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How to grow luxury
You would think that, with all the talk of hard times from here
until the seas freeze over, the one sector that would really suffer would be gifting, the passing of apparently frivolous and unnecessary products from one person to another.
But some trends are up. At one end, top end London stores
are showing serious profit returns. At a more modest end,
people are spending 15% more on a bunch of flowers than
they did three years ago and sales of chocolate selections
are expected to rise by 17%.
This is not a coincidence. In hard times, people seek
compensatory gifts or self-gifts to make up for other, more
expensive treats being unattainable. There are, of course,
still a few whose natural habitat is Kensington and
Notting Hill and have no money concerns. They need
not concern us today. There will always be people that travel first class!
We are defining luxury as the frivolous, unnecessary
purchase. Unnecessary from a practical point of view,
that is, but highly necessary from an emotional point of view.
But, like any market, there are no easy pickings.
Say luxury and you think of art for art’s sake.
Not a bit of it. You still need rigorous segmentation
and targeting. Get it right and opportunities lie
in several areas.
A small compensatory gift will ease the pain when you can’t
go out to dinner, can’t buy that dress, have to shop carefully.
You only have to look at the increasingly desperate 2 for 1 offers
from the restaurant chains to know that there’s a shift to eating in.
Many have discovered that you can have a great and indulgent
evening in for a fraction of the cost of eating out.
We all have egos and there are great opportunities to profit
from markets that set out to flatter. It only succeeds, however,
if the aura round the offer is powerful. Think Fortnum’s,
then think Aldi.
Tourists are people and many of those people have taste.
And money. With the weaker pound and the increase in BRIC
tourists, there are great opportunities to create something
definitively British but classy. We just wish someone would
tell the 2012 Olympic shop.
The key to success is to remember that it’s personal, between
you and the customer, between the customer and the recipient.
If everything about your product and your service reflects this,
you can make a lot of money.
Honey - Commercial Brand Partners:
Commercial Planning, NPD Innovation, Branding, Design, Digital and Marketing.
6 DBA Design Effectiveness Awards in 3 years, makes Honey the UKs most successful new agency ever!
+44 (0)20 7354 4150 honey.co.uk
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