Friday, June 18 2021

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Innovation Secrets of Old Luxury Brands

business meeting

Innovation Secrets of Old Luxury Brands

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Luxury brands such as Hermes, Louis Vuitton, and Burberry were founded more than a hundred years ago, yet they’re still at the top of people’s minds when they hear the words “designer” and “luxury.” What’s more, even people who have never owned a single item from those brands can recognize their styles anywhere. They know what a Hermes Birkin looks like, as well as a Louis Vuitton monogram and a Burberry tartan.

Maybe not all of them can name the styles exactly, but if you show them those iconic designs, they surely know what brand created them. It’s indeed fascinating how the oldest luxury brands managed to stay relevant, even if the market is becoming more conscious of their spending.

There is one challenge luxury brands are facing, though: They are losing American millennials. According to a survey by Deloitte & Unity Marketing, over one-fourth of American millennials didn’t buy anything costing $500 or more in the last 12 months. Meanwhile, their counterparts from the UK, Italy, and China have bought at least one over the same period.

How Luxury Brands Stay Relevant

A classic designer watch may fall short on functionality. It’s handcrafted, mechanical, with absolutely zero smart features, let alone a heart rate monitor. It exists for just a single function: to tell the time. But even that can require a significant bit of your attention because you have to wind it up regularly for it to work.

Still, owners of luxury watches see a unique function for the item: a status symbol. For many people, owning any designer bag, pair of shoes, jewelry, accessory, or clothing is a tangible representation of their status and achievement. And luxury brands know this all too well.

  • They Create Desire

Unlike mass-market brands, which often appeal to people’s practicality and need for convenience, luxury brands just trigger people’s desire. Every promotional material they use seems to say, “You don’t need this at all, but you want it, anyway, and badly.”

They evoke desire by depending on three principles: enrichment, distancing, abstraction. Enrichment is the act of telling a story that leads us to the journey toward desire. Yes, you journey toward desire, because desire is only born when you know you can’t have something easily. If luxury brands were within our reach like mass-market ones, we’d never desire them.

Secondly, luxury defines social distancing differently. They market to the elite, so by owning a designer item, you can feel like you’re part of that group, too. But distancing also goes deeper than that. Top-tier luxury branding is cut out from that of mass-market brands because they veer away from reality. For example, one Hermes advertisement features a woman living in Paris with a horse. The horse symbolizes Hermes’ heritage in saddlery. But the whole point of the ad is to show people the ideal life. As such, it creates desire.

Thirdly, abstraction also depicts the ideal life, through ads as well that blend reality and dreams. But abstraction, in particular, makes ads open to different interpretations. They’re not the what-you-see-is-what-you-get type that mass-market brands use.

  • They Offer Personalized Experiences

store

When you buy from a luxury brand in-store, you wouldn’t just pick up the item you want, head to the register to pay, then leave. Instead, you’d be in a long conversation with the store’s sales associate as you make a purchase. You’d be given undivided attention, and may also be presented with various styles of the same product so that you can choose what you think looks best. You can also experience the same thing if you buy online. Some luxury brands now use online tools to help their e-commerce customers customize their orders. Most of the successful ones use the services of reputable luxury branding agencies to achieve their goals.

  • They Adapt to Technological Advancements

Speaking of e-commerce, luxury brands have caught up to the information age by using social media, setting up online stores, and incorporating Augmented Reality (AR) on their websites. Some luxury brands may now let you see what a product looks like in real life by showing you 3D models. Luxury tech brands, meanwhile, like Alexa and Google Home, can now give you product guidance based on your personal tastes.

  • They’re Becoming Sustainable

To reach the Millennials and Gen-Z, sustainability practices are key. Gucci and Stella McCartney have partnered with TheRealReal, a luxury fashion resale company, to ensure that their pre-loved items wouldn’t go to waste.

Tesla’s commitment to sustainability also took them to success. At the beginning of 2020, Tesla performed the best in total return, sales growth, and long-term shareholder value.

Luxury goods may just be status symbols at their very core, but their innovation secrets tell that they also desire what’s best for us. They offer unique experiences for each customer and make efforts to reduce their carbon footprint. If you were to start a luxury brand, ensure that your branding strategies will allow you to stay relevant for a long time, just like the iconic brands we know,

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