March 2009

Luxury is a luxury again
How changing values are redefining
how high end brands go to market. By Cosmo Mariano

’ve never had much of a taste for beer. So much so that my friends often get a laugh at my expense by asking the bartender to pour only the portion of liquid from the “neck” of the bottle: “That will be two honey browns and the neck of a Bud for Sally over there, please.” I can only guess that this preference comes from having been reared in an Italian household, where highly potent homemade wine was always within arm’s reach. Nevertheless, entirely due to good marketing tactics, I have recently had a sudsy revelation, thrown fiscal caution to the wind and stocked my refrigerator with some of the most expensive frothy stuff one can buy.

A perfect pair
The catalyst for this remarkable transformation was called: “The Labatt Experience.” Essentially, it was a food and beer pairing event hosted in the corporate “bar” at the Labatt head office for a small group of select invitees. There were no bikini clad babes, no sex-starved flight attendants and no May Two-Four cottage shenanigans; simply a casual VIP atmosphere, delicious food and the brewed product — showcased as purely and earnestly as any luxury brand marketer could ever want. The overall experience successfully conjured up sentiments of time-honored tradition, craftsmanship and even divinity (imbued by the original brew masters—elderly Belgian monks— centuries ago).
The event completely altered my appreciation for certain beers, elevated their image in my mind, connected with my values and days later, caused me to shell out fifteen bucks plus tax for a mere six bottles of one of the premium foil-wrapped libations I discovered there. At a time when the global financial crisis has wrecked havoc on what once seemed the impenetrable realm of luxury brands—causing among other things, double digit declines at for Neiman Marcus, hundreds of job cuts at Chanel, and bankruptcy issues for Donald Trump—The Labatt Experience was a fine example of the right way to market luxury during an economic decline.

Consider it a luxury
As a recent study conducted by DeBeers tells us, (to riff off of US Weekly) “The Rich. They are just like us!” Thanks to several forces, including economic uncertainty, there’s been a major shift in the purchase behaviour of luxury consumers. In recent years, the key drivers of luxury purchases were status and prestige. Now, luxury consumers have taken on a more traditional attitude, preferring to look at their purchases as investments that should deliver on a promise and have lasting value. Conspicuous purchases or “Fast Luxury” has given way to a more discerning approach, whereby items are intensely scrutinized to determine if they offer “true luxury”. When I think about these criteria, I can’t help but connect the dots to my Labatt experience.

Quality
Quality has become the most important consideration in the search for superior brand value. Rather than choose more fashionable pieces, the trend is to buy one very expensive, high quality piece.

Exclusivity
Over the last decade, mass production of luxury brands for the middle class has diluted their exclusivity. In response, there is a renewed desire for truly authentic, personalized, exclusive products and experiences that cannot be easily acquired by “just anyone.”

Engagement and experience
The trend is no longer “what you wear” but “who you are.” Consumers want deeper engagement with the luxury brands they purchase, that not only provides them with the item itself, but with cultural, social, and philanthropic benefits like knowledge, skill, experience and the story telling that comes from that experience.

Provenance and focus on “made how?”
How angry would you be if you found a “Made in China” tag tucked in the seam of the $1,500 LV bag you bought in Toronto’s Yorkville last Christmas? Admittedly, this gender based metaphor is not a problem most male readers of this article can empathize with, but you get the point. With goods production increasingly being handled overseas, there is much stronger emphasis on the integrity of the manufacturing process — “where it’s made” is just as important as before but now “how it’s made” – as an assurance that the product is of the highest quality is also extremely important.

Social responsibility
Luxury is a high profile game, intertwined with celebrity and the increased scrutiny that comes with public exposure. In light of the increasing societal call for business to be more environmentally and ethically responsible, it is more important than ever to luxury consumers that their “true luxury” purchases aren’t really expressing “An Inconvenient Truth.” (See sidebar “Luxury Reconsidered.”)

The marketer’s role
So what can the marketer do to adapt to this change? Create deeper experiences across all touch points that enhance the brand story. Marketers already know that when someone buys a product, they are not just buying it; they’re also acquiring the story that comes with it. In essence then, the brand experience begins with the marketing we expose people to, not the actual product purchase. In the case of luxury, this means enhancing the brand story in several ways.

Message in a bottle
Reassess your message to ensure its focus is on all the aspects of the new value paradigm. For example, there are many unmistakable characteristics that define a Bentley – handcrafted luxury, distinctive design, breathtaking power and performance, a refined and exhilarating driving experience. Nevertheless, the handmade motor car company allows customers to visit the factory to enable them to witness the process for themselves.

At Labatt, while sipping on what I would normally consider a simple brew, I was educated about the “no compromise” process that went into its making and the oft forgotten fact that beer retailing (and the bottle recycling program that goes on to this day) was one of the first totally “green” businesses. I also learned that the product is made in very limited supply in a centuries old European abbey. How’s that for covering the pertinent points of new luxury values?

Lux in translation
If luxury consumers place more value on the experience the brand provides, how then can you best express these new messages? When one thinks of direct marketing, images of mail and e-mail spring to mind. For some marketers, a simple content adjustment may suffice; for example, by sharing a brand’s elitist or unique heritage. For marketers at the higher end of the spectrum, using customer data and variable messaging to create extremely personalized, custom content will help enhance the experience. For years, our agency has produced a highly personalized direct mail program for Mercedes Benz that builds in an intimate layer of conversation about customers’ lease end programs, as well as new lux value based messaging. Marketers can extend this approach even further by integrating such communications with special private events (just as Labatt did), online experiences, and truly exclusive offers.

Prove it or lose it
Ultimately, the challenge for luxury marketers (and in my opinion, marketers in every category) will be to develop the increased content necessary to support the intensified scrutiny of brand value. Whether that content takes the form of a factory tour or a list of all the suppliers in the value chain that support the final product, simply having the information available to support the brand story and using technology, and tactics such as social networking (both online and belly-to-belly) to deliver the message to the appropriate influencers will be crucial to being accepted as bona-fide.

Cosmo Mariano is a personalized marketing strategist and partner of LIFT AGENCY, a leading personalized integrated marketing agency based in Markham, Ontario. He can
be reached at 647-880-9468