End Notes

Targeting the New Luxury

How can retailers join forces with this new movement? Here, Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Shopping Experience, points to a few, key strategies culled from recent Unity Marketing research and affluent focus groups.

STEP BACK FROM OVERDOING STATUS AND IMAGE AND GIVE THEM VALUE FOR THEIR MONEY

The luxury consumer's new focus means that status no longer holds the same weight. After thoroughly researching a product, they will gladly pay for superior quality and performance, but if the price is inflated, they won't spend a penny.

“They are looking for good quality products,” says Danziger. “Today, you can buy a really good quality purse in the $300 range, so is a product that is $3,000 10 times better? More and more luxury consumers are saying it's not worth it and luxury brands and retailers have to stop price gouging, really. Shoppers today have made that very clear.”

SHIFT MARKETING TOWARDS SUBSTANCE OVER IMAGE

The winners in this new equation will be retailers and brands with solid value messages. Danziger suggests focusing your marketing to be less Vogue and more Consumer Reports. “I don't think brands are less important, but the messages they deliver needs to change,” she says. “It needs to be more about what makes the brand great and less about simply this image.”

THE THRILL IS GONE—AND SO IS THE URGENCY TO BUY. OFFER MORE PRICE OPTIONS

The luxury consumer is also less impulsive today when it comes to purchases. They are becoming much more strategic and conducting comparison shopping, typically, by tapping into the Internet and looking for the best bargains.

“Saks and Neimans have announced that they are expanding and broadening their price categories,” says Danziger. “While the boom was happening they brought in higher and higher priced goods. Now they are having to bring in nice designer products across a broader range of pricepoints.”

She also notes that this affluent consumer group will not likely return to consistently purchasing “prestige” brands, but will continue to buy “premium” brands. In the end, prestige brands will have a smaller target market to serve as they appeal to only the ultra-affluents.

ALIGN WITH THE NEW PSYCHOLOGY

Green and social consciousness is the new norm for the luxury consumer. You can appeal to them and build a platform for loyalty by showing your own eco-conscious and charitable side. “This is not a fad or recession chic,” says Danziger. “This is real change being made by leaders, movers, and shakers in our society because they are aware of the effects our patterns of consumption are having.”