The London skies begin to clear after a short summer rain. The cobblestone streets mirror the hues of a transitioning sky as a Ferrari Daytona comes into view, it's fiery red glistening like a rare gem in the emerging sun. Behind the wheel, Edward navigates Chelsea's winding streets with practiced ease, his eyes hidden behind Moscot Lemtosh sunglasses.
The sound of the Daytona's engine is unmistakable, echoing through streets once hushed by an English summer storm but no longer so constrained. You feel the car's presence before seeing the car itself. Edward glances at the Rolex Daytona on his left wrist as the silent Swiss hands seem to conduct time itself. Like its owner, the watch carries an effortless elegance honed from decades of hard work and its plentiful rewards.
A simple but distinctive orange box catches your eye on the passenger seat. Nestled within the simple square is a Hermès Carré scarf, purchased for a French friend because the scarf's intricate patterns and vibrant colors define French elegance. The scarf, an artifact of high fashion, and the box, its humble yet artistic abode, reflect Edward's duality - a man of immense success who hasn't lost touch with simple beginnings.
Buildings, laden with centuries of history, stand silent, bearing witness to this soon-to-be-lost moment, a symphony of luxury, power, and quiet confidence. The cityscape seems to bow in admiration as the Ferraris, red, white, and black, move in and out of light and shadow.
Edward's Daytona, the Rolex, and Hermès scarf are extensions of personality, symbols of his journey. They echo aspirations and mirror achievements, and yet, somehow, they serve as reminders of roads not traveled, of other choices it feels foolish to think about now as Edward disappears around the corner.
Luxury goods are booming, with global sales over $240B last year, and are forecasted to reach almost $370B by 2030. Since few markets are projecting fifty percent growth in less than ten years, stealing ideas from luxury brands can help your products, brands, and company thrive. In the hyper-competitive world of high-end consumer goods, three names often float above the rest: Hermès, Rolex, and Ferrari. But how do these companies maintain their top-tier status in the luxury market? What's the secret sauce behind their iconic branding, lasting customer appeal, and unrivaled longevity?
These distinctive brands set and continue to elevate the gold standard in luxury marketing, cultivating, maintaining, and growing their appeal to a clientele that demands the best. Today's blog post embarks on an exciting journey. Delving deep into the marketing strategies of these titan brands to discover eight things you and your small business or enterprise marketing teams should steal from Hermes, Rolex, and Ferrari.
We will unearth eight game-changing luxury marketing tips that have helped Hermès, Rolex, and Ferrari remain at the pinnacle of success for decades. Whether you're a veteran in the luxury market or an ambitious entrepreneur seeking to understand branding, steal any two of these eight luxury marketing tips to increase your profits, create brands people want, and win customer hearts, minds, and loyalty. Ready to steal some top-tier marketing strategies? Use the links below to dive in.
COVID created a luxury brand watershed, as senior Vox reporter Whizy Kim explained recently in The surprising reason luxury goods are Booming:
It’s not just Louis Vuitton handbags that are selling like gold-garnished hotcakes. While the rate of growth in the sector has slowed slightly in recent months, 95% of luxury brands saw profits gain in 2022, according to a Bain & Company report. Hermès, maker of decadent silk scarves and the infamous Birkin bag, saw a record 38 percent jump in profit from 2021. Richemont, which counts Cartier, Chloé, and Montblanc among its brands, saw its fiscal year 2022 profits increase by 61%. Kering (Gucci, Saint Laurent, Balenciaga), Chanel and Prada, Burberry, Luxottica, and OTB (which owns Maison Margiela, Marni, and other luxe brands) — were all up, too.
Being stuck at home watching the same streaming channels appears to have knocked our lizard brain into luxury overdrive as brands like Hermes, Louis Vuitton, Rolex, Tiffany, and Ralph Lauren continue to master the art of creating perceived scarcity and the exclusivity that rides with constrained supply even as some luxury brands attempt to grow. This delicate balance between constrained supply creating the exclusivity a mass market wants to devour, also called massification, requires careful planning and execution.
