NEW YORK — The landscape of the high-end market has changed, from pricing and product to the size and makeup of the consumer base — so marketing plans must change with it.
“The aspirational market has been decimated,” said Andrew Sacks, president of marketing consultancy Agency Sacks. “That was what was driving a lot of revenue growth and transactional growth in the past few years.” Without that fuel, he explained, firms will have to be smarter about the way they attract business.
For instance, most companies have pulled back their spending in mass-market advertising channels, such as magazines and billboards. In the first quarter of 2009, magazine ad revenues from apparel and accessories firms dropped 21 percent from the year-ago period, and total ad pages fell 24 percent, according to the Publishers Information Bureau.
Instead, firms are turning to niche marketing. “Most are taking their dollars and using them for bespoke and special events, where they can invite their best customers to learn more about their products,” said Greg Furman, founder and chairman of the Luxury Marketing Council.
“At the peak of bad news [about the economy], we wanted to develop an innovative way to add value,” he explained. “The women bought shoes and bags to go to Tamara’s house, and then bought more at her house. Now that’s an extreme example of how to get close to the customer and connect with the community.”
For shoe designer Michael Toschi, elite events are essential. A few times a year, he hosts 10 to 30 customers for a private party. His most recent, in early May, at the Martin Estate Winery in Napa Valley, Calif., cost $6,000 per ticket and every guest received two pairs of Toschi’s custom Vecchia Mano shoes, as well as a test drive of a Ferrari Scuderia and a 10-course meal prepared by Georgio Armani’s former chef.
“If I gave you a day that marks the shoes with a memory, that has a real value,” said Toschi. “Plus, it creates a relationship with the product and with us, the brand.”
In addition to events, collaborations are another way to build relationships, particularly with new shoppers, said Furman. It allows companies to share their customers, as well as costs.
Among the companies using creative partnerships is John Lobb. For the last year, the men’s brand has been offering a polishing service at several exclusive hotels around the world, including the Connaught in London, Le Meurice in Paris and the Mandarin Oriental in Hong Kong.
Keeping those lines of communication open with customers could help luxury firms once the economy recovers.
“There’s always going to be a market of people … who appreciate the best of the best,” said Furman. “That’s not going anywhere. People may be more selective and value-driven, but true luxury will never disappear as long as there are companies that know how to create it.”