Luxury Branding: How to Establish or Re-Position Your High-End Brand

The combined value of the various luxury goods markets in 2014 was an estimated 865 billion euros, with luxury cars, personal luxury goods and luxury hospitality taking the top three places, with values of 351 billion, 223 billion and 150 billion respectively. [1]

In order to understand the branding strategies developed and utilized by the top luxury brands, those who have maintained their reputation for over several decades, as well as those that have successfully re-positioned themselves as high-end brands, we must first look at the very definition of luxury.

There are four main characteristics by which the luxury customer defines a luxury brand:

• Quality
• Craftsmanship
• Exclusivity
• Elegance

However, the way in which someone perceives luxury will depend on factors ranging from their socio-economic status to their geographical location. According to latest Albatross Global Solutions and Numberly study, “The Journey of a Luxury Consumer”, people from different parts of the world prioritize the order of importance of these key factors differently when defining luxury goods. For example, an overwhelming majority of luxury consumers worldwide value quality above all else, however, UK luxury consumers place more importance on craftsmanship, while elegance plays a more vital role when it comes the global luxury market.

Since customer preferences and definitions can vary from one jurisdiction to another, luxury brands need to tailor their brand communications strategy for each of the relevant market segments they are targeting, while remaining true to their core brand values, brand DNA and brand story. It can be challenging but with the right brand strategy it can be hugely rewarding, as evidenced by Louis Vuitton and their distinctly different approach to marketing their luxury brand in Japan.

The brand collaborated with Japanese artist Takashi Murakami in the early 2000’s to create a more colourful version of their classic monogram, and even reduced prices slightly during the economic crisis, to retain its position on the Japanese luxury market. However, it performed best when focusing on the quality and craftsmanship aspects of luxury brand on the Japanese market, as opposed to the allure of exclusivity and elegance — that had a greater impact with their customers in Western countries.

Luxury is About Exclusivity

In order to thrive, a luxury brand needs to secure its own unique corner of the market. Premiumisation strategies or high price points are designed to attract a particular kind of customer while alienating others – the high quality, and the unique experience that a luxury brand provides will not be right for everyone, nor should it be. To quote the head of Lexus Europe, Alain Uyttenhoven: “Our cars won’t please everyone.”

The brand strategy developed and deployed in different jurisdictions often varies because the definition of luxury changes amongst consumers as we move around the world and up the socio-economic ladder. Also, some of the top luxury brands strategically choose to stay out of the most obvious limelight. Very subtle marketing and the fact that the general public isn’t necessarily aware of their existence creates a unique aura of mystique and exclusivity. It also alludes to the fact that high-quality craftsmanship and aesthetics are amongst luxury brands’ highest priorities, values which are not compromised by things such as price sensitivities.

The brands at the very top of the luxury spectrum are not necessarily bound by the same constrictions of the more mainstream ‘accessible’ luxury or premium sector. Indeed, more exceptionally wealthy clientele might perceive price tags or ostentatious displays of affluence as lacking in taste in certain markets. In fact, there is a wise old saying in the luxury yacht industry: “If you have to ask about the price, you probably can’t afford it.”

Infographic via Raconteur.net

The French purveyor of personalized luggage, Goyard, is a fine example of a luxury fashion brand that has retained its high-end status for over a century, continually prospering without engaging in many of the strategies that are considered to be the cornerstones of effective mainstream marketing.

The brand favours direct sales and word of mouth marketing over media hype, large-scale advertising and online sales, even though Goyard has thousands of followers on several social media platforms, including the luxury brand’s newly launched YouTube channel.

This extreme level of exclusivity amongst long established luxury brands, e.g. specialising in a single product category to the point of elevating a brand to the level of art or supreme craftsmanship, can be used as one element of a brand strategy to create distinction and separate it from the rest of the market, but it can also be a more challenging route for newer entrants to the luxury market.

The luxury landscape is changing, and a brand can quickly become irrelevant if it lacks online exposure. Millennials are close to outspending Baby Boomers, according to a Berglass + Associates and Women’s Wear Daily study that explored the retail industry, which means that a brand has to account for the values that drive Millennials when developing their brand strategy.

For Millennials the bigger purpose of a brand, its big why, has a significant impact on their purchasing decisions which means that CSR and so forth has a bigger role to play in brand strategy than every before — for this growing audience.

