JULY / AUGUST 2012 | PDF | Subscribe | Home

The Ubiquity of Luxury
The blending of mass and class is a win for brands and consumers alike.

Some may argue that the power of “brand” is diminishing. With the explosion of choice, little differentiating one brand from another, and the increase in cost-conscious consumers, people are less likely to be lured by any one brand, let alone feel any loyalty toward it. But there is another very strong counter-trend going on: It’s what I call the ubiquity of luxury.

 This trend is cutting across categories — apparel, cosmetics, jewelry, consumer packaged-goods and consumer electronics — and it’s not limited just to the wealthy. No matter whether a person has the economic means or their station in life, the lure of luxury is more powerful and universal today than ever before. It appears that certain aspirational brands — those furthest out of reach in terms of price and markup — are the ones with the strongest hold on many of us.

 Such brands are enjoying so much mass appeal that they have become the uniform of our times, which is odd and curious when you consider today’s realities. A surreal disconnect exists between today’s economic realities and the way consumers are behaving with luxury, premium, and prestige purchases. Perhaps it is in direct response (consciously and subconsciously) to the curtailing of spending in other areas of our lives.

 While we become couponing manics (not maniacs!) on one extreme, we are also throwing caution to the wind when it comes to the acquisition of the “it” product or brand of-the-moment. Maybe rebellion is driving this trend. Maybe it is simply a personal reward for the diligence, discipline and sacrifice in other areas of our budgets. This would certainly make an interesting topic of study for a behavioral economist.

 From a marketing and branding perspective, an underlying question concerns how financially productive this trend is for those objects-of-desire becoming massively adopted by the masses. Does it ultimately devalue the equity of brand over time? After all, isn’t luxury defined as exclusivity? Sure, sales skyrocket as a result, and if these new consumers aren’t fickle there could be sustainable, long-term growth for these brands.

 But how much brand erosion is taking place at the same time? Is there a further risk of alienating the core target consumer when a luxury brand goes mass? Or is there a backlash to the entire brand umbrella when certain products in the portfolio expand to serve a more diverse audience? Is it possible for a brand to retain its “luxury” status once it is no longer perceived as exclusive?

 Look at what happened to Burberry in London when its signature plaid became heavily associated with the football firms of the 1990s and the “chavs” that followed. The drastic shift in clientele came as a surprise to Burberry and prompted a change in operations to improve the brand’s image as a premium, high-end fashion label. It ultimately led to a major re-branding and segmenting of its product.

 Tiffany & Co. is another company that has had mixed success managing through spikes of popularity around core, signature products. Many may claim its moves into the mass market have tarnished the image and exclusivity once synonymous with the robin-egg-blue boxes and bags (and what’s inside of them!).

 For every example of a company that has struggled with giving up exclusivity for at least short-term growth, many more are reaping the benefits of the ubiquity of luxury. LVMH totes are everywhere, Gucci bags and belts, UGG boots, David Yurman bracelets, Ray-Ban sunglasses, North Face and Patagonia puff jackets and Christian Louboutin shoes (you know, the ones with the red soles). Even iPhones and iPads can fit within this trend.

Some may even argue that many of the $5-plus treats at Starbucks that have become an everyday “luxury” indulgence are now “ritual” in a way that bucks the current economy. To see these brands on parade like an urban catwalk, look no further than airports, the NYC subway, Midwest sports arenas and malls across America. Perhaps these are biased samples of the population, but given the meteoric growth of many of these companies during one of the worst economic times globally, there’s pretty good substantiation of luxury’s expanding reach.

At play is another rising popular pastime influencing these purchases: our current obsession with celebrity and faux celebrity. Thanks to the rise of reality TV, the popularity of People magazine, and other highly influential media vehicles, many of these celebrity brands have made their way into the picture. On this platform, they become sought-after, must-have aspirational purchases.

From a media standpoint, magazines have become a primary vehicle for bringing these brands to the masses, similar to the way major broadcast networks brought cigarettes, beer and cars to an earlier generation. In fact, many of the ads in the pages of our glossy magazines provide a roadmap to the luxury brands crossing over to a pliable population.

 Add to that the power of blogs and other social networks sharing these acquisitions. In today’s digital age, e-tailing further makes these brands more accessible to purchase — even impulse purchase. Sites like Net-a-Porter put these luxury brands on your doorstep at a click of a button. Talk about instant gratification with no intervention!

 Then there is the influence of music (mainly rap), whose lyrics rattle off many of these brands as badges to the extent you begin to wonder if they’re sponsored.

 For those who crave some element of individualization, there’s also the potential in the luxury of customizing and personalizing the brand in some way. This makes the magnetic pull that much more powerful and the possibility of capturing an even broader swath of people even greater. While we are conforming, we can also feel as though we are differentiating (different just like everyone else, that is).

 Most of these popular luxury items also meet a functional need, as there is utility in much of today’s mass-adopted luxury. The success of these brands is due to a combination of desire meets purpose and function. Let’s be honest: the LVMH carried by millions may just be the perfect all-purpose tote bag. Perhaps it truly deserves its ubiquity. It is the knapsack of today.

 Another phenomenon influencing this ubiquity of luxury has been Target’s successful positioning as a mass retailer offering cheap but chic products to its “guests.” By offering exclusive designer lines created especially for them, Target has made select luxury brands accessible. “Tar-zhay’s” execution has been brilliant because the designer line is offered in limited distribution, further creating the hype while preserving the sense of exclusivity. Other mass retailers have jumped on this bandwagon with varying success — H&M, Macy’s, Kohls, and even Kmart in a last ditch effort to regain relevance. 

The risk, if not well executed, is the backlash of luxury becoming commodity. Alienating the high-end consumer will ultimately prove very costly, and possibly deadly. To avoid this, the strategy of luxury brands creating line extensions that are priced slightly lower but not discounted or reduced is critical. At the same time, they must continue to innovate on the high-end, offering a constant cycle of aspirational products not accessible to the masses.

Occasionally, when it becomes popular for cheap to go chic, we see this trend in reverse. Certainly during the past recessionary times, it became quite common and “smart” for wealthy segments of the population to shop at Walmart. When utility and desirability align, mass products can experience a moment of luxury appeal. Take J. Crew, and the famous Sharon Stone red carpet moment when she was asked, “who are you wearing?” First Lady Michelle Obama similarly popularized J. Crew.

The ubiquity of luxury is simply a reflection of many factors converging: The pervasiveness of brands; the influence of media everywhere; and the sense of deprivation from extended cost cutting in other areas of our lives. Probably the greatest driver of all is a desire for equality from the 99 percent. We all work hard, and deserve the same brand access
and affirmation.

BETH ANN KAMINKOW is president and chief executive officer of TracyLocke. A strong advocate of insights-inspired marketing programs, she is a pioneer in strategic-planning research methodologies.

JULY / AUGUST 2012 | PDF | Subscribe | Home