When you ask about luxury brands, chances are you’ll hear names like Ralph Lauren, Michael Kors, Louis Vuitton, Coach, and so on. These brands are big and they don’t have the same price tag as more ‘generic’ brands do, but they are as mainstream as it gets.
Everybody might seem crazy about these brands, but the world’s richest people simply can’t be bothered. You know who really drives the luxury market? It’s the young chaps with loads of ‘new money’ to spend.
The rise of newly created wealth has been behind the wave of luxury goods consumption that has swept the world over the last century or so. In the seventies, it moved from Europe; the eighties were all about Japan; in the nineties it was Russia; after them, Greater China, and of course the Africans.
Regardless of how and when the new wealth came about, the patterns were similar; the newly rich needed to assert their new status by buying what others couldn’t. They start off buying nearly everything expensive in their path and once they start, they don’t stop.
It’s not difficult to understand really. The new money types have more insecurities and less developed tastes. They need to soothe their insecurities and prove their worth. As for the ‘old money’ types, there isn’t as much enthusiasm to buy because they have everything already. They might be good for your luxury brand as far as endorsement goes, but when it gets down to profits and revenues, don’t expect them to do much for you.
Another group you must not ignore is the rising middle class. There are more of those around and they like to spend on luxury too when they can afford it. You must decide right from the onset who you want your target to be, but it’s okay if you start by aiming really high.
If you look into what Michael Kors has done to project their brand, you’ll find that they stuck with the strategy of marketing to a wider range of consumers, including the younger generation, deep pockets or not. Depending on what you sell, that could work for you too.
Super wealthy consumers count too
If you are more interested in selling to the super rich and to them only, you can, but you’ll have to shift your focus. The more sophisticated ‘old money’ consumers are not looking to buy a product or service simply because it is expensive. They are more interested in the value they are getting by buying the product. They are only interested in top quality that will last and exclusive items. Think of it as wanting a quieter kind of quality.
Luxury brands don’t cater to only one class of consumers and what works for you will depend on your product, among many other factors. Most importantly, do in-depth research into the market you intend to enter and discover what works.