Here are strategies luxury brands use to walk the fine line between too much and too little:
Control Supply Diamonds would be cheap if De Beers didn't limit the diamonds for sale. Many luxury brands sell their products exclusively through boutiques they own, operate, or authorized retailers who agree to restrictive brand guidelines. These "guidelines" are unbreakable rules, with sellers risking their ability to sell a luxury brand when broken. Controlling supply and restricting resale partners means brands don't become overexposed or easily accessible, preserving the perception of exclusivity. They could make more, but constraining supply is a big part of any luxury brand's strategy. Knock-off manufacturers use constrained supplies to sell fake watches, scarves, and handbags. On the one hand, luxury brands hate knock-off products, but on the other, they know their perceived exclusivity is why knock-offs exist. Knock-offs become a market confirmation your luxury branding is working.
Limited Editions Brands like Hermes, Louis Vuitton, and Rolex create limited-edition products or limited-time releases to generate hype and a sense of collector urgency. Limited editions makes luxury brands collectible. Much like baseball cards, time plus limited edition equals sustainable future returns for the brand (mostly) and the collector (some). Betting your limited edition Swatch, Rolex, or Birkin Bag will be worth more to some future buyer is far from certain. Limited editions reinforce a brand's atmosphere of scarcity, exclusivity, and excitement.
Own The Store, Website, or Partnership Many luxury brands sell their products exclusively through boutiques they own and operate or via authorized retailers who must agree to restrictive brand guidelines. These "guidelines" are unbreakable rules, with sellers risking losing their ability to sell a luxury brand when broken. Controlling supply and restricting resale partners ensures brands and products don't become overexposed, preserving the perception of exclusivity. For example, knock-off manufacturers exploit luxury brands' perceived scarcity to sell fakes. On the one hand, luxury brands hate knock-off products, but on the other, they know their control is why knock-offs exist.
Superior Craftsmanship Luxury brands use high-quality materials and exceptional craftsmanship to create products that stand out from the mass market. A luxury brand's attention to detail and quality adds to the perception of exclusivity. Luxury customers buy with emotion and justify with logic, so superior craftsmanship is the logic that supports the emotional purchase of a Swiss watch, a silk scarf few can afford, or a bag that costs more than my first three cars combined. Any marketing team reading this post should steal the emotional hooks and justifiable logic brands such as Hermes scarfs, Birkin Bags, and Rolex watches weave into their branding, storytelling, and marketing.Once your reputation for superior craftsmanship is established you can carefully reduce costs.
Unique Experiences Luxury brands invest in creating unique and immersive experiences, such as personalized shopping experiences in their boutiques, exclusive events, and fashion shows. These experiences give customers a group to join even as they create a sense of tribal exclusivity, reinforcing the brand's luxury status.
Collaborations A luxury brand can go "down market," as brands like Ralph Lauren and Tiffany have shown. Introducing more accessible product lines or partnerships with mass-market retailers without compromising their luxury image can be tricky. While luxury brands can go "down market," the reverse is much more difficult. For example, creating limited edition Tide detergent or Ford cars would prove difficult. However, the Ford Motor Company is doing its best with average resale prices for popular trucks slouching toward $100K. By carefully selecting their partners and maintaining control over the design and production process, brands can go "down market," catering to a broader audience while preserving their exclusive appeal.
Storytelling Luxury brands like Hermes and Louis Vuitton have a rich history and heritage, a heritage they loot to increase their allure. However, the stories they spin from their fabled history emphasize the traditions behind their products, creating emotional connections with consumers.If your brand doesn't have hundred of years of history ask for help. The user generated content your growing tribe shares creates the contemporary digitalized version of a hundred years of craftsmanship. When your followers sell their friends on your disruptive luxury brand you gain network effect benefits more established brands will ignore.
Advertising Luxury brands invest in high-quality advertising campaigns featuring renowned photographers, models, and celebrities to create aspirational imagery and storytelling. Even if we can't afford luxury brands, we want to be "like them. Disruptors should use humor to upset the established brand apple cart (see the Dollar Shave Club ad video below)
Find ways to limit your supply and control your brands to create a perception of exclusivity and scarcity, as Professor G notes in the Prof G On Luxury video linked below. Steal the eight tips above to to create a luxury strategy sure to win customer hearts, minds, and loyalty.
I loved this Dollar Shave Club ad so much that I purchased their razors, which was a mistake. The Dollar Shave Club didn't pay enough attention to the "superior craftsmanship" tip, and that's why Harry's has eclipsed the original Gillette DTC disruptor. It's hard to be sad for a team who are drinking drinks with umbrellas on a beach somewhere, as that funny ad generated millions in sales.