Luxury brands intensify focus on loyal big spenders with an increasingly complex approach

The elaborate, competitive and secretive world of courting private clients, where brands allocate huge budgets for gifts, events and travel, is a decades-old practice and a major marketing tactic in fashion. Loyal big spenders can drive up to 40 percent of sales, said Gary Wassner, chief executive of Hilldun Group, a retail consulting agency. At luxury e-commerce company Mytheresa, 3 percent of its customers make up 30 percent of its business, director of customer experience Isabel May told BoF.

Lately, the game of attracting very important customers, or VICs, has been stepped up. Brands are well aware that wealthy shoppers are hungry for both luxury products and elaborate experiences post-Covid. Fashion is investing in its main buyers accordingly, as well as finding new ones. With the American luxury market booming, many brands are particularly interested in attracting wealthy buyers in the American South and markets like Austin and Miami, as well as younger buyers with tech or crypto fortunes.

“For European brands, the US was all about the West Coast and the East Coast, but they realized that the US is big and there are wealthy customers everywhere,” said Federica Levato, fashion leader and EMEA luxury at Bain.

VICs represent huge potential profits, and managing those relationships is extremely important, said Laurent Thoumine, managing director and retail leader at Accenture. These private experiences, he said, are “absolutely the key to generating long-term income.”

VIC’s strategy is similar to that of casinos that treat “whales” with hotel suites and expensive champagne. At Mytheresa, VICs spend in “high seven figures,” May said, while sources told the BoF that Dior’s private clients typically spend a minimum of $100,000 with the brand annually.

“Brands don’t want someone to go straight for shoes or bags. They are looking for buyers who buy the entire brand…in all categories,” said Gab Waller, a fashion stylist and luxury goods source who works with the VIC. And while some VICs cross over into celebrity influencer territory, many of the top luxury spenders prefer privacy.

“[Brands] keep this world very secret because these people are extremely, extremely private,” said Nolan Meader, a fashion stylist who works with several VICs. “Their social networks are usually private. They are not flaunting what they have.” VICs  are “professionally active founders, lawyers, board members and young entrepreneurs,” May said. Increasingly, brands are also eyeing young tech professionals and crypto wealth.

Previously, VICs were predominantly old-school spenders. Increasingly, younger buyers are also included. These new people and new sources of wealth are very relevant all over the world, but specifically in the US.

By shifting their focus to the US, brands hope to convert first-time buyers driving growth into repeat customers with luxurious experiences. Last month, Givenchy brought some of its top American buyers to the lavish Save Venice benefit gala in New York. In March, Alexander McQueen organized a multi-day New York experience for his American VICs, including a separate runway show. Gucci brought VIC to Coachella and in December, Brunello Cucinelli opened Casa Cucinelli in New York, a new exclusive boutique for the best clients.

Since the pandemic, brands are also looking to regions beyond New York or Los Angeles for big American consumers. Mytheresa has hosted more private events for clients in Florida and Texas, and recently hosted an event in Miami with Dolce & Gabbana. Saks Fifth Avenue is targeting Dallas, Aspen, Miami and Naples, Fla., while Neiman Marcus, which has doubled its VIC experiences year over year, has hosted events in Miami and San Francisco. Specific vacation destinations that attract a wealthy clientele, like Miami for Art Basel or Aspen during ski season, are also important.

Almost all VICs get early access to collections and invitations to brand parties, but trips and seats at fashion shows are the most exciting ways to attract top buyers. Saks Fifth Avenue has taken some of its VICs to the Oscars and Wimbledon. Gucci has hosted film screenings at the Savoy Royal Suite in London, as well as dinners with Gucci chief executive Marco Bizzarri and parent company Kering head François-Henri Pinault.

Remembering a shopper’s birthday or adding family to a party list are also ways to reward big shopper outside of the top tier and are initiatives that can scale, compared to trips typically booked for the top tier. of VIC.

But every VIC experience, from flying to a fashion show to attending an intimate dinner, carries unspoken spending expectations. While VICs are often offered collection pre-order line sheets at fashion shows, or wake up the morning after dinner to a text from a sales associate, the request must be handled delicately.

Brands often hire entire teams to nurture these relationships, and the work is constantly evolving as VIC ambassadors move from one social media channel to another. Companies such as Louis Vuitton, Farfetch, Stadium Goods and Dior are now hiring private client managers.

 

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