Learn exactly what it takes to launch a luxury startup – from positioning your brand to choosing the right marketing strategies.
The luxury brand business has changed. Christian Dior, Valentino and Chanel were big luxury houses because they have a very small market niche. There weren’t so many players in the game. There was no Shopify. There were very limited access points for entrepreneurs who wanted to start their own businesses. It’s easier now than ever for anyone to start a brand- but not in the luxury business. It’s still difficult to penetrate and compete in the luxury market today.
Consider a few key points that will help you structure the development of your new brand. Think about this for a long time before you decide to take the plunge.
While more opportunities opened for entrepreneurs in general, the luxury brand market remains tough. In fact, it has become even more challenging. Consumers’ desires have evolved and become more sophisticated.
Today’s consumers put a lot of value on issues such as…
- Are the products produced sustainably?
- What are the fabric origins?
- What communities am I supporting with these products?
- Is the product artisanal?
There are so many factors to consider, yet the opportunities are promising. Remaining sensitive to the market is key.
Know Your Competitive Matrix.
First and foremost, look at your competitive matrix. What is your competitive matrix? These are the brands you’re going to sit next to in stores so Chanel, Balenciaga, Fendi or other heritage brands shouldn’t be on that list. As a startup fashion brand, it’s just impossible to be sitting next to heritage brands who have been in the business for 20, 50 or 150 years. If your goal is to be a heritage brand, start the business now, but realize it doesn’t happen overnight.
Look at the young luxury brands. They’re relatively new in the market but are doing very well. There are many out there. One of my favorites is Maiyet. They’re an amazing design house infusing a lot of sustainability and a lot of ethical practices into very well-designed, high-price point, ready-to-wear apparel and accessory pieces. Because of their branding, ethics and values, they have attracted a core consumer base who believes what they believe.
As you develop your competitive matrix, think about the other brands out there. Think about who is doing what in your space. You can take some pointers on their distribution. The luxury boutiques selling your competitors’ brands are more likely to be selling your brand too. It’s really a matter of doing your due diligence and figuring out where exactly to position your brand in the market and amongst the competition.
Pump Up Your Investment.
Launching a luxury brand definitely requires a higher investment, not only for production but also for advertising (including your website, copywriting and branding). Everyone needs to tell this beautiful, romantic story to make someone spend $1,200, $2,000, $5,000 on a product. If you’re not investing into the right assets to sell your products, you’re not going to get the returns you seek or make that impression.
It’s really not going to be as simple as with other brands, such as advanced contemporary or even aspirational markets, where you’re just pumping a lot of money into Facebook or Instagram advertising. This is more nuanced. This is more niche. This is something where you need to romanticize your customer. You need to have feeling and passion. That’s going to happen by having a very small list of early adopters, building that niche marketplace and really being able to cultivate that consumer on a very small level. Your stylist program is going to be intense. Your celebrity styling and celebrity gifting program and working with influencers is going to be really important. You’re creating the perceived value of something people want to attain and want to strive for- your brand is a representation of that.
You need to be willing to be in this game for a while. You’re not going to see high ROIs within the first season, two seasons or maybe even three seasons. You’re looking at a 3+ year game to get visibility, especially if you’re a new designer arriving fresh into the arena.
The consumer needs to hear other shoppers’ stories about their experiences with the brand and your products. These stories prove you have excellent quality and service, and that your products truly live up to the brand stories you tell.
Lastly, consumers need about six touchpoints with a brand before making a purchase. They need to feel as if you are where they are. Some of these touchpoints may include digital marketing – through social media platforms such as Instagram or Facebook. Sometimes the touchpoints are attending parties and events and going to more exclusive environments where you can actually be around your potential customer. So much of the luxury business is based on relationship, product and perception.