The Greatest Challenges For Luxury Brands
The first greatest challenge for any luxury brand is trying to define the term ‘Luxury.’ The word itself – Luxury – is being used and abused so much that it seems to be losing its real meaning. However, a clear understanding of the true meaning of the term ‘Luxury’ is very important for products and brands to position themselves in the market. It is important for true luxury brands to carve an identity and make themselves distinctly different from other brands such as the premium and the fast fashion brands. This positioning of a brand as a ‘real luxury brand’ is important if the brand identity and brand values are to be established and maintained.
Going forward, luxury brands are able to sustain growth and retain market share only when they offer ubiquitous products that do not compromise on uniqueness. The key lies in catering to the masses while, at the same time, nurturing craftsmanship and brand values.
The Rise of the Online Shopper
The Internet, over the past decade, has become the most influential medium for customers. Moreover, these customers actively discuss various brands in social media circles and forums. In addition to this, there are a number of luxury brands that are being promoted by various third-party sources. So, luxury brands need to find a place for themselves in the online world if they have to stay relevant. A strong online presence for luxury brands will, undoubtedly, allow them to gain access to various customer groups; it also helps them become part of a world where new sources of revenue are constantly generated. However, the very essence of the Internet is pervasiveness, making it very difficult for a luxury brand to carve a niche space for itself. Moreover, the Internet is, in general, full of counterfeit products, fake imitations and more – where a single search for a luxury brand will throw up a number of look-alike products and fake rip-offs. Luxury brands have to offer premium products at premium prices, restrict distribution, translate brand aesthetics into their website, create online-offline interactions, bring a human face to their online persona and invite customer participation.
Dynamic Market Approach
The market is ever-changing, and to cater to this dynamic nature of the market, luxury brands have to understand the unique interplay of various market characteristics. With cultural, financial, political, media and communication elements being distinctly different from one market to the other, luxury brands have to consider a different dynamic market approach. They have to know whether they can take a country or market model and use it as a standard of approach for other countries or markets. Typically, luxury brands do not have the luxury of replicating market strategies – they have to adapt different strategies while targeting different markets.
Understanding Today’s Luxury Customer
Traditionally, luxury products were designed and created only for the select few; the elite; the affluent. However, luxury, today, is not reserved for the rich and the elite – a new era has dawned where wealth and income are not the only criteria for defining class. The buying motive of consumers has undergone a drastic change during the past 20 years, with consumers buying luxury goods not only to satisfy a need to impress others but also to satisfy one’s self-identity.
The concept of offering discounts to customers has, in many ways, discredited the brand image and value of many companies. Studies have shown that discounted pricing may adversely affect a luxury brand, as the sheen of class and grandeur is lost. However, with the changing global scenario, most luxury brands have to provide discounts to their customers in order to maintain the market share and presence.
The greatest challenges for luxury brands will be to stay true to its identity while adapting to new realities. What challenges are you facing?
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Tags: luxury brands