Remember, oh, say 2007, when luxury was the hottest buzzword in consumer retailing or services? From high-end spa treatments to luxury campouts (yes, campouts) to bling-laden sunglasses and mink dog beds, Americans of all ages (and almost all income brackets) couldn’t get enough luxe.
Fast-forward to 2011 and as shell-shocked consumers slowly creep out of their houses and cautiously start spending again, luxury may be getting ready to rebound—but it’s very different than just a few years ago. JWT Intelligence recently took a look at the luxury market in an insightful interview with Milton Pedraza, Founder and President of The Luxury Institute. You can read all his insights on their site, but I thought I’d spotlight a few here:
Tech is the ultimate luxury. People may be cutting back in other areas, but they’re willing to spend on pricey digital devices (like iPads) because this technology is viewed not as an object, but as “gateways to experience,” Pedraza explains. Tech devices are also tools for sharing with others and for maintaining memories. All of these—experience, sharing, connection—are things that consumers have prioritized over traditional “status symbols” during the recession.
Status shift. Of course, that doesn’t mean tech gadgets aren’t status symbols in themselves. Today, Pedraza says, we convey status by the devices we rely on—an iPhone signals that you’re hip and creative, while a BlackBerry shows you’re a corporate mover and shaker. (Though these perceptions may be shifting.)
Value-add. Even in luxury, consumers are looking for value. If your product or service isn’t tech-oriented, make sure it’s the highest quality. Lasting, durable products that can be passed down to younger generations have more cachet than disposable fads, and services that make a lasting difference will sell.
That’s entertainment. Gaming and entertainment add value to luxury retail, especially online. The best luxury retail stores create a unique environment. In contrast, Pedraza points out, online shopping isn’t typically very exciting, so smart companies will look for ways to up the ante by adding game elements that create entertainment value.
Going mobile. Look for combinations of mobile marketing, ecommerce and CRM. Pedraza cites mobile as the trend to watch, as savvy businesses will use mobile devices to enhance customers’ experiences. For instance, when a regular customer arrives in the store and checks in on a mobile device, imagine a salesperson getting alerted and reminded of the customer’s preferences and prior purchases.
It’s all about relationships. For any business, but especially those in the luxury arena, relationships with customers are key. Pedraza says luxury retailers are striving to continually improve their customer service. That’s a smart move even if you’re not selling luxury.