Ferrari Enzo - Italy -- Photo by Naiyyer
LOCATION. LOCATION. LOCATION!
Provenance refers to a chain of
ownership, a lineage, a pedigree, roots, or ancestry, i.e., where
people, plants animals and things come from. Provenance can add a real
or perceived value to what you are buying. In luxury real estate a home
once owned by a celebrity or a home designed by a well-known architect
or interior designer, can definitely command a premium price. The
location, where something is sourced, is also an important component of
provenance.
To understand the added value of location, consider Chateau D’ Yquem
from France. It is known for being the finest sauterne wine in the
world, often served with foie gras or as a desert wine. A wine
connoisseur can distinguish the difference between their grapes, grown
on only 457 acres, from the same Semillion grapes grown in the adjacent
property. The terroir (the earth where the grapes are grown) and the
micro climate make all the difference.
T
he added value of location can be real
or perceived. When you think of lobster, Maine lobster has an added
value. Pacific (spiny) lobster is less expensive (but equally delicious
in our opinion). Vermont cheddar cheese and maple syrup usually
commands a premium price. As a trend, farm to table dining provides an
added value for those who appreciate supporting local produce growers.
Pelligrino from Italy and Perrier from France have become two successful
sparkling water brands in the USA.
Many luxury brands use the location
where their products are sourced to give their brands provenance. Here
are some examples: Oxford (Men’s clothing-Chicago), Benefit Cosmetics
(San Francisco), Loeb Shoes (London), DKNY (Donna Karan - New York),
Ferrari (Italy) and Yves St. Laurent (Paris).
Authenticating, the chain of ownership
in purchasing a valuable piece of art or an antique or the lineage of a
thoroughbred horse, or the terroir of a fine wine is a key component of
the buying process. Because provenance can add value, real or perceived,
it is mostly appreciated or required by those who can afford to pay the
premium. And, that is why it is such an important topic to understand
as a luxury real estate marketing professional.
But, what happens when a luxury product from a world-class French heritage brand (See Part 3 for more background on heritage brands) is actually manufactured in China? Does that negate the added value of its provenance?
It was this question that inspired us to write this article series, The Added Value of Provenance, and also our previous series, Luxury is a Soul Supplement,
where we explored an entirely new definition of luxury. Stay tuned for
Part 5 where we answer this question and tie the two series together.
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