(Photo credit: Anew creative associates - The Narrative - designed iconic Italian brand Fornasetti’s fragrance and homeware range)
Ours is a varied life.
In one day, we can be speaking to a young luxury start-up seeking advice, a private aviation business about stand out luxury communications, or an established French co-operative wanting new ideas. And be checking the news to see if we still have a government…
In this blog we ditch the jargon, and share our advice - ‘unplugged’ and kept simple – that we gave to a US based, first time luxury brand entrepreneur
Why pay more?
At the luxury end of the market, quality is important. The rational reason people are willing to pay more for high-end products is that they’re buying top-of-the-range quality. That can be defined differently – aesthetics, materials, craftsmanship, where that brand is seen – but it’s got to embody a world of beauty, elegance, and desirability.
Psychological drivers
Emotion – how a brand makes consumers feel – plays a huge role too. The emotional reason people want to buy high-end products could range from escape, reward and status signalling, to brand value, self-worth issues or a need to belong to a certain community.
Image credit: Wikipedia
It’s about aspiration, desire, hope, symbolism – people want the best things in life. While in lower-cost markets, value is often achieved through mass production, the opposite is true at the high end. See here for our related blog - Six ways luxury brands will survive.
Rarity is important
If a brand is limiting its production, then you know it’s not available everywhere. That exclusivity is a big part of luxury brands value.
Image credit: Commons Wikimedia
Hermès’ Birkin bags provide a good example of this. Only a limited run of this iconic bag is produced each year, making it highly coveted and valuable. Special editions are released in even smaller quantities.
Rarity also appeals to the rational mind, of course, as it gives a luxury item intrinsic value. Refusing to discount is another strategy for creating exclusivity.
Companies like Hermès, Louis Vuitton and Chanel never put their bags on sale. The real luxury brands don’t have any wholesale, they only sell directly.
Heritage, higher prices and vertical integration
Alongside quality and exclusivity, heritage, increasing prices and vertical integration are the core factors investors look for in a luxury brand. Vertical integration means keeping the production inhouse.
Image Credit: Boodles.com
That way you are 100% sure that the company retains quality control. One luxury brand even bought a crocodile farm so that there was no risk of buying sub-standard material – that’s the ultimate in vertical integration. Product innovation is much less important in luxury. True luxury is not fashion, it’s timeless.
The importance of a brand story
The personality of a brand, the symbolism is important. Most brands in the luxury space are deeply proud of their heritage and craftsmanship, and customers want a story. For luxury brands, purpose has always been a selling point. A lot of the big European houses were started by having founder stories rooted in craftsmanship. Their family businesses go back a long way. So, many can celebrate over 100 years of heritage and family values. Thinking long term is part of what they’re about. Luxury is also built to last, which is inherently sustainable. Consumers want the same kind of thing as the luxury companies themselves. (See some further reading on the topic here: Luxury brand strategy and country music and Writing compelling brand narratives)
The importance of experts
Experts are back. You need advisers who deal in facts, not fantasy. We have the experience to give honest and informed answers to the important questions: what makes your premium brand more relevant, and what special value do you deliver to your customer that justifies selling at higher price points?
We will help you navigate this new luxury brand world.
Whether it’s insight from research, strategic brand thinking, a new brand name and logo design, messaging, online and offline content or website development, we help companies increase brand profitability through sharper insights, distinctive propositions, creative ideas and faultless execution.
Based in the heart of London, we'd be delighted to meet for a coffee, either face-to-face or virtually, to discuss any new projects you might be considering
Get in touch here.
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