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 microclimate make all the difference.
The 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.
View the Entire Series: The Added Value of Provenance
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