Products alone aren’t enough for today’s luxury buyer
It used to be that simply owning a luxury product was enough for the discerning buyer. But as the premium market becomes saturated and luxury customer mindsets shift, it’s become imperative to go beyond the product by differentiating the experience. No longer are aesthetics, self-expression or social status themselves enough to attract and maintain affluent customers. It’s the unique experiences that surround products and brands that drive engagement and loyalty.
A study conducted by the Harris Group revealed 72 percent of millennials prefer to spend more on experiences rather than material things. This trend also spreads beyond millennials to other consumer segments. Why this shift in emphasis on experiences over goods? One reason is that experiences, rather than material goods, are increasingly seen as drivers of happiness. While experiences can enrich and provide memories for a lifetime, materials items are often a fleeting thrill.
Fortunately for premium brands, there are strategies for creating experiences that make customers feel they’re buying into more than just a product. One strategy is to form an unusual and even surprising partnership with another brand. The Waldorf Astoria in Beverly Hills recently teamed up with Aston Martin to offer its guests not only luxury accommodations, but a complete experience. A special package provided guests a two-night stay, along with the use of one of the premium automaker’s new models. Guests could also purchase Aston Martin wearables and accessories in a pop-up store in the hotel lobby. The strategy expanded the reach of both brands and provided customers a unique experience.
Another example of companies joining together to offer exclusive experiences is the partnership between fashion label Marc Jacobs and Uber. During a 6-hour promotion, people in New York City could engage with the Marc Jacobs Daisy fragrance by receiving a free ride in a daisy-themed Uber vehicle. Each ride came with free gifts, including bottles of Daisy perfume. It was a huge success that resulted in 61 million social media impressions and 5,459 ride requests.
The Macallan is another example of a luxury brand that provides unique experiences to customers. The distillery makes some of the world’s most finely crafted, precious single malt Scotch whiskies in the world. Customers can interact with the brand and products at interactive, private tasting events throughout the country that engage and educate. Each event provides opportunities to taste different Macallan whiskies, hear about new ranges, learn the company’s history and view displays of rare variations.
For luxury auto dealerships, the waiting experience is an ideal opportunity to deliver something unique. Moving beyond the donuts and coffee of yesterday, premium manufacturers are creating experiences that keep customers at the dealership rather than leaving and returning to pick up their vehicles later. From installing mini art studios to offering exercise equipment, coffee and wine bars, and full-scale cafés, dealerships are surprising customers by offering amenities they normally wouldn’t expect while waiting for vehicle service. The longer they stay at the dealership, the more opportunities to engage with the brand and have remarkable experiences.
Brands like Toms shoes are creating experiences surrounding their beliefs and values. Toms’ one-for-one business model provides a pair of shoes to a child in need for every pair of shoes purchased. The initiative was so successful, the company expanded it to its line of eyewear. To date, more than 35 million pairs of new shoes have been given to children in need. Customers have the experience of giving, at the same time they enjoy their purchase.
The luxury market is poised for growth in the coming years with the number of luxury consumers expected to reach 480 million by 2022. Along with this growth is a shift in the premium buyer’s mindset from mere ownership to an emphasis on experiences. More than ever, it’s essential for premium brands to expand their focus beyond the quality and style of their products, and deliver experiences that establish emotional connections with consumers.