The world’s largest economy and super-power par none. Bastion of laissez faire capitalism, where millions are made and lost each day. And a country that has taught the world all about brands and the art and science of building them. But why is America so terrible at building luxury brands?
It’s a thought that has often come to mind and most recently while reading Michael E Porter’s book, Competitive Advantage, in which he mentions Gallo Wines from California. Yes, I have heard of Ernest and Julio Gallo Wines, even if I haven’t had the chance to partake of any, and I do know that Californian wines have been competing with the best in the world, including those prized vintage ones from France, for many years. Yet when you think of wines in the context of luxury, you are hardly likely to think of California, perhaps not even if you live in America.
It is the same across many industries, from whiskies to wines, fashion, travel and hospitality, airlines, automobiles, and the like. And it’s not for want of trying. After all, America does have its unique whiskies such as Kentucky Bourbon and Tennessee Sour Mash, fashion brands such as Ralph Lauren and Carolina Herrera, Coach, Kate Spade, Tiffany and Harry Winston, hotels such the Waldorf Astoria and the Plaza in New York, but also large hospitality chains such as Marriott, Starwood Hotels, Sheraton and Hilton and many more. What it lacks is the cachet that makes a brand luxury.
I have never visited America, but from all that I have read over the years both inside the advertising and brand communications industry and outside it, I am attempting to diagnose what the problems might be and perhaps offer solutions that might help.
When I think of why America doesn’t have a cachet in luxury, there are many possible reasons but the most important ones could be that unlike Britain, France and Italy, America is a country of immigrants and it has not experienced a monarchy at home, nor has it had a tradition of aristocracy. This is an important consideration as these would usually be the classes of people with the wealth and the tastes to patronize luxury goods. Including those from as far as China, India and Persia. Royals and aristocrats are not merely patrons of luxury goods as forms of art, they are also the arbiters of good taste and what they encourage or use usually grows into a wider trend across the rest of society.
I think the second reason related to the first, is that America is a much younger country that industrialised very quickly. It did not experience the age of traditional arts and crafts for long, where artisans’ guilds and merchants’ guilds produced and sold most goods. Nor did it witness the transition from handcrafted goods to machine-produced wares, which came with the industrial revolution. America, almost from its inception as a country, was thrown into the hustle and bustle of the industrial age and its own contribution to industrial development has been assembly-line mass production.
Indeed, some of the mass-production was even justified at the time on the grounds that it ought to benefit every American. Think of Henry Ford and his belief that everyone who worked at Ford Motor Company ought to be able to drive a Ford Model T. Which brings us to the third and equally important reason that the driving force behind most economic activity in America is its democracy. Not only was America not a monarchy nor an aristocratic nation, it was a proud democratic republic and most goods were produced for everyone.
And finally, in a paradoxical sort of way, because Americans spent so much time, resources and effort into building and selling brands, they ended up ignoring differentiation of the luxury kind. Remember, the more popular brands become, the more homogenous the world that uses them, and the less differentiation. Quantity or volume are the enemy of quality and value.
This might have also contributed to the kind of consumer behaviour we see in America. It was, after all, the country that invented the lease-purchase of merchandise or paying for goods in instalments, so more people could afford to buy them. The emphasis is on more consumption, which has led to consumerism of a kind that is based on buy-use-discard-repeat. The kind that has also led to the growth of the fast-fashion industry, responsible today for generating the most waste. There is also apparently the phenomenon of discount factory outlets that American luxury brands rely on, that might be harming it further, according to this article from Forbes Magazine. Little time or attention is paid to the finer details of what one is drinking, eating or wearing. And luxury is all about the finer details and craftsmanship.
What can America do to improve its cachet in luxury goods, given that it has the highest propensity to consume them and that it also attracts the most visitors? I think it would be best to look at what luxury goods demand and what most of them have in common, even if certain industries have their own peculiarities.
Almost all luxury brands begin with origin and lineage. That includes place of origin, its uniqueness, history and culture. In some cases, such as Scotch Whisky and Champagne, it has led to geographical exclusivity at an industry level where a spirit or wine not made in these regions cannot call themselves by that name. In India, it is the same for Darjeeling tea.
America has Kentucky Bourbon and Tennessee Sour Mash, which are region specific already, but these need to build more engaging brand stories or legends that raise their cachet in the world of whiskies, where Scotch Whisky and Single Malt Scotch Whisky are considered the gold standards. This might require more innovation in product so it appeals to a wider and more contemporary palate, as well as in packaging and brand communication. I think the ruggedness and rusticity of both the American whiskies need to be balanced with more elegance and sophistication.
Both Kentucky and Tennessee ought to also allow distillery tours and tasting sessions for visitors, where an entire travel experience can be built around the brand. Scotland and Scotch Whisky makers do this exceedingly well as do wineries and champagne houses in France.
Next, luxury brands need to follow the founder’s vision and philosophy and communicate this as much as possible. Wines and spirits brands often make such references, and so do designer fashion brands. Even while keeping with the times, fashion brands such as Chanel, Valentino and Givenchy refer to their founder’s beliefs and vision.
