How Brands Become Luxury: A 9-Step Process
Rolex, Rolls Royce, and many more exclusive brands are luxury brands meant for the powerful, ultra-rich, and elites of our societies. But how do brands become luxury brands that people all aspire to be able to own to enhance their own status in society?
Luxury brands often display a certain set of traits, or a combination thereof, that are usually associated with wealth and prestige in the Design, Association, Experience, Quality, Price Tag, Image, Market, and Legacy of their brand and its products or services. Focussing on these aspects of your brand can help you to become a luxury brand.
Now let’s examine these elements in more detail for you to understand how they work and create an action plan for your brand becoming luxury.
The design of a product plays a big role in how it is perceived by the masses.
An inherently “good” design will always sell and will often sell big. Good design is often one of the predecessors and factors in how “luxurious” an item will be.
An example of this would be Apple products. The design of Apple’s products like their choice of material, display, user interface, and general aesthetic is at the very least consistent. Apples became luxurious through how they package and present their products. They wouldn’t be able to do this without first making something that people would find appealing and suggestive.
What separates a “cheap” looking design from a luxury type design?
The answer to that question is the amount of effort, talent, and time that was put into a design. Companies pay up to millions of dollars for a good logo. This is because it’s understood within the corporate world that not everything is just functionality or hard facts when it comes to appealing to customers. A feeling or a humanistic aspect is needed and that’s where design comes in.
Cheap design is often fast, quick, and convenient. It’s often the most accessible and easiest way to do it but ultimately may end up hurting your brand and keeping it from being accepted as a luxury brand.
Luxury designs take a lot of time, resources, effort, and talent to create. Designers who have mastered their craft often know how certain characteristics of what they are designing would affect the perception of people on that product.
An example of this could be found in Architecture. A badly-designed house would always appear cheap compared to a well-designed house even if they were made from the same material. The composition, programming, aesthetics, and materials used adds up to creating a house that real estate agents can easily sell.
The things that people associate with a product often determines if a product is a status symbol. Luxury brands create this image that their products contribute to a person’s personal image and how it improves others’ perception of them.
It’s often said that we shouldn’t judge a book by its cover but the truth is before people get to know a person, they often have judgments based on appearances. This line of thinking is one of the many reasons why luxury products are sought after.
An example of this would be in clothing brands like Louis Vuitton or Gucci, which are established fashion houses, being worn by celebrities and the like. People end up characterizing these brands with these types of people. It may not be accurate but it works because it’s something that people see all the time and it contributes to a “story” in people’s heads.
Another example of this would be the iconic “Supreme” box logo. The brand itself does not consider itself a luxury and yet those into streetwear culture do. The exclusivity of the brand and the celebrity association Supreme has made it so highly coveted by streetwear enthusiasts that Supreme’s products sell out in seconds.
The reason why companies shut out so much money and endorsement deals with celebrities is that celebrities are often seen by the general public as high-status people, including wealthy people and politicians. Knowing this and playing on the belief of consumers that if they buy this product from this company they would be able to meet this sort of inclusion in status.
The products endorsed by celebrities are often viewed as high status because of those celebrities associate themselves with it.
The value of a luxury product is providing an experience that not everybody has the opportunity to afford. These experiences are sought after because they improve the quality of your life by offering a special convenience.
Companies capitalize on the value of their products through marketing it as something that can help you improve your daily life in terms of your daily activities. The new way that companies do this is by highlighting the features of this luxury set up.
An example of this would be iPhones and their AirPods. AirPods are considered a luxury product because of its price tag, marketing, and the new experience it offers to iPhone users. They offered it with the iPhone 7 as a new technology that offers a different experience compared to regular earphones.
Another example of an experience that may be more relatable is when you enter a boutique shop versus when you enter your local H&M or Gap.
When you enter a boutique there’s a different air of prestige and taste in terms of ambiance, the service, and the general look inside the boutique store. This provides that experience of going inside something different from a regular commercialized clothing store. It gives this feeling that you are in an art gallery or maybe a fashion house.
The packaging of both product and branding gives you this feeling that you are separate from the rest or that you have a certain privilege that not many can relate to. The point of luxury is the exclusivity based on who can afford it. Use this by capturing the higher end of the market and bringing it the best services products and experiences.
Quality and work
For luxury products, the golden rule is quality over quantity.