The smartphone is an essential component of the Millennial lifestyle because it allows easy access to multiple online platforms and immediate connectivity – 85% of Millennials in the 18-25 age bracket and 86% of those in the 25-34 age bracket own a smartphone[2], while 88% of Millennials use Facebook as their primary news source.[3] For more traditional brands this means embracing new fully integrated brand strategies that wouldn’t have seemed relevant eight to ten years ago.

Even luxury brands that are primarily focused on in-store purchases, e.g. Goyard, are investing in social media and reaching out to affluent Millennials. The way that younger generations perceive luxury is markedly different from the way Baby Boomers perceive it, and luxury brands have a challenging task ahead of them – educating Millennials on luxury goods and adapting their brand strategy to fit the Millennial lifestyle.   

Develop Trademark Brand Symbols and Assets Beyond Just Your Brand Logo

Rolls-Royce Phantom Drophead Coupé has been virtually unchanged for years, and the silhouette itself is just as recognizable as the logo, brand name and the Spirit of Ecstasy mascot attached to the bonnet.

It’s the Rolls-Royce uncompromising commitment to quality craftsmanship and attention to detail that has the brand where it is today. When we work with clients to develop a distinct brand identity that reflects their core brand values, personality, story and communicates their brand message it requires a similar level of focus from everyone working on the project coupled with a deep understanding of the brand’s primary target audience in order to achieve successful results.

Burberry’s trademark black, tan and red check pattern and Channel No. 5 perfume’s simple, yet elegant bottle design are both instantly recognised by the average consumer. These are distinct, different and memorable brand assets that are as important as the brand names themselves.

Founded 150 years ago Burberry is a particularly interesting case study because not long ago it was struggling to maintain a consistent brand identity leading to the brand falling off its luxury positioning, despite its admirable provenance. Inconsistencies in product variants, pricing and communication strategies all combined to undermine the brand. In fact this brand, now worn by Emma Watson and Kate Moss to mention a few high profile names, was once at risk of being considered frumpy before its very successful luxury revitalization strategy was implemented so successfully.

It wasn’t until Angela Ahrendts took over as CEO that a long-overdue brand repositioning and brand relaunch was set in motion resulting in the iconic and much sought-after luxury brand we see today. The company was restructured and the sourcing of materials and production was centralised in the UK. Burberry stores were modernized and equipped with iPads, digital displays and audio equipment that enabled the brand to showcase its quality craftsmanship through video material, and to provide a more engaging customer experience.

However, the true stroke of genius was the decision to focus on a younger demographic, and utilize social media as a powerful promotional tool. To successfully target the affluent Millennial consumer, Burberry had to diversify its product line and make significant stylistic changes, while at the same time retaining the timeless aesthetic that the brand was once known for.

The results of the brand relaunch were astonishing – Burberry doubled their revenue and operating income within five years, and successfully repositioned their brand as a luxury brand. Their famous Burberry check is once again associated with premium quality British craftsmanship.

Provide a Memorable Brand Experience for Your Customers

With a luxury product, the brand packaging, presentation and shopping experience are just as important as the quality and exclusivity of the product itself. Luxury customers are far from average shoppers, they are wealthy and powerful people with refined tastes. A luxury brand has to engage these customers on multiple levels – spark curiosity, engage all the senses, stimulate the mind, and make an emotional connection.

The Gentleman Floris, a new line of luxury men’s grooming products launched by the Floris London, a nearly 300-year-old British family perfumers brand since 1730, uses understated heraldic symbolism on the embossed navy blue packaging to reference its noble origins and royal patronage coupled with its renowned to quality, craftsmanship and rich heritage. The brand story is used eloquently to draw its audience in and sell its brand proposition.

We have created many different packaging design solutions for clients over the years, both luxury and FMCG, and when you consider that on average you have less than 9 seconds to engage your customer through the impact your packaging design has on them, it is critical that your customer gets an immediate sense of your brand story, promise and values if you want to close the sale.

Image via www.florislondon.com

In luxury branding everything from the customer journey to the brand experience and customer service, not to mention the accessories, has to be carefully considered to ensure that it’s elevated to an exceptional level.

