The higher you shoot, the fewer short-cuts you can take.
Say this aloud – L.U.X.U.R.I.O.U.S.
Isn’t it amazing how even the word luxurious feels luxurious?
Soft, plush, and kind of thrilling. Sumptuous. Even the dictionary defines it as “the state of great comfort and extravagant living”.
But luxury isn’t about the price tag.
In fact, the price of a luxury product is the most insignificant factor of a luxury offering.
Luxury isn’t really about how much something costs.
Luxury is about earning the right to place a high price on a product or service.
EXAMPLE: TORY BURCH
(Yes. I’m aware that we’re talking about a lifestyle brand that’s at the high-end of mid-range pricing. But if you keep reading, you’ll see why Tory Burch is the perfect ‘poster girl’ for luxury.)
Smart and chic, Tory’s clothing is impeccably designed and meticulously crafted. All the pieces of her collections fit together, and work – on their own – to fit seamlessly into your existing wardrobe.
Tory’s also the FACE of her products and wears all her own clothes and accessories: She’s LIVING what she’s selling.
Everywhere you look – the Tory Burch website – and her social media channels, there she is wearing her own clothes; traveling places; designing new products; heading up workshops; visiting her studios.
Tory has a 29 room South Hampton estate filled with antiques and found treasures from around the globe. Tory makes no distinction between her clothing line and her lifestyle – which is very inviting & exciting to her customers.
(Everytime I open up an email from Tory Burch, I feel like I’m entering a secret world where only a select few receive an exclusive guest pass. Spoiled – without spending a penny!)
Here’s how Imran Amed, founder of the website Business of Fashion, breaks down the formula for Burch’s success:
“She creates beautiful things. But Burch also priced those beautiful things like a retail Goldilocks—not too high, not too low. The Reva ballet flat, named for Burch’s mother, was initially priced at $195 per pair. “My God, the shoes!” says fashion critic Robin Givhan of The Washington Post. “Someone who’s accustomed to spending $700 for a pair in the realm of Manolo Blahnik or Jimmy Choo can buy her shoes and feel like she’s getting a bit of a bargain. And then they’re aspirational for someone for whom Nine West is standard—but not so aspirational that it’s out of reach.” Millions of pairs of Revas have been sold, helping to herald the emergence of “affordable luxury.” It may be the most important segment in global fashion today.’
Add in the fact that Tory is warm & welcoming and constantly posting pictures of her home and her life, making her customers feel like they could easily step into that world as well. Especially if they’re wearing Tory Burch clothing.
(Tory Burch is one of the savviest marketers on the Internet. Even if you sell crow-bars, you need to get on her email list to watch her in action and get schooled from one of the greats.)
So why am I using a mid-range line as an example for luxury?
Because Tory is doing everything right.
Her world feels inclusive and exclusive at the same time.
Tory’s customers feel like they’re getting WAY more than they paid for.
She could raise her prices and people would still buy her products.
Unlike ‘The Mulberry’s Mishap’ she’s laid the groundwork…
: Her customer feel welcome in her world.
: They feel what they’re buying is worth the price.
: They feel they’ll be taken care of at every stage.
Laying the groundwork for a high-end luxury brand (even if you charge mid-range prices) takes careful thought, exquisite attention to detail, bone-breaking hard work, and truck-loads of patience. Not to mention risk.
As Tory herself says “Being an entrepreneur is hardcore.”
It’s important to point out that Tory had no background in business. And while she worked in the fashion design industry, she didn’t have any background in designing clothes. She studied art history at the University of Pennsylvania.
When she decided to start up her own brand, she’d been on maternity leave from her public relations gig at a major fashion house, and while her three sons were napping she would cold-call stores and buyers and ask if she could show them her image books.
These image books were not sketch-books of her designs – but rather a book of images she’d collected over the years that showed what she thought was missing from fashion and stores.
Guts? Check. Hardcore? Check. Patience? Also check. All from her kitchen table – sometimes until 3 or 4 o’clock in the morning – while her kids were asleep.
