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Four Insights on How to Build Your Brand With Today's Luxury Customer

by Suzanne Hader  |  
January 22, 2008

Not so long ago, luxury goods and services were thought accessible only to the rich and famous—those with seven-figure incomes or inexhaustible trust funds. Indicators of class and status, luxury goods were outward signs that the purchaser had arrived.

By default, this customer purchased the best across the board. It was Chanel in the dressing room, Bentley in the garage, and Antigua for vacation. And, by definition, it all cost a pretty penny.

In the last two decades, however, the luxury goods landscape has changed dramatically. Various economic factors have created enormous new wealth—and a new type of luxury consumer whose motivations and needs are vastly different from those of the luxury customers of old.

Not surprisingly, there's a big push by marketers to position—or reposition—brands to better capture the attention of this demographic, whose spending is estimated by analysts to be $220 billion and growing at a clip of about 10 percent annually.

To inspire long-term, loyal relationships with this new breed of luxury consumer you must understand how they want to relate to your brand.

The following are four critical insights on what motivates this group, and how brands can best connect with them:

1. It's all about indulgence and expression

Today's luxury customers consider the materialistic aspect of luxury goods as secondary. Their luxury purchases are both an indulgence and a form of expression. And since they use shopping as a means to explore and express their identities, they adjust their shopping preferences accordingly. If "sexy and confident" are better expressed by Dolce & Gabbana than Gucci this year, that's what they will gravitate toward.

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Suzanne Hader is principal of 400twin (, a New York City-based consulting firm that provides research and strategic direction for luxury brands. She can be reached at

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