IS LUXURY RIGHT FOR YOU?
For business owners who are strategic about earning a reputation as a luxury brand from the start, the risk can pay off. “If you are known as a luxury product to begin with, and you do it well, you are going to do well in any economy. It transcends the economy,” says Gelbs.
But perhaps you are looking at your middle-income clientele and wondering if a switch to high society would be a better financial move. Despite the growth statistics in the luxury business, store owners should not rush into luxury sales, say experts. There are a couple of challenges associated with a transition into the luxury business that might prove insurmountable.
First, Blackwell reminds retailers that “targeting prestige buyers is expensive.” They look for the nuances that are not offered at lower-end stores, whether it’s the decor, the prime location, product selection, customer service, attention to detail or convenience, he adds.
Another, perhaps more daunting challenge is that even your store employees’ best customer service may not be enough “service” for a high-end consumer’s tastes. Blackwell sees a difference between a boutique and a run-of-the-mill store; viewing the latter as predominately filled with merchandise. “Prestige buyers are not taking their beauty regime into their own hands. They pay for the comfort and luxury of having someone else take care of their beauty needs; therefore, they would not have a tendency to frequent beauty supplies,” says Blackwell.
Even if a beauty supply owner invested the money and time necessary to recreate the space’s image and inventory into a luxury atmosphere, it might not work, say experts. “I don’t think that a beauty supply can transition into a luxury boutique. It would be difficult to change the general opinion of the consumers in the area; [seeing] what was once a run-of-the-mill store [turned into] a place to find luxury items and services,” says Blackwell.
Gelbs agrees, saying it would be much harder for a store to transition into a luxury brand if it were not originally considered one. “Generally speaking, a company that is more moderate or middle-of-the-road doesn’t transition well into luxury. You’ve made your name catering to a certain type of clientele. You’ve built your reputation on that type of clientele,” says Gelbs. “If you are trying to break into luxury but you have a different reputation, it’s difficult to be successful. Imagine if Wal-Mart started selling Rolex. High-end customers still wouldn’t shop at Wal-Mart.”
Leah Genuario is a Hawthorne, NJ-based freelance writer. She is the former editor of Beauty Packaging.