Luxury Brands Battle Back: 5 Ways to Communicate Luxury in Today's Bland Economy
Jennifer Green
By Jennifer Green, Senior VP, Michael A. Burns & Associates PR
It’s no secret that the current economy has most consumers tightening up their purse strings. And in this kind of market, luxury brands are the ones that pay the biggest price. The Luxury Institute reports that growth in luxury goods spending has been marginal since 2009, and this trend is likely to continue for the next three years unless some unforeseen, and probably unlikely, event occurs that revives the global economy.
For those of us communicators who aim to reach the affluent market, our job is even more challenging in these challenging times. And the need for creative communications strategies is at a premium, especially for luxury brands. Following are some ways to maximize your communications reach for the luxury segment, and hopefully help drive consumers to their next spending spree:
1). Make the case for sustainability – The saying “you get what you pay for” certainly applies to luxury brands, and most high-end brands can claim a premium price due to the quality and sheer allure of the design that goes into it. Luckily with a quality, well-designed product also comes the inherent knowledge that it will last longer than a less-expensive substitute – making it a “sustainable” purchase that pays for itself over time. Our client American Leather, for example, designs and manufactures luxury leather furniture, which sells in the top 20 percent of furniture brands. While consumers will pay a premium for this furniture, we focus on the fact that they are investing in a timeless design that will be beautiful in their homes for many years to come.
2). Help consumers fall in love with the brand all over again – Many consumers have an emotional tie to buying a luxury brand product. Whether it’s a luxury SUV, leather sectional, a handbag, or bottle of bubbly, consumers love seeing themselves with a well-known or on-trend brand. PR in this economy is about making consumers remember what they love most about wearing/sitting/driving in a brand that has class, mass appeal or the “it” factor. We all know, for instance, it is possible to find a great cup of coffee cheaper than at Starbucks. However, consumers also know when they buy Starbucks, they are buying more than a cup of coffee – they are buying an experience. And it works so well that millions of consumers spent $10.7 billion last year on the branded brew. The brand is so well recognized; it doesn’t even put its name on cups anymore.
3). Create appeal for that “must-have” buy – In this economy, consumers may not be wadding up their wallets, but more often than not, when they see that “brand d’jour,” they dig in deep and find a way to buy it. Luxury brands that romance their products, or create an emotional campaign around a particular brand, will help draw in consumers that may be setting aside savings for that “must-have” buy. The Hermès Birkin Bag, for instance, may carry a $10,000+ price tag; however, you must know someone…to get on the wait list…to even buy this sought-after satchel. To many, owning this much-coveted handbag is priceless.
4). Initiate goodwill campaigns – It’s important for consumers to know that their money spent is also helping a good cause. Communicators that help their luxury brands tie in with a charitable cause, a disaster relief effort, or a community program, will go a long way to helping consumers “justify” a more expensive buy. Famed fashion designer Tory Burch created a special edition t-shirt, with all proceeds going to the American Red Cross to benefit the Pacific tsunami relief efforts. While this $45 t-shirt may not have been a necessity for most closets, knowing it was for a good cause – and had the Tory Burch label on it to boot – had it flying off shelves.
5). Engage, engage, engage – Regardless of whether sales are up or down, luxury brands need to constantly be in front of their consumer audiences through social networking, PR and advertising. Social media plays a vital role in creating relationships with consumers and keeping them engaged in the brand. Companies that continue to interface with customers through Facebook offers and through social branding initiatives will be on the winning end when the economy does turn around, and consumers start buying again. Banana Republic, Kate Spade and DKNY offer exclusive coupons and discounts to e-mail subscribers, Facebook friends and Twitter followers. Being able to purchase these high-end products at a discount lock consumers into the brand, and will likely keep them returning even without the promise of a discount.
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Jennifer Green, senior vice president and account supervisor, leads the agency’s B2B Group. With more than 15 years on the MB&A team, Jennifer serves some of the firm’s longest-standing accounts. Offering a strong background in media relations, marketing communications and event planning, Jennifer’s broad range of experience spans an array of industries, including real estate, manufacturing, financial services, transportation, facility management and home furnishings.
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Also, Jennifer, studies show people prefer tried-and-true brands during economic downtowns, while they are less likely to risk unknown labels. Thus, it’s important to trumpet well-known brand names when rolling out new products. Stay away from spin-off brands until the economy improves, and consumers are more open to risk-taking. Thoroughly understanding the audience also enables offering value-added benefits that meet specific needs while maintaining healthy margins.
Kay – that is true indeed! There is a really good report that came out the end of last year by the Boston Consulting Group (http://www.bcg.com/documents/file67444.pdf) which reports that even though the global luxury market is valued close to €1 trillion, luxury brands are seeing profound changes in consumer behavior and the competitive landscape.