There is a recent phenomenon, somewhat paradoxical, that begins to gain momentum in the luxury market. It is called Secret Shopping. This trend invites premium and luxury brand executives to think about and eventually adapt to some good practices. Quo vadis, Luxus?
Sometime ago, I have read an interesting article about this phenomenon written by my good friend Susana Costa e Silva, PhD, university professor and marketing researcher, arguing that the economic crisis is driving luxury consumers to be more socially responsible and more discreet in the form of purchase and consumption. The article also quoted Milton Pedraza, President of the Luxury Institute – whom I met in New York City to discuss ideas: “It is distasteful today, to adopt exuberant and flamboyant behaviours when buying luxury products and services“.
A friend of mine who lives in Spain and works as store manager for a very well known French luxury brand, recently told me over dinner that, in recent times the purchase by phone and internet of leather bags and purses has increased, because such customers still wish to enjoy their favorite luxury items, but do not want to be seen in the store buying in these times of recession.
An article published in the Universia Knowledge newsletter of Wharton Business School cites Roxanne Paschall, senior merchandising director of the Italian luxury brand Bottega Veneta: “It’s a little bit gauche to be ostentatious with your purchasing”. Customers are asking for plain white bags, no boxes, or requesting goods to be delivered later to their hotels. “They don’t want everyone to know. They don’t want to flaunt.”
I have found good food for thought in these three loose stories. The global financial crisis that we are living – which also is a consequence of a crisis of values – is slowly contributing to a change in consumers’ attitude towards luxury products and how they buy them. Apparently, luxury consumption for personal pleasure and discreet enjoyment is increasing, a type of consumption away from other people’s eyes. Some experts are already arguing that conspicuous consumption will no longer be standard in luxury markets.
However, this growing propensity for Secret Shopping does not mean that all consumers behave that way. Exuberant luxury shopping and consumption still have followers and seem to be a phenomenon with cultural and demographic characteristics, having greater adherence in groups of certain social status, age and geographic regions, around the world.
Edible gold is increasingly in vogue in luxury gastronomy and champagne that is served in some clubs in Monte Carlo, where more and more millionaires from emerging countries are habitués. A well known luxury nightclub in Sao Paulo, Brazil was pioneer in promoting a small fireworks show and a parade of attractive female dancers, each time a client orders the most expensive bottle of champagne in the menu.
Given the many luxury consumer profiles and the scope of behaviors ranging from discretion to ostentation, what can and should luxury brands do? Well, they should learn how to “read” the customer and provide each of them with the appropriate experience.
Of course this is not an easy task but it is crucial to win customer loyalty to the brand. Some luxury brands of tangible product, in the fashion, wine, jewelry, perfume and accessories sectors, or services brands in luxury hospitality, private jets, charming spas, the business of fun and unique sensations are increasingly creating the position of an Experience Manager or hiring a CHO – Chief Happiness Officer, a job position that I particularly like, to be performed by someone who combines technical training and talent to ensure the happiness of customers during the purchase of a product or consumption of a service.
There is plenty of work to do in this area. However, I would highlight two concerns that I believe are quite important:
- the development of online sales – which paradoxically grow in the luxury market – complemented with details that enhance the luxury experience when receiving and opening the package, at home or in the hotel;
- strengthening the management of customer compatibility (or the lack of it) – a typical practice of services marketing – both in store when purchasing the product and at the place where the service is consumed and enjoyed.
There are and there will always be those who seek simplicity, sobriety and personal pleasure in luxury consumption and those who want social competition and acceptance, enjoy ostentation or aspire to belong to an upper social level. And all of them are legitimate behaviours. It is up to the brand managers to decide who they wish to serve or learn how to deal with them all.
Marketing . Luxury . Innovation . Consultant and Speaker