Is “Luxury” a Dirty Word?
Posted by Michele Clerici | Filed under Advertising, Media, Tips and Trends Series
lux·u·ry (n.)
1. Something inessential but conducive to pleasure and comfort.
2. Something expensive or hard to obtain.
3. Sumptuous living or surroundings.
Consumers’ pennies and purses are kept under tight lock and key these days—which is why, for the moment, the dictionary definition of “luxury” is unlikely to draw a good consumer response and, therefore, has become somewhat of a “dirty word” in marketing hospitality and travel. But what is the true meaning of luxury, and have we begun to redefine its terms?
Lavish vacations at extravagant resorts are not high on the priority list when people are scrimping just to keep a roof over their heads, put food on the table and gas up their vehicles. In a down economy, consumers are in no state of mind to spend frivolously on things that are not essential to their everyday lives. So what does this mean for the luxury hotel and resort industry?
It means taking a look at people’s redefined values and repositioning the concept of luxury itself. It means evolving the way the industry approaches and sells the idea of a luxury experience. No longer is luxury about glamour, glitz and having expensive “stuff”—now it’s about precious time with family, meaningful experiences, authenticity and genuineness. Luxury is less about materialistic, flashy lifestyles and more about personalization—finding what truly matters to the consumer and providing them with that “luxury.”
The hospitality and travel industries can offer this new concept of luxury in a number of ways, and it begins with strategy.
According to the March 15th release of The Wealth Report, “The onslaught of economic recession and the inevitable changes in customer values and behaviors during 2008 and 2009 caused luxury brands to embrace the concept of customer-centric, data-driven marketing. In 2010, marketing and communication budget dollars are being reallocated to more measurable and highly profitable customer-centric initiatives to deliver short and long-term brand growth and profitability…Luxury brands are now looking to understand their customers and adapt their marketing strategies to best serve their interests.”
“This all means that luxury brands are looking to gain a complete understanding of their customers across all sales channels. This includes key insights on customer profiles and purchase behaviors by channel, value and loyalty, seasonality, gender, product affinities, and cross-sell/up-sell links. With customer data in hand, they are able to implement differentiated communication treatments to identified customer segments, personalize the customer experience and increase revenue.”
Hope is not lost for luxury brands even at the hands of a recession, so long as they remain dedicated to understanding and catering to their audience at all times. For more information on how to position and sell your luxury experience in today’s economy, contact jzech@danacommunications.com.
March 26th, 2010 at 9:41 am
I don’t believe “luxury” is a dirty word, but it is an ambiguous and over used word (especially in the travel and hospitality industries).
I would hope the CMOs of luxury brands were working hard to understand their customers well before the recession and the changes in consumer attitudes that it has caused. The changes are most apparent among the so called “mass affluent” and the “aspirational affluent”. These market segments created a very shaky foundation for expansion of the luxury industry prior to the recession.
In fact, our research and that of Thomas Stanley (author of “The Millionaire Next Door” and “Stop Acting Rich and Start Living Like a Real Millionaire”) demonstrates that most of the true affluent are not likely to change their purchase patterns as a result of the recent economic challenges. The true affluent tend to spend carefully (with a high priority given to value), save aggressively, and live within their means.
The true affluent define “luxury” by price points and brands in ways that might surprise the CMOs that have not been doing good research to understand their customers and their target market.
March 28th, 2010 at 3:23 pm
Another fun way to personalize marketing messages is to use “Personalized URLs” (PURLS). An example would be yoursite.com/sally.smith, and when Sally would visit her “PURL” the content would be specific to her. A great way to cut through the clutter and increase resposne rates. I have created a PURL application that you can check out here: http://purlem.com.
May 19th, 2011 at 12:48 am
Fell out of bed feeling down. This has birgtheend my day!