Marketers hike prices to restake luxury claims

By Published on .

maintaining luxury status means higher-priced collections for the likes of Godiva, Coach and J. Crew.

Coach this month launches its first evening collection featuring, among other things, a Mink Frame Bag for $698, while Godiva Chocolatier pushes its "couture" G Collection line including a $350 African Wenge Wood box and J. Crew bows a Limited Collection including a Shearling Toggle coat for $1,500.

The moves are indicative of luxury marketers' need to pull up their elite images with ultra-lux products to balance out the descent toward mass luxury that threatens to bring their brand status down.

"Marketers are realizing that they've gone too far in making their brands more accessible and now they need to address the other end as well," said Michael Heitner, partner at AgencySacks, a New York agency that specializes in helping clients reach the super-affluent. Across the board, he said, luxury clients once interested in focusing marketing around their more accessible "introductory" product lines are now pushing their highest-end, limited-edition offerings. "Even if you can't afford those things, it still makes you feel good about the brand," Mr. Heitner said.

g collection

Godiva, a unit of Campbell Soup Co., is counting on that. The chocolate retailer is upping the luxury ante as part of its overall "total pleasure" push, which features new ads centered around indulging the inner diva as well as a focus on such offerings as its exclusive G Collection.

The high-end line, created by former Ritz Carlton Hotels pastry chef Norman Love, ranges from $40 for a 15-piece box up to $350 for the unique collector's box and will be offered in limited quantities solely in luxury retailers Neiman Marcus and select Saks stores through February. In spite of-or more likely because of-that scarcity, the line is the main feature of Godiva's Web site and will be supported with one-third page ads adjacent to the base campaign beginning in December.

"The G Collection is not as much about sales as it is about positioning the Godiva as a luxury brand," said Jacquie Lenart, VP-marketing for Godiva (see Player, P. 46). "It has to be a balance of luxury and accessibility," she said. "We could broaden distribution tomorrow and get short-term sales but we have to protect where this brand goes."

Pamela Danziger, president of Unity Marketing, said, "When Godiva first came into the mall, it was very luxurious, top-of-the-line, but what happens is that luxury is always being reinterpreted down to the masses, where the real growth is." Ms Danziger, author of the upcoming book, "Let Them Eat Cake: Marketing Luxury to the Masses-As Well as the Classes," said that "marketers must continue to inflate the luxury value so they can counteract that gravitational pull."

Coach has been riding high on the "accessible luxury" wave, reporting a 60% rise in profits for its recent first quarter. But unveiling Madison, its first-ever evening collection, is definitely a move toward securing the high-end consumer. Available online and in exclusive retail outlets-certainly its Madison Avenue store-for a limited time, Madison moves beyond typical leather to handbags, shoes, gloves and other accessories made from premium materials such as mink and satin.

Raising its luxury image and the perception of quality that comes with it is crucial to J. Crew's ongoing turnaround strategy. That strategy is beginning to pay dividends with recent sales increases for its second quarter up 15%. The chain has been focused on offering fewer markdowns and more luxury items at higher price points. For its limited edition collection, billed on its Web site as "so incredibly luxurious that we only make a few," J. Crew created only about 50 of its $1,500 Shearling Toggle Coat.

select items

That appeal to the elite is "something we're doing more of," said Margot Brunelle, head of marketing and PR for J. Crew. While she said the items are intended to serve J. Crew consumers looking for exclusive, upscale quality, she said, "I wouldn't say it has negative marketing impact. It's very J. Crew to have select items."

Increasingly, AgencySacks' Mr. Heitner maintains, luxury brands must appeal to their clientele's desire for unique items in limited quantities, "things they're not going to see on the street very often."

Even in their standard lines, luxury marketers are moving up the price scale to reinforce the aspirational aspect of their brand.

Polo Ralph Lauren Corp., which has certainly profited from the accessibility of its outlet stores (which at 143 now far outnumber its traditional stores), earlier this year raised the price of its signature Polo shirt 24% from $52.50 to $65, the first price hike on the product in many years.

The result? Sales spikes of 100% for the women's shirt, 25% for the men's.

"A key priority of our corporate strategy is to be sure we're building a luxury image," said David Lauren, Polo senior VP-advertising, marketing and corporate communications.

Most Popular
In this article: