Here is a direct link to this new LinkedIn group and I invite you to join it!
Another LinkedIn group recently created by SCHMOOZY FOX is called Affordable Luxury. It is also very relevant to all those who are in the business of building innovative, striking (aka "funky") brands. Here is the direct link to this LinkedIn Group.
In one of my previous articles called How Funky Brands Can Be Profitable, I discussed how a consumer product or service could succeed if positioned in the affordable luxury segment. This segment can also referred to as mass luxury or new luxury.
From SCHMOOZY FOX's perspective, there's a close link between two groups.
The Affordable Luxury group falls nicely with the concept of funky brands.
There are several ways of looking at it.
In fact, most of SCHMOOZY FOX's clients are consumer goods or services seeking to craft a brand strategy that will aim at their positioning as affordable luxury brands. And in our experience, most funky brands are exactly affordable luxury products or services!
Just have a look at our Funky Brand Interviews with all those brilliant businesses that have been built based around such elements as creativity, design, affordable luxury and fun!
SCHMOOZY FOX invites you to become members of one of both groups on LinkedIn!
Schmoozing and fun are guaranteed! :)
I've just come across a series of thought-provoking posts on springwise. Their common theme is brands trying to build loyalty with online tools. Whereas some of them do it in a democratic and "inclusive" way, others opt for "exclusivity". Let's see how this might result in their brand positioning. One article describes a hotel in NYC which has set up an online forum for its guests. The Pod Hotel offers budget accommodation for young travelers, and the forum is a brilliant solution to help them connect to each other in real life, and have fun together in NYC. It clearly addresses the pain particularly of those who travel alone and don't know anybody in New York City.
This is a brilliant idea, and The Pod Hotel is surely on the good track of creating some valuable loyalty with this simple online solution. My advice is that it should definitely do a bit more to make this feature known on its website. As it stands now, the site fails to communicate it. I don't know if it's a planned move or not. If yes, I suppose that the reason might be that the hotel works at capacity most of the time, in which case the forum is only there to trigger repeat visits rather than recruit first-time customers.
Another idea featured on the same site is an online social network launched by the airline KLM. The online network is not targeted at all KLM's customers, but only frequent flyers.
For the moment, KLM has set up two online communities -- one for China, and another one for Africa. Essentially, the main target is entrepreneurs who all share the same challenges working in emerging markets. They can discuss issues of common interest and network online, which triggers encounters offline.
KLM even organizes offline networking events for the online community members both in China and throughout Africa. KLM says that its online social community is "exclusive" and by invitation only. My guess is that this exclusivity is tied to KLM's reward program which actually makes sense.
Think of it: the more you fly, the more chances you get to meet like-minded entrepreneurs. And the better you should get rewarded by an airline company for your loyalty. So, this kind of "exclusivity" achieves both goals -- it rewards frequent flyers whilst giving them a possibility to socialize.
I also want to address another kind of "exclusivity" which rarely does anything good if a brand seeks positioning in the luxury or affordable luxury segments.
I've come across many brands, especially various online shops, which try to create an aura of exclusivity out of .... well, pretty much nothing. I find it amusing when some freshly launched site writes me to become their member "by invitation only"and start shopping there.
In this respect, the example mentioned on springwise is Claseo, a recently launched "luxury" label. Unfortunately, it's not possible to have any idea about how luxurious its designs are because you can't enter their site. The reason is that the site is "exclusive" and by invitation only.
I think it's counterproductive to seek positioning as a luxury brand through such self-limiting "exclusivity". Whereas this might be feasible in instances when brand equity is already at its peak, this move is rarely a good solution for a start-up. This is particularly true for web start-ups. Building a user base is of ultimate importance for them, and certainly a key to creating a strong brand. I have written and spoken about this on several occasions.
Looking at three examples above, the "inclusivity" of the budget hotel in New York in fact makes it truly exclusive. By solving the real need of its customers -- a simple human desire to socialize -- the hotel succeeds in occupying a very lucrative segment of affordable luxury. The same refers to KLM's online social network for frequent flyers, which helps entrepreneurs connect and socialize in real life.
Funky brands are smart because they understand what true luxury is, and although it may sound counter-intuitive, in many cases being inclusive and democratic, rather than "exclusive", is what really helps build a great brand!
In December 2008 I published a post called Right moment, right message, right place: how to build luxury brands using social media. It seems that only a year ago most luxury brands were so hesitant to embrace the power of social media and the Internet in general!
Back then, I personally had a bit of a challenge to spot the funkiest first-movers in social media among luxury brands. There was a good debate on some LinkedIn groups related to my search for such pioneers, but the overall opinion of those I asked to share their examples was this, "Luxury brands won't embrace social media because they fear to lose their exclusivity appeal."
