It is not just about shopping for physical goods; the luxury sphere is about creating memories and providing services that are experiential. There is almost an ephemeral quality to premium goods - the idea that you can't just buy a brand identity, you have to live it.
Aspiration to luxury goods is twofold - the physical financial piece and the allure of the brand. Many women do not necessarily purchase a Hermès Birkin bag because of its functionality, but rather for the connection to a brand that is recognized for craftsmanship and the finest quality.Cultural movements
Two cultural movements empowered the current and aspiring luxury consumer. The dual-income, no-kids phenomenon of the 1980s, which helped BMW establish its brand identity in North America, and the bourgeoisie bohemians of the early 2000s.
Both of these shifts in how affluent customers consumed goods aligned new premium buyers with the habits of old luxury - it's about having the right thing with the right label.
After the market collapse in 2008-2009, these cultural factors did not die. They simply moved further away from the acquisition of things and more toward the altruistic and intangible parts of a brand's identity.
If you were to simply manage a luxury brand, you'd be missing that intangible piece that makes the luxury market so different from just selling a normal item, such as a toaster.Selling a way of life
With luxury, you are not selling an item, you are selling an entire preformed life and way of being and associating. Nearly all high-end fashion and beauty brands have perfected this, but it becomes less obvious when you look at furniture, financial services, and autos.
Cadillac, America's only full-line luxury auto brand, stands for progressive technology and provocative design. The customers we seek would describe themselves similarly. How do you find such people? By being where they are and being one of them.
That means shopping at Saks, not necessarily because of the brand names, but for the level of service and professionalism provided, buying Apple products to keep up with cutting-edge technology and forward-thinking aesthetics, staying at luxury hotel properties such as the Four Seasons in interesting locales, and more.
Managing alone does not allow for immersing oneself in a brand's essence. It's not just a matter of knowing your products inside and out. It's about knowing every piece - tangible or not - that you and your customers purchase, experience, and live every day.