According to our research, Tory ended up working out of her kitchen with a team of six for 3 years before she officially opened the business in 2004 with $2 million of personal savings plus an undisclosed amount raised from 120 friends.
What was she doing doing those 3 years at her kitchen table?
Concepting. Designing. Creating the experience. Securing manufacturing chains. And making lots & lots of cold-calls.
Compare this 3 years of pure preparation & thoughtful planning with popular ‘Write A Bestseller In A Weekend’ workshops.
Why would anyone want to rush the best part of creating? The actual creating process.
90% of her inventory sold from her flagship store – on Elizabeth Street in NYC – the first day they were open. The first day!
Business started turning a profit in the second year. Sales passed $100 million in 2007, $200 million in 2008, and $500 million in 2011.
Currently the company is worth upwards of 3 billion dollars.
Imagine if Tory had tried to shortcut her success at a Billion Dollar Business In A Weekend Workshop? Where do you think her success would land today?
Tory’s done the hard work to earn her company’s success.
Other companies that have tried to shortcut their way to success – haven’t fared as well.
C. Wonder – a brand set up to directly rival Tory Burch’s line. It had a similar look and slightly cheaper prices.
I’m not one to get caught up in scandals, but the rival was Christopher Burch – Tory’s ex-husband. Business of Fashion called it ‘Revenge Retail’!
While they had some fun pieces and bright colors, C. Wonder hadn’t laid any groundwork to entice their customers.
They pretty much relied on raising capital to create a clothing line, make some spiffy advertising, and assumed people would just buy it. They also counted on the similarity to the Tory Burch line to give them a step up – without laying any of the same groundwork that Tory had spent years building.
This is aspirational pricing at its worst.
It’s thinking about the price tag without thinking about the customer.
C. Wonder paid the price. After an initial strong opening, business started to decline within the first year. 4 years later, after slashing staff, closing stores, and moving manufacturing through 3 different countries, C. Wonder filed for bankruptcy.
Lauren Sherman of Fashionista.com says it best:
“Everybody wants to be a lifestyle brand these days, and both C.Wonder and KSS [Kate Spade Saturday] offered everything from jewelry to home goods from the get go. It’s the dream, right? To be like Ralph Lauren, winning in every channel. But when you wrap up a lifestyle brand like a present and hand it over to consumers, they’re not always comfortable accepting it. “
Perhaps you’re thinking that luxury brands don’t feel very inclusive, that it’s like a secret society that most people can never enter.
But think about everything Tory Burch did to create a billion dollar brand. She made things that she – a wealthy woman – wanted to wear, priced them moderately, then wore them proudly. Constantly. Everywhere.
When she posts on Instagram, she’s not saying things like “here I am with the Duke and Duchess of Castiglione getting off our private jet onto our private island.” She’s posting pictures of flower arrangements she made, her kids in the swimming pool, the cookies that she burned, or getting dirty on a hike.
Everything she does, she shows us that she’s just like us. A working mom who likes to travel. Wearing Tory Burch clothes.
So exclusion may work for things like country clubs and expensive cults, but smart luxury brands know better – here’s how.
Just the other day, I went into the Louis Vuitton store in Minneapolis to look around. And was greeted by a charming gentleman named Joel – and I do mean charming.
We talked about the Louis Vuitton line, me, my book – which he said he wanted to read – and how his favorite part of his job was creating long-term customer relationships and hunting up special products for ‘his people’ that they couldn’t find in Minneapolis, or even online. He loved it. I mean LOVED it.
Even though I didn’t buy anything, I left the store feeling pampered,
Joel is not an anomaly in the luxury goods business. Rather, finding people like Joel is part of the luxury business directive. His reason for being there is to make you feel that ‘state of great comfort and extravagant living’.
Mission accomplished! I felt great – especially when compared to being ignored at Kate Spade just a few minutes later. And don’t get me started on the ‘Walgreens Experience’.
Luxury brands know that they fail when they don’t take care of you, whether you’re currently a customer, a possible future customer, or never a customer.
True luxury brands commit to creating an experience REGARDLESS of whether a purchase is made.
The higher you shoot, the fewer short-cuts you can take.