Accessible Luxury: It’s Not an Oxymoron Anymore
The term “luxury” is still used to imply a certain level of scarcity. As a result, once a brand becomes too ubiquitous or – dare we go here – begins selling to the masses with a discount strategy – a la Coach or Michael Kors – that brand can no longer be seen as luxurious. This poses a conundrum for luxury retailers and brands, especially since consumers have more choices than ever when it comes to where they shop. This said, the reality is the goal of any company is to make a profit – yet if they do so by selling their products at lower price points they risk losing that ever-important brand perception and thus inevitably lose out on margins. Luckily, there is an alternative for these luxury retailers besides staying stuck between a rock and a hard place with their pricing strategy.
Let’s talk about how luxury brands can elevate the perceived value of their products while simultaneously increasing sales to make a profit as they build their brand.
Continually Docking Prices Lowers Brand Perception
Let’s get real here for a minute. When a luxury brand continuously discounts their goods, they cease to be a luxury brand and instead become a mass-market company. Sure, it’s great for brands to make a profit by being sold at numerous retail outlets, while some brands like Michael Kors and Coach excel at being hybrid companies – falling somewhere between luxury and middle-of-the-road. However, ubiquity is the enemy of scarcity, and as Neil Saunders, Managing Director of GlobalData Retail told Racked.
This is a perennial problem with the accessible luxury sector as it is easy to become slightly too mass-market in a bid to chase sales.”
So, how can luxury brands continue to be perceived as “luxury” while also making a steady profit? They have to get a little creative with their payment options.
New Payment Options Redefine Affordable Luxury
Luxury retailers can maintain their brand perception while also increasing sales by giving customers the options to break the price of their high-priced merchandise up into smaller, more affordable payment “chunks.” Take a $250 pair of jeans, for instance. Instead of lowering the profit margin on the jeans by selling them through a middle-market retailer or discounting the price of the product, a retailer can offer customers an alternative payment option to pay for the denim that makes the price of the item seem more manageable. Instead of coughing up $250 at the register, customers can then select a payment option at checkout that breaks the $250 price tag down into 4 more manageable “chunk” payments of $62.50. This enables retailers to make their luxury products accessible to a larger pool of consumers, without lowering their prices or changing how consumers view their brand.
Breaking Down Payments Without Adding Interest
Of course, the benefits of any savvy payment option go out the window if the customer has to pay interest on the products they purchase. After all, Millennials are even more afraid of debt than they are afraid of death, and nothing scares a young person away from the cash register quite like the threat of putting their finances more in the red. This is why retailers need to offer customers a payment option at checkout that can break down the price of luxury products into palatable chunks without requiring extensive, credit card-like background checks, or increasing their debt with excessive interest. Quadpay gives retailers the ability to break down the price of their products into 4 simple, interest-free payments spread out over a 6-week time period. This makes the price tag on luxury goods less daunting for young customers, while enabling brands to retain their aspirational image. The customer simply enters their debit or creditcard info at check out and Quadpay does the rest, automatically charging their card at pre-determined intervals – thus eliminating the fear factor of purchasing on credit by enabling customers to buy aspirational products with money they plan to have.
“Accessible luxury” is no longer an oxymoron. In fact, making products accessible to a wider pool of consumers without lowering brand perception should be a goal for all modern luxury retailers. Quadpay makes it easy for luxury brands to offer customers an elevated retail experience that remains uncompromised… at prices they can actually afford.