Third, luxury brands thrive on the details of craftsmanship. America needs to pay more attention to the finer aspects of making their goods, and the more the role of hand-made in the final production of a product, the greater its value-added as a luxury good.
Luxury brands also make it a point to communicate their exclusivity through engaging communication that tells of their craftsmanship, their heritage, their cultural connections with the category if not the brand, and a strong sense of individuality and character.
While in whiskies, America has a foundation to build on, it needs to do the same for Californian wines, perhaps through creating a legend around Napa Valley. And while the country has had no experience with aristocracy or monarchy, America can perhaps rely on some of its old wealth. “Old money” is the best credential a luxury brand can have, especially since it is usually accompanied by good taste and culture. From what little I have read, I have the impression that most old wealth is to be found in the East – New England, in particular – from Virginia to New Hampshire and perhaps also in cities such as New York, Philadelphia, Boston and Chicago.
To build its luxury industry, America also needs to go back upstream, to where the original hubs of those industries lay. In textiles and lace-making, in leather goods design and making, and yes, even in the automobile industry. America has had its luxury car brands such as Ford’s Lincoln, GM’s Cadillac and Corvette. However, none of these brands were ever seen in the same light as any of the German, British, and Italian luxury cars.
I think it’s because of the same lack of hand-crafted luxury dimension, as well as the engineering and the styling. Today, the most luxurious car America can boast of is the Tesla Model S, which is a product of a completely new automobile technology. Does it cue luxury the way a Rolls Royce does, or a Bentley? Perhaps not. It is possible to include luxury and attention to detail in the hand-made parts of it, from the body, to the dashboard, to the upholstery and other aspects of the vehicle.
America might not have had an arts and crafts movement of its own, the way Britain did as a reaction to the industrial revolution, led by people like John Ruskin and William Morris, but it can try and revive whatever little home-grown arts and crafts it had. Perhaps there is a need to encourage newer kinds of handicrafts and revive old ones if there were any, and this must be done at an industry level. In the absence of anything like a style suited to or belonging to a historical period, like the Tudor or Elisabethan, America can rely on its art and design movements. From what little I have seen or read on the subject, the country does have distinctive styles of architecture, visual art, home and interior design, that can lend themselves well to luxury goods. Therefore, a lot of building American luxury can be revivalist in nature.
Besides, a whole new world of American luxury can be built around futuristic tech and minimalist design, the way the Scandinavians have excelled in this area. And it might even take on an environment or sustainability theme, in using new eco-friendly materials and processes. This is where America can showcase its innovation in tech and luxury.
In the hospitality industry, America boasts of several luxury hotel chains. However, these are mostly located in cities and metropolises, obviously catering to the luxury business traveller. Perhaps, they also have some that are golf resorts, a la Trump’s. Given that the country is vast, and boasts of so many different topographical features, America could explore luxury leisure hospitality in regions that are already tourism destinations or those with potential. For example, luxury resorts linked to whisky or wine trails in Kentucky/Tennessee and Napa Valley. Or those linked to nature reserves and parks as well as mountain and hill resorts, especially ski resorts. The idea here is to promote a sense of relaxation and well-being as luxury, since Americans themselves are so busy “hustling” all the time to make a living that they forget to enjoy the rewards of all that hard work.
In this area, in particular, America can turn to people like Frank Lloyd Wright, David Thoreau and Ralph Waldo Emerson for inspiration.
There are just my initial thoughts on the subject. As an Indian I know there is plenty that my own country can do to build and promote its luxury industry. At the moment, Indian luxury is known only through our tourism and hospitality industry, mainly through its three largest hotel chains, Oberoi, ITC and Taj. In recent years, the Indian fashion industry has been receiving international attention and recognition, particularly through a few of its designers and their brands.
However, as a country with a rich tradition of arts and handicrafts and a long history of royals, both Hindu and Mughal, and several Indian princely classes, India is well-poised to develop its handcrafted traditions into luxury. For years, they have remained rural and folk arts, and it is high time they are elevated to the level of luxury. It is also time that artisans received due recognition and reward for their skills and painstaking work. Similarly for Indian tea and for our silks and brocades, and our jewelry-making traditions.
In the old days, Indian princes and royals used to shop overseas for luxury goods. It is well-known that their preferred choice of luggage was Louis Vuitton, which is how the brand has an age-old connection with India. Not exploited enough in India if you ask me, but it proves my point that for a brand to be considered truly luxury, it must travel beyond the country’s shores.
For America to build its luxury industry, the country needs to go back to its roots as well as explore contemporary tastes. And it needs to build something so unique that people travel miles to experience it. And that idea of luxury also travels well across the seven seas.
I have shared links to my thoughts and ideas on Chivas Regal Scotch Whisky and Perrier Jouet Champagne in the article above. You may also read my thoughts on fine writing instrument brands such as Parker and Waterman, and luxury automobiles such as Jaguar and Land Rover.
The featured image at the start of this post is of Fantesca Estate Winery, Napa Valley US on Unsplash