When luxury brands are mentioned, certain words come to mind. Craftsmanship, exclusivity, and the price tag of course. Names such as Ferrari, Hermes, and Cartier may also occur. The most successful luxury brand in the world in 2021 was Louis Vitton Moet Hennessey. The revenue for the LVMH Group that year was around $75.7 billion.
The most successful brands can sell simply because of their logo or branding. Iconic and timeless are two other words that might be attached to some of the biggest luxury brands, but sometimes the exclusivity that a brand may want to express can go awry.
The luxury brand, Burberry, suffered unwanted attention in the UK as it was adopted by C-list celebrities and individuals who were not the demographic that the brand sought. It took Burberry many years to shake off the ‘chav’ tag that their famous check pattern had become attached to.
Incidentally, Burberry had a revenue of nearly $4 billion in 2021 and was in the top ten most successful luxury brands. So, how do luxury brands become successful, and if their star slips as Burberry’s did for a while, can they re-establish their exclusive status?
How do luxury brands become successful?
There are a number of steps and strategies that luxury brands follow to achieve success in key areas. Below are some of the factors and strategies for improving the reputation and success of a luxury brand.
Use a brand consultant
Utilizing a brand consultancy, or bringing in an expert in this field can help build a long-term strategy for success. Hiring a manager for brand consulting will help with analyzing the business and improving its performance against competitors in the same field.
These consultants will implement brand strategies, and marketing, introduce solutions and provide analysis. They will help to establish the true value of the brand.
Find a niche
Luxury brands have to appear exclusive. The most successful brands have what is known as a high symbolic value. While the craftsmanship will be expected to be high and the materials of the best quality, there is a value associated with luxury brands that go beyond the literal cost.
Luxury brands can become desirable when they have a high symbolic value. This represents status, culture, and any number of other factors including being on trend, or being limited in numbers.
Establish an emotional connection
Establishing your brand’s symbolic value is vital. The success of a brand is often due to perception. How consumers perceive your brand can add to its growth and value. When Burberry was adopted by an unwanted demographic, it lost that air of exclusivity, and the perception was that anyone could wear the brand.
An emotional connection is also critical for a luxury brand. Marketers and brand consultants will try to establish a link with consumers’ emotions and desires. A strong brand story can help to introduce ways to make customers engage with your brand. A marketer will look to make the brand aspirational, and even appeal to an individual’s ego.
Strong IP protection
The brand needs to be protected from imitators and plagiarism. Luxury brands have all had their clothing copied and their logos reproduced for inferior fake products. Gucci, Armani, and Rolex fakes are sold all over the world, and this has a huge impact on revenues.
It is expected that the global counterfeiting industry will be worth $4.2 trillion by the end of this year. Clothes and shoes are some of the most pirated items as they are easy to replicate. Shoddy counterfeit clothes not only hurt revenues, but they can damage the perception and symbolic value of a brand.
Luxury brands are using influencers more as they adjust their marketing strategies to modern consumer trends. Now with the growth of ecommerce, more luxury products are being sold online, and not just in traditional outlets.
Major global firms grow brand awareness with an influencer through social media. A luxury brand can link up with the right creators to produce aspirational lifestyle posts. It is estimated that for every $1 spent on influencer marketing, a return of $5.20 will be gained.
Establish a differentiation strategy
This is an important and necessary strategy for luxury brands. Not only does the brand need to appear exclusive, but it also needs to be unique. Take Louboutins’ red sole feature for instance. A differentiation strategy means that a brand has a unique selling point, and is clearly recognizable.
Some other factors will help establish a luxury brand’s success or failure, but these are some of the more vital steps to take.
The quality of luxury branded products is expected to be superior, and the craftsmanship will help to establish trust. An emotional connection is vital, and when this happens, luxury brands will see it purely because of the name and logo behind it.