And look what's happening in December 2009!
Stefano Gabbana, a co-creator of the Dolce&Gabbana brand, is on Twitter (@stefanogabbana).
Chanel and Alexander McQueen have Facebook fan pages.
It looks like luxury houses have taken note of the fact that even people with the biggest purchasing power -- their potential customers -- hang out on various social media platforms.
"(The web) is very important by the sheer fact people are spending more time online, on Facebook, Twittering," said Emanuel Ungaro's chief executive, Mounir Moufarrige, quoted on brandchannel.com.
As I mentioned in that article a year ago, even if resistant, luxury brands would eventually explore social media, because their customers would digitalize their brands for them. It looks like SCHMOOZY FOX's predictions are coming true to life! ;)
Is this democratization of luxury? Let's watch this trend and see what shape it takes next December.
An important one is the fact that they are not driven by innovative and creative ideas alone, but are or have the potential to be profitable. This, of course, requires a good deal of business development and brand building work done.
In today's post, I want to talk about how your brand can benefit and become profitable from mass luxury brand positioning.
Mass luxury (often referred to as affordable luxury or new luxury) brand management essentially combines characteristics of building brands that have the luxury and exclusivity appeal, with techniques that can lead to relatively high sales volumes.
My marketing professor at ESSEC (a Paris-based business school famous for its luxury marketing program) was a former Armani guy. He certainly knew a lot about sustaining those "old luxury" brands like Chanel and Gucci (and Armani, of course). But he was nevertheless fascinated how some innovative companies managed to combine classical Kotler marketing with the know-how of luxury brand management by building extremely funky brands in the mass luxury segment.
Some of these brands were created completely from scratch (for example, Coach and Victoria's Secret in the US, Agent Provocateur in the UK, and a Dutch brand Marlies Dekkers whose founder spoke in an interview on this blog), and others were born under the umbrella of already existing "true luxury" brands (for instance, Armani Exchange as a modest brother of the brand Giorgio Armani). Over the past decade or so, many brands were launched to satisfy a desire for a better lifestyle expressed by wealthier middle class eager to splash out on previously unaccessible items.
So, what can you learn from mass luxury brands in order to make your brand profitable? You'll be surprised how many potentially funky start-ups fail just because they are disconnected from their potential customers. So, the most important rule of thumb is that you gotta get to know your consumers, their lifestyles and their desires as much as you can.
Stop for a moment doing this tedious market segmentation based on geographical location, age and gender. This stuff tells you nothing about your consumer's deep emotional needs and desires. Unless you've understood what emotional connections they can make with the products you sell, you'll be wasting your time.
Besides that, keep in mind the following factors which, in my view, may trigger consumers' interest in purchasing your funky mass luxury goods or services:
- The lifestyle factor: Whereas splashing out on a single Gucci outfit is an extremely rare occasion for most people, and buying a Lamborghini is simply out of the question, a sizable market out there still wants to have a luxurious lifestyle. "Luxurious" can mean different things for different customers, and the trick is to find your loyal segment for whom your product will be a luxury. The right combination of such items as furniture, consumer electronics, food and drink, beauty products and fashion can do wonders and make our lifestyles luxurious and enjoyable. Not every item in your customer's home has to be of super funky design and great quality, but make sure your brand can end up on your customers shelves!
- The self-worth factor: people appreciate goods and services that can contribute to their enjoyment of life (e.g. high quality perfumed candles, a meal at a gastronomic restaurant, or a visit to a spa) and feeling of self-worth. Do you know what contributes to the feeling of self-worth within your customer segment? If not, the first step towards making profits is to find that out fast and act on it.
- The funky factor: people like standing out from the crowd, and making a statement about who they are. They often express themselves through the clothes they wear, or items they use (computers, phones, cars). If your customers have created emotional connections with the products you sell, and even made them part of their personal brand, you've for sure kept the funky factor in mind successfully! Again, if you know how the attributes of your brand can enhance the funky factor of your customers, you've certainly moved forward towards a beefed up bottom line.
Mass luxury is the most profitable segment of many markets because attractive margins can be combined with sales volume. But the challenge is, mass luxury brands do not sell themselves . They are driven by hard-to-define factors like fashion, word-of-mouth, and constantly evolving preferences of your customers. If you've managed to apply a rigorous framework to identify these factors, and closely monitor them, you'll certainly be on the path towards making sizable profits and building funky brands.
Finally, a good article on the subject that I can recommend is "Luxury for the Masses" by Michael J. Silverstein and Neil Fiske, published in Harvard Business Review in April 2003. Have fun learning the tricks of the funky brand trade!
Is it time for luxury brands to get engaged in more pro-active marketing in social media, or does the concept go against their brand values? This blog posts addresses these issues and gives a couple of examples to illustrate them.