Making your mark as a new brand in a niche market requires a mixture of determination, innovation and insight. Established luxury labels can still persuade discerning customers that it’s safer to trust their time-tested products than those produced by a novice who’s still wet behind the ears. But everyone’s got to start somewhere — and newcomers still break through despite the odds stacked against them. So if you want to throw your hat into this refined ring, here are three steps to sustainable success as a luxury startup.
1. Market research
Developing a prototype and sourcing materials for manufacturing are expensive in any industry — but costs can go through the roof when you’re aiming at the higher end of the marketplace.
So before you spend cash that you can’t recoup, make sure that there’s actually a demand for your innovative product. There are high risks and rewards for a product that’s completely unique, but it’s also possible to piggy-back on the success of an existing category by differentiating enough to create an effective Unique Selling Proposition (USP).
Euromonitor International provides market research on the luxury good market in exhaustive detail — you’ll find useful statistics on market size, share, trends and sub-categories in every geographical territory around the globe. And once you’re armed with persuasive data metrics, you can proceed with your project in confidence and attract investors more easily.
New luxury watch brand Filippo Loretti has made inroads to a highly competitive market by designing watches that look and feel fantastic, but cost customers far less than more established competitors. The brains behind the brand are Lithuanian brothers Danielius and Matas Jakutis — and they raised investment for their enterprise with commercial crowdfunding through Kickstarter. Their product is the platform’s most successful watch brand of all time and in the top 20 campaigns across any category. The brand is only available online and orders are shipped directly to customers — creating an air of exclusivity that’s not dependant on a high price tag. So if you believe in your product, but it’s not attracting traditional investors, sourcing funds from members of the public can help you turn your vision into reality.
3. Cut overheads
Another potential pitfall that new luxury companies face is spending too much on overheads before profits start to roll in. So decide whether you can postpone renting a salubrious Mayfair office until it’s really necessary. Trade from more modest premises and allow your products to speak for themselves — or even operate entirely online. And apply streamlining to your staffing too — HR software from SD Worx can automate payroll and tax compliance with no need for an HR partner and hiring a virtual PA as and when required instead of splashing out on a full-time assistant is an appropriately thrifty approach.
Follow these three steps to sustainable success as a luxury startup and you’ll soon be snapping at the heels of top-notch competitors.
Have you launched a luxury startup? Share the secrets of your success in the comments section.