Experiences will be the winners for this holiday

Pam Danziger, author of Putting the Luxe Back in Luxury and president of Unity Marketing, is predicting that the affluent and aspirational will be reluctant to indulge in showy luxury items this holiday season. In part, she says, it is a response to the Occupy Wall Street movement, which has made it unpopular to indulge in conspicuous consumption.

Danziger predicts a continued emphasis on practical gifts such as technology and on experiences.

Frye Leather Stakes Its Claim to Luxury

Pam Danziger writes in her latest blog:

Get Inspired>>

The Frye Company is a case study in how to build a luxury brand in the new economy

I love my Frye boots.  I’ve owned a number of pairs over the years and just got a new pair from Zappos.  Priced at $295 and made with rugged Fyre quality leather and all tricked out with straps and buckles, I will enjoy wearing these boots for years to come.  That’s why I was thrilled to learn that Frye had just opened its first branded boutique in SoHo.  Coincident with that boutique opening, Frye also relaunched its website with enhanced search capability and a new look.

Frye is stepping out to create a new luxury brand based upon its ‘cowboy/girl’ western chic, one that perfectly matches the ‘zeigeist’ for authentic quality and value in the new economy where even the affluent are watching their pennies.  Frye has leading-edge design covered too, as low-heeled riding boots are the look this fall.

As a brand, Frye doesn’t have to resort to marketing gimmicks like red soles to earn their luxury label.  Frye delivers boots of unique and distinctive design that expressively communicate the wearer’s attitude.  And that also assures that the brand has exclusivity.  Frye boots are clearly not for everyone, so a person  makes a statement when he or she chooses to wear Frye’s.

Frye is no upstart, with a 150- year heritage of creating leather goods in the U.S.A.  Frye’s boot designs reference the past but also have an edge that propels the brand into the future.
Frye stands behind its ‘made in America’ quality products by offering a two-year warranty.  Frye also has an in-house refurbishing center for boots that fall outside of the warranty, but need a little TLC.
The key to Frye’s success is affordable luxury.  Frye boots hit the ‘premium’ sweet spot; higher price points than that found at mass, like Nine West, yet lower than that of exclusive designer brands.  But even though Frye’s are priced under designer brands, they are super-high quality which you can wear day-in, day-out with complete confidence and very little upkeep.

Take Action>>

New luxury brands, like Frye, need to deliver 10 key values — Use every consumer point of contact to deliver those values 

Ultimately your brand is the vehicle by which you deliver a luxury experience to your customer.  The brand communicates the value and values that your company and its products stand for. The Frye Company clearly understands and delivers their unique value proposition succinctly.   My new book, Putting the Luxe Back in Luxury:  How New Consumer Values Are Redefining the Way We Market Luxury, defines ten key attributes that luxury brands must convey.  These attributes include superior performance, craftsmanship, innovation, sense of place and time, heritage, creative expression, exclusivity and responsibility.

For example, Frye’s products express responsibility through leather sourced from local farms and tanneries, while the Frye SoHo boutique conveys responsibility by using reclaimed wood paneling, recycled fixtures and antique tools.  These architectural elements also encompass the attributes of heritage and place and time that are also essential for a luxury brand.  Marketers must use all touch points with the consumer, from advertising, product design and materials, packaging, website and retail environment to communicate the brand’s core values, as Frye has done.

Resources to help you think in new ways about the values of your luxury brand

For those looking to delve more deeply into luxury branding, besides my book ‘Luxe,’ I also recommend BrandAbout by Andrea Syverson.  Of all the many books on brands, Andrea takes a totally new and unique approach.  BrandAbout gives you a practical approach to branding that includes ten practical lessons in branding with more than 40 creative homework exercises.  She makes branding fun, rather than drudgery.

These two books together, Putting the Luxe Back in Luxury and BrandAbout, will give you the tools you need to build a new luxury brand, like The Frye Company is doing, or reinvigorate an existing brand.   Paramount Market Publishing is offering a discount to these two practical books for smart professionals.  Click this link to access that offer.

High-end fashion brands should embrace social media

What kind of fashion brand customer is influenced by social media, such as Facebook, Twitter, and FourSquare?  If you guessed that only students and young adults with minimal budgets to spend on fashion frequent these sites, you might be surprised.  And if you are a luxury fashion brand making this assumption, you may be damaging your brand, according to new research on the high-end fashion customers from  Unity Marketing.

 The study, entitled The Fashionable Affluent,  gives insights into how affluent consumers shop for fashion, including how social media influences their fashion choices.

While the data does show that young consumers are more likely to use social media, it also gives a very different income and overall demographic profile than one might expect.  The research study was headed up by Pam Danziger, president of Unity Marketing and author of the new book, Putting the Luxe Back in Luxury:  How New Consumer Values Are Redefining the Way We Market Luxury.

"Without a doubt the population using social media skews young, but luxury fashion brands need to be aware that these media are powerful influencers of shoppers with a great deal of discretionary income and high-net-worth.  The study found that nearly half of the ultra-affluents (incomes $250,000 and above) and HNW ($1 million or more in investible assets) fashion customers surveyed were spurred by information gathered via social media to visit web sites, shop in retail stores, and to make a decision about which luxury fashion brand to purchase,"  Danziger explains.

