The Right People
Luxury brands have always employed a number of strategies to keep their products out of the hands of “the wrong people.” These strategies include natural barriers like price, location and quantity as well as how they decide to treat certain people when they walk into the store.
But what happens when the democratization of wealth and the growth of new technologies allow anyone anywhere to have virtual access to the clubs that as Groucho Marx would say wouldn’t have them as members? What happens when the brand gets “hijacked” by becoming popular with the very people that they’ve spent millions of dollars trying to keep out?
Pretend you were the president of a major luxury brand and woke up one day and found that the people who were buying your product were not the people you intended? What would you? Why do some brands embrace this as an opportunity to grow while others silently hope it will quickly go away?
In a review of blogs and websites that have invited commentary on the matter, the answer is not exactly clear. A number of brand managers felt the story was blown out of proportion, others pointed out, “…people who would use a product not to show their taste or style but as a prop in a wet T-shirt contest would be a concern for most brands.
Certainly, the role of artists and musicians as a fashion influences for young people have been around since Beatle boots, glam, punk, grunge and emo.
For the watch industry the problem is that the industry has been very slow in re-directing their significant resources towards attracting millennials. But even if a brand were to actively pursue a path into the hearts and minds of the younger, newly affluent masses, what happens when the stardust clears, the hip has hopped, and the customer has moved on to the next trend? A justifiable fear given that millennials tend to be brand agnostics and message purists.
For the longest time, luxury brands have succeeded and survived because they are built for the long haul. Think marathon versus 100-yard dash. Tortoise versus hare.
When brands become less exclusive and less special, their images suffer and their value proposition cannot justify their high prices. I have always thought that the price value relationship of image to functionality for luxury brands was about 90:10. If brands consciously allow their equity to deteriorate and all they are left with is the 10% then a Rolex would be priced like Swatch.
There’s no right or wrong answer when it comes to expanding a brand’s base of business. It has long been known that brand loyalty starts at a young age, yet luxury brands still focus the bulk of their marketing efforts on protecting their current customer base. I think the industry needs a little less arrogance and an infusion from the fountain of youth.