Study uncovers key to Luxury Brand loyalty

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By: Wise Marketer Staff |

Posted on June 23, 2004

Luxury Brand loyalty is the result of consumer aspirations and psychology matching corporate strategy, and can even be seen as a scorecard for the accuracy of that match, according to Unity Marketing.

Through brand name recognition, logos, imagery, and tag lines, marketers hope to forge lasting emotional connections with customers, which suggests that the brand has become a key connection between corporate strategy and consumer psychology.

In the luxury products category, brands take on an even more complex and demanding role in linking with the consumer. According to Unity Marketing's latest report, 'Luxury Market Report, 2004: Who Buys Luxury, What They Buy, Why They Buy', it is no longer enough to simply create brand name recognition: Instead, luxury marketers must stimulate fantasy, aspiration and desire in the consumer. If that corporate strategy connect with the luxury consumer then brand loyalty usually follows.

Brand as media and message
"In today's hyper-emotional marketplace, where marketers use every trick in the book to push consumer's hot buttons and stimulate an emotional reaction, brands have become the medium and the message," explained Pam Danziger, president of Unity Marketing, and author of the book 'Why People Buy Things They Don't Need'.

While it is often thought that the status of a luxury brand is the key purchasing motivator, Unity Marketing's latest research among luxury consumers says otherwise. In fact, only in very few luxury categories does the brand play a major role in purchase motivation among the top 20% of affluent US households (those with a combined income of US$75,000 or more).

Importance of brand
Based upon an index that ranks the relative importance of brand loyalty in purchasing luxury brands, categories ranking highest included:

  • Home luxuries: Electronics and photography equipment (index 167, meaning that brand is 67% more important to the luxury consumers' purchase decision than the norm), kitchenware, cookware and households (index 147), and tabletop, dinnerware, crystal stemware and flatware (126).
  • Personal luxuries: Automobiles and recreational vehicles (168), watches (129), and fragrances and beauty products (125).
  • Experiential luxuries: Spa, beauty services and cosmetic surgery (110).

Brand loyalty was found to be highest in categories that are mechanical in nature (such as gears, movements, wheels, and motion) and those that are highly personal in nature (such as cosmetics, beauty products, and spa or beauty treatments services).

Luxury brand characteristics
According to Unity Marketing, high brand loyalty categories are characterised by intense competition among marketers, with the top brands being those that forge the strongest connection with the luxury consumer. But the luxury categories with low brand loyalty, such as jewellery (index 40), home decorating fabrics, window and wall coverings (index 59), highlight opportunities for new luxury branding strategies because the competitive playing field is still very much open.

But, according to Danziger, luxury marketers must be attuned to the concept of performance when planning their branding strategies, because luxury brand performance relates directly to how the product delivers or performs experientially. In other words, it is through the performance of the brand, in both tangible and intangible emotional ways, that the business delivers luxury satisfaction to the consumer.

Change in attitude
"The concept of luxury brand performance must be freed from a mechanistic definition and seen in the light of experiential marketing," said Danziger. "Luxury jewellery's 'performance' is in the feeling you get from wearing it. Home fashion such as luxury fabrics and rugs perform in the home as an expression of your good taste, or by imparting a peaceful and serene home environment."

The concept of luxury brand performance connects both the intrinsic definitions of luxury (i.e. quality performance, design performance, and uniqueness) with the experiential - how the brand makes the consumer feel and the way they experience the luxury. Luxury marketers must design and produce the 'best of the best' product, and make sure that it delivers the emotional and experiential satisfaction that the luxury consumer desires.

Details of the report are available on Unity Marketing's web site.

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