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Understanding Right this moment’s Luxurious Shopper | Branding Technique Insider

Understand today's luxury consumer

Luxury marketing is mostly about exclusivity. If everyone has it, it’s not a luxury. The popular bumper sticker slogan “Whoever dies with the most toys wins” sums up the desire to collect these badges of achievement.

Many marketers try to target wealthy, upscale buyers. This makes sense because these consumers obviously have the resources to spend on expensive products with higher profit margins. And our current economic system tends to encourage wealth accumulation among the relatively few: the 80 richest people in the world are worth $ 1.9 trillion. This is roughly the same amount shared by the 3.5 billion people living in the lower half of world income. The wealthiest percent of the world’s people control more than half of the world’s total wealth.

Even in tough economic times, we will continue to see elite products and services that only the wealthy can afford. For example, if you go to school in London and happen to have “a few pounds” to rub in, you can join The Luxury Student. This is a subscription service for wealthy students. It’s “… a truly unique service for those looking for the finer things in life.” Members receive a VIP student experience that includes a free Nespresso machine, blogger photo shoot, surprising luxury gifts, and access to Quintessential Travel, a luxury store Lifestyle travel management company. Who said college has to be about making a living on ramen noodle? How bleak …

The market continues to introduce increasingly expensive luxury goods and services, from $ 12,000 for mother-baby diamond tennis bracelets to $ 600 for jeans, $ 800 for haircuts, and $ 400 for wine. While it seems like almost anyone can flaunt a designer handbag (or at least a fake version with a compelling logo), America’s richest consumers employ 9,000 personal chefs, visit plastic surgeons, and send their children to math tutors for $ 400 each Hour.

A luxury brand is a complex platform that conveys messages about quality, origin, status and taste. It often includes a number of visual symbols, such as: B. a distinctive logo, monograms, patterns and images. A good example is Bottega Veneta (picture), whose leather goods have no visible symbols or logos. Those who “know” will recognize them by their characteristic weave pattern.

Compare a discreet luxury brand like this, for example, to the very noticeable repeating logo pattern you might find on a Louis Vuitton bag or sunglasses, adorned with a very large Dolce and Gabbana label on the front. This contrast shows that luxury brands differ in the type of status signaling they use. Typically, those who are richer and do not have high status needs rely on “quiet signals” and are likely to be put off by excessive advertisements. Luxury brand marketers need to understand these distinctions as their customers may or may not appreciate products with explicit logos and other prominent cues that indicate conspicuous consumption.

Segmentation within the “haves”

How do we know if customers appreciate or avoid loud signals? At the very least, it is useful to focus on another well-known dichotomy: old money for new money. People who have had money for a long time tend to use their wealth differently. Old money families (e.g. Rockefellers, DuPonts, Fords, etc.) live mainly on inherited money. One commentator called this group “the class in hiding”.

After the Great Depression of the 1930s, greedy American families became more discreet when it came to showing off their wealth. Many fled mansions like the ones we can still find in Manhattan (the renovated Vanderbilt mansion is now Ralph Lauren’s flagship store) to hide in Virginia, Connecticut, and New Jersey.

Mere wealth is not enough to gain social significance in these circles. You’ll also need a family history of public service and philanthropy, and specific hallmarks of those contributions often enable donors to achieve some sort of immortality (e.g., Rockefeller University, Carnegie Hall, or the Whitney Museum). Consumers of “old money” differ more according to origin and descent than according to wealth. In addition, they are safe in their status. In a way, they’ve trained their entire lives to be rich.

Unlike people with old money, there are many people today – including high-profile billionaires like Bill Gates, Mark Zuckerberg, and Sir Richard Branson – who are “the working rich.” The Horatio Alger myth, in which a person goes from “rags to riches” through hard work and a little luck, is still a powerful force in our society. That’s why a commercial showing the actual garage where the two co-founders of Hewlett-Packard first worked struck a chord with so many.

While many people do indeed become “homemade millionaires,” they often encounter a problem (although it’s not the worst problem to think of!) After getting rich and changing their social status. The Nouveau Riche label describes consumers who have recently reached their fortune and haven’t had years of training to learn how to spend it.

What a shame about the poor art nouveau wealth; Many suffer from status fear. They oversee the cultural environment to ensure they are doing the “right” thing, wearing the “right” clothing, being seen in the “right” places, using the “right” caterer, and so on. In large Chinese cities like Shanghai, some people wear pajamas in public to show off their newfound wealth. As one consumer said, “Only people in cities can afford clothes like this. In farming villages they still have to wear old work clothes in bed. “

Obviously, income is how many of us “score” in our consumer society. Even a person’s credit score also serves as a ticket sometimes when dating sites like Datemycreditscore.com use them to screen potential applicants.

Understand the “haves”

If we take a closer look at the basic dichotomy between Haves and Have Nots, it is not so difficult to identify counterexamples that illustrate how permeable these categories can be:

The abdication of Edward III to marry simple Wallis Simpson in 1936 and, more recently, the “stepping down” of Meghan Markle and Prince Harry in the transition from royals to commoners.

The practice of parody, in which affluent consumers intentionally use symbols that we associate with people who do not have pockets as deep as ripped jeans and trucker hats.

Historically, people have associated tattoos with social outcasts. For example, in 6th century Japan, authorities tattooed the faces and arms of criminals to identify them, and these markings served the same purpose in 19th century prisons and 20th century concentration camps.

Fringe groups such as bikers or Japanese yakuza (gang members) often use these emblems to express group identity and solidarity. In contrast, a tattoo is now a fairly risk-free way of expressing an adventurous side of the self – even if that self belongs to a middle-class youth. Coloring is the order of the day all over the world. At least according to a survey, Italy leads the pack. 48% of the respondents say they have at least one tattoo. Hardly marginal, right?

Organizations targeting “the rich” could fall into the trap of assuming that all wealthy consumers are equal. Despite our stereotype of rich people just partying all day, one study found that the typical millionaire is a 57-year-old man who is self-employed, has an average household income of $ 131,000, and is married to the same woman for most of his Growing up has kids, never spent more than $ 399 on a suit or more than $ 140 on a pair of shoes, and drives a Ford Explorer (humble billionaire Warren Buffett comes to mind).

In fact, many wealthy people do not consider themselves rich. One tendency that researchers are noticing is that these people indulge in luxury goods while pinching pennies on everyday items. For example, you buy shoes from Neiman Marcus and deodorant from Walmart.

These revelations at least remind us that the simple dichotomy of Haves vs Have Nots deserves more nuance and probably some psychographic work as well. In fact, SRI Consulting Business Intelligence divides consumers into three groups based on their attitude towards luxury.

1. Luxury is functional: These consumers use their money to buy things that will last and have lasting value. They do extensive pre-purchase research and make logical decisions rather than emotional or impulsive decisions.

2. Luxury is a reward: These consumers are usually younger than the first group, but older than the third group. They use luxury goods to say, “I did it.” The desire to be successful and to demonstrate their success to others motivates these consumers to buy flashy luxury items like high-end cars and houses in exclusive communities.

3. Luxury is pleasure: This group is the smallest of the three groups and tends to include younger consumers and slightly more men than the other two groups. For these consumers, the purpose of owning luxury is to be extremely wasteful and indulgent. This group is ready to pay a premium for goods that express their individuality and take notice of others. They are more emotional with luxury spending and are more likely than the other two groups to make impulse purchases.

Contribution to Branding Strategy Insider by: Michael Solomon, excerpt from his book The New Chameleons: How to Connect with Consumers who defy categorization

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