Whichever industry you are in, competing on price is usually a short-term strategy at best. If people buy from you primarily because you are the cheapest, then you will be dumped as soon as someone else can undercut you. It’s usually a viscous cycle of diminishing returns. Paradoxically it can be a safer bet to aim for a price position that is ‘reassuringly expensive’. You’re instantly giving customers an implied promise that you will be reliable and consistent, as well as making them feel altogether better about you and themselves. You’ll also be generating surplus to invest in ever better quality and customer satisfaction.
At the top of the ‘reassuringly expensive’ tree is the luxury brand. So how do you build your business in that particular mould? It won’t happen quickly, that’s for sure.
Luxury brands – we’re talking the likes of Rolex, Louis Vuitton, and Hermès – definitely didn’t get to where they are in merely a few years. The progression of these companies has taken decades and a significant amount of dedication and hard work, but thankfully, the secret to their respective successes has been well-documented and tracked; we now have a blueprint of how a luxury brand is built.
The growth of a small business into something bigger certainly won’t be exactly the same for every company, and the methods used by Rolex and Louis Vuitton won’t work for everyone, but there are definitely tips and tricks which can be used to fast-track your way into being a luxury brand.
Be inspired by your competitors (but don’t copy them)
You’ll never be a leader of the pack if you’re always looking ahead to see what others are doing. All businesses recommend being inspired by different companies, but you’ll still need to forge your own ideas and paths eventually. You’ll find that even the big players in the luxury business game aren’t afraid to be motivated by the new trends, either. Audemars Piguet is set to open up its own store for pre-owned watches, as it’s clear this is a huge movement that’s on the rise. “Second-hand is the next big thing in the watch industry,” said Audemars Piguet’s Chief Executive, Francois-Henry Bennahmias. The brand itself hopes to cash in on would-be watch owners looking for second-hand items.
Showcase what makes you different
There will never be a substitute for manufacturing high-quality goods and no amount of cutting corners will ever work, as consumers are too savvy. Some luxury brands find that having a limited run of an item helps generate buzz and the feeling of exclusivity. Hermès’ Birkin bag, for example, is said to have had some consumers waiting six years until they could purchase it! Viktor & Rolf even built an upside-down store in Milan to demonstrate just how wacky and dissimilar it was to other brands. Plus, let’s not forget that Abercrombie & Fitch’s idea of making its stores almost pitch black with mood lighting! Sounds also play a part in catching the ears of consumers, as Apple, Nokia, and Samsung all work hard to make their notifications and calls sound iconic – these are all steps to differentiate themselves from competitors.
The concept of allowing consumers to have a say in their luxury item has been a trend of late, as Louis Vuitton, Mymuesli, and Absolut Vodka have all provided the option of letting the buyer choose particular things to how they prefer it. Luxury brands need not discard the importance of tailor-made items, as this certainly isn’t a tacky option when we consider just how expensive some objects can be! It’s their money, why not let them spend it the way they want to. Also, luxury brands haven’t been ignoring the benefits of philanthropy, as this has proven to be a big engagement win from consumers.
Which market are you trying to target?
Are you targeting millennials or those over 40? Although it’s not always so black and white, social media/influencer marketing may well be more preferable if your goal is to reach millennials and teens, yet traditional billboards and print ads could be better suited for those aged 40 and over. However, the concept of “marketing a lifestyle as well as a product” should never be forgotten. Daniel Wellington watches, for example, promote its watches practically every day with a new user-submitted image via Instagram. The picture is always someone beautiful doing something cool and adventurous, as this engages the fans and keeps the word spreading ever further.
Make consumers want your brand
When all is said and done, the allure of luxury brands comes from the fact that consumers may well purchase an item because that’s the lifestyle they want. In a way, luxury brands don’t just sell watches or shirts or shoes, but sell dreams and aspirations, too. The dapper men and gorgeous women some brands use on their advertising materials… that’s who the consumers are aiming to become. Furthermore, a good backstory never hurt anyone, as the heritage, knowing where your business came from, and the mission statement undoubtedly means a lot to some consumers and builds trust and respect.
The past is one thing, but the present and future are certainly incredibly important as well. Your company needs to feel modern, hip, and something that’s not simply a flash in the pan. Having a rotation of brand ambassadors and social media influencers will help in this regard, as you’ll never be short on representing your brand in the coolest way imaginable.
If your aim is to be a luxury brand, then be patient, diligent, and always aware of market trends.