Those with cash to spend appear to be the last consumers left standing, so what will it take for brands outside the luxury sector to appeal to them?
The fact that luxury brands have continued to post extraordinary profits when an array of high street names have fallen like the proverbial house of cards is surely proof that somewhere, somehow, there exist people where money is the least of their problems.
As more every day brands launch themselves upwards in an attempt to appeal to these consumers, the science in doing this appears as simple as following the classic rules of luxury branding.
Peter Cross, business partner of Mary Portas at the retail branding agency Yellow Door, noted last week that while wealthy consumers have become more open to value offerings and selective about purchases, the rules of luxury prevail. He was speaking at The Champagne Assembly event last week run by brands GH Mumm and Perrier-Jouët.
“True luxury is still based on exclusivity, rarity and scarcity,” he said. And it is as simple as that – or complicated, as it might be – for brands looking to target this audience. He revealed a couple of ways of going about it – telling a compelling story with integrity makes your place in the shopping universe clear, he advised, while also saying no can be powerful.
Making people feel special, such as through complementary gifts not available to other consumers, is also a powerful tool, he noted, in terms of generating goodwill and word of mouth.
This takes me back to the World Travel Market last year, where the marketing director of Honeymoons.com noted that at an upmarket hotel she stayed at, a gift such as a journal or travel bag would be waiting on her pillow each night on her return from dinner. Deep down she knew she had paid for these herself in the room price, but nevertheless these gifts delighted her and she couldn’t wait to tell her friends when she got home.
Indeed, psychology plays an important part in luxury branding. At the Champagne Assembly event, University of Hertfordshire professor in developmental psychology Karen Pine, revealed research supporting the power of “delayed pleasure”.
Pine cited studies that show happy chemicals are released in the brain more when anticipating an experience, or thinking of a future experience, than during the actual experience. A Dutch study of 15,000 adults showed that happiness levels were higher when planning a holiday than actually being on the holiday.
While that might be down to pricey cocktails, bad buffets and annoying tourists, Pine linked this concept to how we are drawn to products we can’t have immediately. Luxury brands like Patek Philippe and Birkin, with lengthy waiting lists coupled with sky high price tags, have embodied the idea of delayed gratification, and that is one of the main reasons they are highly sought after.
It is not only mainstream brands that can take note of these ideas, but luxury brands experiencing challenges. Also speaking at the Champagne Assembly, Boodles managing director James Amos said that non-jewellery brands entering the space, like Louis Vuitton and Chanel, had the brand thinking harder about invoking nostalgia in its designs and enforcing its history and craftsmanship.
In champagne, global sales director for G.H. Mumm and Perrier-Jouët, Pierre Aymeric du Cray, revealed how Perrier-Jouët created a special bicentenary package containing two magnums and a money can’t buy offer – keeping one of those magnums in a cellar for the buyer to pass on to an heir at the time of their choosing, up to 100 years from the purchase time.
Will such pointers see an influx of everyday, mainstream brands create limited edition offers in an attempt to grapple for market share in the luxury sector? Like any strategy, this won’t be for every brand, but for those that are willing to invest the time in creating a tailored strategy, there are successes to be had.
To read more about wealthy consumers, see this week’s cover feature.