Luxury marketing no-no’s and why you may need a new strategy

Chidiadi Madumere

Earlier this week, I was preparing a strategy document for a luxury good retailer; the more I delved into my market survey and research. The more I realized that luxury marketing is such a big joke in Nigeria. Luxury brand retailers in Nigeria have completely missed the point. A classic case of a lion seeing itself as a cat.

Unfortunately, in luxury marketing, the usual rules of marketing do not apply. This has made it very difficult for luxury good retailers to understand exactly how to market their luxury goods to their target market. Hence, big players in luxury market view themselves as fashion retailers thereby committing hideous errors and shamelessly violating the anti-laws of luxury marketing in a bid to make sales and gain cheap popularity.

The nature of luxury brands has changed in recent years, and they are increasingly being ‘democratised’ as product categories such as;
1. ‘Luxury’,
2. ‘Fashion Mass-luxury’ and
3. ‘Premium FMCG Categories’ have been created.

Different strategies apply, to each his own. Ordinarily, the standard luxury strategy model deployed by brands like Louis Vuitton, Chanel, Hermès, Tiffany & Co., BMW, Ferrari, and Ritz Carlton – seeks to create the highest pricing power by leveraging all of a brand’s intangible elements (think: time, heritage, craftsmanship, handmade products, small series ranges, and prestigious clients, etc.). By mobilizing all of these intangible assets, the brand positions itself as largely incomparable to any other, even its rivals. At least, that is the goal.

This luxury strategy model differs from the “fashion strategy model,” which, which sees its appeal and value dependent on season-specific offerings. In the fashion strategy, heritage and time, are not important; fashion sells by being fashionable, which is a difficult-to-preserve value once the said season has come to an end.

Then, there is the premium strategy, which is also different from the luxury strategy model. The premium strategy model can be summarized as “pay more, get more.” Within this category, the goal is to prove – through comparisons and benchmarking – that a brand/products presents the best value within its category.

It is therefore very important for a luxury brand retailer to pick a niche market category, understand it and become a big player in it. This will definitely be your unique selling point. I feel like a lot of luxury brand retailers do not understand the segment, which they are in or even how they got there in the first place.

My question is where are you in the product segment? If you are all about LUXURY, then here are all the things that you may be doing wrong at the moment and why you need to implement a new marketing strategy, one that is aimed at enabling you to expand on your consumer base but also allows you to remain firmly within the luxury sector.

Keep stars out of your advertising
Using celebrities to promote luxury products is extremely dangerous. A luxury brand is courted by the stars, in the same way as those stars are courted by journalists and paparazzi. As we mentioned earlier about a luxury brand’s typical relationship with its customers, it must respect them, but it also has to dominate them. Even the most famous ones. Calling on the services of a star is tantamount to saying that the brand needs some of this star’s status just to survive, and admitting that it has none of its own.

For the luxury brand, this is a gross error of strategy, for it turns the relationship on its head. Only brand domination, standing above everything like a god, is acceptable, not simply behaving like any ordinary mortal. If celebrities are used to promote the luxury product, the status of the latter is reduced to that of a mere accessory.

This is not about sales but even if it is, how many of their fanbase can buy your product? Remember that using a celebrity to market Coca-Cola is not the same as using them to market a $1.9 million dollars Hermes Birkin Bag. Are you kidding me?

Louis Vuitton avoided this by choosing to advertise with Mikhail Gorbachev, former USSR President and they had this to say: First, the celebrity is not a fashion symbol but a man who changed the world; and second, his Louis Vuitton is not the hero, but only the witness of an exceptional moment (a strategic negotiation). How about that for an AD. One word, powerful.

Celebrities are to be used with caution in the luxury strategy, if the brand wants to build its pricing power, distinction, style and sustained appeal. They are not to be used as selling agents for new customers to buy the product through an imitation model (“I want to buy the bag because this celebrity has it”) – this is the fashion business model. They must be used, when used, as a testimonial (“this famous person is also using my bag, staying in the hotel I went last year”) for existing customers.

However, although brand ambassadors cannot be used fully in luxury, they can be used locally – especially when the brand is not well known in a specific country or if its dream seems too exotic, a brand ambassador will give a relevant incarnation to the dream.

Does your luxury product have enough flaws to give it soul?
What are those flaws? Are you talking about it? To who? This is where strategic PR comes in. What are you to talking to the media about? Are you promoting the luxury product by talking about it or are you promoting your local store or your personal brand?

Do not sell openly on the Internet
The lure is so tempting but check it. Luxury is not a flea market exercise. Selling on the Internet is strictly hype in luxury marketing. Many marketers seem to think that if you do not sell on the Internet, you are ‘out’. There, the distinction between luxury, fashion and premium strategy of prestige brands operating on the luxury market is crucial.

Internet sales are extremely well adapted to fashion and premium, but not to luxury.
Self-proclaimed ‘web specialists’ fault the luxury companies for not selling online, forgetting – or ignoring – that all the ‘plusses’ of digital trade (instantaneity, permanent change and actualization, availability, accessibility, price reductions, automation of service, crowdsourcing, etc.) are huge ‘minuses’ for luxury.

Luxury purchase needs time and effort to be deserved, true price and no discounts on excessive prices, one-to-one relationships with the salespeople and not with a machine, feeling of belonging to a ‘club’ of selected people and not being part of an anonymous crowd. The Internet can be used as a complementary service for existing customers, or as initiation to the brand story or to the product for potential and selected new customers. It cannot be used as a selling tool, except for products that are not part of the luxury strategy of the brand, such as fashion lines or entry products.

Forget about brand positioning; luxury is not comparative
In consumer marketing, at the heart of every brand strategy, you will find the concept of positioning, of the unique selling proposition and the unique and convincing competitive advantage. Every classic brand has to specify its positioning, and then convey it through its products, its services, its price, its distribution and its communication. Positioning is the difference that creates the preference for a given brand, over the one that it has decided to target as a source of new business and whose clients it is going to try to win over.

When it comes to luxury, being unique is what counts, not any comparison with a competitor. Luxury is the expression of a taste, of a creative identity; luxury makes the bold statement “this is what I am,” not “that depends”– which is what positioning implies. It is identity that gives a brand that particularly powerful feeling of uniqueness, timelessness, and the necessary authenticity that helps give an impression of permanence. Chanel has an identity, but not a positioning. Identity is not divisible, it is not negotiable– it simply is. Luxury is superlative, and not comparative. It prefers to be faithful to an identity rather than be always worrying about where it stands in relation to a competitor.

Dominate the client
You are bigger than the client. The client is not bigger than you. If you represent brands in Nigeria, then you should represent their interests as well

Communicate to those whom you are not targeting
Luxury has two value facets – luxury for oneself and luxury for others. To sustain the latter facet, it’s essential that there should be many more people that are familiar with the brand than those who could possibly afford to buy it for themselves. In traditional marketing, the keyword is return on investment. In advertising, for example, the media plan must concentrate on the target consumers and nothing but the target consumers– every person reached beyond the target is a waste of investment money. In luxury, if someone is looking at someone else and fails to recognize the brand, part of its value is lost. It is essential to spread brand awareness beyond the target group, but in a very positive way– brand awareness is not enough in luxury; it has to be prestigious.

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