The World Wide Web has given way new online culture of fashion addicts who love the finer things in life but don’t necessarily want to pay full price for them. This new demand for luxury goods at discounted prices is playing a huge role in the diminishing returns traditional retailers are seeing. Department stores like Barney’s and Bergdorf Goodman can hardly compete with companies like Gilt.com and BillionDollarBabes.com. Luxury resale is growing market as well. A swift fashionista can pick up a gently worn item over at Portero and save a huge chunk of change.
As luxury marketers and consumers we have to wonder what this means. Has luxury lost it’s exclusivity?
I would say absolutely not. Though marketing of luxury goods is changing, exclusivity is something that is determined by stable, consistent prices and scarcity of goods. If the “true” luxury brands refuse to discount, then luxury can stay exclusive. Some brands discount for the sake of moving stale merchandise. Even Jimmy Choo, one of the most popular luxury handbag and shoe brands, hosts a sample sale twice a year.
It’s important not to forget the emphasis that luxury brands must place on quality and craftsmanship. What sets a luxury brand apart from its cheaper counterpart is its distinct elegance, that stands out among lesser quality goods. True luxury brands are timeless and transcend trends. When determining if something is luxurious many point to the price tag. However, I would ask myself a few other questions as well. For instance, how long will the product last? Will it get better with age? Is it an heirloom piece or more of a trendy item? Where did it originate from? Are the textiles trustworthy?
Many marketers try to pass non-luxury items off as luxury pieces in an effort to add value and prestige. We are all familiar with knockoffs and luxury “inspired” goods. One of the many factors contributing to diminishing value of luxury goods is knock-offs. When a consumer is paying a low price to obtain a luxury knock-off, the value of the original item depreciates. The rat race to sales and immediate accessibility combined with the global presence of the online realm has led to a marketing “Catch 22?: if a brand presents a product online for the sake of the sale, it makes itself vulnerable to knock-offs and replications. What’s a luxury brand to do? I would say it’s important to concentrate on authenticity, or focus on an element that cannot be easily replicated by a competitor.
The lines between the authentic and the faux-luxe are blurred, and the inundation of affordable luxury goods and knock-offs into the luxury world is making it more and more difficult to distinguish the two. If luxury is more readily accessible, so what? People are still buying luxury goods, but the economic climate and market have changed. Consumers are still vying for the same luxury items as before the market tanked, they just want them at a better price point. Most luxury brands are dependent on their loyal customers with whom they have built lasting relationships, so if the brands don’t discount they can still stay in the market. The only proven way to maintain brand equity is to refuse to discount, and the only way to keep some customers is to give them a break. So what’s a luxury marketer to do? Perhaps luxury marketers should be more creative with their marketing tactics and more careful with the placement of their goods.
Keep in mind, exclusivity isn’t tangible, it’s more of an intrinsic quality or an idea. Luxury is about an experience, so as long as the brand provides a unique experience for the consumer, it can still stay afloat in this economic climate. It’s really a matter of defining one’s market and sticking to it. If the brand is aiming for the luxury market, it’s important to narrow the scope, and do what it takes to retain customers.
Though discounts may not be an option, diffusion lines are more popular now than ever. Some designers see diffusion lines as the end of their careers, while others see them as mass marketing opportunities. It’s all in how a brand structures its marketing initiatives and the way it reaches customers. After all, Luxury isn’t in a price tag, it’s in the feeling one gets from owning something that enhances one’s lifestyle. Enjoy
A good read Deluxe: How Luxury Lost its Luster http://www.amazon.com/Deluxe-How-Luxury-Lost-Luster/dp/1594201293