While there are some overarching premises that apply to all types of retail brands, there are differences in the mobile offer and loyalty approach that luxury retailers need to have from others in the industry.
Because high-end brands center around being exclusive and high-quality, discounts, coupons, and special offers can degrade the image a brand is working to portray. Customers of these brands want to feel like they’re one-of-a-kind in buying high-dollar products, not one of millions of people who, as an example, have identical t-shirts from a popular mid-range retailer.
So how do you as a luxury brand find the right balance between offers and loyalty when you’re selling luxury products?
Consider an Offshoot Brand
It’s not possible to sell a ton of $25,000 fur coats. It is, however, lucrative to set up offshoot retail locations that sell luxury products at a discount. The benefits are twofold: revenues increase because more people are buying products that perhaps didn’t sell well at the primary retail locations, even if profit margins are lower (luxury brands average 18-25% profit margin normally). And offshoot brands open up an entirely new market. People who can’t afford a $400 Ralph Lauren Purple dress shirt are able to buy a polo shirt from the Polo Outlet store.
Focus on Rewarding Loyalty
For any retailers, but particularly luxury brands, loyalty is a key component of an effective marketing and sales strategy. Customers of high-end products like to feel like they are in an exclusive club.
However, loyalty rewards don’t necessarily need to come in the form of freebies or discounts. Instead, experiences and upgrades are better aligned with the luxury audience. A frequent shopper might be invited to an exclusive VIP group that gets early access to new products, or might receive a complimentary beauty consultation. By focusing on experience rather than the tangible, loyal customers feel a stronger bond with the brand, and end up spending more as a result.
And speaking of that bond: loyalty members should be acknowledged as such when they visit a retail location. Recognizing member status can go a long way to building that relationship.
Test Discounts Carefully
This isn’t to say that luxury brands should never discount products, but you should do so cautiously and strategically. The holiday season, for example, when consumers at every level are expecting reductions in price, may provide opportunity to capture some of the shopping frenzy. But pay close attention to results; if a 20% discount doesn’t result in the sales you want, or if it tarnishes your brand’s reputation, pull back.
Where Does Mobile Marketing Fit In?
While much of mobile marketing centers around promotions and coupons, it doesn’t necessarily have to. For luxury brands, the mobile experience is central to its success: 59% of traffic to luxury sites comes from mobile.
Lush branding and easy-to-use capabilities are one component, then adding in the right loyalty mix rounds out the strategy. Having a mobile app is one way to engage luxury audiences, as long as the app provides real value, like the Jet Smarter Private Jet Charter app.
Using push notifications, luxury brands could invite loyalty members to an exclusive event. After RSVPing, the members would receive notifications on the event through their mobile wallet, where their ticket is stored.
Brands could send sneak peeks via SMS or MMS so that subscribers see the new product line before the public. This is a great strategy to also drive in-store traffic from mobile messaging.
Essentially, anything that reinforces that “you’re special to us” message will help a luxury brand connect with customers via mobile.
There is a balance between offers and loyalty for luxury brands. It may be different for everyone, but mobile definitely can help you find equilibrium between the two.