The Business of Luxury: What it Takes to Make it in a Competitive Market

Establishing yourself in the world of business isn’t easy in any industry. As a start-up and a new entrant to market, the pressure is always on. Yet, when you throw the luxury sector into the mix, things start to heat up a little bit.

 

Retail is already struggling in the European sector. So, with such a strain on the economy, is launching a luxury brand really a good idea?

 

It might be luxury goods, hospitality, transport, or otherwise–the luxury market is a highly competitive space. Its dynamic nature, the increase in competition, and even the notoriety of some of the world’s most longstanding brands can make success difficult.

 

Yet, it’s not impossible.

 

To do it, mastering what it takes to make it is a must.

An Understanding of the Luxury Market

The first part of the process will always be having a very strong understanding of the luxury market.

 

It’s not enough to just have good business acumen and an idea; thoroughly understanding the luxury sector is a non-negotiable.

 

Ideally, before launching a luxury brand, you’d have experience in the luxury field. It doesn’t matter if it’s working in retail or being in senior management–the luxury market is a whole different game. So, if you don’t have experience, you might want to work on getting some before you begin.

 

At the very least, you need to conduct extensive market research into the industry.

 

Of course, understanding the particular niche you’d like to be in–from luxury goods to hotels–is one thing. But ideally, you’ll understand luxury as a whole and, more specifically, your ideal client.

Knowing Your Customer Intimately

As with any business, you need to know your customer. If you don’t know them intimately, how can you cater to their needs?

 

This often begins by understanding their lifestyle. While historically this would mean old money types, aristocracy, high-powered business executives, and some of the world’s most well-known celebrities, the landscape is changing.

 

Internet entrepreneurs, in-demand influencers, and the new wave of luxury digital nomads are changing the way we look at high-end customers. Understanding how they live, the way they experience the world, and what they want from luxury is key.

 

Exclusivity is still key, as is quality–but a fresh, modern take is often of importance, particularly when perfectly balanced with what we classically expect from a luxury brand.

The Ability to Speak Directly to Your Customer

Yet, it’s worth knowing that knowing your customers inside out isn’t quite enough. You might know the chosen lifestyle, likes, dislikes, needs, desires, and pain points for your main client avatars, but can you speak to them?

 

If you don’t know how to appeal to your audience, you’ll fall at the first hurdle.

 

This is where the importance of working with a highly experienced luxury marketing agency comes in. There’s power in being able to harness the expertise of a company that can connect with the right audience.

 

After all, you need every single part of your marketing activity to not only connect with your audience, but also invoke a reaction in them. You want them to become loyal customers, not just resonate with what you say.

Providing an Exclusive Experience

Luxury isn’t luxury without exclusivity.

 

While there are different denominations of exclusivity, a high-end brand needs to make a client feel special.

 

If everyone can have it, it doesn’t quite have the same allure.

 

Yet, we are seeing more and more luxury brands becoming ‘the norm’.

 

With the rise of designer goods popping up on young people all over social media and luxury travel becoming more of an essential over a desire, can we still classify the idea of luxury brands being entirely exclusive?

 

Perhaps not. Yet, as much as some level of accessible luxury will always be in place–particularly among the more affordable pricepoints, there will always be room for the very exclusive level of service reserved for top clients at every brand.

 

If you want to do luxury well, you need to provide an experience that billionaires who have seen it all will appreciate.

Committing to Quality

It may seem like a lot to note when it comes to finding success in a luxury market, but never forget the basics.

 

Yes, you want to stand out and yes, you want to put your own spin on things–but, as with anything, your foundations need to be in place!

 

The biggest one of all is quality.

 

If you’re not able to create an exceptional, high-quality product or service, go back to the drawing board and start again.

 

Luxury buyers are prepared to pay a premium for what they want. But they will always expect the best possible quality for that price.

 

If there’s better out there, go back to the drawing board again.

 

Remember, you need to meet your client’s needs at any cost. This is the luxury market–no expense should be spared!

Building a High-End Brand

To the point of standing out, you’ll also need to ensure that your brand screams luxury.

 

You may have an idea in mind of what you want to create, but it’s important to ensure that you’re infusing the essence of a luxury lifestyle into everything you do.

 

If you’re going to attract loyal buyers, your brand, packaging, and even brand voice need to first capture their attention, then say ‘I’m for you’.

 

Again, investing in experts to formulate a brand image for you is worth its weight in gold here.

Prioritizing Innovation, Differentiation, and Profit

Ultimately, when you’re looking to emerge into the luxury sector successfully, you need to keep three key things in the back of your mind.

 

1. Innovation – luxury customers aren’t interested in seeing more of the same.
2. Differentiation – you still need to look luxurious without blending in with other brands in your niche.
3. Profit – it might take time, but your brand must be profitable in order to be successful.

 

By following the steps were’ve outlined here, you should have every chance at making your luxury business one to remember.

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