Luxury brands: the non-discount approach
Luxury brands: the non-discount approach
Consistently discounting products undermines the perceived value of a brand, casting doubt on the true worth of the full price and potentially eroding the brand's prestige.
The moment of a sale plays a crucial role in shaping the perceived value of a brand. It's pure communication. As a rule, luxury captivates with meaning, and the act of selling unfolds with subtlety and charm. Salespeople are often referred to as advisors, highlighting the nuanced approach. However, similar to any business, luxury brands occasionally require strategic incentives to maintain a steady cash flow. The challenge lies in instigating an immediate desire to purchase without compromising the narrative.
In contrast to conventional mass-market practices, discounts in the luxury sector should only be employed when strategically tied to logistics. Consistently discounting products undermines the perceived value of a brand, casting doubt on the true worth of the full price and potentially eroding the brand's prestige. Moreover, habitual discounting can inadvertently train consumers to await sale seasons, disrupting the regularity of their purchases.
The high price tag associated with luxury products is justified by factors unrelated to market demands. This elevated price reflects excellence, savoir-faire, and artistry. Consequently, there is no room for discounting, as it would compromise the intrinsic value of the product.
Presented below are some exemplary luxury purchasing incentives, all united by a common thread: generosity.
Herein lies the essence of distinction—not only in the products a brand offers but in the altruism it bestows. Gifts serve as a tangible embodiment of the brand's commitment to elevating the customer experience, surpassing mere transactions. Each gift is meticulously crafted to exceed customer expectations, transforming every interaction with the brand into a genuine encounter.
1. Discount by bundle
Unique bundles that not only save costs but also enhance overall value. Commonly referred to as gift sets, they can be presented as a start to a collection, or a way to introduce a new flavor, color, or style alongside a best-selling item. Moreover, they invite consumers to increase the average ticket and are especially effective for gifts where there's a more defined and generous budget in consideration.
Examples: Dr. Barbara Sturm Advent Calendar, Boy Smells exploratory set, Merit Beauty sets. In the photo: Chanel's always sold-out gift sets.
2. Refer-a-friend
Refer-a-friend programs capitalize on the power of word-of-mouth marketing by leveraging the trust individuals place in recommendations from their friends, family, and peers. In a landscape where only a third of consumers express trust in advertisements, the Refer-a-friend strategy becomes a potent tool for businesses. The premise is simple: existing customers are incentivized to recommend a product or service to their social circle, often through discounts, rewards, or exclusive offers. This approach not only taps into the inherent credibility associated with personal referrals but also takes advantage of the fact that people are significantly more influenced by word of mouth when deciding on a purchase. As a result, Refer-a-friend programs can foster a sense of community while simultaneously boosting customer acquisition through the genuine endorsement of satisfied customers.
Examples: Tesla refer and earn. In the photo: Matches Fashion referrer program.
3. Complimentary gift packaging
Luxury brands often dedicate a complete service of gift packaging, often referred to as the Art of Gifting.
Complimentary gift packaging not only enhances product presentation but also symbolizes the brand's commitment to refined elegance and sophistication across all aspects of its offerings. During special occasions like Christmas and anniversaries, introducing limited edition packaging adds an extra layer of exclusivity, contributing to a festive atmosphere and collectible potential.
Examples: Hermès' orange box, Dior's art of gifting, Carthusia Profumi packaging. In the photo: the art of gifting by Officine Universelle Buly.
4. Upgrade gift or collab gift
Luxury brands redefine communication by prioritizing emotional resonance and introducing a collectible, limited-edition dimension. In contrast to premium counterparts emphasizing "good investments" and "you get what you paid for", luxury focuses on exceeding expectations. Whether through extra gifts, exclusive collaborations, or limited edition offerings, the emphasis is on creating a distinctive connection.
Examples: Clé de Peau with Katie Rogers, Chanel's lipstick glass packaging. In the photo: La Bouche Rouge leather lipstick case.
5. A smaller version of the same product
Again, generosity is key. A luxury product can sometimes be imbued with a certain hesitation in using it, given the higher price. One way to encourage use beyond decoration is to give a smaller version of the same product. This strategy serves as a returning customer impulsion, providing a guilty-free yet complete experience compared to traditional free samples. We call this concept a dispersion gift when intended for sharing with others. It acts as a tangible form of word-of-mouth marketing.
Examples: in the photo, Diptyque's birthday gift candle.
6. VIC rewards programs
They are one of the hottest ways to cultivate loyalty and enhance the overall customer experience. This strategy focuses on Very Important Clients (VICs), who contribute significantly to sales: typically high spenders. It is not about traditional discounting: their relationships with brands involve private events, gifting, and exclusive experiences. Brands are expanding their focus to regions beyond traditional luxury hubs, particularly targeting wealthy consumers in the American South and markets like Austin and Miami. The emphasis is on finding clients who embrace the entire brand, rather than focusing on specific products.
Example: Business of Fashion article How luxury brands court the 1 percent. In the photo: Casa Cucinelli, also mentioned in the article.
It is worth noting that these strategies depend closely on well-executed graphic design. From packaging, emails, letters, and seat indicators at a dinner. These elements are as important and must be as memorable as those of the product or service being purchased. They capture customers' memories very elegantly and effectively.
That's all for today, see you next time!
Isis
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