When Hermes and Louis Vuitton first started in business, they made tools. When customers wanted a new suitcase or saddle, Hermes and Vuitton offered extraordinary products that combined impeccable functionality with unmatched performance. As time passed, Hermes and Vuitton no longer competed with other brands based on functionality. They competed on luxury or an entirely different value proposition than the optimal design of a tool.
When we think of luxury brands and luxury products what comes to mind? Cost is certainly at the forefront. Luxury products cost more, but why? Customers pick luxury products regardless of brand, because they not only make the buyer feel good about the product, but also luxury products perform impeccably well. A big part of the luxury premium revolves around the story that the brand tells. That’s why it is so important for kitchen and bath showroom sales professionals to be able to tell stories that resonate with customers who really are not familiar with most luxury or other brands sold in their showroom. The story must relate both the experience and the process, not necessarily features and benefits.
The challenge manufacturers that produce luxury products and showrooms that sell them is that eventually when you combine functionality with top of the market, those paths converge. Technology and efficiencies eventually erode the price-performance paradigm. It’s also difficult when brands that were once confined to the luxury arena find their way into mainstream retail. Luxury is compromised for distribution. Lost luxury profitability is made up in volume. Remember the industry outcry when products that were pioneered by independent showrooms suddenly started to appear at big box retailers?
What makes luxury sustainable? It’s not so much about maintaining a cutting edge as it is being viewed as desirable by the fashionable elite. Honda has maintained a cutting edge by producing cars that perform exactly as advertised. Hondas are boring and their profits are not commensurate with the quality of product the company produces. Conversely, as Seth Godin wrote in a blog post, “Few Jimmy Choo customers complain about their inability to run a marathon in profitable high heels.”
The ability to appeal to the fashionable elite is a distinctive competency of the independent kitchen and bath showrooms. Luxury consumers want luxury experiences. As functionality differences between products continue to erode, the luxury showroom consumer will be looking for products that are desirable. Desirability stems from telling a compelling story and delivering compelling experiences. Are those really available online or at a big box retailer?