As you might already know by now, I’m a huge sucker for law/finance/shoes, and possibly an permutation/combination of the three. Here’s an article that I bookmarked recently, for future reference: Affluent Shoppers Look for ROI
ROI, or Return on Investment, is finance-speak for what you get in return when you make an investment. So, say, I put in $10 and I get a $50 return. My ROI is (50-10)/10 * 100 = 400%. Note that this is the simplest formula there is and I didn’t discount it for the time value of money.
So apparently we apply this to our purchases:
“The concept of investment implies that the purchaser gets a return on what they spend. Luxury consumers expect their fashion brands to deliver a return on their investment in the form of timelessness, sophistication and distinction, according to the survey results.”
Frankly, I’m a little surprised that these were the most highly rated brands: Talbots, Armani, Coach. Then again, the only other brands that were included in the survey were: Ann Taylor, Anne Klein, Brooks Brothers, Calvin Klein, Gucci, Liz Claiborne, Michael Kors and Ralph Lauren.
The other day, SY (friend and LV-fan) was talking about why he likes LV — essentially it’s the high return on investment, despite LV’s growing customer base. I would have liked to see more brands being compared in terms of their ROI.
On a related note, Millward Brown Optimor released its BrandZ Top 100 report for 2010 a couple of weeks back. I’ve reproduced the luxury rankings here, but do note that this is sourced from the .pdf file that Millward Brown Optimor released.
The report is an extremely interesting read, so I suggest you download and scroll through it yourself when you’re free. It’s a really good (and simple) reader on brands and how they’ve managed to maintain their value through this crisis.