Brand elevation. The term has been used a lot recently, but the practice has always been a priority for luxury companies. In simple terms, it helps brands to keep and possibly increase their positioning in relation to their peers, and also helps them to remain relevant with their consumers over time. In fact, the longer and the more intense the exposure that consumers have to luxury, the more sophisticated their preferences and demands become. Therefore if brands want to retain their consumers, they have to continuously build up more a more exclusive offer to remain relevant for them in their progressive level of sophistication.
Today, brand elevation is more important than ever, and this is essentially for two reasons. Firstly, in the current volatile economic environment, luxury demand is more resilient for brands with higher positioning and at higher price points. And secondly, in the current physical and digital world in which brands are even more visible than ever, it is key for companies to keep the perception of exclusivity, scarcity and desirability of their products to avoid overexposure and dilution.
Therefore, it comes as no surprise that nowadays brands like Gucci and Prada are focusing on reinforcing the top of their product pyramid and reinforcing their attributes of exclusivity, and companies like Burberry are focused on elevating the whole positioning of their brand. For example, when Burberry chief executive Jonathan Akeroyd announced plans earlier this month to grow the British luxury brand’s annual revenues to £5 billion in the long-run, it marked yet another move from a luxury company looking for reinforce or improve their standing in the market at a time of uncertainty.
Burberry’s brand elevation, focused on introducing “fresh, more relatable products and clarifying the brand’s message,” sounds not dissimilar to the one announced by Coach in September, and Ralph Lauren in March. Whatever the finer points of the strategy, brand elevation is buzzword of today used to described a shift away from the old and the move toward the new.
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Whilst it sounds pretty simple, brand elevation can mean a lot of different things to a lot of different companies. And how companies manage their brand elevation is a delicate balance. You must hopefully enhance your brand values, you need to please your existing customers, you need to maintain your pricing power, you need to attract new customers and not just new, but younger ones, the list is endless. And yet, from what we can see, many players in the luxury industry are choosing to elevate rather than not, because if they don’t, they won’t be relevant. And relevance is the name of the game.
Take for instance, when brands raise their prices to maintain their exclusivity and positioning in the market as one form of elevation. French luxury house Chanel raised its prices three times in 2021, and twice more in March and August this year. Or Hermès, which announced plans in October to raise its prices by 5 to 10 percent in 2023. The raising of their prices allows these ultra-elite luxury brands to keep their relatively higher positioning against their peers, and helps to elevate public perception of their exclusivity, and to protect and expand their margins.
But it isn’t enough to raise prices and hope that your customers will go with it. We know from the famous example of Mulberry attempting to raise prices, which backfired spectacularly with its customers. Because brand elevation isn’t just one thing in isolation.
Luxury companies have to craft a story around all of their all levers to consistently justify the higher prices of products that are more expensive. Because it’s not just that there are rising production or shipping costs, but it’s about a higher level of quality or a higher level of design and perceived exclusivity and content innovation.
And this is the same for luxury brands’ communications. The way brands communicate must also be elevated, from the way they present themselves online and offline, how their stores look, how their sales associates interact with their customers and share knowledge about the brand.
When you lift one thing, you must ensure that you are lifting all the other components too.
We can see this in Burberry’s plan to elevate the brand to a higher positioning and one with more global cultural relevance by making it a “cooler, more desirable name, while leveraging its national identity to stand out in a crowded market, as well as reinforcing its appeal with top-spending clients.”
Not only will Burberry continuing to focus on its accessories category, particularly its leather goods like handbags, as well as footwear. It will also increase its investment in publicity, with marketing spend expected to reach high single-digits in the coming years. The roll-out of a new store concept will continue, and plans to double its e-commerce sales.
It’s aim and the potential to make Burberry stand out as “the modern British luxury brand,” could be achieved. But convincing its existing customers and potentially adding newer ones remains the challenge.
For if there is one lesson to be learned about brand elevation, it is that companies must elevate progressively. As a luxury brand, you should always aspire to elevate progressively over time because your luxury customer and their ability to purchase products is maturing as your brand is maturing.
Because if you decide to accelerate your brand rapidly, you must bear in mind that this is a path that requires a lot of investment and dedication and the results are not always immediate. As with many things in luxury, consistent and steady wins the race.