The economic downturn of 2008 rattled the gilded cash registers of high-end retailers forcing them, ...

1. Branding Strategies That Keep Luxury Brands Competitive
The economic downturn of 2008 rattled the gilded cash registers of high-end retailers forcing them,
like other merchants, to re-evaluate, re-align and regroup. What next steps will these powerful,
luxury brands take to keep their wealthy customers happy, their margins consistent, and their
elevated status in the new economy?
Understanding What Brand Means
A company's brand is the culmination of experiences, perceptions and feelings that customers have
about their products' or services' quality and image. It all begins with their name, the foundation of
their brand. A luxury brand's name (Louis Vuitton, Tiffany, Mercedes Benz) sends a message to the
consumer that there is nothing on the market that can compete with what they're selling. Branding
offers that guarantee to customers and then meets their expectations with value, service and
support. "Branding has become the crux of selling in the new economy," according to Virtual
Advisor, in their editorial, "Building Your Brand."
Branding Strategies Luxury Brands May Implement
Along with other businesses, the new economy is changing the face of the the high-end retailer;
there are now, more than ever, acquisitions and consolidations in the luxury industry, competition is
fiercer and credit is hard to get. Business as usual isn't a mantra that works any more and so
customer-centric, prestige retailers are turning to technology and the Internet to create new
passions for their brand and provide their customers with the luxurious experiences that have come
to expect.
Social Media: An online identity will be paramount for luxury brands to incorporate in their
marketing plans, starting immediately. While they all have web sites offering products for sale, they
haven't been quick to jump on the Facebook and Twitter band wagon. High end retailers are hiring
luxury consultants and branding agencies to help them understand how to get the most value in
building niche-focused friends, fans and followers.
CRM: Customer Relationship Management is a software tool that companies employ to consolidate
information--from many data sources with the organization--about each individual customer. Having
this information available at their fingertips through mobile devices (phones or hand-held
computers) enables the salesperson to understand the customer's buying preferences, which he or
she can then use to up sell or cross sell their products. This vital information lets the sales associate
provide the customer with unparalleled, personalized service based on their shopping history.
Customer Management: One of the most important assets of any company is the house list, a
customer database containing detailed contact information and buying history. Many luxury brands
ignored building and maintaining this list in years past, and some were even negligent in
understanding its value to the customer experience of purchasing. Demographic and transactional
data are more often appreciated by company accountants rather than sales or marketing
departments. That will change as luxury brands discover the customer insights these lists provide.
Strategic Alliances and Partnerships: In an effort to build brand equity, edge out the competition and

2. enhance customer loyalty, many luxury brands are partnering with other non-competing, luxury
companies to provide mutual customers with experiences, products and services they might have
gone to different venues to obtain. The value add of two respected brands working together for the
customer's buying experience or enjoyment, is exponential in terms of future purchasing and
goodwill.
Digital luxury, the new buzz word surfacing in digital circles, will take its place in the new economy
as luxury brands embrace e-commerce, digital PR and marketing, and m-commerce (phone apps) to
conduct business and stay relevant.
All of the above branding strategies complement each other to forge success for any marketing
program. If you're interested in social media, check out these two articles: Can Twitter Improve
Brand Loyalty for the Luxury Industry? and Should Luxury Brands Use Facebook to Attract Wealthy
Friends? CRM and building strategic alliances are two other components to be considered, so read
Luxury Brands Use CRM to Sell Smarter and Luxury Brands Form Strategic Alliances to Increase
New Business.
References:
G-Cem.org, " What Will Happen to Luxury Companies In a Downturn Economy? (accessed January
2011)
Luxury Institute, White Paper, Wealth and Luxury Trends, 2010 and Beyond. The Luxury
Renaissance Begins in Earnest. October 2009
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