32 The challenges of luxury branding Jean-Noël Kapferer Keywords conspicuous consumption, fashion, luxury, premium. Introduction: The irresistible growth of luxury Whereas once it was a niche research domain, attracting mainly historians, philosophers, moralists, sociologists and economists, luxury has become a prolific research theme in equally as many managerial domains, including marketing, finance, human resources, sustainable devel- opment, strategy, supply chains and law. Luxury research even has its own journal (Luxury Research Journal). What prompted this shift in academics’ attention? Perhaps the most compelling reason is that luxury is no longer a small sector, aimed only at the happy few. Luxury offerings and their ubiquitous brands are highly visible facets of globalization and consumption societies. A simple observation pertaining to retailing reveals just how pervasive luxury brands have become: There are luxury brand stores in every major capital city of the world, as well as in China’s second and third tier cities, most airports, and other hubs. Luxury department stores and commercial centres have opened in emerging countries, signalling their growth and desire to enter consumption society. As a sector, luxury also is highly successful, steadily growing since 1990. According to estimates by Bain & Co. (2014), the luxury consultancy company, in 2013, the overall luxury market reached 800 billion euros (B€), including 319 B€ for cars, 138 B€ devoted to hotels, and 218 B€ in personal luxury goods (e.g. watches, jewels, leather, clothing, fragrance). In 1990, personal luxury goods accounted for only 90 B€. But in 2013, Ferrari sold only 6,950 cars, and Rolls-Royce sold 3,500, suggesting that growth in the luxury segment results from its appeal to a broader swath of society (Nueno and Quelch, 1998). The Chinese middle class represents 300 million people (Wang and Wei, 2010), so the prospects for this sector are compelling. They might not buy private islands, yachts, Bentleys or Lamborghinis, but they can purchase a Hermès bag, a Rolex watch, some Chanel accessories, a few nights in a five-star hotel or a birthday dinner at a Michelin three-star restaurant, anywhere in the world. Western countries have exhibited steady growth in their consumption of luxury 473