Why you should consider an experiential luxury strategy for your brand.
Several years ago, I was working on brand strategy with my clients at Viking Range. The philosophical question on the table was this: Is a giant stainless steel Viking an end unto itself – or a means to an end? Are we asking consumers to pay $15,000 for the status of owning this beautiful appliance – or could it be a transcendent tool that elevates the act of cooking from a domestic chore to something higher and more meaningful? If you followed the brand at all, you know that we chose the latter and built the Viking brand around an experience.
Today, experiential luxury is stronger than ever. Boston Consulting Group reported that the luxury market as a whole remains strong, compared to the anemic growth trends in many other categories – and that the luxury market is forecasted to grow seven percent over the next few years. But within the overall luxury market, it’s the experiential luxury subset that is really performing well. Marketers of high-end home brands should take note: sales of experiences outpace sales of things.
“Luxury is shifting rapidly from ‘having’ to ‘being’ – that is, consumers are moving from owning a luxury product to experiencing a luxury,” says BCG. “Experiential luxury, such as exotic holidays, gourmet meals, and art auctions, now accounts for 55 percent of global luxury spending.” Moreover, BCG’s research found annual growth among experiential brands running at 14 percent compared with 11 percent for sales of personal luxury products.
BCG considers the “Home and Furniture” sub-category (with an estimated worldwide market size of $70 billion) a part of the experiential luxury subset. The billion-dollar question – literally – is whether your home brand can generate more revenues and profits positioned as an experience versus simply a product. I firmly believe that it can, because I’ve seen it done.
It begins by asking yourself a very simple question: how might my customer not only own my brand, but experience it? If you can answer that question, you’re already on your way upward.
You can find a link to BCG’s report, Shock of the New Chic, by clicking here.