Luxury Marketing: what is it and what strategies are applied

Luxury marketing is that branch of marketing that has as its object the so-called luxury goods and as protagonists, at least traditionally, luxury brands and companies that target top-spenders.

 

WHY DO LUXURY GOODS MARKETING?

More realistically today, people who practice luxury marketing strategies are very different from each other and who above all differ, even considerably, from the more commonly accepted definition of luxury brand. In fact, more than one scholar has pointed out that, in the almost total impossibility of giving a univocal definition of luxury goods, the term “luxury” is currently “one of the most abused in the world” and that this should be taken into account, for example, when reading data with numerous zeros and enthusiastic trends in the luxury market.

Equally legitimate is, in this perspective, to ask whether all luxury marketing strategies are actually marketing strategies for luxury goods or if it is simply a sort of vertical brand extension, through which even non-luxury brands try to reach top-of-the-range market segments or, more frequently, a masstige-type strategy (Silverstein, Fiske, Luxury for the masses, 2003). The expression, used more and more frequently, has to do with the so-called democratic luxury, it is a crasis of “mass” and “prestige” and consists precisely in the use of codes, stylistic features, forms, marketing tools typical of luxury also in the promotion and communication strategies of the most commercial and mass products.

In short, the intrinsic characteristics and qualities of the product or service in question do not seem to make a luxury strategy indispensable, as the image and positioning that is intended to convey those same products or services or the brand to which they belong: much more pragmatically, the hypothesis of some scholars (Kapferer, The luxury strategy: break the rules of marketing to build luxury brands, 2009) is that it is the adoption of typical luxury codes that makes a luxury brand and not necessarily the other way around.

 

UNDERSTANDING THE NEEDS AND HABITS OF THOSE WHO SHOP FOR LUXURY: THE FIRST RULE OF LUXURY MARKETING

Like and more than any other marketing strategy, after all, luxury marketing starts from understanding what the pyramid of needs of high spenders is; in the light of what has just been stated, however, a luxury marketing trend impossible to ignore is to target differentiated targets that are not only consumers accustomed to buying luxury goods or with considerable spending capacity, but also collectors for example or fans of fashion or antiquity, depending on your sector of reference.

By analyzing the purchasing habits of high spenders, various theoretical models have been developed that highlight macro-descriptors and micro-descriptors of luxury (Aiello, Donvito The evolution of the concept of luxury and strategic management of the brand).

A qualitative analysis of perceptions. on the concept, on the brand and on a luxury product, 2006) which, in turn, help to understand why luxury purchases are made.

Quality, uniqueness, refinement, creativity, power are among the most used expressions to explain even semantically why you opt for a luxury brand and what distinguishes it from a brand that is simply trendy or premium.

More traditionally, luxury shopping stands out in ostentatious shopping and hedonistic shopping. The former, as the adjective itself suggests, serve to flaunt a status or a lifestyle and are in turn linked to three different effects studied in literature: 

  • the Veblen effect wants purchases to be finalized, especially if they are luxury to indirectly manifest their wealth, their social belonging, their power;

 

  • the so-called snobbish effect links the purchase of luxury goods directly to the idea of ​​uniqueness or rarity of the products / services in question and is closely related to the life cycle of the product, since top spenders are also among the early adopters of innovative products and among the first to abandon them when they reach a certain critical mass; 

 

  • the bandwagon effect, on the other hand, is linked to social expectations and the need for belonging, postulating how it does that those who buy luxury goods are driven above all to get on the winning bandwagon of their reference group.

 

If we consider luxury shopping as hedonistic, on the other hand, its recreational nature and linked to the pleasure component are emphasized, so much so that it is considered a sort of reward, a legitimate reward for one’s daily commitment (Fabris, The new consumer: towards the postmodern, 2003).

In order to create an effective luxury marketing strategy, one cannot fail to consider what has been said so far and have a clear idea of ​​who one’s buyer personas are. Clearly, your reference sector also plays a fundamental role, so much so that more than just luxury marketing it would be more correct to talk about luxury fashion marketing, luxury hospitality marketing, luxury retail marketing depending on whether you intend to do luxury marketing in the fashion field. hotel or non-hotel hospitality, retail and so on.

