A lesson in luxury: Achieving fast brand growth in a high-end market
There are three important lessons that any company or startup can learn from luxury brands to ensure they are best placed to experience similar growth and success.
Suffice it to say, it’s a turbulent business market out there. In the past few weeks, we have seen several beloved brands close up shop including Milkrun and Ezibuy, with many more anticipated to fall as the year progresses.
A recent study from Allianz would have us believe that the level of corporate bankruptcies is anticipated to rise by 19% globally in 2023.
However, despite this, luxury brands still seem to be booming. Last week, luxury skincare brand Aesop was sold for a whopping $3.7 billion and LVMH reported strong 23% net income growth for 2023. At Collecting Cars Australia, we are seeing record numbers of prestige cars sold weekly via our online auction platform — anticipated to hit $90 million worth of sales by the end of the year.
With the rising cost of living impacting businesses and individuals across the nation, I am left wondering how these two trends can co-exist with one another: premium brands skyrocketing while affordable brands are tanking. Yes, luxury brands have staying power, but there’s more to it than that.
There are important lessons that any company or startup can learn from luxury brands to ensure they are best placed to experience similar growth and success. And it all comes down to quality, customer service, and future-proofing.
Lesson One: Quality is still king
Luxury brands are typically associated with high-quality, limited-edition pieces. Creating very exclusive product lines allows brands to deliver a sense of desirability in their offerings and drive-up price and demand. Over the past decades, we’ve seen the rise of convenience across all aspects of our lives, with brands providing multiple product SKUs and generating clever strategies to ensure customers are coming back again and again. This fast-moving retail space is appealing, but it doesn’t have longevity. And that’s where luxury brands win.
With trends changing constantly, consumers are becoming more discerning than ever and are seeking iconic items that will stand the test of time. At Collecting Cars, guess which cars are our best-sellers? The Ferraris, Lamborghinis, Porsches and classic muscle cars — the ones that are rare and will age like fine wine! So, invest in the quality of fewer offerings, rather than trying to be everything to everyone.
Lesson two: Don’t undervalue customer service
Regardless of whether you are the founder of a tech startup or a pet grooming business, your ability to provide elite customer service plays a vital role in how stakeholders engage with your brand. Collecting Cars launched in Australia in 2021 and in two years, we have seen immense 92% growth — anticipated to triple by the end of the year. This wasn’t achieved by sitting back and relying on luxury cars to sell themselves.
Instead, we have put the focus solely on servicing our stakeholders, finding gaps in the market our competitors aren’t, and relying on data and tech to drive our offering within our target audience. We ensured that the Collecting Cars online auction marketplace took all the stress off buyers, allowing them to list and sell for free and receive 100% of the highest bid. The quality of your customer service reflects the brand you want to build, so don’t skimp on it.
Lesson three: Futureproof your offering
Many luxury brands live confident in the knowledge that people will return again and again for the brand name. Startups unfortunately are not afforded this luxury (no pun intended). So, unless you are the next cult brand, you need to find ways to futureproof your offering without contributing to category overwhelm or alienating your audience.
How to do this? I recommend digitising your brand as much as possible.
The businesses that are pioneering in this category are the ones who are creating a fantastic digital experience. Regardless of whether you’re e-comm or not, take your brand’s niche (for us, it’s iconic and collectable cars only) and create a powerful digital community around it. Use the owned channels at your disposal to create a premium online offering and market to your audience in the right ways. This could be as simple as creating a database, a subscription offering or even paywalled content.
Having worked across multiple startups and big-name brands in my time such as Dell and Virgin, I have learned that while luxury is powerful, disruptive business models can outperform the big guys any day.
Richard Fowler is the head of Collecting Cars Australia. An Entrepreneur, digital strategist and growth hacker, Richard has a wealth of digital media, advertising and business experience. He has previously worked on the world’s best-loved brands, including Dell, HP, Virgin, HSBC, Mother, Wild Turkey, Toyota, and Hyundai.
