Posted at Mar 14, 2019 2:46:00 PM by THAT Agency | Share
For small and emerging businesses in the luxury goods space, the thought of competing against behemoths like Tiffany, Gucci, Chanel, Hermes, and Dior is not only intimidating - it seems impossible. And it will be if you use traditional marketing techniques and try to play on the same field, so to speak. However, when you build a niche luxury brand, you can capitalize on current trends in the market, grow your profits, and most importantly, wow your customers time and time again.
What Are Niche Markets in the Luxury Space?
Your niche is your specialty; it is what you do, and do exceptionally. In past decades, small, profitable luxury brands were scooped up by investors. Seeing a goldmine, new luxury goods stores popped up like weeds.
But this over-expansion violated a fundamental tenet of luxury: that it is exclusive. Instead, goods became overproduced, and customers no longer felt as if they were buying something scarce and special. This gave rise to “mass luxury.”
There is a marked shift in today’s consumers: they do not want mass-produced luxury items. They don’t want the same diamond engagement ring as five of their friends; they don’t want the same pendant, or the same handbag, the same little black dress, the same watch, or the same cuff links. They want something rare, unique, and genuine.
And they don’t just want to own a product. They want to relate to the story behind that product. This is true across luxury demographics, but is especially relevant to millennial buyers. Yes, they are purchasing luxury goods, but they’re doing so for the narrative and the experience, not simply for the earrings, the luggage, or the tailored suit.
These factors position niche luxury brands to capture the attention of their target audiences and carve out a space for themselves in a highly competitive market.
Key Elements of a Niche Luxury Brand
As a niche luxury brand, you are uniquely positioned to build deep and long-lasting relationships with customers. You’re not trying to be all things to all people; you’re trying to be everything to select clientele in a given space. Specificity is essential: when you’re niche. You make the choice to turn down wholesale opportunities that, while they would increase cash flow, would also dilute your brand.
Will staying ultra-specific (e.g., limiting product lines or offerings) restrict you? When you are in the luxury space, the answer is no. You want to limit your audience, build loyalty and relationships with them, and cultivate ardent customers who are also brand advocates and ambassadors.
Successful niche brands also recognize the power of their stories. As mentioned, customers want more than products - even beautiful, unique ones. They want to be part of the story, to relate to your brand, and to connect. When you tell your narrative, and weave it into all your messaging in person and online, you give your niche luxury brand a personality and an identity that resonates with your customers.
Talk about your beliefs, values, and the driving force behind your brand. Share a glimpse into your creative processes. Be transparent in terms of the sourcing of your materials and supplies.
Niche markets are conscientiously limited and specific: this brings the true meaning of “luxury” to life. Your niche luxury customers want to feel valued, special, and that they are receiving both a unique product and a unique experience.