Breaking into the Lucrative Luxury Goods Market

Unless you’re in the business of selling luxury goods, most business-minded people and certainly entrepreneurs don’t quite understand the psychology behind a desire for what are referred to as luxury goods. You don’t even have to be in business for it to blow your mind as to why on earth someone would readily spend something like 20,000 Euro on a handbag, just because it’s branded with some “famous” designer’s name. “Who buys this stuff?” a certain Mr. Piers Morgan can be quoted as asking, on the Marbella episode of his hit series “Piers Morgan On…” (Piers Morgan on Marbella).

Setting up a luxury goods business appears to be somewhat of a binary situation, where it’s either you get it, or you don’t. While the odds of turning your venture into a success might be ambiguous, you should put in the work necessary to make it a hit.

Start off with figuring out what your offerings are and understand what kind of product sells where. Then, figure out where you’re going to be located and how the logistics will work in terms of storing and transporting these luxury goods. You’ll obviously have to invest in reliable business alarm systems for your shops and warehouses, as well as monitoring and tracking software for transportation. Once you’ve settled on a process from end-to-end, then you move on to analysing data.

Observe the different trends in the market and keep an eye on how other luxury-based companies present their products. Compile and analyse them with the help of an integrated data platform (such as the one on adverity.com) so that you can develop a comprehensive marketing plan. Once it is set up, market your products and gauge how the public reacts to it. Take notes and see which products have a higher chance of success and begin manufacturing.

Once the manufacturing engine is up and running, use different ways to present your products for consumers to buy. Some of these ways include:

The conventional luxury goods sales route

You would probably need quite a bit of start-up capital to go the conventional route in selling luxury goods, but the good news is that pretty much all the marketing will have been done for you. Having paid rent on the equivalent of a High Street retail outlet location, something like the concept store of a well-known luxury goods brand will inevitably draw the clientele you’d be looking to sell to. The marketing efforts of the brand managers, which feature the likes of celebrity endorsements and the likes, basically trickle down to all franchisees or retailers in one way or the other.

As mentioned though, you would need a considerable amount of start up capital to go this route.

Cutting down on your overheads

Cutting down on overhead costs is a crucial strategy for businesses aiming to thrive in the competitive luxury goods market, especially via retail stores. One effective approach is to invest in integrated security systems that are readily available on the market today. These systems combine various security measures like surveillance cameras, access control, and alarm systems into a unified solution. The automation aspect of such systems also helps fight staff shortages, which means you can run your business with fewer employees to pay. These saved expenses can be allocated towards enhancing their product quality, customer experience, and overall competitiveness in the lucrative luxury goods market.

Direct marketing

Luxury products may not be on the radar of many people unless they are exposed to them through various online channels. To achieve that, you may need to apply some direct marketing strategies that would spark their curiosity in these products. This involves the use of channels like email, social media, and text messages. Since these marketing methods can yield beneficial outcomes if sustained for a long time, you may need to have an advanced marketing automation platform to run these campaigns efficiently for a long duration.

Clever sourcing

The best source for luxury goods may just be the so-called “second-take” market, where some of the props used in movies and on television sets are sold after being only used once or twice. Most of those props are luxury goods, making for the latest iterations of what’s available on the market, so it’s worth looking into this second-take market to source goods that you can physically show your prospective customers.