In the lap of luxury

As an IT worker in London’s West End, Sophie Brown has a taste for the good things in life. But when compelled to choose between cappuccino and catwalk fashion she knows where her loyalties lie. “A few luxury items in my wardrobe are a real confidence booster. Cutting back on Starbucks and lunches out makes me feel justified when I buy a pair of designer jeans.”

Sophie (not her real name) recently participated in a survey by BrandAlley. Her financial juggling act highlights a pressing challenge faced by luxury brands. In an economic downturn, people still make luxury purchases. But they make fewer of them and the hoops that luxury brands must jump through to coax consumption are raised higher. So, how to encourage purchasing without appearing pushy, or worse, desperate?The first requirement is to know your customer. Because of the way in which the luxury market has evolved, this is no longer simply a matter of talking to a well-to-do elite.

Danielle Pinnington, managing director of Shoppercentric, says: “Your average luxury purchaser is not necessarily an AB who shops in an exclusive store. They might just as easily be a CI or C2, purchasing over the internet, who has saved up to make a special purchase.”

Just as advertisers adapt their tone of voice to reflect the diversity of the customers, luxury brand researchers must adapt their recruitment methods to engage a variety of customer groups. At the affordable end of luxury, financial rewards, or better still inducements such as a designer accessory, may be all that is needed to hook a sample of aspirational consumers. But marketers seeking to recruit from this group should also bear in mind that the way an approach is worded may determine people’s willingness to get involved in research.

“It’s important to sell research in a way that is sympathetic to the approach the marketing initiative will take,” says TNS head of brand and communications research Sue Burden. “If you ask someone whether they are in the market for a luxury watch they will probably say no. If you ask them whether they would consider a quality timepiece which would last a lifetime, they may well say yes.”

Offers of cash and expensive freebies are unlikely to tempt a busy high net worth customer to spare time in their day to answer questions. But presenting research as an opportunity to network with like-minded people and enjoy experiences that money alone cannot buy just might.

Another golden rule is to work around the interviewee’s schedule. That might mean meeting overloaded executives at their office, at an unusually late or early hour, or even offering to accompany them on a journey. “You have to be prepared to bend over backwards,” says says Sarah Hamburger, research director at Spring Research. “I once interviewed one incredibly busy chap on a plane.”

Future strategy

She adds: “Whatever else you do, be sure to leave your respondents in no doubt that their participation in research events will make a difference. People are more willing to come along if you can convince them they are really going to be listened to and that their views will influence future strategy.”

When it comes to publicity, luxury marketers tread a fine line between creating a buzz and promoting goods so hard that they lose the very cachet that first drew people to them. In a downturn, judging where to draw that line is even harder. One approach is to use the allure of well-crafted advertising to make the brand desirable. “Rather than throw themselves at people, luxury brands need to be desired, yearned for and earned,” says Caroline Gibbs, senior planner at integrated agency Kitcatt Nohr Alexander Shaw. The caveat, however, is that while desirability may trigger boom-time purchasing, in a downturn even the most avid admirers of brands may ignore advertisers’ messages. So might face-to-face approaches work better?

Face-to-face approach

Mention field marketing and the image that springs to mind is one of ladies in lab coats brandishing morsels of cheese on paper plates in supermarket aisles. Perhaps partly for this reason, field marketing has often been thought too pushy a medium for luxury. “A face-to-face approach smacks too much of a barrow boy’s hard sell,” says Gibbs. But face-to-face communication does not have to be brash to persuade. Annlouise Cawley, head of experiential and field marketing at Carlson Marketing, says a personal approach can draw people into a discussion. “With advertising you have one opportunity to create an image of a brand. With face-to-face, it’s possible to tailor marketing to individual circumstances.”

The first challenge for luxury field marketers is to find a venue that draws the right people to the brand, and in large enough numbers, to be cost-effective. To support the launch of the X1, the first handset in Sony Ericsson’s high-end Xperia range, field marketing and experiential specialists Iris Experience partnered with the organisers of Tent London, an exhibition that showcases cutting-edge interior design.

“Staging a sales demonstration would have been out of character with the event,” says Iris Experience global business development director Cameron Day. Instead, Iris equipped a lounge with magazines and X1 handsets, which visitors could use to select music, adjust the lighting and text waiters for drinks. The payback was that lounge users had to provide their contact details, which are now being used in a follow-up campaign to drive sales of the new handset.

Membership club

Creating a membership club is another way to market luxury without sacrificing all pretence to exclusivity, says Anna Sampson, head of research at brand communications agency Rise. Private sales, introduced to Britain by online private sales boutique BrandAlley, provide an interesting angle on this concept. “By registering with us, you opt into hearing about the sales that we hold online and in hired rooms,” says marketing director Melissa Littler. “Our sales last only for two to seven days. It’s a way of encouraging people, from our membership, to trial and buy brands at prices that normally they couldn’t afford or might not have access to on the high street.”

Whether selling designer fashion at knock-down prices is genuinely in-keeping with the ethos of luxury is debatable. For her part, Littler says that by restricting the duration of sales to a maximum of seven days, BrandAlley injects its sales with a sense of specialness and occasion. This, says Littler, plus the fact that BrandAlley promotes only to its membership, preserves the cachet of the designer labels it carries.

If Christmas 2008 fulfils the worst fears of retail analysts, a lot more luxury labels may decide to avail themselves of BrandAlley’s discretion. 

 

Case study: Hotel Chocolat

As a manufacturer and retailer of luxury chocolate, Hotel Chocolat needs to draw the public to its brand and encourage existing customers to make regular purchases. Ten years ago, it created the Tasting Club, a mail-order club that it promotes through its website, direct mailings and by placing inserts in lifestyle media. Customers who join receive monthly selections of chocolate through the post.

Co-founder Angus Thirlwell says the Tasting Club, which now has over 90,000 members, supplies a ready-made base of chocolate enthusiasts to take part in market research and evaluate new recipes. “Every month we create a completely new selection,” he explains. “Members of the Tasting Club know they are guinea pigs. We ask them to fill in a score card and mark each chocolate out of ten.”

The Tasting Club also helps to bring in new customers. Thirlwell says: “If you introduce new members, you might get your next tasting selection at half price, receive a copy of our chocolate cookery book or be entered into a competition to win a trip to our cocoa estate in the West Indies.”

 

Case study: Grey Goose Vodka

Putting samples into commuters’ hands at a railway terminus is a quick way to expose lots of people to your brand. But presenting a product out of context does nothing to make it more desirable, says Adam Wylie, managing partner at brand communications agency 23red. As an alternative, Wylie recommends putting luxury into the hands of opinion formers and celebrities at highly publicised events that attract international audiences.

For its client Grey Goose vodka, 23red brokered a deal with Soho House, the private members’ club favoured by media people. The link-up focused on promoting the brand at international film festivals. During the run-up to the 2008 Oscar awards, the partners jointly hosted penthouse parties for celebrities from the world of entertainment. At the centre of the revelries, which took place in a spectacular West Hollywood skyscraper, was a “pop-up” bar dispensing Grey Goose cocktails. These included Film Noir and Golden Goose, a concoction garnished with minuscule flakes of real gold, created exclusively for the Oscars.

“The twist on conventional product sampling,” Wiley says, “was that the real target market was not the Hollywood stars. The real audience was the people who logged onto the internet the next day or picked up celebrity magazines to find out who was out partying and who drank what. It’s not the night itself that is critical for us, it’s the capital that we make from it afterwards that really matters.” In monetary terms such an event “is worth hundreds of thousands of dollars of PR and support for the brand”.