Good businesses change us. They provide us with a renewed sense of self, and dare we say, self-worth.
Finding the freeing feeling that comes from making a luxury purchase is a high that many customers will chase their entire lives.
And while this seems like it is consumerism at its worst, it’s actually intentionally designed business at it’s best.
Before I explain why this new type of business is good for you and for consumers as a whole, it’s important that I take a step back and explain what I mean by transformative business.
Businesses in luxury settings aren’t focused around meeting basic needs. If you need a pair of cheap socks, Walmart or Target are there to assist you. However, if you need cashmere socks, expect to pay 5x more at a premium store. Socks are the new neckties after all.
The point here is that whatever you buy comes with a feeling.
Cashmere socks provide a different feeling than getting a bargain. Both are experiences, but one has the power to transform form how you feel about a brand and the other doesn’t.
Cheap socks are disposable.
Cashmere socks should come with a certificate of authenticity for the price.
This is nothing new. However, the experiential factor is something often gets overlooked by brands seeking to permeate the luxury arena.
For example, taxi and limousine services have been around forever. But with the addition of UBER, came increased demand for experiences. Instead of just stopping at ridesharing–UBER decided to go a few steps further, providing customers with UBEREATS and with UBERLUX. Both of these add-on elements make their service more desirable–not as a commodity–but as an experience.
Apple was a pioneer of this principle. They provided geniuses to walk around the store and communicate via iPad. Need help? Set up an appointment, just like you would need to make a reservation at any good restaurant.
By being more exclusive and more inaccessible, they actually weed out the tech-baffled time wasters, and the window shoppers. Instead, they put more value on their services and their employees’ time, and as a result they sell more Apple Care product protections.
But what Apple did actually stifles one of the most important aspects of a luxury brand. While it may work for them, user beware, it will aggravate other customers in certain industries.
Instead, what more and more brands are seeking to do is to provide experiences that change us. Not through the physical experience of the brand, but what the brand communicates to the customer when they buy their product.
For example, in the Chicago Midwest where the winters reach heroic wind chill sub-zero temperatures, warmth is of prime importance. Coats of all different shapes and sizes, large scarves, and hats grace the crowded streets. However, the Chicago Tribune reports that there is a singular luxury coat that is being worn by the likes of…well…everyone.
Canada Goose, whose jackets cost roughly $800 and can go up much higher, is a status symbol in the Third Coast.
The luxury brand may be out of the price range of many who wear it, but it communicates status, and empowers the wearer. Instead of spending a few hundred dollars on an untrustworthy jacket, the Chicago trend shows us that adding style points and brand recognition is worth paying nearly two to three times more.
Think that luxury clothing is the only thing that can be transformative?
As the summer months come into full swing check your Facebook feed every once and awhile. You will probably see some of your friends actually spending money to run.
This once crazy-notion, reserved for actual competitive racers, has turned into a burgeoning cottage industry filled with races where you are chased by zombies, shot by paintballs, forced to hurdle fire and crawl over barbed wire.
This is a sign of the times, for what’s in store.
Experiences are here to stay.
Think about something as simple as Starbucks, or other luxury coffee shops.
Why pay $4 for a a single shot of cortado–that’s steamed milk, mixed with espresso–when you can buy an entire cup of coffee at McDonald’s for a quarter of the price?
The answer is the experience. The coffee is a small luxury item, in a world where most people can’t afford Tiffany & Co, a high-priced latte or mixologist cocktail is within all of our budgets.
Is it necessary?
No, and that’s the point.
It makes us feel engaged with our identities as consumers, and we feel validated by being able to spend a little more on something better, even if it’s seen as a waste of money.
What Does This Mean for New Brands
The fact of today’s luxury market is that it’s changing. Ferrari doesn’t advertise on television, but many brands are using online advertisements, which never would have considered it before the Internet.
This means that exposure on brands is up–the secret is out, and now the public gets to decide where to shop.
Typically, the best experience will always win–hands down.
Allen Edmonds and other brands, provide their shoe customers with incredible rebuild values for only a fraction of their original cost, where the shoes can be completely re-soled as needed.
Customer service is only going to start improving as the Internet makes reviews more common, and more powerful.
How Can Businesses Take Advantage of This?
One of the fastest ways to be a leader in today’s luxury market is to provide experiences that are out-of-this-world. When a customer spends more money with your brand, it’s imperative that you provide them with a better product or service than what they could find elsewhere.
Additionally, focusing on incentivizing reviews, and transparency is something we will see more of, as review sites become more popular.
In order to increase the likelihood of positive user experiences–it’s really important that companies find a way to differentiate themselves from their competitors through transformative experiences.
In other words, the more a company helps its clients to grow as humans, the more revenue they will see as we move closer to the third decade of the 2,000s.