Daniel Langer is one of the world’s most renowned experts on luxury, pricing, and disruption. He is named one of the global "Top Five Luxury Key Opinion Leaders to Watch” by Netbase Quid. He founded the luxury strategy firm Équité and is also the Executive Professor of Luxury Strategy at Pepperdine University in Malibu and a Professor of Luxury at NYU in New York. With his team he consults some of the world’s most admired and iconic luxury, lifestyle and consumer brands and also several luxury startups and smaller brands. Daniel is the author of several top-rated luxury management books in English and Chinese and is frequently featured in leading global media publications including The Economist, Financial Times, Forbes, New York Times, Nikkei, Luxury Daily, and Jing Daily. His education includes Harvard Business School and he holds an MBA and a Ph.D. in luxury management.
Q: Gucci just named Sabato De Sarno as new creative director. What will be critical for him as he takes over the direction at the brand?
Dr. Langer: Over the last years, Gucci was in my view one of the best brands in storytelling, Every new execution was balancing disruptive elements with extreme precision in bringing Gucci’s mantra of boldness, individuality and freedom across. Since Alessandro Michele’s departure I am missing these elements and many of the recent executions feel generic, interchangeable, and with dramatically less brand storytelling. This is a huge risk. Sabato De Sarno will need to inject into Gucci his own interpretation of the brand while continuing to communicate the brand story precisely and with emotion. The clarity of brand storytelling is critical to create extreme value for clients in luxury. Brands often forget this.
Q: Why is brand storytelling so fundamental?
Dr. Langer: One of the most significant mistakes luxury brands make is losing touch with their core values and forgetting to express who they are. A brand's story is the key part of its identity and what sets it apart from its competitors and it is what builds the emotional connection. Importantly, the story needs to be told from a client perspective. It’s not “about us,” but rather what can the brand enable its clients to do and feel differently. By ignoring or forgetting the story, brands risk losing authenticity and uniqueness. If there is no story, there is no value. It’s that simple.
Q: Is the story really more important than everything else?
Dr. Langer: I give you a recent example. I spent a week in two hotels that many would place at the pinnacle of luxury. The product was - in both cases - stunning: overwater villas with direct ocean access from the deck, both at significant price points. One of the hotels provided brand storytelling at every touch point. The service was different to anything I ever experienced before and always “on brand.” It created an extreme emotional response and a desire to come back. The other hotel missed a story. Staff interactions seemed random, there was no clear theme. Instead of being client-centric the experience was distant, almost arrogant, and self-centered. No story, no value, as stated before. Consequently, in my audit, one hotel scored extremely high, the other hotel felt like a shit show despite stunning architecture. The two most critical mistakes in luxury are not having enough clarity of the brand story and - as a result - the inability to bring the story across, The outcome: very limited perceived value, limited loyalty, not enough emotional connection. Many brands perform far below their potential, also financially.
Q: What other mistakes do you observe in luxury?
Dr. Langer: Maybe this sounds surprising: neglecting digital channels. In today's world, digital plays a critical role in consumer behavior and client decision-making. Équité Research indicates that up to 95% of luxury purchase decisions are initiated through the digital journey, especially on social media. Many luxury brands fail to embrace digital marketing and distinct e-commerce experiences precise enough. In many cases the social messaging is too blurry, not creating enough engagement and conversion. Millions of dollars are literally wasted. And I have seen many brands who had to reduce prices because they were unable to tell their story convincingly to their social media audiences. As the metaverse is evolving, the dependence on digital storytelling will grow exponentially.
Q: You wrote recently in Jing Daily about the problematic relationship between FOMO and luxury NFTs with the example of Porsche. Why do so many top luxury brands struggle with their NFT projects?
Dr. Langer: The key mistakes brands commonly make are treating digital assets differently than their physical counterparts and succumbing to the fear of missing out, or FOMO. Why FOMO?. Many metaverse projects are driven by a business’ desire to appear at the forefront of innovation and to not miss out on the hype. As prominent brands created NFTs, DAOs and other digital products and rolled out massive public relations campaigns around them, others felt the urge to quickly join in. Many brands over-react, hastily briefing agencies to quickly develop NFTs or other metaverse projects, launching them without deep strategic scrutiny. Marketing managers often face huge internal pressure to jump on the bandwagon. However, many managers lack significant experience in creating digital assets, and digital agencies often don’t understand luxury and its extreme value creation principles, leading to disastrous outcomes. Most luxury space digital initiatives analyzed by Équité Research either create little to no intrinsic value, are launched on the wrong platform, or address the wrong audience, or no audience at all. Shockingly, hundreds of thousands of dollars, in some cases millions, have been wasted on digital asset projects with no clear objectives or long-term vision, and little understanding of key performance indicators or success factors. This must change. As the Porsche NFT debacle shows, there’s much more at stake than money — brands risk their credibility.
Q: What is the conclusion?
Dr. Langer: As luxury brands evolve and look for growth opportunities, they must keep in mind the critical success factors of brand storytelling at all touchpoint, authenticity, innovation, and emotional connections. These factors will ensure that they are able to create extreme value.
