Although many people are familiar with the concept of luxury goods, such as Louis Vuitton and Hermes, there is still a wide range of definitions of this type of product. For instance, various studies have been conducted to define luxury goods according to multiple criteria such as price, quality, and aesthetics. On the other hand, individuals and investors may have different ideas about what luxury is.
Aside from being a distinct consumer category, luxury goods also have substantial brand equity. According to studies, people loyal to a luxury brand are likelier to maintain brand loyalty than mass-market consumers.
Despite the various advantages of being a distinct consumer category, luxury goods also have substantial brand equity. According to Bernard Arnault, the CEO of luxury goods giant LVMH, the industry is the only one that can provide luxurious margins. In addition, during the COVID-19 crisis, the consumption of luxury goods was more resilient than the mass market.
So how do they stand the test of time? These are some of the things that keep these brands thriving.
Consistent, Compelling Branding
A luxury brand’s most critical factor when building a solid emotional connection with its consumers is the presence of a legendary founder or character. This individual or character can help create a deeper understanding of the brand and its values.
Coco Chanel is one of the most prominent figures in the fashion industry, known for her elegant and feminine style. Her image has been used in various marketing efforts. Her personality and essence have helped create Chanel’s strong sense of superiority and distinction. Whether a new luxury brand or a historical one, the brand story should invoke a sense of power and prestige.
The Allure of Exclusivity
Providing a unique and exclusive product is one of the most critical factors that a luxury brand should consider when building its brand. This can be done by hosting private trunk shows or distributing its products to select retailers. Unfortunately, many luxury brands fail to capitalize on this type of product’s opportunities and end up with a bottom-line decline.
During the 1990s, Burberry faced a backlash and low sales due to its decision to take the brand mainstream. However, it regained its reputation as a prestigious luxury brand by focusing on its core business and minimizing its distribution. The company’s experience has shown that being able to provide exclusive products is very desirable.
Timeless Design
Despite the changes that have occurred in the fashion industry, luxury brands are still able to produce timeless products. This is because their customers are still looking for the best possible product. Online shopping has also led to a more targeted and strategic marketing approach for luxury brands. They can still maintain their exclusivity factor and highlight the products that will remain a part of their history.
They have also started to embrace the customer journey. They can create a personalized and unique experience at every touch point, from the initial online experience to the follow-up communications.