Staying Above the Fray: Crafting and Maintaining the Mystique of a Luxury Brand

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A luxury brand must do two things at once: produce a beautiful and functional product of a superior quality that can’t be found elsewhere—being handmade doesn’t hurt, either—and maintain the mystique. It’s this perception of intrigue and exclusivity that keeps their products in demand instead of plummeting into the bargain bins. This can be achieved in a lot of ways—having a long, rich history with a near-mythological founding figure helps (think of Coco Chanel or Thomas Burberry), but there are plenty of other strategies these companies employ to remain distinguished and keep their lines from going the way of the (Ford) Jaguar.

Limit Distribution and Licensing

Luxury consumers must feel they are buying something exclusive.
Being on the racks at JCPenney can be a death knell for these brands. It goes without saying, but Prada, Gucci and Chanel have their OWN stores—you won’t find their latest offerings at a mall department store. Lately Prada has boosted sales on the strength of opening nearly 100 new stores in the last few years (30 of them in China), and thereby asserting more control over their brand. Limiting licensing and franchising is important; these dilute the brand’s image, and it’s that kind of overexposure which nearly killed Chanel in the 70’s. This in turn led to them culling their distribution outlets by one third, which had the intended result of driving demand back up.

Remember Your Roots

Diversifying the line is important, but companies have to keep a focus on their core, historical offering.
 By the mid 2000’s, this had become a problem for the renowned British company, Burberry. By diversifying too much and concentrating on selling polo shirts, dog leashes and endless plaid/check knick-knacks, the company had diluted the exclusivity and focus of their brand, with outerwear accounting for only about 20% of their  global business. As current Burberry CEO Angela Ahrendts notes,“In luxury, ubiquity will kill you—it means you’re not really luxury anymore. And we were becoming ubiquitous.”

Ahrendts notes that the iconic trenchcoats which launched the company to fame were worn by British soldiers in the trenches of WW I, and by the explorer Ernest Shackleton on his Arctic expeditions, but that “Burberry was the only iconic luxury company that wasn’t capitalizing on its historical core. We weren’t proud of it. We weren’t innovating around it.” The lesson: never forget where you came from. Burberry has since refocused on their roots, making their high-quality raingear the centerpiece of their product offerings.

Target the “Rich People Sports”

It goes without saying you want to target people with plenty of money, but you won’t find them in the stands at WrestleMania. Marketing to the affluent sports fan/athlete can lead to inroads with those who don’t even watch or care about the game. While not quite in the top tiers of luxury, Ralph Lauren’s Polo brand is the obvious example here; I can’t imagine there are that many polo players in the world, but at this point the very word “Polo” is more closely associated with the clothing and fragrances than it is with the sport. Consider sports like tennis, golf, sailing or even skiing. These sports have prohibitively high financial entrance barriers (sailboats aren’t cheap to own or to maintain barnacle-free, and you just can’t buy a horse for the amount of money you used to), so the people that play them tend to be loaded. Look at where the best players compete: St. Andrews, Aspen, Santa Barbara, Beaver Creek…these are the customers you want.

Get Big In Japan

And not just in Japan, but India, South Korea and China, too (China now ranks #2 in billionaires, just behind the US). Newly-rich Chinese in particular have an affinity for almost indiscriminately snapping up luxury Western goods, be it cars, golf clubs, handbags, suits or motorcycles. In India there are often months-long waiting lists for luxury accessories. European and American consumers may have more cash to spend, but it is Asians who are now driving the demand: Asian consumers now spend over 40 billion a year on US luxury goods, accounting for half of that market. The reasons for this are the complex economic, social and societal changes rocking countries like China and India right now, but it boils down to this: in the new global economy, Asians are turning to new ways to show off their status. Telling statistic: in Japan, almost 95% of women in their 20’s own a Louis Vuitton handbag. As India’s economy continues to develop, look for increased demand for high-end goods there in the near future.

Playing Hard To Get

LVMH (an acronym for Louis Vuitton Moet Hennessey) is sort of the crown prince of luxury brands; they’ve got you covered for your handbags AND your booze, and their champagne brands (including such top-shelf names as Veuve Cliquot and Dom Perignon) account for nearly 20% of the global market. Fact: to produce champagne, you’ve got to own land in the Champagne region of France. If it comes from anywhere else, it ain’t champagne; it’s just a sparkling alcoholic beverage. Not only that, but unless they decide to sell, no one else can grow on that land. Production is also strictly capped by the French government to create that most necessary of all traits for luxury brands: scarcity (or at least the illusion of it). With their Hennessy brand as well, LVMH pays farmers in the cognac region to grow other kinds of wine grapes, thereby artificially restricting the total supply (tactical scarcity, something DeBeers knows a thing or two about as well).

It’s a lot easier to create barriers to competition after you’ve achieved market dominance
—this holds especially true for centuries-old brands.

Celebrity Endorsements

Surprised? While it’s true many top-tier brands shy away from having a movie star hawk their wares on television commercials, many opt for a more subtle approach. Often this will come in the form of product placement in films—for instance, Daniel Craig’s prominently placed Aston Martin cars and Omega watches in the James Bond films (by the way, I literally can’t think of a better luxury pitchman than James Bond). Another even less direct ploy is cajoling the right celebrities to wear their clothing or accessories while strolling down the red carpet at a film premiere.

Now It’s Your Turn

It can be intimidating to mix it up and compete with deeply entrenched and established brands, and not all of these methods can be realistically replicated (for instance, it really helps to be a centuries-old legacy company which enjoys government assistance, so good luck with that), but some of these strategies are applicable to almost any company or product offering. And when in doubt, remember these 6 little words: “It’s supposed to look like that.”

Want to see how we do it?  Check out our portfolio here.