It’s that time of the year again where the retail world goes mad for discounts and special deals. It starts in the East with Singles Day, where spending surpassed a record $38 billion this year, and over in the West peaks this week with Black Friday. The increase in consumer spending on these days (and increasingly in the run-up to them) is significant. Black Friday gets its name from being the day many retailers first enter the black on their financial balance sheet that year. But for luxury brands, how do we find the balance between capturing the increased revenue potential and protecting our long term brand equity?
Does Black Friday Work for Luxury Brands?
In a recent survey, PWC found that 77% of men and 67% of women shop for themselves over Black Friday / Cyber Monday, rather than purchasing gifts. This means the same focus on audiences & personas that you should have throughout the rest of the year still applies. In answering the questions of what your brand should do for Black Friday, you must first answer the question of why your most valued customers buy from you and what they would think of any Black Friday activity you do?
Many of the established, big-name luxury brands have distanced themselves from Black Friday and giving discounts entirely. Hermès, Louis Vuitton & Tiffany & Co are just three such names who famously never go on sale. For them, this goes entirely against their brand values and they will instead opt for smaller or limited edition collections, to ensure supply is not greater than demand. This is a smart move and one that helps them retain their status as some of the world’s most desired luxury brands.
Whilst this approach may not be possible for all, for luxury & premium brands that need to capture extra revenue during the Black Friday period it does offer an alternative solution.
Luxury Alternatives to Black Friday
Rather than giving discounts, consider if there is a limited edition collection you can release. You could make this seasonal and launch just before Black Friday, so it’s still available whilst consumers are in that enhanced buying mindset, but without it being associated with a day of deals & discounts. With this approach, a branding campaign is crucial in the run-up to the launch, to ensure customers are waiting and ready to buy when it lands. Apple is a premium brand that has perfected this model, never going on sale but ensuring there are hype and anticipation surrounding each new product launch, still often leading to queues outside their stores on the day of release.
Another approach luxury brands can take to securing sales over Black Friday without damaging their brand, is to hold exclusive sales. This could be for your most valuable customers only, to prevent them spending their disposable income with a competitor (be that direct or indirect), or could be used as a new customer acquisition tool, encouraging sign-ups to your database before the big event. Lead form ads across Facebook / Instagram, LinkedIn and Google Ads can be a great way to generate interest and new leads before a big event. If taking this approach, it’s important to make sure you don’t end up with a database full of poor quality leads, so you will need someone analysing and managing your CRM. The other thing to consider here is still the longer-term brand impact of offering discounts. Even within an exclusive sale, treat it more like a sample sale with a limited selection of lines & sizes. You can then utilise any purchasing data you collect to turn new customers into long-term, loyal customers.
How to Leverage a Luxury In-store Experience
If you have a physical store, another great alternative you can offer is in-store experiences. This could be a special event over the Black Friday / Cyber Monday weekend, to draw consumers in who will then be willing to purchase at full price whilst there, or could be an add-on of tickets to a future in-store event, for anyone that makes a qualifying purchase during the Black Friday period. With this approach, you can actually enhance your brand by using the experience you provide to showcase your superior expertise, quality and attention to detail. By focusing on service during these experiences, you can build more personal connections with high-value customers.
Whilst Black Friday / Singles Day and other discount events will always receive a lot of hype from the mass-market retailers and traditionally you may have thought to stay clear, it is the smart luxury brands that will be able to turn this frenzy into an opportunity to further elevate their status and showcase their quality. Some of the ways to do this are:
- Commit to never discounting & make that a clear brand value
- Launch a limited edition collection in mid-November
- Run an exclusive sample sale
- Focus on the experience, utilising your physical store if you have one
As with everything we do in the luxury space, if considering one of the options above or any other ideas of your own, you must first carefully consider if the long term impact on your brand will be positive or negative. Whilst a Black Friday event may give you a short term boost in revenue and ROAS, if there’s any chance it could undermine the integrity of your brand then you could actually be doing more harm than good.
In March 2020 we will be hosting the upcoming TREND on Luxury Fashion and retail. Get in touch with us to find out more!
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