Despite the title of the article, we are not quite yet “post” recession. Still in the midst of an economic downturn, the only difference today, our third year in a depressed economy, is that we no longer feel the pressure and urgency of being in crisis mode. We have all adapted to certain fiscal occurrences and accepted them as our new reality.
This acceptance has resulted in behavorial shifts that have altered our perceptions and actions, changes we will continue to feel long after the recession is over. Because these shifts in thinking are not temporary, luxury brands must learn how to market to this post-recession consumer in order to successfully manage their businesses now and in the future.
Fashion’s Collective had the pleasure and opportunity to be present at the recent American Express Publishing Event where they unveiled the results of a study on luxury consumers, a group they have been tracking annually since before the recession hit.
Measuring 2,400 individuals who possess varying degrees of wealth (the minimum was earnings of $100K/year), the findings show significant and valuable changes in the mentality of affluent consumers that affect how marketers position brands and foster relationships. Shifts in how people approach discretionary income and luxury goods have been taking place since the start of the recession, and it is now up to the brands to understand their new consumer.
These include a shift from full price to best price (this is not necessarily the same as sale price), from splurge to save, from emotion to rational exhuberance and from impulse to due diligence.
So what do these shifts mean, exactly?
We have previously covered how consumers are using the web to conduct research prior to making a purchase, and this new data enforces that consumers are more informed than ever (see article,Role of the Curator). It’s no longer about making a quick impulsive purchase, but instead in making an educated and savvy one. This can ultimately result in the same item being purchased, but the rationale behind the purchase has changed.
If people are now so well informed, the brand needs to re-position in order to effectively address this new consumer. Marketers now need to make a solid case for why their product is extraordinary, and back that claim up with supportive content and information that will arm the post-recession consumer and validate their purchase choice. It will be the brands that shift marketing tactics to align with the consumer’s shift in perspective that will ultimately come out on top in a post-recession era.
So how do brands translate this new understanding of their consumer in baseline marketing efforts?
The post-recession consumer is all about finding value. Value can be perceived and articulated differently, depending on the strengths of the brand and product offering. Perhaps value means quality of the material, craftsmanship, or country of origin. It could instead be the brand’s heritage, the designer’s inspirations or even a celebrity endorsement.
As marketers it is our job to identify the strongest values and ensure they are communicated to our customers. Post-recession, shoppers are researching and comparison shopping. They are performing the due diligence needed to make an informed decision. As a brand, the goals is to have the information readily available and accessible to the savvy shopper. There are two main touchpoints the brand can control without modifying the brand image:
1. Through the sales force. The Harrison Group reported that, of luxury brands, a whopping 70% of their sales forces are currently not performing in this new economy. It is up to the brand to instruct their front line in the value of their merchandise and the value of the brand story so that these values can be communicated directly to the customer on the sales floor, the place where the customer is faced with a real purchase decision.
2. Through the website. There are various implications for the brand website, the most basic being to have one that appears as a top result in the most commonly used search engines. From there, ensure that information exists on the site that conveys the value of the brand and prompts users to continue exploring. Retorial style online merchandising is something we have discussed before, and this speaks directly to adding value for brands and products through perspective, editorial content.
The good news in this brave new world of luxury is that optimism is up and there is a 7% increase forecasted for luxury sales.
Photo Credits: Change the Thought Poster, Apartment Therapy
Research Credits: Survey of Affluence and Wealth in America, 2010 Conducted by the Harrison Group and American Express Publishing
Edited by: Gina Conforti
