Bottega Veneta’s Initials program
Prashant Saxena, associate director of Agility Research & Strategy, details why aspirational brands seen as rewards are doing exceptionally well with affluent Asians
Luxury is akin to a kaleidoscope. The moment you rotate it, it surprises you with another amazing perspective. No wonder many luxury brands, while arriving at a dominant positioning strategy, have interpreted it from various viewpoints.
Stressing the importance of self-worth, Bottega Veneta began their brand story with an identity-related tagline, “When your own initials are enough”. With “I feel therefore I am”, Giorgio Armani rode on the emotional quotient of its consumers. Similarly, others have likewise adapted formidable pillars of prestige, exclusivity and conspicuousness.
As the luxury bandwagon plays pied-piper to its new aspirants in the quickly-developing markets of China, India, and Indonesia, brand managers struggle to juggle the crystal balls of exclusivity and profits. Maintaining exclusivity of your luxury brand, while cashing in on the strong purchasing power of affluent Asian consumers, is indeed a challenge.
“ Stressing the importance of self-worth, Bottega Veneta began their story with an identity-related tagline ”
At Agility Research & Strategy, we began the year with an extensive study covering 6000 affluent Asians across India, Mainland China, Singapore, Hong Kong, Malaysia and Indonesia. The results of the study countered the prognostications of apocalyptic economists, by reaffirming the optimism amidst troubling times and apparent resilience of the Affluent Asian consumer.
This consumer, who represents the emergent nouveau riche in their respective countries, whilst cautiously optimistic of the future, is still splurging on his/her favourite luxury brands – which includes tech-gadgets, fashion and accessories, and luxury travel.
This time, the kaleidoscope of luxury pleasantly surprised us as we fielded the second wave of our study amongst 2500 Affluent consumers from India, China, Indonesia and Singapore. The key findings screamed two big themes – “Self Rewarding” and “Social Identification”.
“ The affluent Asian consumer continues to splurge on tech-gadgets, fashion, luxury travel & accessories ”
For example, a 25 year old young achiever gifting herself with a Gucci handbag/watch to win the appreciation of her like-branded social set. Or a 28 year old young careerist gifting himself with an Audi or BMW he’s been eyeing for several months, to signal how he has kept up with the rest of his clique.
Or a 23 year old career starter gifting herself with the new iPhone5, in addition to her new MacBook Pro and her iPad, as a self-reward for successfully crossing over to the “real world” and as a symbol that “I am doing fine outside the four walls of the classroom.”
Asia is young, Asia is collectivist. Asia is also aspirational in its choices. The new mantra to win over the Affluent Asian consumer lies in two simple steps – One, maintain your brand’s aspirational quotient so your products are viewed as personal rewards for “a job well done, a challenge well managed, a life well lived and balanced."
And two, leverage brand perception amongst the target consumers’ cliques, through the most visible ways of sharing; digital social networks.
“ Maintain your brand’s aspirational quotient so your products are viewed as personal rewards ”
In this study, we asked six key questions that tested the responses on six different attributes closely associated with luxury: self-definition, need for uniqueness, perceived quality, exclusivity, social Identification and self-rewarding behaviour.
Four key themes emerged from our data. While perceived quality, need for uniqueness and self-definition emerged strongly, social Identification and self-rewarding behaviour were clustered together. This gave rise to four important themes in our research.
Consumer’s need for uniqueness and to define oneself through luxury purchasing, each resonate with pre-established consumer motivations as to what luxury is and why people buy it.
The third theme, premiumness, is about the perceived quality of the brand. Hand-stitched seams on a calfskin leather bag and uniqueness of its design – or even simply the brand and its ability to command quality – are all indicators of a brand’s perceived premiumness amongst affluent Asians.
“ Leverage brand perception amongst the target consumers’ cliques through digital social networks ”
The same was true with exclusivity achieved either through artificial or innate scarcity. Luxury was defined not just by premiumness but also the exclusivity it exhibits: the scarcer a brand is, either through limited editions or the establishment of financial barriers, the more exclusive and the more premium it is percieved to be.
Quality – innate or derived (i.e., perceived) – and exclusivity by scarcity are two components underneath the third theme of “premiumness”.
The other two themes – social Identification (buying the same brands as one’s referents) and self-gifting – also became apparent in our analyses. What was interesting however, was the fact that these two were highly-close to each other as if they were pointing to and measuring the same underlying theme.
Our research found that what consumers like to buy as rewards or self-gifts, is likely to be the same as what other people in their respective clique would buy for themselves in the same situation.
“ While the self-gift is essentially a personal reward, it still is affected what the clique thinks, feels and buys ”
While the self-gift is essentially a personal reward, it still is affected what the clique thinks, feels and buys. It seems that when it comes to buying luxury, “others” still have a view even if it is “for me”, because it is indeed about “me” but I remain immersed “in the world of others”.
“The interplay of self-rewards and social identification strategically explains why aspirational brands are being seen as rewards are doing exceptionally well among the highly cohesive and socially identifying Asians,” explained Amrita Banta, our managing director.
This article was co-written by Agility Research & Strategy director Philip Tiongson and associate director Prashant Saxena
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