Luxury: a market with special characteristics
What are the defining factors of a luxury brand? Price is just one of them.
Talking about luxury can generate a misconception: thinking that everything expensive is luxurious.
The truth is that, to be considered luxury, a product or service must meet certain conditions in addition to its price.
What are the defining factors of luxury brands?
For decades, various authors have established guidelines for identifying luxury brands. Currently, with new consumption patterns and with the addition of digital communication channels, luxury is defined by the following factors:
1 The Price
Price is a deciding factor for luxury brands regarding their classification. Although there is a more recent category that speaks to us of accessible luxury, a high payment has always been related to the exclusivity of a product or service. However, it is only one element since within luxury brands there are no comparisons nor competitions based on their price.
2 Rare and/or high quality raw materials
Rarity refers to scarcity and luxury makes use of special raw materials. They can be natural or made-to-measure. For example, we can talk about cloth, gemstones or precious metals that differentiate it from another product aimed at a mass market. Of course, the materials must be of an undeniable and exceptional quality. On the other hand, if it is a consumer product within a gastronomic experience, we can talk about differentiated wines, cheeses and spices.
Craft refers to the transformation of a raw material or product through manual work. Generally, such work is linked to a traditional or contemporary trade, whose personalized execution gives it a unique character. A masterful execution can elevate the craft to the category of a work of art.
4 Product exclusivity
Exclusivity is contrary to mass selling. If a product or service is massively marketed, it is not exclusive. Therefore, exclusivity is related to production volume, price, and sales channels.
It does not happen in all cases. But, with the new demands of the market, more and more brands are offering to personalize their products or services. Personalization can range from a choice of tone in a garment, to the choice of places or activities within luxury tourism.
6 Point of sale experience
The service at the points of sale of a luxury brand is distinguished by its quality. The unique customization and experience offered to the client must be a reflection of their exclusivity.
7 History and authenticity
Many luxury brands have a history and carry with them a legacy of decades. Others, more recent, seek to impact and transcend from the values that are part of its essence: products and services that contribute to environmental or humanitarian causes, or that transmit a social message.
In any case, luxury brands seek to communicate authentically through their products and services.
There is no ruling on what is the most important factor in identifying a luxury brand.
There are those who agree that price is the most relevant factor when defining luxury. Others consider that the most important thing is the perfect execution of a craft work. Some give more weight to exclusivity.
Regarding quality, it is stated that this is inherent to luxury, that is, there can be no luxury if there is no superior quality in the product or service.