What Does “Luxury” Mean Today?
There has been a significant shift over the past two years in what consumers are calling “luxury”. Are you paying attention?
Many well-to-do Americans are re-prioritizing their lives – and their spending habits – to match the realities of the ‘new normal’ after the subprime mortgage mess and the Great Recession. Designer clothing, cars, and jewelry are still being sold, but they’re in far less demand.
What’s hot and what’s not? According to a recent USA Today article, a survey by Affluence Collaborative shows that the top four brands most admired by Americans with incomes of $100,000 or more were Apple, Microsoft, Best Buy and Sony.
Apple appears to be the new 800-Pound Gorilla of luxury labels. Design, function and experience are the three things that people point to when comparing Apple to other high-end brands. The iPad, Apple’s newest entry, is selling briskly mainly because of its appeal to the high-end consumer who sees the newest Apple gadget as sexy.
Sony has created a new way to define their brand, according to the USA Today piece: “functional luxury.” Providing a new or upgraded experience from the norm is what Sony is doing; 3-D televisions, panoramic photos, and computer-in-picture TV’s are just a few examples Sony has created.
How can you continue to grow and thrive as a business in this environment?
- Look at how your brand helps others experience things in new ways. Consider the ways in which your current clients are enjoying their purchases with you. How does your brand provide an “upgraded” experience from others in your category, and how can you better tell that story to non-customers to help them realize your benefits?
- Consider re-positioning or expanding your brand in a slightly different way. The sheer joy of ownership of a luxury item is becoming passé; designer handbag maker Coach has introduced a value-priced product line called Poppy, which starts at $198, while maintaining the average Coach purse price of $350. (Coach sales are up 8% for the first nine months of their 2010 fiscal year.) How can you help someone find a way to become an owner of your product or service and feel good about the value they’re receiving?
- Promote your brand as the “smart” choice. If anything has changed in the past 24 months, it’s the perception of paying full price for anything and receiving only average value. People are more interested in the adrenaline rush of being able to snag something good for a price point lower than they were expecting to find. How does your brand fit in that kind of marketplace, and how can you help people feel “smarter” about choosing you?
