Erwin Bamps, CEO, Gulf Craft, takes TRENDS through the process of buying a luxury yacht and explains the changing involvement of current customers with increasingly tailor-made vessels.
Erwin Bamps, Chief Executive Officer of Gulf Craft at the Arab Luxury World conference
How is Gulf Craft performing in the luxury market in the UAE?
We are no longer a regional company, we are truly global today. We have been going through tremendous expansion which wasn't halted in the recession and continues to grow. We have a lot of appreciation globally not only for the product we have, but also the approach we have to it.
I think for a homegrown brand that is more than thirty years old and now having four shipyards, we have been doing something right. I believe the approach we have in building semi-customized product. We deliver in a different kind of approach not only in terms of product styling and design, but also in the way we build our clientele; it's a very personal lifestyle oriented business we are in and we are present globally in countries including Europe, Australia and elsewhere.
In this sense, we seem to be one or the ambassadors for homegrown brands. We believe actually there is good value in the way we do business as much as in the product that you build. That is what fascinates people, including luxury industry, you have to fascinate people in order to let them come over and look at your product and buy it.
You mentioned that your niche of luxury did not suffer during the economic crisis - why is that?
I think the ultimate luxury did not suffer. I think the old money was still there and is still there. The people who were affected the most were the middle sized market: the people who have mortgages and send their children to school and have a dispensable income but not the upper middle class. From the upper middle class to the ultra-rich, we did not see any halt in spending. We actually saw them enjoy this period over the last five years, as they realized they can get better deals at this time than ever before, they can get better value, and so they have seen this as an opportunity to step into luxury that they have not stepped in too before. We have never sold as many large yachts before as we have in the last five years. The people are spending more now, as they will get more attention, and the buyers are mature and so build more value into the product.
How do you customize the experience for your clients?
The first thing is customization of the product. So we sit with the client and talk to him about the things that he always wanted and never knew he wanted, so we build the product around him. And we make sure that the approach we have to him is a very soft approach, in terms of - not selling - leading him into the world of yachting, to see what it is all about, and we talk about the process and the factory, and show as much the factory as the catalogue and try to invite people into our kitchen and let them see how it is coming about. Then you are trying to sell traditional workmanship. You build an emotion not only around the product but around the way it is coming together. So he becomes a part of it, and then you build a bonding with the client which is beyond the product.
What is the process that the buyer will go through until the yacht is received?
It could take ten years or it could be one day, and that depends purely on how emotional the client is when he comes and purchases. But we find that the buying process has been a little bit lengthier in the last few years, which we do not mind, because if you are a brand that cares about a strong story and underlying values, then it is nice to have a customer that wants to know. The client could be someone who has a story to tell, and enjoys it and becomes part or it, because then you get to build better customer loyalty, and we assume that the buying process has to be extended.
It is like planning a holiday, where you don't know where to go but you know what you want to do, so we let him describe what he is looking for, and this part of the process is the most important to us. Then we do our proposal, and then when he feels this is matching his expectations, he signs it. And then it is not when he signs he pays a deposit, only on delivery.
So for us, 70 percent of our new sales are coming from the current clients, that means you can build strong customer loyalty in the luxury segment we are in, and that is good, because this means you don't have to go out there and continue to look for new clients all the time.
How do you define luxury in your products?
Luxury is defined by uniqueness first of all, and it is focusing on the things that people think they can't afford, or they are dreaming about, so you have to find what it means, for everybody it means something different. For some, it is a lot of features and toys on board with bells and whistles, for a lot of women it is more the type of smell they get on board, the type of leather, the type of woods,
the finishing, the luxury that appear in the interior, it differs from customer to customer, each is looking for a different experience. So basically you have to try to get it from them, what defines luxury for that person. Because, as a luxury brand and a luxury manufacturer, you tend to generate something that you think will match everybody's luxury experience or expectation, but you don't.
And it is not only between the Chinese, Russian or Arab clients, but it is even person-to-person, between one Emirati and another; they are looking for different experiences and it is this that makes it so fascinating.
What are the trends you see in customers' demands?
We have seen over the years that people have gone for comfort over speed and performance. Now it is important that the sound system must be a state-of-the-art, rather than just the biggest engines you could find. We've seen that technical performance is declining; in terms of it is being the biggest part because it is now more about individuality. And the trend is towards, customization and semi-customization.
We see that some people are very patient if they can get something that is really unique to them; if it is something that puts together the things that they have always wanted to have. So people will wait and they are specifically on board with the yachts and boats that we build. They want enrichments in the use of texture and materials, such as fabric and marble. And they are more educated than they used to be; they want to know the name of the marble stone; they want to know the name of the wood; and if you have a client like that, it can build better satisfaction, better loyalty, because he will be producing the boat, not just observing.
Reference: Trends magazine, July-August 2014 issue, by Bassema Demashkia