Consumers are lining up to buy the high-class experience
The American Dream is no longer the two-story house with a white picket fence, a high-paying job, and 2.5 kids.
The new American dream is luxury. Yet it's not about sheer materialism, and who has the fastest car or the biggest flat-screen TV. It's about the experience inherent in luxury. And at a time when cell phones and MP3 players are status symbols, and when the kind of olive oil you buy speaks volumes about your taste in the finer things, marketers have taken notice that consumers are clamoring for that luxury experience.
So glossy magazines about stars, beauty, and fashion crowd newsstands like never before. There are cable channels dedicated to food, home and garden, and fine living. And staple products such as water and coffee have gone from mundane to luxurious.
The role of communications in luxury marketing to the masses is to focus on meaning and experience, advises Pam Danziger, author of Let Them Eat Cake: Marketing Luxury to the Masses - as well as the Classes. Companies need to know what their product means to the customer. It's not just another commodity consumers seek; it's an experience they demand. So companies need to tell that story, and make the customer a part of that story.
"It started with Evian," says Ann Peterson, an SVP with Rogers & Cowan. "[It] took a commodity and turned it into a luxury product. So did Starbucks. People now pay $4 for a cup of coffee. But it's not about price. It's about the experience. And that helps guard the equity of the brand. The key is maintaining the prestige factor."
So brands once out of reach for the mere mortal consumer - such as Prada, Montblanc, or Tiffany - now sell products at prices that allow all consumers to enjoy that luxury experience.
That's what Montblanc, the luxury pen company, is aiming for. In the late 1980s, the company dropped all ancillary products, focusing just on its pen. After making Montblanc synonymous with luxury pens, it began reintroducing other luxury items in the early 1990s, including watches and cufflinks. "We made a strategic decision to make the brand a luxury lifestyle brand," says Jan-Patrick Schmitz, president and CEO of Montblanc North America.
The company never had a strategy to present lower-priced products. But it did grow its portfolio into other more-affordable areas. So for consumers craving the Montblanc experience, but who can't afford the $150,000 diamond-encrusted fountain pen, there's the $95 small leather notebook. And while that might still be pricey for a notebook, it is the most affordable way to experience the Montblanc brand.
It's not about the price
But price is an afterthought in marketing. To mention how affordable a luxury-brand product is would only dilute that brand's siren song, warns Schmitz.
"We changed our communications so that it wasn't about the product," says Schmitz. "It's about the experience and the pride of ownership that comes with our products. But we don't talk about price. It's not a luxury product if you have a functional price."
"Luxury used to be defined by income and what you are able to spend," adds Joan Brower, SVP and co-director of the travel and lifestyle group at M Booth & Associates. "It used to be about exclusivity."
Today, it's about the feeling a brand gives you. Luxury isn't just something everyone wants, but also something they think they deserve, adds Brower.
"It's a reflection of our current state of stress," says Brower. "We're living in a more stressful time. There is an emotional payoff with luxury."
When Prada teamed up with Puig Prestige Beauty, a global manufacturer of fragrances, cosmetics, and fashion, to launch its own perfume, the company recognized this would be a way for many people to finally own a piece of the Prada experience.
"There was a real synergy between the fashion and the fragrance," explains Patricia Dente, executive director of PR and advertising for Puig Prestige Beauty. The company slowly introduced the fragrance - first to Women's Wear Daily, then VIP customers, then celebrities, and then the media. So by the time the public could buy a bottle, Prada had methodically introduced the fragrance so that it would be viewed as another Prada luxury product, not just an affordable way to buy into the brand.
Many different reasons are converging to drive this new lust for luxury. Part of it is baby boomers who are facing empty nests and spending more to fill the void. Others are spending money to feel more comfortable during stressful times. And some just feel like they are entitled to a bit of luxury.
Luxury is all around
A key part of this desire to pamper ourselves silly is due to media saturation, says Jim Allman, CEO of DeVries PR. With such an abundance of instant information from endless media, people of all incomes aspire to the same thing.
And luxury is all around us, he points out. People who shop at Donna Karan also shop at Target. Discount airlines such as JetBlue Airways offer nothing but coach seating, yet every seat is leather and has a TV in the seatback.