How well A product is made depends on the material, process, and manufacturing. The quality of a product also determines how well it can be marketed, and serves as a justification for the price tag. An example of this would be how designer brands would always include the source of the leather they use and try to integrate the process of how their products are made into their marketing strategies.
This makes their product look like it’s world-class, makes it more marketable, and serves as a justification for the price.
Another example of this would be the market for Japanese denim. The price for Japanese denim starts at $200 and goes up from there. The reason for this price tag is because of how much effort and specialty are required to create these jeans. Companies make sure to point this out and make it a highlight in their marketing.
They do this by describing how the product gets made. It starts with the process of how Japanese cotton is carefully selected and then brought to specialty mills, which were specifically created in order to create the product, and then they show the special work that would go into this product in order for it to reach the quality standards of the end product.
These products become luxury when businesses highlight how through such a complicated and resource-heavy process in creating a pair of these jeans, it makes it one of the best and highest quality products in the world.
The price of a product determines how much the product is really worth to customers and is justified by good design, good associations, providing a lot of value, and being of the best quality.
The concept of luxury is that it should be objectively and subjectively the best thing that people can get of that certain type of product, be it clothes, houses, cars, etc.
The meaning behind the price tag is establishing how if you own this certain item, then you have money and by the association of having the money you are seen as part of a higher status in society.
An example of creating this image and creating this package would be Virgil Abloh’s Pyrex Vision brand. Pyrex did not have any of the resources, quality, or value compared to other clothing brands within the same price range.
Using good marketing and setting the standard with their price tag, it was perceived by the streetwear market as a luxury and high-end product which instantly gained popularity and sold out.
Many rappers and famous personalities started wearing the brand, and in combination with a high price tag, Pyrex Vision was catering to the higher end of the market.
During this time streetwear culture was becoming popular in mainstream media. Rap and hip hop was the most popular genre in the world. Brands realized this and started capitalizing on this trend. Luxury brands such as Supreme, Ralph Lauren, and Burberry have all partnered with streetwear brands in the past decade.
A good way to quickly establish yourself as luxury is by establishing yourself early on as an authority within an emerging market.
Another example of how important an image is for luxury branding is Coach. Coach used to be a well-established luxury brand that was meant for the high-end consumers in their market, however, for a while they started marketing themselves to the masses. They did this by offering discounts and by opening outlet stores.
Of course the opportunity for luxury at a lower price was perceived by the market as an opportunity to have a taste of that luxury lifestyle. Coach made a lot of money during this time because of the sheer number of sales received from the masses through outlet stores and because of the many discounts.
However, after a few quarters and when the market got saturated, Coach starting losing sales. This was because their brand perception was starting to fail and they were now being perceived by the high-end of the market as a less exclusive brand. Now Coach is attempting to re-enter that portion of the market by bringing back the exclusivity to their brand.
How can you claim that your business is a luxury brand?
Being a luxury brand is determined by the market in which the demand for your products or services is among higher-income sections of your market. This also includes a lower demand for your products in lower-income markets.
Remember the definition of what a “luxury” is. It’s synonymous with privilege, riches, and quality for a reason.
What separates luxury brands from regular brands for people is that, surprisingly, the more expensive a product becomes, the more sales it tends to generate. Businesses use the justification from the manufacturer to the customers that this product is of better quality compared to regular items. Brands are required to be the most high end within the industry in order to justify what they charge their customers.
There are two types of luxury brands. The more globalized and corporate, which cater to bigger markets throughout the globe and smaller, more localized luxury businesses that excel within their own markets.
What may be luxury for one person may not be a luxury for another person, because the definition of luxury is an item that increases in value and sales as the price goes up.
An example of local luxury would be a regular haircut from your technical-vocational school barber compared to your artisan barber from Italy. This could simply also be your nearby Japanese restaurant with 5A wagyu steak compared to your nearby McDonald’s. These other markets are simply luxury because they provide exceptional quality, service, and experience.
The other form of luxury is more on branding due to their large scale. This includes clothes, cars, etc. These aren’t specialized items but rather they are established brands that cater to the higher end of the market.
There seems to be a trend that the older a brand is the more it tends to be luxurious. This is simply based on the fact that through years of business and experience your product will be ahead of the market, but this mostly depends on how well it is managed and maintained.
