Back in May the European Commission announced that, after a difficult five years, Europe was officially in recovery. This would have come as welcome news to retailers across the continent, with high street brands in particular having endured rapidly declining sales over long periods and scrapping for survival during the low points of the recession.
Boarded up shop windows across the continent act as a chilling reminder that some brands will never recover.
For luxury brands, the financial crisis has been rather unpredictable and tumultuous. Initially, it was all doom and gloom, with loyal customers turning to cheaper alternatives and losses being forecast on a grand scale. Nevertheless, for some luxury brands, such as fashion-powerhouses Louis Vuitton and Ralph Lauren, these losses never arrived on any detrimental scale. Almost paradoxically, sales boomed.
Solid sapphire crystal is used for the screen giving it strength and clarity, as well as a full HD display
While there are those who would rub their eyes in disbelief at the €2,000 price tag of a handbag, ultimately it is the consumers that can make or break the success of any brand and there is an affluent market willing to pay for premium products.
Emotionally driven
The most successful luxury brands, and the ones that flourish during hard times, manage to encapsulate what it means to be a premium product and, more importantly, what this means for the consumer. “Luxury is something very personal. It means different things to different people and it is emotionally driven rather than rationally so,” says Massimiliano Pogliani, CEO of Vertu, the market leader in the production of luxury mobile phones. “Luxury is something that you do not need but that at the same time, if you appreciate it, you cannot live without.”
Over a decade ago, Vertu pioneered the luxury mobile phone market. Today the company has three distinct models – the Signature, Signature Touch and Constellation. Handmade in England, using the world’s finest materials, each phone is assembled by a single craftsman. Vertu phones are now available in around 500 stores and boutiques in 66 countries across the globe.
Vertu is a prime example of how a company has managed to grow and thrive in the premium retail sector, despite the obvious economic challenges of recent years. This is down to the brand itself, as much as it is the products it produces, something Pogliani is keen to accentuate. “I often say that Vertu is a luxury brand that happens to design and manufacturer mobile phones,” he says. “Our aim is to deliver the world’s best luxury mobile phone experience for our customers by combining expert craftsmanship and peerless materials with innovative technology and unique services.”
So often, customers are not just buying a product, but are buying into a lifestyle, an experience and what a brand represents. This is reflected in the way the market has evolved since Vertu exploded onto the scene. Luxury retailers have needed to adapt, in order to maintain their position in high-end markets.
To this end, Vertu offers its clients curated services, exclusive offers, and content, specially selected to enhance the customer’s lifestyle. At the heart of this is Vertu Concierge, which offers luxury lifestyle assistance and enrichment to facilitate the customer’s every request 24 hours a day.
Consumer awareness
It is vital that a brand understands the luxury buyer. Tastes have changed and will continue to do so, as the consumer becomes more knowledgeable about products. Pogliani knows this only too well, having led a career encompassing premium branding and communication. Most notably he held the role of chief commercial and marketing officer for Nestlé Super Premium, and contributed to the creation of the Nespresso phenomenon.
“The most successful luxury companies over the last decade have been those that have become much better at creating a strong emotional attachment between themselves and their consumers,” explains Pogliani. “However, we have also seen luxury buyers becoming much more discerning in their purchases as they look for products that have real value and substance, rather than just those being sold at a premium.”
This is a philosophy that Vertu and Pogliani practice, as well as preach. While the Vertu Signature Touch is assembled with high-quality materials, each aspect has its function and purpose on the phone. Solid sapphire crystal is used for the screen giving it strength and clarity, as well as a full HD display. The phone is finished in titanium and calf leather, to create a durable and attractive exterior, protecting the cutting-edge technology within. Every inch is designed with the customer in mind.
“Luxury consumers are eager to be recognised in a more understated way, not like it was in the past by showing off their wealth, but by showing more their knowledge, their discernment, the fact that they know certain things,” says Pogliani.
Brand identity
It is not enough, however, to simply identify the desires and necessities of the consumer. Establishing an identity and linking up the two is how any brand – luxury or not – succeeds. According to Pogliani, Vertu has positioned itself in the market with a strong identity and clear values. “At Vertu, we talk about a fully rounded, sensory experience, which means providing our customers with something that goes beyond the physical presence of our phones. They see the clarity of the screen, hear the quality of the audio and can touch the hand crafted peerless materials that we use.”
A large part of this experience and brand identity now stems from the company’s digital strategy. Over the past decade the internet has become the most influential platform for customers, not only to shop, but to interact with brands on social media and learn more about brand heritage. “Going forward, it is likely that our digital environment will be as key to our customers as our physical retail spaces,” says Pogliani. “It’s our job to join these up seamlessly so that the customer experiences one single, effortless journey with Vertu, which should be both enjoyable and informative.”
Ultimately, the customer and their experience remain at the heart of what Vertu, and other luxury brands do. Pogliani explains that Vertu’s customers appreciate the curated services and privileged access to experiences and events around the world. It is such attention to detail that endears customers to brands. Now, with the financial situation in Europe improving and people having more money to spend, luxury brands are well placed to lead the resurgence.