A recent study of luxury handbags, featured in Psychology Today, suggests once the price exceeds $300, the logo decreases in size. But why pay more for a brand without the recognition? Sterling Lanier, President of the market research consultancy Chatter, performed in-home case studies of affluent Gen Yers to provide insight. In one of Sterling’s audience testimonials, a Gen Yer said he purchases shirts from a Scottish designer with around three small stores in Europe. With only a small colored tag to identify the designer, he gets gratification seeing others wear the Scottish brand. As consumers, we identify personalities by the brands and products we purchase. And as Sterling’s testimonial illustrates, we strive to emerge ourselves in brands that help build our identities.
Passion Immersion in Products
For many high net worth individuals, luxury is about finding your passion, immersing yourself in its niche culture and being in-the-know. Brands are picking up on this trend, says said Luxury Institute Chief Executive Milton Pedraza: “Brands that are seen as experts in a few categories tend to manage those portfolios very well. Sort of putting one egg in a basket and then taking good care of it.” Indeed, Sterling’s research suggests two pleasure points with niche brands. Using Sterling’s example, the affluent Gen Yers is: 1) passionate about Scottish fashion and 2) he noticed people like him, that were in-the-know, wearing the same designer.
Passion Immersion in Services
Luxury concierge services also help high net worth individuals. Instead of providing rare fashions, they cater quite the opposite service by offering personalized, once-in-a-lifetime experiences. These experiences are typically derived from individual passion points, such as quest for adventure, or “if I wasn’t a ____ I would have been a ______.” For instance, if you wanted to be an archaeologist, Artisans of Leisure Travel offers a Turkey and Israel cultural vacation. Or, if you would have been a dare-devil, Quintessentially offers an Indiana-Jone-inspired adventure.
Passion Immersion in Communities
Passionate niche communities rally around purchasing decisions, as in Sterling’s illustrative example, but also connect like-minded individuals in a meaningful way. Lululemon Athletica excels at the latter. Lululemon is a high-end athletic apparel company that empowers its community to interact and engage with others — using the brand as a conduit. The athletic apparel company enlists elite ambassadors — comprised of award-winning athletes, such as Olympians — who wear the brand. The second tier of the community is made up of Lululemon-vetted athletes that embody the brand’s healthful living philosophy.
When we look at where people allow themselves to splurge, it’s in a space high net worth individuals are passionate about. Whether they are passionate about niche designer brands or once-in-a-lifetime adventures or being a part of an exclusive athletic club, they spend money with the heart. Products and services help consumers feel comfort in actualizing their dreams of being in-the-know, exploring the world and being the best of the best. Niche luxury offers a chance for high net worth individuals to be themselves, in the most fantastic way.
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