How do brands position themselves as luxury brands?

Many of us love shopping. We do not always end up buying something, but often we do just that. Have you thought about what makes you actually shop for something, what made you go into that particular store? In this blog, we look at the importance of visual merchandising for goods and brands, and we look in particular at what makes some brands often perceived as luxury brands. Is it about a particular quality, or is it the packaging that makes people willing to pay so much for an item?

What does "merchandising" mean?

According to the Oxford Dictionary, "merchandising" means: The activity of promoting the sale of goods, especially by their presentation in retail outlets. It is thus about how goods are exposed in a shop premises with the help of furnishings, lighting and other tools. In other words, it is about the visual expression of the store and the goods, hence also often called visual merchandising.

You have probably noticed that store employees arrange the goods so that they look their best. This is easiest to see in stores that sell clothing or interior items. But merchandising is an essential part of any professional retailer. And for sellers of luxury goods, merchandising is big business.

See how physical stores harness the power of design to win the battle against online shopping.

What makes a brand a luxury?

Brands such as Ralph Lauren, Gucci, Prada, Hermès and Louis Vuitton are often considered the crème de la crème of luxury brands. But why are they? Is it due to a very special quality of raw materials, production and craftsmanship? Yes, some would argue. Historically, there is also a core of truth here, at least for some of these brands. Both Gucci and Hermès have a long history as manufacturers of high quality leather products, including saddles and other leather equipment for equestrian sports. But the journey from there to the catwalk in Milan, Paris and New York is about much more than quality. It's about positioning, attracting the right brand ambassadors - and it's about merchandising.

If you visit a Louis Vuitton store - or showroom - as it is often called in the luxury segment of the retail industry, you will immediately notice that it is something completely different than stopping by any other store. When it comes to stores in the luxury segment, you can expect that:

1. You will find the store in a shopping street or at a shopping center along with other luxury brands. In Oslo, the area around Akersgata is discussed about the new trend area for luxury with, among others, Louis Vuitton, Bottega Veneta, Mulberry, Hugo Boss and more.

   1. The store has particularly elaborate window displays where carefully selected products are placed in a context that highlights the products.

Some stores style the windows better than others. Many are lured.

1. The store has uniformed guards who politely open the door for you.

2. The shop premises are decorated with exclusive materials, the lighting is optimal to highlight the products, which are often displayed on shelves that go from floor to ceiling.

3. Store employees are often dressed in black and behave exemplary in terms of customer service, discretion and let you know yourself as someone who actually intends to spend 80,000 kroner on a handbag. It's about packaging

"They make you feel like a million dollars."

It's about packaging

There is a difference between selling Tesla and Skoda. There is a difference between selling Friele coffee and Nespresso. And let's stop by Nespresso for a moment. Norway is a coffee-drinking nation , and Oslo has received international fame due to coffee bars such as Java, Tim Wendelboe and Fuglen. What is it about Nespresso that makes coffee-drinking people around the world invest in expensive coffee machines that can only be used with Nespresso coffee pods? Yes, it's about all the accessories.

Nespresso shops are reminiscent of a cross between a clinical laboratory and an elegant lobby of a business hotel. Here, too, employees are stylishly dressed, and the level of service and expertise is turned to the top level. If you are in doubt about the type of coffee you want, you can try different flavors in the coffee bar they have. By being a member of your own Nespresso club, you feel extra well taken care of. And it does not hurt that packaging on everything from the coffee pods to the coffee machines and shopping bags gives an impression of luxury. But you have really only bought coffee. And paid more than for the coffee you find on the shelf at REMA.

Brand ambassadors as magnets

There is a luxury segment for all types of goods today. Traditionally, we may think that luxury has been reserved for the car and fashion industry, and most of us have only been able to admire the show from a good distance. Today, we find industry slippage across different customer and product segments. For example, we see that H&M is good at involving celebrities and designers in designing unique collections. These are often "limited editions" which gives them extra value. Due to its affiliation with celebrities such as David Beckham and Madonna and designers such as Karl Lagerfeld or Stella McCartney, H&M can charge higher prices for the goods than otherwise, and as a brand, associations to a life with a high celebrity factor are aroused. We can say with others that Stella lends some of the shore to H&M.

The attraction lies in the illusion

So why do we choose to go into a store? Why do we choose to shop for that particular item? I claim that it is about us getting excited by the emotions the goods arouse in us. When we buy an item in the luxury segment, it is not just the item we want, but the feeling of belonging to an elite, a "tribe" or a club. This is not necessarily a deliberate act or thought. Many will probably just deny that they are acting because of such dreams of greatness. But it is a fact that you see far more people on the streets of Oslo with brands like GANT, Ralph Lauren and Tommy Hilfiger than you do on the Harvard University campus. This is despite the fact that these brands play on associations with the prestigious university environment in Massachusetts, USA - and on the privileges many have as a result of having gone to school right there.

This illusion is incredibly important for brands to maintain. This is why great emphasis is placed on details in how the brand is presented, and that is why it should be perceived as expensive to shop. It should feel like an investment in yourself, in your own future, in your destiny. You buy yourself a place in good company. And by shopping, you not only achieve belonging to an elite for a poor while, you also get marked distance to the rest, to the others.

Checklist for luxury brands

If you want to climb the social ladder in brand building, you must therefore have a clear positioning strategy:

1. Location places you in good company

2. Exclusivity means that you do not exist for most people

3. Provide positive brand associations that enhance the feeling of luxury

4. Invest in the store or office premises

5. Cultivate service culture among employees

6. Connect with you brand ambassadors who strengthen the brand

7. You can not get away from quality

8. You must deliver visual merchandising in the top division

9. Make shopping with you a unique experience, time after time

10. Always deliver above expectations