Building a Small Luxury Business in a Big Luxury Brand World

It’s impossible to discuss luxury without referencing the most popular luxury brands— Louis Vuitton, Dior, Gucci, etc. As a coach, author, and keynote speaker for independent luxury providers such as interior designers, home builders, jewelry makers, artists, and service providers, I am keenly aware that referencing these large luxury brands may not feel relatable to the small business owner or solo service provider.

While much can be learned from large luxury brands, the strategies for small luxury businesses are different and the challenges are unique. Notice how I intentionally referenced large luxury “brands” and small luxury “businesses”. More on that in a moment.

Whether you are a small business with many employees, a small team, or a business of one, let’s discuss the common challenges and solutions of being a small luxury business in a big luxury brand world.?

Brand Awareness and Credibility

In the luxury market, reputation is everything. Large brands have the advantage of long-established history and credibility, while smaller luxury businesses often struggle to gain recognition. Building a reputation in the luxury market takes time and consistent effort and small brands may find it difficult to get noticed.

Solution: For one, start thinking big even if you’re going to stay small. All those recognizable luxury names you can think of have built a luxury “brand”. To succeed in the luxury market you need to understand you may be building a small business because you are not trying to compete on size, but you need to develop a strong luxury Brand (with a capital B). The luxury buyer is buying into a brand, an image, and a reputation.

No matter your product or service, you need to establish your brand as the best choice in the marketplace. You don’t have to compete with international luxury brands. Just build the best brand story and image that dominates your industry in the market size of your choice—local, regional, or national. Also, while it may take longer to build the luxury brand you want, you have to come out of the gate established as the best. Luxury is not something you can level up to. If you start being seen as mainstream it’s nearly impossible to ever be seen as exclusive. Establish the standards by which you’ll operate, understand the needs of your ideal customer, build a clear luxury brand, put in consistent and unwavering effort, and be patient. It’s worth the wait.

Access to Big Data and Consumer Insights

In business today and especially in luxury, it can seem like data is king. Large luxury brands have access to sophisticated data analytics tools and market research that allow them to precisely target their ideal customers. They can analyze purchasing trends, identify emerging markets, track social media behavior, and personalize their offerings to an unprecedented degree. Small luxury businesses, on the other hand, often lack the resources to gather this level of data, leaving them seemingly in the dark about who their customers are and their behaviors.

Solution: Utilize the data available, study the actions of larger luxury brands, and apply what I refer to as a filter of discernment. Take the best from what you can learn, toss out the rest, and leverage your advantages. For starters, a small business can use cost-effective tools such as social media analytics, Google Analytics, and customer feedback surveys. These data points can offer valuable insights into customer preferences, behaviors, and trends that can help small businesses tailor their offerings and marketing strategies.

Additionally, small luxury businesses can engage in direct communication with their clientele to gain first-hand insights in ways that larger brands may struggle to do. This direct interaction is an advantage that smaller brands can capitalize on, allowing them to develop deeper and more personalized relationships with their customers. Also, consider the power of observation. Small businesses often have opportunities to observe the behavior and lifestyle of their clients in ways that large brands could only dream of. This front-row seat is priceless.?

By definition, market research, data, and trends are only available in hindsight and can only offer glimpses into the future. I stand by a core belief that the best data will never hold up against real-life in-the-moment encounters with the luxury buyer to fully understand their worlds and adjust as needed at a moment's notice. Intimacy is the greatest secret weapon of small business brands.

Limited Marketing Budgets

Marketing is the lifeblood of any business, but luxury marketing, in particular, comes with a high price tag. Large luxury brands invest millions of dollars into high-end advertising campaigns, celebrity endorsements, and global events. They have the financial means to create experiences that capture the imaginations of consumers. For small luxury brands, limited marketing budgets make it difficult to compete on the same scale.

Solution: Small luxury brands should focus on more specific marketing strategies, targeting the segments of the luxury market where they can make the most impact. Smaller businesses can invest in in-person, digital marketing, and low-tech strategies that offer more precise targeting and build stronger relationships. For example, maintaining a high repeat business percentage can cost nearly nothing through email marketing and personal emails. Often, a simple reminder email to reengage a past customer is all it takes. Relationships are the currency and require the least amount of money invested. As I say when coaching small luxury brands, make it impossible for people to break up with you. That requires effort and relationship far more than money.

Lack of Support

In the world of luxury, large brands enjoy the dual advantage of being among the chosen few for their customers and yet they stand alongside a rather vast group of businesses that dominate the industry with an abundance of resources and data available.? For small luxury businesses, this can be an isolating experience. When you’re a small luxury brand, by definition you are not like others in your field. You are an exception. While this is ideal and intentional for brand building, it can also be an isolating and lonely experience with far fewer resources available.

Solution: Consider connecting with and spending more time with luxury providers outside of your industry. By being exceptional in your field, there will be few others that you can can relate to so you’ll need to expand your sphere. Additionally, it offers a great opportunity for cross-innovation amongst luxury providers and can open up creative marketing and service ideas.?

Also, take the best of what you can learn from large luxury brands and creatively apply ideas in ways that fit a small business. Lastly, small businesses need to more readily ask for what they need. Understand that by not being for everyone, you’re going to have to dig deeper for the resources you’ll need and want to learn.

In the end….

Small luxury businesses can absolutely overcome the challenges and thrive in a world dominated by large brands and big data in the luxury industry. In fact, small, exclusive, and intimate are the epitome of luxury and perhaps the enviable goal of large brands. Embracing creative marketing strategies, building a strong brand identity, and keeping a close eye on customer behavior are crucial for succeeding in this competitive space.

Through this newsletter, I hope to inspire you and provide insights that will give you an edge in your luxury business. The diamond edge--sharp, precise, intentional, and cuts through. All necessary elements to be exceptional in business.

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Few people can speak about the emotions and behavior of the luxury market better than Jeffrey Shaw. Having been a preeminent portrait photographer in the U.S. for 40 years serving the most discerning clientele, as Jeffrey says, "I don't just know this market, I was in their closets."

A speaker who lights up an audience with innovative marketing and branding ideas, offering a whole new perspective on business, customer service, and the behavior of luxury buyers to motivate business owners and luxury brands to implement proven strategies, grow their businesses, and raise standards in the world.

The author of LINGO and The Self-Employed Life , a TEDx speaker featured on TED.com , host of the popular podcast, The Self-Employed Life , Founder of The Self-Employed Business Institute and The Exceptional Business Academy .

For more information about Keynotes, Coaching, Luxury Marketing, and my year-long High Achievers Mastermind- www.jeffreyshaw.com .