Mainstream retailers have also put a premium on luxury and style. Target works with Isaac Mizrahi, Kmart works with Martha Stewart, and JCPenney has even hitched its middle-America wagon to the likes of Nicole Miller.
"We have the opportunity to bring great fashion at a smart price to a huge population segment that is demanding better style, quality, and service from the shopping experience," says Michael Cape, JCPenney's VP and director of brand marketing and graphic design. Average consumers have become more brand savvy, and already know what those brands represent and the kind of experience they deliver. And luxury brands and designers are well aware of these savvier shoppers' buying power.
Much of the messaging stays the same, whether the company is Montblanc or JCPenney. Luxury items, regardless of price or audience, still need to be pampered by marketing. So marketing presents affordable luxury the same way it would other luxury items - reaching out to the same group of influencers, such as fashion media, who hold sway over the most affluent audiences. This helps continue the luxury experience everyone craves. Marketers then follow up with outreach to the masses.
JCPenney launched its Nicole by Nicole Miller line by introducing the clothes not to average consumers first, but to fashion editors, publishers, and broadcast media at a fashion show at New York's Four Seasons restaurant. The show featured a reunion of top models Miller had previously worked with, including Nikki Taylor, Janice Dickenson, and Frederique. Media relations to reach consumers followed the high-end debut.
As for companies, they recognize the power of brand loyalty, and are trying to capture that loyalty earlier than they could previously.
"There are marketing opportunities underneath your traditional market," points out Danziger. That is why many high-end designers team up with more affordable retailers, such as Karl Lagerfeld with H&M or Mizrahi with Target.
Mercedes-Benz is one company that has done this, says Jesse Toprak, a senior analyst with automotive information website Edmunds.com. He calls the new generation of car buyers the "aspirational generation," those who want and desire luxury. And companies such as Mercedes, BMW, Audi, and others are reaching this generation - who can't afford to buy such a luxury brand - for the first time through leasing programs.
"This is a fairly recent trend for these companies," says Toprak. "They want to capture you as you first get into the market. One of the big selling points is the treatment. It doesn't matter if you buy the most expensive car or lease the most affordable, you're treated the same.
The messaging is all about how the product makes you feel, adds Brower.
"It's about individuality," Brower adds, "and how the product and brand connect with the consumer. There has to be an emotional payoff."
"We knew Prada was a brand people aspired to buy, and that this would be another way to wear Prada," Dente says. "But I don't think anything was compromised. We were careful to make sure this wasn't about price, but another way to wear Prada."
And that is something companies must be very wary of, warns Danziger. Some would say that providing more affordable products dilutes a luxury brand, but she disagrees. People crave luxury not because it's beyond their reach or just for luxury's sake, but because it delivers a unique experience. That is more special than exclusivity.
"Keep both your brand and the experience unique," Danziger says. "That's what consumers value."
Champagne taste on lemonade money
Low-end: iPod Shuffle, $99
High-end: PowerMac G5 (Dual 2.7Ghz), $2,999
Low-end: Key-chain, $48
High-end: Tiered coat, $1,580
Low-end: Leather valet key-chain, $18
High-end: Canvas/python large boxy tote handbag, $750
Low-end: Half-pound assorted chocolates, $19.50
High-end: "G" handmade chocolates, $100 a pound
Low-end: Metallic flower slides (available at Target), $19.99
High-end: Embellished suede slide (at Neiman Marcus), $228
Liz Lange Maternity
Low-end: Liz Lange for Target Maternity sunny blue sleeveless shirt, $12.99
High-end: Gracie dress, $325
Low-end: 2005 C230 Kompressor sport sedan, $29,970
High-end: 2005 SLR McLaren, $452,750
Low-end: Nicole by Nicole Miller beaded tank top (available at JCPenney), $11.99
High-end: Strapless Applique Orgaza dress (at Nordstrom), $620
Low-end: Lead crystal Louis Comfort Tiffany candlestick, $40
High-end: Emerald pendant (18k gold with diamonds set in platinum), $650,000