If you search for the most expensive luxury brands, some famous names will pop up. Louis Vuitton came in at the number one position in 2021. At the time, it was worth $38.7 million.
Close on its heels were Chanel, Hermes, Gucci, and Cartier. These brands deal with fashion accessories like handbags, clothing, and perfumes. The jewelry company Tiffany&Co. took the seventh position with a brand value of$ 5.4 million. What these companies have in common is that they found a niche and optimized it.
Think about it. Why would someone spend thousands of dollars on a simple accessory like a bag? Simple, the company has invested in building a brand people want to associate with. For some, owning luxury items provides a feeling of belonging. It also increases self-esteem and a sense of accomplishment.
And if you wonder how you can successfully start up a luxury business like the ones mentioned above, read on to find out.
1. Identify a niche area for your luxury business
If you look around, there are plenty of people offering luxury items. The competition can be pretty tough if you decide to go into saturated segments. Even if you must go into such markets, look for a point of differentiation.
Let’s take the example that you want to enter the diamond jewelry luxury business. The more prominent brands may only sell high-cost diamond mined products.
Yet, there is a market looking for a more affordable option without losing out on the beauty of diamonds. In this case, the differentiation could be in offering the best lab-created diamonds. Many people do not know that lab-grown diamonds have so many benefits.
- They are eco-friendly, unlike mined diamonds. The latter destroys land resources during the mining process.
- There is zero loss of life or injury with lab-created diamonds. Any type of mining is hazardous. Reports show that fatalities could be as high as 15,000 miners every year. True, not all this is due to diamond mining. But, the same situations facing other mineral miners present to those in the diamond industry.
- Finally, you could pay up to 30% less for lab-grown diamonds when it comes to pricing. Yet, we get the same clarity, carats, and color as mined diamonds. Indeed they undergo the same grading and certification as the mined diamonds.
2. Attach a symbolic value to your product offering
Remember, at the beginning of the article, we asked why someone would spend thousands of dollars on a bag. What the successful brands have managed to do well is to attach symbolic value to the products.
So, what does this mean? It is all about looking at what customers value and giving it to them. When a customer buys a Louis Vuitton bag, it makes them feel good. This is because it communicates a sense of achievement.
The symbolic value is not a tangible product. Instead, it is an immaterial value attribution to an object.
Let’s go back to the example of lab-grown diamonds. Your brand could build upon the benefits we have highlighted. The symbolic value could be a company that values sustainability and the protection of human life. Any customers who share the same ideas would be your target market.
3. Affluent customers are key
Luxury brands have a very specific customer target. These should be people who have the means to buy the products. The more affluent your customer base, the more status people attach to your brand. That is why such brands spend millions of dollars on celebrity endorsements.
Dior spent a cool $55 million on an 11-year contract with Charlize Theron for the J’adore perfume. George Clooney earned $40 million to be the face of Nespresso, a luxury coffee brand.
As early as 2012, Angelina Jolie pushed Louis Vuitton for $12million. You see where we are going by sharing these examples, right? Get the right people wearing your products, and the rest will want to do the same.
For a startup, getting this caliber of people to endorse a product may not be possible. But, the right marketing strategies could land you in the right places. Some upcoming designers will give celebrities outfits to wear during public events. In exchange, the star mentions the designer’s name in the interview sessions. A few have managed to break into the industry this way.
Lending a few of your lab-grown diamonds to celebrities who push sustainability is a fantastic marketing idea. Find out who dresses them and pitch your products to them.
4. Think about your marketing
One of the most powerful tools to market your luxury brand is digital marketing. Start with the basics of setting up an entire website. Get the help of expert web developers and designers to do the job for you. You want a high-performing and beautiful website that communicates your brand very well.
Visual social media platforms like Instagram should also be on your list. Other strategies include search engine optimization (SEO), paid ads, and content generation.
Here is a tip when marketing luxury brands. Focus on communicating the following.
- Exclusivity or rarity of the items – no luxury brand customer wants to buy mass-produced goods.
- Level of craftsmanship and quality
- The symbolism that you can communicate through storytelling
Pay attention to the language and campaigns. We talked about lab-grown diamonds being 40% cheaper than mined diamonds. Yet, the word cheap should never find its way into the marketing language.
Discounts or slashing prices is also something you should never consider. For such customers, the higher the price, the better. Luxury brand marketing experts will tell you one thing. You are not selling a product. What you are selling is a value. Ralph Lauren, for example, designs dreams, not clothes. Rolex represents elitism and success, and so on.
Final thoughts
Setting up a luxury business comes with its challenges. The most significant is building upon the value rather than the product. Yet, the success of some brands is proof enough that it is possible.
Get the basics right by entering into a niche segment. Next, think of your core brand value and target affluent customers. Also, spend time developing solid marketing strategies. You need to go right where the customers are.
