What do mass brands like L'Oreal Paris, J.C. Penney's, Ann Taylor, Amazon.com, Cost Plus/World Markets have in common? Each of these mass market brands is getting more than their fair share of sales among luxury-leaning affluent consumers. These affluent consumers are the economy's 'heavy lifters' -- They account for only 20 percent of total households but more than 40 percent of consumer spending, and they are the prime target customers of most brands, luxury and mass alike.
With the middle class consumers emerging from the most recent recession weakened and their spending power stressed, more mass market brands are going to have to attract the upscale affluent shopper. To do that they have to put more 'luxe' into their brand.
Putting more 'luxe' into the brand means aligning your brand values with the changing customers' values. It is delivering high levels of quality and design along with a reasonable price, which is what L'Oreal Paris does in beauty and Ann Taylor and Banana Republic do in fashion.
In my book, Putting the Luxe Back in Luxury: How new consumer values are redefining the way we market luxury, I write:
"People with money will always want the best quality, best workmanship, best style and design, but they want the emphasis on concrete attributes and values that are measurable and defined by fact and figures, not image or status....Luxury is turning inward. It is no longer about an external or outward show of status or wealth, but an inner state of being defined by personal happiness and an outstanding quality of life. The challenge for marketers and retailers that sell luxury goods is to get inside the minds of these new post-materialistic, value-driven, affluent consumers and demonstrate in a measureable way how the things they sell improve customers' quality of life."
While some may argue that you can't get Prada or Gucci quality fashion at the local Ann Taylor boutique -- though I think L'Oreal Paris comes pretty close to the high-priced beauty lines -- mass brands don't have to aspire so high. Rather they need to think how to differentiate their brand and their products around the values that matter to the wealthier customer. Let's face it, people get more happiness when they get more for less and their quality of life is improved when they can get products that perform well without costing a fortune.
It's the new 'cheap chic.' Not long ago 'cheap chic' referred to mixing the cheap, say a Gap t-shirt, with the chic, a Chanel jacket. But today 'cheap chic' is about how 'chic' it is to be 'cheap.'
People who have money didn't get that way by spending it all; they are careful with their cash and in a persistent search for products that satisfy their high expectations at a reasonable cost. They will certainly pay for luxury quality, but they are no long willing to pay ten times, twenty times, fifty times more than the ordinary mass market price just for the privilege of wearing a luxury brand's label. They demand more value today in exchange for their hard-earned money.
“People say Zara and H&M are a detriment to luxury. For me, Zara and H&M have fueled luxury. They copy fashion and sell it at a lower price. That’s made young people realize that fashion is more important than brand. Then, one day the young people will want to buy the original. So Zara and H&M have increased business for luxury brands." -- Patrizio Bertelli, Chairman and owner, Prada
With increasing concentration of income – and resulting spending – toward the affluent segment of the market, the top 20 percent will be not only a desirable target for mass marketers. Attracting their disposable income may be do-or-die for many mass brands and mass retailers in the next decade. So mass marketers must learn to talk the language of 'luxury' to these customers.
To help marketers responsible for more popularly priced brands, as well as luxury brand managers who want a refresher course in luxury branding in the new economy, I will host a luxury branding webinar on November 10 at noon e.s.t entitled, Putting the 'Luxe' into your Brand. In the webinar you'll learn:
- How to satisfy the youth passion for luxury indulgence through brand positioning
- How to think beyond features and benefits to "buzz
- What ten brand attributes that every brand has to have to attain 'luxury' status in the consumers' eye
- The five 'hot button' words that translate into quality for luxury goods
- How to think beyond product to deliver branding experiences for your customers
Follow this link to learn more about the upcoming 60 minute webinar or to register to attend.