Key takeaway: Perfume is the highly profitable, entry-level souvenir (as product) for a luxury brand.
While talking with my friend Emmanuel recently about the product as a souvenir to the experience, I kept some key notes that I transcribe below.
Chanel is in the business of perfume. The brand is embodied by the highly profitable perfume product. Perfume margins are apparently incredible. And it is usually affordable. So the other items that Chanel sells embody the brand and do not need to make a whole lot of money as selling perfume so akin to selling souvenirs of the brand — as product. These bigger ticket items can in many cases be unaffordable, like a Chanel couture dress, and even greater financial gains can be achieved.
Seventy percent of department store sales is on the ground floor. That’s where perfumes get sold. What does that say? Is the ground floor merch the essence of the souvenir culture of luxury brands?
“The full experience of a brand is in its public presence.” The experience of Louis Vuitton can be Virgil Ablot, but the business is in the Louis Vuitton bags. One is the souvenir (as product) of a period of time, and the other is a permanent souvenir (as product) as a show that you are a member of the movement.
Interestingly, the smell of Chanel is ethereal and intangible. And it cam carry the entry point to an entire luxury brand.
Hmm. Now that I write this, it all kinds seems obvious ;-). –JM