Redefining 'Accessible Luxury' from 'Affordable Luxury'
One of the topics that I’ve been following with interest recently amongst the Luxury groups and individual specialists has been around ‘Affordable Luxury’. However, in my opinion, I believe that we should be rethinking the definition in order to fully appreciate the value that the brands referred to bring to the whole Luxury market.
‘Affordable’ and ‘Luxury’ is only a recent strategic and commercial construct, never having been part of the origins of Luxury itself, which was always expensive and intended only to be bought by very wealthy individuals.
By putting these two words together we have created a debate that is clearly intentionally divisive, so here are my 5 thoughtstarters on the topic:
The over-riding sentiment is that ‘Affordable Luxury’ is not really Luxury at all, and there’s been some evidence of the old elitism creeping back into the debate. I think however that this is potentially an issue of language rather than a critique of the brands’ Value Creation for their customers.
At the most obvious level, ‘Affordability’ is relative to the individual’s ability to pay the (full) price that is asked by the luxury brand, whereas ‘Accessibility’ is about opening the door to a broader consumer base, and is a conscious strategic decision by a brand to position itself via its pricing and product ranges as being able to attract this wider audience.
A number of the brands that have been referred to in a slightly sniffy way as ‘Affordable Luxury’ are actually, within my definition, ‘Accessible Luxury’ (sometimes called ‘Bridge to Luxury’). Some industry commentators are inclined to refer to this as ‘Premium’ positioning but I feel that this doesn’t truly reflect the higher level of design input or attention to quality provided. For example, Michael Kors, Coach, Nappa Dori (as featured above), and Jo Malone are all strong brands that bring a high quality product to an aspiring consumer in attractive and attentive retail stores. The Value that they create is focused on stylish and trend linked products that are priced to allow the consumer to buy, use and enjoy them along with the benefit of the brand halo conveying some status. Naturally, these are the brands most likely to suffer most during a slowdown in global economies as revealed in Bain & Co/Altagamma’s recent report, as their target consumer will feel the disposable income impact of this. But they will bounceback once their target consumer starts to feel more financially secure. For a number of these consumers, these brands are not actually a Bridge into ‘True Luxury’ at all, but the end point. Whilst they might aspire to buy from a ‘True Luxury’ brand, they have different spending priorities and more limited disposable incomes. This means that buying from such a brand will probably remain a dream rather than a reality …a ”When I win the Lottery” type of aspiration. It’s no surprise that these brands also tend to focus on accessories rather than higher priced apparel, in order to deliver the trend-driven styles. No one buys a Michael Kors bag as an investment, and after a few seasons, it will probably be replaced by another handbag.
‘True Luxury’ is never Affordable for most consumers. This intentional decision ensures that the brand can attract the consumers that it wants. The need for like-minded people to gather around a brand that they can identify with necessarily involves an element of ‘selection’ based on common characteristics, such as an appreciation of what Luxury is and a clear understanding of why this brand delivers on that definition for them. Excluding the majority is a necessary part of this.
The recent move of a number of ‘True Luxury’ brands into the Beauty and Hospitality sectors reveals the desire to anchor their brand fans within a wider range of lifestyle categories. However, with a Prada refillable skin serum priced at $350 or a $500 Dior lipstick in a limited edition case, no one will claim that this is a mainstream ‘Accessible Luxury’. It is a great example of how they have maintained their position as a ‘True Luxury’ brand that very clearly is not intended for many consumers to buy.
‘True Luxury’ and ‘Accessible Luxury’ brands both have a valuable role to play in growing the total global Luxury market, pushing higher quality, innovation, and consumer experience within their own positioning.
Certainly ‘Accessible Luxury’ brands could learn a lot from the different in-store experiential and retailing excellence approaches used by ‘True Luxury’ brands to engage with their customers, but ultimately they have very different strategic paths to achieve their commercial goals.