"Ultra-affluents and HNW fashion shoppers were far more likely to be influenced by social media than were HENRYs (High Earners Not Rich Yet, $100k-$249.9k) and low-net-worth shoppers (less than $1 million investible assets)."

"Fashion marketers need to make strategic use of social media to build powerful relationships between their brand and these high-value customers.  That will translate a shopper's 'like' of a brand or becoming the 'mayor' of a retail location into added revenues and profits," Danziger says.

The data gathered by Danziger gives insight into affluent consumers' preferences and buying behaviors when it comes to fashion, including the demographic profile of the best customer for each fashion category.

In the survey, affluent shoppers were asked about purchases of clothing and apparel, shoes, handbags, and other fashion accessories, including the role of the designer in their purchases.  Key data collected includes:

What fashion items they buy
How much they spent in total on high-end apparel, shoes, handbags and other fashion accessories
What influences them in their fashion choices
Where they like to shop
Role of social media in influencing their purchases

To learn more about special report offers from Danziger, click here.  To purchase a copy of Putting the Luxe Back in Luxury, click here.

Luxury Brands Like Prada Struggle with Mixing A-List Reputations and D-List Countries of Manufacture

By Pam Danziger, author of Putting the Luxe Back in Luxury

Get Inspired>>

Prada is going to China not just to sell, but to make — Is this where your brand should go too?

Prada – it’s a name synonymous with luxurious Italian fashion and design. That’s why the Wall Street Journal story on Prada manufacturing in China gave me a jolt. Click here to see the story.
Prada is gambling a great deal on the notion that its customers won’t care about where their clothes and handbags are made as long as that logo is there.  Miuccia Prada, the brand’s designer, says, “Sooner or later, it will happen to everyone because [Chinese manufacturing] is so good.” Many luxury consumers would beg to differ, as would I.

For a brand like Prada, being made in Italy is one of the foundational pillars of the brand. Without it, all that’s left is a hollow shell of the classic luxury brand. A recent Unity Marketing survey among 1,321 affluent luxury consumers with an average income of $287.2k reveals the danger in Prada’s made in China strategy. Over 80 percent of the luxury customers agreed with this statement:

“Many luxury goods brands have a heritage associated with a particular country, such as Chanel with France, Gucci with Italy or Mercedes Benz in Germany. These country associations are important to maintain and integral to the perception of the luxury brand.”

Brands like Prada, which displays ‘Milano’ proudly in its logo, are closely aligned with a specific country or place and have the most to lose if changes are made to where it traditionally has manufactured products. These companies need to understand that the mystique of their brands is a complex amalgamation of reputation of the company, experience in the store or online, and knowledge of the craftsmanship in manufacture of the goods.  If a luxury good is made in a country with a questionable reputation, this decision can damage the brand far more than it saves in overall costs.
In that survey, China led the ‘D-list” of countries for place of manufacture. Some 56 percent of the luxury consumers surveyed said that they associate China with poorer quality goods.
Even Chinese luxury consumers are suspicious of made in China goods, as consultant Armano Branchini says in the WSJ article, “Chinese consumers are ready to pay higher prices for luxury brands, but they want products not to be manufactured in China.”

Take Action>>

Think verycarefully about brand integrity and consumer confidence if you chose to ignore the halo that traditional place of manufacture bestows 

In this time of economic uncertainty, the pressure is on for brands to move to China or other low-cost countries in order to bolster operating margins and keep prices in line. Further, production capacity in many traditional European countries is limited, as we were reminded not long ago when Louis Vuitton had to close some of its stores early in the day because stock was running low.

Before making any such drastic move, companies need to conduct market research to talk to loyal customers who will be affected by such a move. Marketers need to learn through one-on-one interviews or focus groups about their customer’s prejudices and fears should products be manufactured in new places. By understanding the specific areas of concern to the customers, marketers can develop marketing messages that address these concerns directly.

Such research will reveal to luxury marketers the importance of place of origin in the buying equation for their brand. Through this understanding, they can use country of manufacture to their advantage when they can; and if not, take steps proactively to counter negative perceptions about a country as a place to manufacture.

Brands may find it is better to accept the increase in price and limited availability of product in order to play up the prestige that comes from association with an ‘A-list’ country of manufacture, rather than switching to production on the cheap in a country that might damage the brand.

For companies that already source their goods in ‘D-list’ countries or decide the time is right to make the move, they need to educate the consumer. Luxury marketers in these cases must convey to the consumer that they hold high standards of quality, regardless of the country that produces the product.  For example, they might take their customers behind the scenes into the factories through videos or pictures on the company website to demonstrate quality standards are in place.

Luxury marketers must work to overcome the negative association with the “Made in China” stamp

While it is tempting to ignore the country of manufacture in one’s marketing efforts, especially if it is a ‘D-list’ country, luxury marketers do so at their own peril. They must address head-on the country of origin of their products, because they can be sure their customers are flipping the item over to take a look at that country stamp before they buy.

For example, Coach is a USA heritage brand which has moved much production overseas to China. They have been able to seamlessly integrate their global sourcing thanks to the company’s iron-clad lifetime guarantee, which reads, “Coach products are made to ensure satisfaction and service for the natural life of the product. If, during its lifetime, your item should require repair, we offer a repair service for many of our products.” Such a guarantee gives reassurance that quality standards are not compromised no matter where the item is made.