A luxury market expert gets inside the heads of the top 1% of consumers and shares strategic marketing tips for appealing to them.
By Dianne M. Pogoda
How does the luxury customer think, shop and buy? What appeals to this exclusive slice of the audience, and how can designers, retailers and brands get on their radar?
Karen Brandon, Senior Marketing Manager of Luxury Appliances at Nationwide Marketing Group, delved into the mindset of luxury clients, their habits, attitudes and aspirations, and how to appeal to them in “Luxury Clients: How Do They Think?” at the NKBA Summit: Luxury Defined.
“Do they buy luxury to make themselves of others feel good, or gain a sense of power from spending big?” Brandon began. “The pandemic has forced this top 1% of consumers to think much more about what makes them feel good in luxury expenditures.
This audience is changing their attitudes and beliefs and maintaining a favorable perception in an unfavorable era. This is causing the appearance of luxury to take on a whole new shape.
“Luxury will always be around, no matter what happens in the world.”
“I believe [fashion designer] Carolina Herrera said it best: Luxury will always be around, no matter what happens in the world,” said Brandon. “With a forced decline in experiential spending, customers have reallocated those funds to bring the experience to them – starting in the kitchen. Our data shows luxury appliance sales at record highs, and designers working on a backlog of three months or more.”
While this market is alive and thriving, what consumers expect from a luxury product has evolved. It’s important to understand that the winners in this space are providing more than a superior product. They’re also appealing to the “pandemic luxury aspirational sell” – which Brandon described as a midpoint between desirable and realizable, that which is attainable while still remaining exclusive and unique. “It’s important to remember that true luxury whispers, it doesn’t scream,” she said.
To describe this new way of thinking and understanding this evolving lifestyle, she uses the acronym VALUES, and said luxury must align with these concepts.
Versatility
The luxury design must cater to both the clients’ function and lifestyle needs. With many families confined to their homes, they’ve asked their spaces to function for everyday use and easily convert to a space for entertaining. All elements must perform multiple functions, and every bit of space must be maximized. Activate unused space with built-in designs and choose what functions to control from a remote device, Brandon advised.
To suit lifestyle requirements, the spaces should be customized for that particular client. “For instance, if kids do crafts in the kitchen, provide appropriate storage for their supplies,” she said. “Build hidden storage for spices or specific tools, and make sure the quality of the appliances will satisfy and exceed the chef’s needs and expectations.”
Availability
Brandon stressed that a big part of the luxury experience is that providers are available to their clients at all times. “It’s important for clients to know you’re there and that you care. Yes, it’s a 24/7/365 proposition.”
This applies to the time before they buy, she explained. Consider arranging “test-drives” for appliances, such as hearing the dishwasher and knowing it will fit their cooking essentials, or trying out the range in the test kitchen. It’s important during design implementation, and after the job is complete to answer any questions or provide training and tips in their own environment.
Lasting Guarantee
It’s a big investment — it had better last! Clients expect a substantial warranty on luxury appliances. Any time someone is spending upwards of $5,000 to $10,000 on a refrigerator, it had better last a minimum of 20 years. The designer or retailer will be the first ones to hear about it if something doesn’t live up to its promise. A brand that doesn’t stand behind its products will devalue the circle of trust among customer, retailer and designer, and ultimately that hurts your trustworthiness and reputation, she said.
Uniqueness
The luxury customer responds to design personalization and things that are exclusive, limited and rare. “Beyond customized handles and red knobs, luxury clients are incorporating self-expression with personal, pre-pandemic items infused in the design,” Brandon said. “It could be a stone or tile brought home from a special vacation built into the backsplash, or a scene from a favorite work of art etched above the range. Luxury clients also value VIP status, being invited to exclusive, special events, tastings, launches, etc.”
Evolving
New audiences are coming into this market all the time — “and they’re not your parents or grandparents,” she noted.
Enter the HENRYs: High Earners Not Rich Yet. They’re Gen Y (Millennials) and Gen Z, they earn six-figure incomes but have high debt, little savings and work full-time to maintain the appearance of luxury.
“They will be your target audience in no time, and will soon be the biggest buyers of luxury, representing over two-thirds of global purchases by 2025, according to Bain & Co.,” Brandon pointed out. “Get to know them, their values and priorities, and where they shop and research — online and in social media. It’s vital to embrace a mobile-first mindset, adapt to the digital marketing landscape, use shoppable imagery, livestreaming video and other online tools. This is vital to remain relevant to this generation. Creating a business page on sites like Pinterest, Instagram or Facebook, adding high-quality images, tips or business practices. Best of all, it’s free, and you get the advantage of analytics insights that aren’t available on personal pages.”
Sustainable and Smart
Today’s customers view sustainability as a quality assurance guarantee, but tomorrow’s audience demands that brands are “woke” about social, environmental and political issues, too. HENRYs value green products that don’t leave a big carbon footprint, like electric cars, recycled plastic shoes and organic food. They expect also labels to provide proof of their ethical and sustainable practices.
Regarding smart technology, today’s customers want limited functionality and mobile control over their appliances. Tomorrow’s client doesn’t know a life without a mobile-first mindset — they want to control everything from their mobile device.
“If you remain cognizant of this acronym for values,” she concluded, “you’ll continue to appeal to today’s luxury client as well as position yourself to cater to the client of tomorrow.”
To view sessions from the NKBA Summit: Luxury Defined, visit nkba.org/luxurysummit. Access to the sessions is included in NKBA membership at no additional charge, and non-members may purchase a video package for $99. The sessions are available until Dec. 31, 2021.