 

THE “ANTI LAWS” AND THE MARKETING MIX OF LUXURY GOODS

However, what all luxury marketing strategies have in common seems to be the ability to rewrite even the most classic laws of marketing, so much so that there are those who have tried to define “anti-laws” of luxury marketing (Kapferer, Bastien, The luxury strategy. Break the rules of marketing to build luxury brands, 2012), linked to how the traditional “7 P’s” of marketing are reinterpreted to give life to a completely sui generis luxury marketing mix:

  • The first “P” in this case would be that of performance: the luxury item must guarantee maximum results both in terms of product characteristics and in terms of brand experience, which means that a luxury brand cannot give up as much to high or very high quality raw materials, craftsmanship, innovative processes, as well as investing in experiential marketing.

 

  • Personality and in some ways even pedigree are the second lever on which luxury marketing can focus: brands such as high fashion firms or top-of-the-range car manufacturers can count on a sometimes centuries-old history that gives them a certain character and a certain personality and there are consumers who prefer them to other competitors or even to other cheaper brands by virtue of their inheritance.

 

  • Scarcity (in English “paucity”) is one of the most classic principles on which the luxury industry has always played: the simple availability of only a few pieces, the explicit reference to limited editions or unique pieces increase the perceived value and the willingness to buy of luxury lovers and of those who, as we have seen, make purchases guided above all by the so-called snob effect.

 

  • The same principle of scarcity is often repeated in the distribution and placement strategies of luxury products. Many luxury brands still sell in dedicated boutiques or, if they are online purchases, they shy away from large aggregators on the Amazon model in favor of proprietary ecommerce. For other luxury goods, distribution is siphoned or takes place on dedicated channels precisely because the more they are unavailable, the more they can increase the desire, the challenge of buying them.

 

  • Pricing also assumes a strategic weight within a luxury marketing strategy: in fact, by greatly simplifying a relatively low price or one that appears competitive compared to that of other non-luxury products or services, it could cause the luxury item to lose all one’s aura; at the same time, however, it is important that this is kept just below the threshold of consumers’ willingness to pay, so that it gives an index of quality, good workmanship, etc. does not become an obstacle to purchasing.

 

  • PRs are used above all as a tool for luxury branding and serve to maintain, even in the collective imagination, the positioning of the brand and, more metaphorically, to feed the myth that often lies behind the history and activities of a luxury company . Depending on the type of brand, the sector in which it operates, etc. they can take the form of sponsorship of large public events for example. 

 

For many luxury brands, however, the deliberate lack of public relations activities, a bit like the deliberate lack of investment in advertising campaigns, is also a strategy, as if the absence is among those factors capable of increasing the desire for a brand or its products and services.

 

DIGITAL LUXURY MARKETING: DATA AND FORECASTS

If we consider data and forecasts according to which Chinese consumers, for example, are already accustomed to shopping for luxury mainly online and digital stores will become the favorite place for shopping for many top-spenders, it is not difficult to understand, however, how the In the years to come, traditional levers will be added to those of digital luxury marketing.

Especially since personal reasons will ensure that among the ranks of luxury spenders there are more and more young consumers, millennials or Gen Z, digital natives.

Tools such as display and social advertising, remarketing or direct marketing through email marketing can benefit the luxury brand at every step of the funnel and whether the goal is to increase or improve brand awareness or interest in the brand, whether it is the most concrete one of generating conversions.

Similarly, to better define the digital identity of a luxury brand, collaborations with influencers or luxury affiliate marketing plans can be exploited. Digital marketing of luxury, however, can also mean investing in technologies such as augmented reality or artificial intelligence to improve the user experience at all levels, from the website to branded content strategies.

It goes without saying, however, that all digital luxury marketing strategies must be integrated, and in a coherent way, with offline ones.

 

THE PROFESSIONAL FIGURES OF LUXURY MARKETING

To succeed in a goal like this you cannot improvise, you need professionals with ad hoc training and experience in the field.

It is therefore not surprising that, in the context of the many training courses dedicated to new digital professionals, there are also luxury marketing masters aimed at training specialists in the marketing of luxury goods: often these are, among other things, rather sectorial paths. and dedicated to markets such as fashion, food, made in Italy, aware of how much the professional contribution can make sectors such as these really competitive in which more and more companies are looking for luxury marketing consultants and other special figures.