The brand experience has to be much more personal, which means that staff, your brand ambassadors, must be chosen to fit with your brand values and culture. They need to be fully inducted and trained in all the details of how your brand is lived and experienced, both internally and externally, and how that unique brand experienced is transferred and cultivated with each the individual customer.

Sometimes this training may also require the front line staff to make important judgement calls in the heat of the moment, in order to accommodate the customer’s specific needs. At the Ritz-Carlton Hotel, each employee is empowered and trained to anticipate and fulfil their guests needs with an exemplary level of service.[4]

Image via www.Ritz-Carlton.com

The Ritz-Carlton is another good example of a luxury brand that successfully maintain its positioning for decades and in fact case studies have been built around its success. The Ritz-Carlton Leadership Centre is now the place where executives from other companies worldwide in many different sectors come to learn The Ritz-Carlton principles of service.

The Ritz-Carlton success is due to a number key factors such as they have:

• A formulated a set of standardized hiring criteria
• Empowered their front line staff and instituted a standardized brand language
• A consistent high-end luxury brand experience regardless of location
• Take note of user feedback, perform regular brand audit health checks
• Constantly evolved to adapt with the times while staying true to their core brand values

The Ritz-Carlton has created an admirable balance between maintaining a consistent brand image and evolving to meet the needs of a new generation of patrons who prefer more authentic interactions with the staff. It’s their uncompromising commitment to excellence which has made them the only brand to win the much sought after US Presidential Baldrige Performance Excellence Award twice, firmly establishing Ritz-Carlton’s positioning as a luxury brand and setting the highest standards for customer service throughout the luxury hotel market.

Create an Aura of Exclusivity by Limiting Supply

Special limited edition items often become cherished collector’s pieces and dramatically increase in value over the years. In fact, the lack of product availability doesn’t negatively affect a luxury brand they way it might other mainstream brands. Its limited availability to the select few makes it even more appealing to its target customers.

Long waiting lists have never deterred Hermès fans, who often wait several months for the privilege of purchasing the brand’s signature Birkin bag. [5] Some of the most popular luxury car brands are the ones with both the highest prices and longest waiting lists. Only the most persistent and loyal customers gain access to these limited items, which enables you as a brand owner or manager to create an elite subgroup within your customer base.

The Rolls Royce SG50 Ghost Series II is a prime example of a brand offering a limited edition product to a particular segment of their target demographic, another example of the exclusivity strategy at work, and establish an emotional connection with its customers. In this particular example, Rolls Royce honours the fact that 2015 marks 50 years of Singapore’s independence, helping it increase individualised customer brand relevance and secure an increased market share in one of Asia’s most developed economies, second only to Hong Kong in terms of financial freedom.

Image via www.luxuriousmagazine.com   

The Apple Hermès brand collaboration helped connect the luxury fashion brand connect to a well-developed demographic of tech-savvy affluent Millennials while at the same time opening the horizons of the wealthy Apple users to the allure of a luxurious brand such as Hermès.

Image via www.apple.com

High-end craftsmanship and a sense of exclusivity have already been associated with both brands, but the halo effect of this collaborative project, the super-luxurious Apple watch, has proved to be quite beneficial in terms of exposing previously unexplored segments of the market to each brand.

Luxury watch aficionados and loyal Hermès customers who are delighted with this new offering will be tempted to explore some of the other Apple devices. On the other hand, the more affluent Apple consumer may easily eschew their previous luxury favourite and make Hermès their alternative preferred choice instead.

Be Proud of Your Heritage, but Offer Customization to Build an Emotional Connection  

Giving consumers some decision-making power over the production process, even if their contributions are limited to the choice of colour or engraving, accomplishes several things:

• It turns each product into a personalised more unique item that is to be cherished
• It creates a more personal connection between the customer and the brand
• It enhances the overall customer experience

Goyard doesn’t offer a diverse product range, but what it does offer is the ability choose from a wide range of colours and styles. A luxury customer can leave the Goyard store safe in the knowledge that the product they have purchased is truly unique, and tailored to their personal tastes.

