“Affordable luxury” is fictitious.
Luxury can mean access. i.e. the luxury of having clean access to food and clean water. However, in markets, it most commonly means extravagant, rare, and premium. Niche markets. Please explain to me, if you can, what is affordable luxury? How can this be?
First, I would like to acknowledge that the word luxury can represent different things many of which can be good and bad to each of us. In a time when so many have had their livelihoods destroyed by COVID-19 and digital disruption. Let’s not forget that this has also been a controversial subject with the poverty existing the world over. However, it must be understood that poverty is a complicated issue and not just a lack of food, food is a need created by poverty, but poverty is a result, a symptom of a lot of variables including politics. My article is only focusing on or advocating for luxury as a market and the conflict of using the phrase “affordable luxury.”
If we are discussing markets this is how it works, or it’s structured: Luxury; High-end; Mid-end; Low-end.
There are two primary segments in my opinion, mass, and niche markets. The luxury market is a niche market, but not all that niche is luxury. Luxury is a state of great comfort or elegance, especially when involving great expense/price.
“Price is positioning” — Blair Enns
Your pricing is a result of several things including manufacturing/production cost, and if you are a luxury business then rarity would be a factor, in most cases, value perception from both the company and consumer plays its part. Consumer perception dictates a lot, but marketing can also influence that perception. for example, pink salt is not a luxury product, but it’s placed above mid-market by pricing, it’s not rare either, it’s just not white. Sea salt is placed above rock salt…all this is pricing — Positioning — and possibly the effort of the entire process.
Positioning is what you do because you can’t change the constant, the market is what it is. Instead of competing with everyone else in one segment you can go up or down to position yourself. However, you must also find a way to differentiate — Brand design and development — your branding is how you represent and communicate to the public. This includes packaging design.
A brand can tap into a different segment by offering access to other consumers. They still produce quality products, but they are not targeting luxury if they are a luxury brand, they are now going into a high-end space to maintain the optics of that luxury reputation but differentiating themselves from a lower market based on price.
Luxury auto brands do this by making smaller cars, or less luxurious models that are just above the other markets, but the badge of honour remains, such as Mercedes and BMW. Technology also allows for this entry because they can produce some products at a lower cost which allows them to enter a new segment.
Auto brands and the auto industry and quite a few brands/companies have suffered great losses for various reasons over the years, everything they have done is a business decision. Which is what choosing to niche, and whether you go luxury or not is, they are business decisions based on opportunities that can be leveraged. Remember that pricing is positioning, you must decide where is most valuable for you based on what it cost you to manufacture your products and how you wish to be perceived as a brand.
Affordable luxury is fictitious in my opinion. Creating access to other consumers to be part of your brand and how you do this, does not take away from being a luxury brand. You’re merely offering an opportunity for others to buy into the brand. A product being affordable means it’s now accessible to a wider audience, but I would not consider it luxurious and affordable, it’s just affordable. It can most definitely be a high-end offer though.
“Luxury is hard to define; it’s expensive but not overpriced. It’s high-quality and long-lasting, but futuristic. It’s aesthetically pleasing, but unique. It’s not only rare, but also difficult to access. It’s service-minded, but elitist. Luxury is a belief that relies upon elucidation.
Senior Contributor of Forbes, Pamela N. Danziger, and author of Putting the Luxe Back in Luxury: How new consumer values are redefining the way we market luxury, believes there are 10 specific values that a brand must uphold in order to rightfully be named “luxury.”
The ten luxury brand values as defined by Danziger are superior performance, craftsmanship, exclusivity, innovation, sense of place & time, sophistication & design aesthetic, creative expression, relevance, heritage, and responsibility.” — blog.thatagency.com
Markets aside, luxury in the context of access is an entirely different thing. Access to certain things in some places would be considered a luxury but it’s defined as a luxury because it’s not easily accessible, which is the same definition as what defines a luxury brand. Affordable luxury is a buzzword used to make people feel great about buying something well-made that is within the reach of their pockets. A product created by a luxury brand, or made from materials and styled in ways not commonly found.
However, there is a new approach to luxury, and in some ways, it’s being redefined, or access to it. Not necessarily changing it to “affordable luxury.”
“The change in how consumers define luxury and the new path to purchase is dramatically redefining the marketing strategy. Luxury brands must be very agile and innovative in order to gain the favors of the new luxury consumer.” — blog.thatagency.com
I am not trying to be stubborn or fight against change, things change. I am always open to learning new information. If you have information or an explanation I am not aware of regarding the phrase “affordable luxury” do share it with me. Sustainable luxury is something I can get behind, and perhaps sustainable can open up affordable access…but sustainable luxury is a different conversation. It’s also the focus of one of our agency’s client partners.
