Luxury Brands: ‘Fake it till you make it’?
If you launch a new luxury brand, can you just ‘fake it until you make it’? Some companies believe they can. For example, the cosmetics retail chain Arbat Prestige has the word ‘Prestige’ in their brand name, possibly the bluntest way to communicate to your customers that that you are a luxury brand.
Most brands are a bit more subtle about it, using words in their communication that people associate with luxury brands. Words like ‘hand-made’, ‘exclusive’, ‘personalized’, ‘classic’, and ‘audacious’. Or they associate themselves with locations that are known for their prestige; for example a fashion brand that has ‘London | Paris | Rome’ under its logo. Maybe they have flagship stores in these cities, maybe not.
So is it really that simple? Can you simply charge high prices, call yourself a luxury brand, and then you are one? Not quite. This approach may persuade (or fool) some customers, but not genuine luxury shoppers. Arbat Prestige shops in Moscow and Saint Petersburg are pleasant and stylish, and they are popular destinations for regular Russian shoppers, but informed consumers know that there are other chains with better service and more premium products.
The first requirement to becoming a luxury brand is obvious: you must have a top-quality product. Something that people are willing to pay a serious premium for, even without recognizing the brand name.
Exclusivity is important, but it’s not enough to simply make fewer products and double your prices. Rather, the exclusivity must be a result of the product quality: hand-made products take longer to make, and require more resources, so it’s only natural that they are most expensive and most exclusive.
You must also get the other Ps of the Marketing mix right. We have already discussed Product (high quality and exclusive) and Price (high); but we also need to take care of Place (i.e. how you make your products available) and Promotion (i.e. how you stimulate interest in your brand). Both must be in line with your luxury image; they need to be exclusive, prestigious, and stylish.
So is that it? Can we launch a new luxury brand as long as we get our strategy components right? Possibly, but it’s only a start. To become a successful luxury brand you need to develop an identity, an authenticity. Your brand needs to have a soul. Some brands are authentic because of their history or their creator; think of Chanel and Versace. Others, such as Porsche and Rolex, get their authenticity from the quality of its products. Again others, such as Burberry, get it from a unique style. You can’t fake authenticity, and you can’t acquire it overnight. Developing an identity takes time.
One last thing you need: loyal customers, who are excited to buy and use your products. This also takes time, and you won’t get them until you have an identity. In fact some of your customers may help you to define your identity. Harley Davidson’s identity it directly linked to American bikers culture. The office worker who rides his Harley on Sunday afternoon does so because he (or she) aspires to have the freedom and companionship that genuine bikers are known for.
It’s definitely possible to create a luxury brand from scratch. But the right approach is not to call yourself ‘Prestige’ from the start. Rather, you start by developing a distinctive identity and find your niche customer base. Your reputation as a luxury brand will develop from there.