Image via www.Goyard.com

Luxury brands can also use their geographical location to their advantage. A luxury brand is often associated with its country and region of origin – sparkling wines from the Champagne region have become a key component of many major celebrations, BMW and Mercedes are touted as the epitome of German engineering precision and so on. The brand thus takes on the qualities associated with the local culture. We can use Burberry as a good example once again – its British heritage has been a key component in successfully repositioning the brand as a high-end brand.[6]   

Create an Epic Brand Story that Mesmerizes Your Customers

A good brand story is instrumental in capturing the imagination of customers, but a luxury brand needs to go beyond mere storytelling and develop a veritable fairy-tale that fully immerses a customer, to the point where he or she wants to become a part of your luxurious world. The brand experience and how that is created lived and experienced is the penultimate test.

The legend of Coco Chanel and the immense respect consumers still have for the Chanel brand matriarch is a prime example of how effective legends can be in promoting a luxury brand. Her humble beginnings, timeless style and daring persona are woven into a narrative that all ambitious, independent, fashionable and adventurous women around the world find inspiring.

On the other hand, we have brands with a proud and storied history, such as White’s Gentlemen’s Club in London, which has no intention of expanding or opening its doors to anyone but the most select clientele.

Image via www.Goyard.com

Much like Goyard, White’s has no need for heavily resourced marketing campaigns, as it relies on its few elite “members” for word of mouth marketing. With patrons like Prince Charles and several British Prime Ministers gracing the bar and gaming rooms with their presence, being a member of White’s Gentlemen’s Club is considered a privilege. Even David Cameron’s vocal critique of men-only clubs and the fact that the British Prime Minister resigned from White’s did little to tarnish the reputation built on several centuries of myth and legend.   

Key Takeaways to Consider

In conclusion, here are some key points to keep front of mind when re-evaluating your luxury branding or premiumization brand strategy:

• Ultra premium luxury brands often use understated branding strategies coupled with word of mouth, but offer unmatched top end quality and exclusivity   
• Brands that have successfully repositioned themselves have invested in brand audit health checks and embraced the affluent Millennial demographic and use social media to spread brand awareness
• Luxury brands that have successfully maintained their positioning for decades have used their provenance and leveraged near mythical brand stories to maintain brand distinction, but continued researching the market and changing trends regularly, and encouraged customer feedback to maintain relevance
• Providing an exceptional customer experience in-store, through empowering frontline staff and developing a consistent brand language, is very important, as a majority of luxury consumers make their purchases in person
• Involving customers in the production process enables a luxury brand to personalise its offering with a diversified range of unique variations, even if it doesn’t have an extensive reach across multiple categories
• Collaborating with a brand that has a significantly different customer base and brand associations can produce a halo effect that is highly beneficial for both brands

You may also like:

• Co-Branding: 13 Tips for Growing Your Brand Through Strategic Partnerships 

• Brand Audit: Tips for Determining Your Brand’s Health – Can it be Improved?

• Rebranding Strategy: Why Your Rebrand Must Embrace Storytelling

• Rebranding Strategy: Using Premium Repositioning To Increase Profitability 

• Colour in Brand Strategy: Colour Psychology and How it Influences Branding

• Video Brand Strategy: Top 11 Tips for How and Why You Need to Use Video

• Creating New Brands: Top 10 Tips for Brand Success  

• Brand Profiling: Top 6 Components to Creating a Strong Brand Personality

• Millennial Branding: 6 Ways Your Brand Can Appeal to Millennial Customers 

So, what do you think?

• Have you performed a brand audit to identify the holes in your luxury branding strategy?

• Is your brand utilising social media to its fullest potential and reaching out to affluent Millennials?

• Are you using appropriate brand language?

• Have you created a consistent brand image?

• Have you considered how you can make your brand more profitable by changing your brand strategy with a premiumization approach to reposition your brand, create an aura of exclusivity and attract luxury consumers?

• Do you have an exceptionally engaging brand story that elevates the brand to legendary status and could be leveraged to better effect with a rebranding?

[1] Statista.com, Value of various global luxury markets in 2014, by market type (in billion euros)

[2] Nielsen, Mobile Millennials: Over 85% of Generation Y Owns Smartphones, September 2014

[3] Americanpressinstitute.org, How Millennials Use and Control Social Media, March 2015

[4] Forbes.com, Micah Solomon, Your Customer Service Is Your Branding: The Ritz-Carlton Case Study, September 2015

[5] Uché Okonkwo, Luxury Fashion Branding: Trends, Tactics, Techniques

[6] The Australian, “Paul Smith, Burberry and Mulberry Revive ‘Made in Britain’”, September 2014