12 Rules for the 21st Century Luxury Enterprise

Survive and thrive in the rugged luxury landscape
-from The Luxury Institute

The luxury industry is experiencing unprecedented upheaval. A new landscape demands a reinvention of massive proportions. In 2009, in the midst of tumultuous change for the industry, the Luxury Institute reviewed five years of global proprietary luxury brand ratings surveys, fielded attitudinal and behavioral surveys with wealthy consumers, conducted intimate and candid discussions with dozens of luxury executives at all levels across the world, and studied business models and technological advances across several consumer industries. We have translated our findings and recommendations into 12 Rules for the 21st Century Luxury Enterprise.

Benefiting from the 12 Rules requires not simply a shift along the current innovation curve. It demands an upward shift in the curve itself. For many senior luxury executives, it requires a rewiring of their mental models of the luxury world. While many brands are in rapid transition mode, others continue to resist the inevitable change. Not all luxury brands will make the shift. In rough terrain, the rigid will become irrelevant. We call the new kind of luxury entity the 21st Century Luxury Enterprise‟, and we have coined the obsolete model, “Old World Luxury Co.‟

Old World Luxury Co. (OWLC) is an inflexible enterprise. Its metaphor is a castle with high walls ruled by elites. It is a closed system whose leaders believe that their success depends on their creative genius and the knowledge of what is best for luxury consumers. OWLC is closed to continuous consumer feedback on the theory that it is the rightful curator of luxury taste to the growing number of uninitiated masses of new money around the world. To OWLC, business is a series of zero-sum games. All around them, OWLCs make false trade-offs between creative genius and customer feedback, failing to see the simple reality that most luxury business interactions are optimized by cooperation and collaboration with your customers.

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