Running a luxury business is different to running businesses that aim to appeal to the mainstream, or to provide services to other businesses. For one thing, when you are operating in the high-end market, it is not so much about the volume you can sell, but the value a relatively small group of customers place in what you offer. Exclusivity becomes a major selling point, and so mass sales and heavy blanket marketing are not what you are aiming for.
Unique Experiences and the Very Rich
A key to tapping into the affluent market, as with any other market, is understanding what inspires them to buy or spend. One of the most important things to know here, is that the very high-end market – that is to say, people who can pretty much buy anything they want – tend to be one where people want to pay for unique experiences that allow them to use their money to enrich their lives, and give them something nobody else can duplicate exactly.
The Five Star Hotel in Space
Here is a very good example of this. How do you get wealthy people to spend $40-$60 million on staying in a hotel, with an additional $20 million to go on a brief excursion? You attach it to the International Space Station, and make that excursion a space walk.
As reported recently in the America Herald, the Russian Space Agency has recently announced plans to attach a luxury hotel to the ISS, which will be equipped to host wealthy space tourists for up to one month. Only six people a year are expected to make the trip, with the program expected to be ready to launch in 2022. This means that in just four years, someone with $60 million to spend will be able to make space their vacation destination of choice.
This is a prime example of the kind of thing that draws the very wealthy – every person who makes the trip to the ISS as a tourist will have an experience completely unique to them, and the people who have experienced it at all will be rare – even the people who work on the ISS will not have enjoyed the five-star luxury of the new module in the same way.
Unique Experiences in Retail
Of course, it is easy to see where travel and hospitality companies use approaches that grant unique experiences to bring in wealthy customers, but what if you sell physical products?
In fact, experiences are used to sell high end products, too. A good example is the flagship stores of luxury brands like Chanel and Dior, which are typically designed to be different in every major city, and for which famous architects like Peter Marino are often commissioned. While a customer can buy the same Chanel suit or Dior bag online, they are far more likely to want their purchase to come with an experience such as being attended to by great staff in a beautiful building in a wonderful city.
When you are operating in the highly affluent market, you really can’t go far wrong if you can offer a desirable and exclusive experience – whether it is the product itself (for instance in travel and hospitality), or the buying experience around a physical product.