Marketing Takeaways from Luxury Brand Trends
Luxury Daily is a great source for tracking developments across luxury brands not only if you are interested in Maserati, Hermes and the like, but also if your interest is in understanding the affluent and high net worth (HNW) audience as consumers. Recently, Luxury Daily published 2015 trends for luxury goods brands with a few insights and recommendations that are equally as relevant to financial services:
- 2015 could be a challenging year, as the Luxury Institute sees it, with winners and losers clearly identified on the basis of “which luxury brands have extraordinary product, which ones have extraordinary experience.”
Now is the time for affluent-engaged banks to get onboard and offer retail bank products and experiences that are truly special. It is not uncommon for financial institutions to follow the pack and simply keep up with one another, resulting in ubiquitous products and services. There are some exceptions in the payment category with credit cards like Visa Infinite, Amex Centurion and The Palladium Card from JPMC – all are highly targeted to UHNW and not generally available for the asking.
- The mass affluent consumer is where a lot of the action will be in 2015, according to the Shullman Research Center. These consumers are ready to get back into buying luxury goods after they “withdrew from the luxury and premium markets since the 2007/2008 economic downturn,”says Bob Shullman, founder/CEO.
Banks and FIs should get ready with opportunistic value propositions and positioning for products and services targeting the mass affluent as they start to act on their pent up demand for affordable luxuries for special occasions. In addition, they should think about partnerships that will support discretionary spending and timing (seasonality) that aligns with the demand.
- Affluent consumers will carefully spend on luxury goods. Unity Marketing predicts that affluent consumers will not give affluent goods up. Instead, they will apply more “demanding standards” to the purchases they make.
For banks looking to steal share from their competitors via strategic affluent marketing, it may be more difficult to woo bank prospects away from their existing relationships, since affluents will demand more and require proof that your FI can deliver a better experience and a more beneficial product set. The 2015 affluent consumers are going to be savvy shoppers for luxury goods, and that perspective will impact their choice of bank.
Relationship focus, where customization of banking may be based on number of bank products or level of investment, is the best way to respond to affluents, who see themselves as making smart and individualistic decisions. One size fits all will not fly with the demanding affluent.
- Today’s affluent consumers are looking for understated and modest expressions of their lifestyle: substance over style, quality and brands that are respectful of their intelligence. Unity Marketing notes, “The affluent are embracing brands that tell them new stories about quality and reflect their personal value system which is egalitarian and anti-elitist.”
Since status symbols and conspicuous consumption are out, communications to the affluent and HNW – the entire look, tone and feel of communications – need to be carefully executed. Appeal to their intellect and their ability to recognize quality. Deliver on service essentials. Be careful with elitist expressions and positioning that may have worked for you in the past.
Spend time communicating the value of products and services which may require fee rationalization. A robust communication of benefits and the ability for your prospects and customers to seek and find detailed information are critical. There’s no longer a guaranteed pay-off to leveraging elitism as the reason to acquire your product, given your customers desire to “stay undercover.”
SOURCE: Luxury Daily, “What Luxury Marketers Should Expect in 2015,” (January 2, 2015).
