Case Study | How Brands Sell Luxury to the 1%

Because the world emerged from 2020′s coronavirus lockdowns, spending on luxury items has gone into overdrive. This spelled excellent news for high-end manufacturers, which skilled explosive development fuelled by stimulus packages, deferred scholar mortgage schemes and fewer alternatives to spend cash on experiences.

However throughout 2023, aspirational shoppers hit by the rising value of dwelling lastly sobered up. As development of the broader luxurious market slows, attracting the top 1 percent of earners, whose well-padded budgets are extra insulated from world uncertainty, will likely be key to driving gross sales. Already, courting “VICs” — essential purchasers — has turn out to be a strategic focus for manufacturers. Nonetheless, partaking this shopper cohort is barely turning into more difficult, as competitors for his or her consideration intensifies. The dynamic is pushing retailers and megabrands to implement extra refined, differentiated methods to foster relationships.

This case examine will study methods adopted by Gucci, Mytheresa and Tiffany & Co. which are designed to construct nearer relationships with high purchasers, foster better loyalty and enhance their spending in the long run.

Gucci opened its first by-appointment store completely for servicing the model’s most essential purchasers in Los Angeles, dubbed “Gucci Salon.” Right here, the model’s most unique product ranges are on show, whereas every appointment is rigorously tailor-made to the wants and needs of every buyer. The model has replicated the idea with devoted non-public flooring at flagship shops in London and Tokyo.

Mytheresa ratcheted up its calendar of elaborate occasions (typically hosted in collaboration with its purchasers’ favorite manufacturers) providing unique entry that cash alone can’t facilitate: from intimate dinners at designers’ non-public residences to starry, insider-only reveals and events.

In the meantime, Tiffany & Co. has rapidly expanded its ultra-exclusive high-jewellery division, with a specific emphasis on personalisation. This contains sourcing unrivalled gem stones and welcoming purchasers to fee bespoke items from chief creative officer Nathalie Verdeille at its newly renovated experiential flagship in New York.

These methods supply useful classes on how cultivating private relationships and crafting memorable experiences for buyers can foster an emotional connection to manufacturers, serving to them to face out amongst opponents and construct loyalty amongst luxurious’s most sought-after prospects.

Disclosure: LVMH is a part of a bunch of buyers who, collectively, maintain a minority curiosity in The Enterprise of Trend. All buyers have signed shareholders’ documentation guaranteeing BoF’s full editorial independence.