as they are emblematic of the brand and transcend a single product. The life-cycle analysis encompassed an extensive information-gathering exercise in areas such as raw material use, production processes and transportation.

For several years now, 100% of Cartier's paper product has been made with paper from well-managed forests, and Forest Stewardship Council (FSC) or Programme for the Endorsement of Forest Certification-certified trees.

For packaging such as shopping bags and boxes, Cartier goes further by using certified materials that contains post-consumer-waste (PCW) recycled fibres. Since 2009, the paper used to cover the red boxes contains 30-50% of PCW recycled fibres. This initiative has been rolled out to boxes for watchmaking, jewellery and eyewear.

"Most of these products will only be bought once by a consumer, engagement rings for example, and the packaging has to stand up to the moment in time that is associated with its presentation," says Ait-Hocine.

"Certifications allow us to responsibly source the right material, and bring it through the supply chain and into consumers' hands so that when the moment arrives and the packaging is presented, it accentuates the occasion.

"As that box will then be kept by the consumer for years to come, we need to ensure that it is of the highest quality possible and that it meets our exacting responsibility guidelines."

To achieve the 'feel' of luxury, the packaging that is employed in this sector tends to have multiple layers, such as metallised films and glass, and paper, that provide the decorative effects a consumer can recognise as a prestige brand. One disadvantage of this multilayered packaging approach, however, is that the materials used can be difficult to recycle.

Creating sustainable and recyclable luxurious packaging that communicates the brand's excellence is a difficult task, but despite the various issues involved, there has been a move towards sustainable practices in the luxury packaging market in recent years. Fashion brand Gucci, for example, launched 100% recyclable packaging with FSC-certified paper in 2010.

However, do customers really care about sustainability when purchasing luxury packaging? Is this move towards sustainability for the luxury sector genuine or simply a passing fad?

According to research undertaken by Greenwise Business, 47% of the 200 branding and marketing professionals consulted felt that Gucci's initiative to cut down on excess packaging was a true reflection of the industry's environmental concerns and its future direction.

As Kering's François-Henri Pinault states: "If we wait for consumers to insist upon sustainability as a condition for purchasing, nothing will happen. It is up to us to see to it that the environmental products become the new norm."

The iconic red box has seen a shift towards sustainable practices, including using 100% recycled paper and limiting shipping distances.

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