As long as you have the cash, you can have a luxury handbag delivered in two days – something hard to imagine 20 years ago, but routine today.
It’s an example of the way marketers have embraced the changing world around them, and brilliantly understood both the shifting needs of their customers and how to best manage their brands. The category has thrived through the GFC and the digital age. In 20 years global sales have tripled, to around $1.2 trillion last year. Twenty years ago the category had an almost formulaic and very traditional go-to-market strategy. Today it’s making the most of the numerous media channels available in a technology-driven world.
The essence of a luxury brand means it is for the few: relevant to a small percentage of customers but highly differentiated by its uniqueness. Impeccable quality, yearned for and priced accordingly. As private companies became corporations, and the need for shareholder growth increased, luxury marketers faced a dilemma. How to sell more in a category based on selling to few? The tactic has been to widen a brand’s relevance while maintaining its uniqueness. Luxury car marques launched smaller models at a lower price, making the brands more accessible. Think Mercedes’ A Class and BMW’s 1-Series. Luxury goods brands launched accessories such as sunglasses that were half the price of one of their famous handbags, making buying the brand more possible to others. Mass luxury, or mass-tige, was here to stay. It has meant not just triple the sales, but triple the customers over the past 20 years. And for every customer gained, luxury marketers needed to augment the product offering, and deliver unique and engaging experiences both in-store and online.
The allure of luxury brands has always been driven by storytelling and craftsmanship. Johnnie Walker is a great example. To highlight this to the new affluent market in Asia that is craving unique experiences, the brand has built four Johnnie Walker Houses, three in China and one in South Korea. In the Shanghai location, the first floor walks customers through the history of the brand. The second floor has an exclusive whisky mixing room where people can have a master distiller mix their own Signature Blend from more than 40 single malts. The third floor is a restaurant available for private functions and the option of bringing in your own master chef, with whiskys matched to the food. Pictures of celebrities who’ve dined there adorn the walls. All reiterating the brand’s story, quality and craftsmanship in the most contemporary way. Brands such as Cartier have also managed to translate such storytelling into the online world.
As sales of luxury cars, holidays and goods continue to grow, marketers have pulled many of the right levers. To grow sales by 300 per cent when the population only grew by 30 per cent and CPI only rose by 55 per cent is a terrific success story.