Take for example Ferrari and Lamborghini which are both brands that are a lot older compared to newer sports cars like Tesla. They started as established sports cars and from there, by combining that aspect of being a sports car and the regular everyday car, you get the expensive luxury supercars that people can easily recognize on the street as being an indicator of wealth.
A simpler version of this would be the legacy of Rolex, which has been a watch company that was established over a hundred years ago, with a very rich history. Everyone who knows anything about watches knows what a Rolex is, and the brand has established and ingrained itself as being associated with the concept of what a watch should be.
The branding of these products will live on as being established and trusted, and through traditions they are able to produce a unique and superior experience to what other new companies can. They often go for a look that’s considered classic, timeless, and traditional that often gives that presence of higher society.
They say this through their design, which is considered very ornate compared to the current minimalistic trend now. These brands offer a different kind of elegance and prestige to them that other companies have not achieved yet.
Brands becoming temporarily luxury?
In recent years there has been a trend of regular consumer brands becoming temporarily luxurious by having releases that are highly sought often.
An example of this would be the Nike air mags. Nike has never advertised itself as a luxury brand. It’s meant as a sporting band for the people and the average athlete, but with this release, however, they have shown that they can reach the luxury market by releasing a limited and high-quality product with completely different tricks and features that offer a new experience combined with a high price tag.
Another example would be the Nike Air Jordan 1 Breds. This may sound like a stretch, but the reason why this shoe is considered a luxury for a Nike product is because of its history combined with its scarcity, which makes it the price of 10 shoes.
The reason why this shoe became so legendary was that Michael Jordan was not allowed to use this shoe and was fined every game. Despite this, Michael Jordan decided to still wear the shoes. This history and the low stock of the shoe made it an item for collectors, thus becoming a luxury.
An example again of how regular brands become luxury or try to attempt to reach that market, is Adidas. Adidas partnered with Kanye West to create the Yeezy line which is both a fashion and footwear line that has become very popular.
The Yeezy’s used to be considered a luxury brand due to their price tag and demand, however throughout the many releases of the Yeezy shoes and many choices the market has decided that the brand has lost its status as a luxury and instead seen as an expensive item that is somewhat accessible.
There are however some exceptions to this label as some Yeezy’s are so limited in their lease that they are worth easily 10 times over that of the original price.
The point here was just to illustrate how certain products can obtain luxury status and how they can lose that luxury status.
In summary here are the key points of the steps I’ve listed on how brands can become luxury.
Design: The design and aesthetics used in all aspects related to the product and the business will have an effect on its perception as a luxury brand.
Association: What people associate with luxury is wealth, power, fame, and exclusivity. Your brand should have at least one of these traits for people to think about your business as a luxury business.
Experience: One of the factors that contribute to why people want to buy luxury products, is an experience that is different and on the high-end within your market. The experience you offer to a customer and the quality of this experience is what will make your business a luxury business.
Quality and Work: Again one of the factors that contribute to a luxury product. Ensure that what you are selling is one of the best products within your market and it will naturally be highly sought after. Good quality and specialized work are what will make your business a luxury business.
Price Tag: This will contribute to how your brand is perceived as a luxury product. The higher your price tag the more that consumers will assume that your product is high-end and of the highest quality. This also contributes to associations with your products being for the higher-end for your market. A justified high price tag will make your business a luxury business.
Image: The image of your brand is the complete package. The visuals, the prestige, the quality, and the price tag. All of these are what will serve as a basis for when people judge your brand and what they will use to assess whether or not they should buy your product. Working on the first 5 steps and executing well will make your brand image luxurious.
Market: The market you enter will determine if your product will be considered a luxury by consumers. Luxury is expected to be at the higher end of the market and only accessible by that higher end. Aim for this target audience and the market will see you as a luxury business.
Legacy: Establish your brand as a cornerstone of your industry by either innovating within the market or keeping to the traditions and executing it well. Look at what other brands did well and how they captured their market when they first started out and apply it to your own business to become a luxury brand.
How regular brands can also achieve luxury: Use the examples cited to elevate your current business into a luxury business. Create a new product or line and apply these steps to achieve luxury status in your market.
Having a luxury brand that serves the powerful, ultra-rich and elite individuals of society can be very rewarding, but comes with it own set of challenges.
Nonetheless, if you click on this article to learn more about what you can do with your brand to becoming a luxury brand, I hope this answered all of your questions and that you will be on your way to creating the next Rolex or Rolls Royce, to name only a few.