In this guest post, AFFINITY strategist Caspar Yuill (pictured below) offers his top tips for playing luxury marketing AND a few more for improving your own social cachet too …
Consider this brand proposition. A product with a ridiculously high entry price; extremely limited availability, to the point of having a waiting list that can stretch for years; and a pervasive sense of needing to prove you’re worthy of parting with an exorbitant sum of money for the privilege of shopping success. You would be forgiven for thinking this is a doomed brand proposition. In what world could something with such a difficult customer journey succeed? It would be the Birkin universe.
The Hermes Birkin handbag (main image), which can cost you between $ 10,000 and $ 300,000 (the same resold for half a million dollars recently), requires serious strategy and effort. You may forget to walk into a store and ask to buy one or even see one. You have to be a Hermès customer who has demonstrated your love and spending before the coveted and limited bags are presented. You must prove your worth before you get the privilege of owning the holy grail of bags.
It may sound absurd according to rational economic theory – someone who wants the optimal utility of an item would never choose a luxury product with so many other options. That said, luxury shopping is actually quite rational when you consider social status theory, which also gives us clues and avenues for successful luxury brand marketing.
The basis of social status
The pursuit and display of social status often gets a mockery when an expensive car drives by, or a glance after seeing an outfit worth $ 20,000 strutting the catwalk. This is not all that outrageous or surprising, however, as the pursuit of social status is closely tied to our evolution and biology.
Humans understand and recognize social status from an early age. Even pre-tongue toddlers can grasp social domination, and anticipate that social domination leads to more rewards. Social status may have health benefits – study found that increased social status can help us respond more productively to stress. And luxury is a viable route to getting more: a study found that the display of luxury labels over anonymous brands leads to more favorable perceptions and obtains preferential treatment for the wearer.
This idea of social status is not new. Economist Thorstein Veblen invented the use of conspicuous consumption to signal social status in 1899 to describe luxury goods that challenged the conventional economy. Unlike the usual relationship between price and demand, whereby when the price increases, the demand decreases, Veblen goods see the demand increase as their price increases. The likely explanation is that Veblen goods are scarce and in turn act as a social signal that the person has an appropriate amount of resources, either means or social ties, to obtain them. Collect enough of these signals and your social status increases.
Status across social groups
Social status is not only limited to class structures. Social status can be acquired in any group and vary depending on the group. Signals that would show people’s social status in the corporate world, like a designer watch or frequent LinkedIn posts, are very different from signals that show status in skate culture, like nailing a backside tailslide, for example. example.
The importance of proof of work
What I think is the cause of the Veblen goods is the way these items display proof of work – the demonstration of resources like time, money or effort, to be able to show a signal that increases status. social.
The Birkin is a classic example of proof of work. The wearer indicates that he has done an important job in purchasing Hermès products over a long period of time and therefore by holding this bag he is a person of considerable status. Another good example of proof of work is used by luxury streetwear brand Supreme, which uses limited edition drops so that its wearers can show off their proof of work by acquiring these rare collaborations and products.
A cheat sheet for applying social status theory
Identify who and what?
- Identify the target audience, the group you want to gain social status with, and the behaviors that create those signals.
- Psychographic research can be useful here to establish a large audience. For example, a recent study by Mindshare America identified 5 distinct luxury personalities, each with different strategic considerations for marketers.
- Once you have an audience in mind, do some qualitative research to identify the behaviors that lead to social status. It can be as simple as walking down the street and taking note, as nifty as delving into forums and captions, or as complex as conducting ethnographic research.
Build proof of work
Think about the social status signal
- Consider how important the signal should be to your target audience. A study found that as luxury goods got more expensive, their labels and logos got smaller.
- Indeed, the higher the status of the group, the less likely they are to want to associate with the lower classes. To this end, they will want to be more subtle in pointing out to each other which class they are in. Think of the Maison Margiela jackets, with their four stitches, versus a technicolor Kenzo tiger. Your price will affect your design.
Use your customer experience as a trial
- Establish a microcosm of processing within the brand experience that buyers can expect from using the product.
- For example, Net-a-Porter recently launched shopping experiences chosen for you and presented in your home, and events by invitation only. This experience of additional status in the brand suggests that it could apply outside the brand as well.
So, is this article just a way to elevate my own social status in the group I have chosen? Well yes, of course it is! But you could say that most of our behaviors are.
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