Creativity for Luxury Brands
With the phenomenal expansion of (the crisis-resistant) luxury markets, certain issues – highly relevant for contemporary luxury brand managers – are in need of an effective and creative approach.
In a recent article of mine, published as the lead paper in the Journal of Business Research (vol. 65, 10, p. 1399-1407), my co-author Prof. G. Balabanis and I, look into some of these consumer trends. Luxury brands try to leverage particular meanings and themes to fuel consumption. Academics, for example, usually argue that the true meaning of a luxury lies in its uniqueness, rarity, and the inability of the masses to obtain it. On the contrary, we see that managers (who are engaged in the day-to-day battles in luxury markets) are stretching the boundaries of access to luxury brands.
If both parties are right (and I believe they are), luxury firms must try to balance two seemingly incompatible goals: (1) maintaining their perceived exclusivity in consumers’ minds, while simultaneously (2) increasing brand awareness and growing their revenues or market share – eventually selling massive amounts of luxury products.
Are these 2 goals mutually exclusive – or maybe not? And how can a luxury brand creatively balance sales expansion while re-creating the ‘distance’ a luxury brand should have in consumers’ minds?
The answer is that (most) luxury brands don’t offer any more real scarcity; rather, they offer an illusion of scarcity, as Prof. Catry (2003) argues as well.
In our study we looked, among many things, into consumer characteristics such as their need for status, need to belong in the ‘right’ groups, and even their need to ‘be different’. While these may be separate consumer segments, in many situations they overlap. Hence consumers need luxury products that make them feel special and unique, while at the same time making them be part of their chosen (real or imaginary) group of ‘beautiful people’. And managers, on the other hand, need to translate these ‘needs’ into consumer ‘wants’ that satisfy the goals consumers try toattain.
So, how can a company meet its (ever increasing) sales expectations and offer scarcity, belongingness to ‘special’ groups and/or status?
We believe that a creative approach might start with managing successfully the illusion of scarcity. Managers need not always sell scarce goods such as the naturally scarce diamonds or crocodile bags; instead, they can creatively manipulate the idea of scarcity in consumers’ minds. Such scarcity, for example, could stem from limiting the exposure of the brand/communication within tightly defined segments/channels, or limiting the information available to the public (information rarity); another way would be to creatively manage limited editions, i.e. the very successful luxury camera Fuji X-100 sold about 100,000 items per year before launching its higher-priced “black-edition”, topping up the ordinary sales by another 10,000 units (with a much higher profit margin); in technology-related luxuries, initially limiting the new technology into the upper segments and then working into the economics of diffusing the technology to lower segments (while continuing with new innovations for the top segments) might be an answer. Finally, on the communication side, luxury companies should creatively balance mass advertising with more traditional PR-like techniques: advertising is good for building awareness for the public (creating the dream and the brand’s ‘aura’), while focused PR events are the vehicle to create the feeling of exclusivity and access the right micro-segments.
After all, luxury creators have always been creative. Shouldn’t managers continue on this path?
By Minas Kastanakis, Marketing Professor at ESCP Business School.