RAPAPORT... Even though the economic downturn is causing consumers to pull-back spending across all income segments, there are some opportunities luxury retailers can tap right now, according to the latest report by the Luxury Institute of New York.

Part of managing the brand successfully --through a downturn-- is taking a fresh look at policies and procedures to align internal processes with customer expectations, but the brand cannot survive without incorporating customer feedback. The Institute's results of its recent survey found, on a broad scale, consumers want information to make an informed purchase..."and respect me as a human being."

One way to show respect is to hire/maintain a knowledgeable sales force with the people skills to make the consumer feel good. If your staff rates low on product knowledge -- you will lose the shopper's confidence. (More than 9 in 10 rated product knowledge as No.1 trait.)  Other highly ranked practices for sales staff included trustworthiness (8.95 in 10), politeness (8.94 in 10) and that salespeople be considerate of the consumer's time (8.83 in 10.)

Become extraordinary -- do not use gimmicks, but create talented, caring people who connect with customers one-on-one. "How much extra does it cost to staff your company with people who are experts in products, and even so for your competitors' products?"

A great website is by far the most cost-effective outreach for the brand. Still, some luxury brands fail to please wealthy consumers. Retailers must not hide charges in the fine print, and they must make sales quick and easy. The Institute concluded that luxury goods firms could learn from other websites that are not dedicated to this segment. "The online retailing pioneer [Amazon.com] garners favorable mentions from 28 percent of the wealthy respondents for providing the best online transactions in luxury goods," the Institute found. Nordstrom follows with 19 percent and Neiman Marcus with 10 percent.

Never share customer lists

Junk mail (delivered to residences) is the most annoying retail practice at the moment, so says 9 in 10 wealthy consumers. The Institute found too that if a retailer is found to have shard customer information with marketing firms --  that was one quick way to lose the customer for good.

Wealthy consumers also demand to speak to a real person when telephoning your company so make it  immediately clear how to bypass all those automated menus and ramp-up the telephone sales staff to handle these calls. Customer service representatives who are polite, trustworthy, and focused win highest praise from the wealthy.

These consumers also stated they do not wish to be cold-called with "special offers" unless they have previously authorized your brand to contact them.

Re-think marketing initiatives

The Luxury Institute suggested ways in which to polish the brand image during the current market conditions. Drop the hobby line immediately. Most product categories are not logical extensions of the luxury brand, the Institute concluded. "Many luxury brands have entered into categories where they have no expertise because they want to be lifestyle brands...Fashion brands are notorious for pasting their logos on anything that they think will generate growth regardless of the impact on long-term brand equity and the long-term bottom line."

Moving down-market will kill your brand. "It is the 'boiled frog' syndrome. The warm water feels so good that the frog doesn't know it's being made into soup till the water starts to boil. By then, it is too late to bail."

Dare to be different. Stop emulating all the other brands. Create never-before-seen products, stand-out, and stand-tall. "Walk down most high streets, such as Fifth Avenue, Avenue Montaigne, or Bond Street, and you see the same look and feel in store designs and products to the point that you can take away the signs and logos and wealthy consumers would probably not be able to identify who is who."

When the economy is challenging, each dollar spent on communication counts. A public relations campaign is more effective than advertising, the Institute found. "Give your agency the opportunity to communicate the authenticity, the rich history of your brand, your brand integrity, your brand's corporate citizenship, your knowledge of the category via your internal data, and most importantly, your breakthrough innovations."

Open the doors of your boardroom and listen to what customers say. During tough economic times, board members (or internal strategists) play defense to save themselves or promote their own agenda. Don't go there, the Institute concluded. "You need to have a great offense. Inject the voice of the wealthy consumer into your strategy sessions. Use internal and external quantitative research, create an online community, mine your transactional database, and engage customers one-on-one at point of purchase, wherever and whenever that may be.

"In effect, do whatever it takes to understand what consumers are thinking right now and why they are behaving the way they are. Find ways to immediately put consumer feedback into practice. They will guide you not only to survive --but thrive-- in any landscape, including the current downturn."