Luxury is no longer purely a matter of quality: today’s brands must also be a seamless fit for customers’ aspirations. Matteo Atti, Vista Global Group EVP of Marketing, explains more…
When Covid-19 started spreading, the luxury sector was hit hard, as Statista data illustrates. With little international travel, lockdowns and the demise of footfall, many businesses suffered.
Yet, as the situation evolved, I saw newfound confidence slowly growing among top-tier brands. Rolls-Royce revealed it had higher sales in 2021 than in any other year of its 117-year history because the pandemic, claims the marque (registration required), made the super-rich realise that life can be short. Chief executive Torsten Müller-Ötvös claimed in a virtual press conference that it is “very much due to Covid that the entire luxury business is booming worldwide.” People were encouraged to invest in what Müller-Ötvös calls “the nice, lovely things in the world.”
I agree – but I would also go further. The brands that came out of the pandemic strongest were those which evolved by emphasising the added purpose, happiness and enrichment that their products and services can bring. Brands such as Gucci and Nike are not just competing against other fashion or footwear brands but also for share of wallet and share of customers’ hearts across all luxury segments.
The Changing Image of Success
In a digitally dominated world, the pandemic has accelerated how brands reach and reward their customers. As Bain & Company notes in a recent article, the industry ‘should come out of the crisis with more purpose and dynamism than before.’ The management consultant says: ‘By 2030, the industry should be drastically transformed. We will not talk of the luxury industry anymore, but of the market for “insurgent cultural and creative excellence.”’
What does that mean for the customer-brand relationship?
Power and luxury go together with freedom. With power and money, ultra-high net worth individuals (UHNWI) can choose what they want to have and what they want to represent.
Glossy adverts in high-end magazines or images of what to wear and where to stay to embody the image of success may no longer be enough. Marketing success today is entwined with social media and self-editing, as the most successful people exist in both super-public and hyper-private environments of their own choosing.
That means marketing should change, too. Brands should reflect a customer’s self-expression and self-determination.
Luxury and Marketing
Luxury is no longer just in the materials of a product you can discover first-hand in a beautiful store. In a world where commerce increasingly means clicks, brands without big budgets could find themselves lost under the surface of the immense number of conversations constantly shifting in the grand ocean of the web.
People can now click on the big-spending advertisers as well as search for heritage brands such as Chanel. But for the brands in the middle with limited name recognition or shallower pockets, it’s important to create a new strategy.
Smart luxury marketers should start to look to super-segmented search and super-segmented PR as their way to define and own a place in somebody’s life. They should not hinge this strategy on generic search terms because customers have virtually unlimited choice online — and a brand that does not hit the top will likely not be noticed, let alone considered.
Becoming a Symbol of the Moment
To seal a deal, you must often move somebody else out of the consideration process. In these circumstances, ‘generic’ is the enemy of success. And this step can cost a fortune.
Find a context in which you want to win. How can you demonstrate that you are more relevant than somebody else? How do you really fit into that specific moment?
If you fit perfectly into somebody’s life at a specific time, then they can search for and find you — over and over again. Appeal to the instant gratification that human beings seem to be hard-wired for, then make them want to stay with you.
As you become relevant for journalists and influencers, this strategy can have the added benefit of supercharging your PR efforts because they will highlight your product in those specific moments.
Think back to Rolls-Royce’s recent success: They’re innovating in service and product alike by bringing out electric versions and bespoke versions of their iconic cars. In fact, the BMW-owned marque also offers the ‘Black Badge’ treatment, aimed at those who ‘dare to be different.’
That’s something we can all aspire to.