The consumer is king

Gabrielle Coco Chanel thoroughly understood the luxury consumers of her time. She also recognized the influence of the wider society on shaping consumer expectations and outlook. In the early twentieth century after the First World War, fashion designers continued to apply the pre-war styles characterized by extravagant and elaborate designs. Chanel however opted for classic and practical clothing such as trousers and the famed little black dress for women. This design approach was embraced by society because consumer needs had evolved after the war. Women who had been forced to work during the war and also cater for their families in the absence of their husbands had been exposed to a different lifestyle that required dressing in a different and more realistic way. After the war, they maintained the same attitude towards fashion. They were no longer attracted to extravagant dressing but desired more practical clothing like trousers. Chanel's designs offered the fashion solutions they sought. The approach to anticipating and meeting consumer expectations formed one of the key success factors of the Chanel brand. It also significantly contributed to the continuous existence of the brand unlike Coco Chanel's contemporaries like Paul Poiret, Madeleine Vionnet and Elsa Schiaparelli who have all closed shop.

In a similar manner, when Gucci's former Managing Director, Domenico de Sole and former Creative Director, Tom Ford, left the company in 2004, the seat of de Sole was filled by an industry outsider, the former head of Unilever's frozen foods division, Robert Polet. The unexpected choice of this man considered as a stranger to fashion was a surprise to several practitioners in the highly protective luxury fashion industry. Gucci's reason for choosing him was strategic. The company wanted a manager who had a deep insight and understanding of the customer and would effectively apply the concept of meeting consumer needs and exceeding their expectations to the brand. Polet was credited with the know-how of providing the desired products and managing effective relationships with customers. Several people predicted that his lack of luxury experience, industry relationships and creativity and press savvy would backfire on the Gucci brand. However, the approach of customer orientation applied by Gucci has been effective, as the brand has increased its brand equity, sales and profitability under Robert Polet's helm.

It is apparent that insight into consumer behaviour is imperative in the luxury fashion sector and beyond. Gone are the days when products were guaranteed to sell, provided that they were well-designed, expensive and branded as luxury. Today's luxury consumers are different. They have to be surprised, tantalized, captivated, courted, pampered and constantly pleased without end. The competitive environment of luxury goods is also increasingly rife, making the quest of attracting and retaining the consumer's interest and loyalty more challenging.

There are currently two major segments of the luxury consumer population. The first is the 'traditional luxury consumer' who still reveres established brands like Herm├Ęs and Christian Dior; and the second segment constitutes a larger proportion of luxury consumers known as the 'new luxury consumer' population. This new consumer group are no longer lured by only brand names but also cherish a complete package of products and services that offer solid value through innovation and an exceptional experience in every element of the brand. They know exactly what they want and are not fooled by pseudo-luxury offerings. The luxury consumer of today has different desires, expectations, outlook, influences and characteristics from those of as recently as 30 years ago.

To illustrate the advanced level of the current consumer progression, an advertising campaign of the software solutions company, Siebel, in the 24 October 2005 edition of Businessweek, had the caption 'The Benefits of Selling to Sheep'. It showed a graphic image of a sheep, divided into four portions each with the following labels:

Sheep want simple things

Sheep are predictable

Sheep aren't demanding

Sheep don't mind being treated like sheep

The advertisement then proceeded on a cautionary note to highlight that companies should desist from treating consumers like sheep because consumers have evolved beyond exhibiting the attributes of sheep. The lesson

Figure 3.1

Consumers have evolved from the previous tag of 'Sheep' to the current tag of 'Smart'!

Figure 3.1

Consumers have evolved from the previous tag of 'Sheep' to the current tag of 'Smart'!

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of the advert is simply that consumers are not sheep and should not be treated as sheep by companies, including luxury brands. Consumers are, rather, among the major assets and leeway that companies have for increasing revenue. They should therefore be considered as such and treated accordingly. The days are long gone when luxury consumers exhibited the characteristics of sheep through unbending single-brand loyalty. Consumers used to be pleased to make purchases from their favourite brands without seeking alternatives, but today the luxury fashion consumer is everything that is the opposite of a sheep.

Having said this, we have to understand the relationship between consumers and luxury brands and the role of luxury brands in the lives of consumers. The reason for the purchase of goods, regardless of category, is to fulfil consumer needs. When people pay for products or services, they are actually looking for solutions to problems and needs, and luxury goods form a part of those solutions. They are objects of desire that consumers view as a means to solving multiple problems and fulfilling multiple needs. Some of these needs are related to the consumers' real or aspirational identity, personality and lifestyle. Luxury brands help consumers define and accentuate the type of person they are or who they would like to be and also assist in communicating this definition to others. This is one of the roles of brand association in the luxury sector.

As is highlighted throughout this book, the concept of branding begins and ends with the consumer. The relationship between consumers and a strong brand is a type of bond or pact that starts with a psychological process in the mind of the consumer and is manifested through product purchases. This relationship is highlighted even more between luxury brands and consumers because of the profound role of the branding factor in the development of luxury goods. The source of the attachment of consumers to luxury goods is the role of luxury brands as symbols of personal and social identity.

Consumers offer their trust and loyalty to luxury brands with the understanding that the brand will deliver its promises and exceed their expectations. These expectations include the fulfilment of both functional and symbolic needs. The functional needs are the tangible and practical benefits of a product such as the time-keeping function of a wristwatch. The symbolic needs involve intangible benefits linked with the emotional and psychological dimensions of the consumer. These include fulfilling ego and self-esteem needs, reinforcing social status and projecting a self-image. The self-image extends from the consumer's true-self, that is who they truly are; their idealself, that is who they would like to be and their social-self, that is who they would like others to think they are. Although both tangible and intangible benefits are derived from luxury brands, the principal value of luxury brands to consumers is the intangible benefit. The intangible level brings the branding aspect of luxury goods into prominence and is reflected in consumer preferences and the decision-making process. It is also on the intangible level that the relationship between consumers and luxury brands moves from logic and functionality to what has been interpreted as irrationality. Now let's take a look at the 'rational' consumer decision-making process and compare it with the decision-making process of the purchase of luxury goods.

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100 Fashion Tips

100 Fashion Tips

One of the most important things you need to take note of about becoming fashionable is to get fitter. Therefore, if you are carrying some extra pounds, then you should lose some of it soon. You can do it through dieting, working out, or a good combination of both. Find more fashion tips like this one within this guide.

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