Why European Luxury Brands Miss Their Target In Reaching The US Wealthy

Why European Luxury Brands Miss Their Target In Reaching The US Wealthy

(And Why Lorre White Is So Successful).

The US’s social classes are based on wealth, not ancestry. The many implications from this difference are why European Luxury Brands miss the target in reaching the US
wealthy.

For our non American readers let us define “blue collar”. It is a term that means working class. White collared shirts were worn by professionals that required a university education like a lawyer, a doctor, or
a teacher. The term blue collar was
dubbed from the blue uniforms worn by janitors, mechanics, trash collectors and
others jobs not requiring a higher education.
So, white collar denotes better educated, wealthier and in a socially
higher class than blue collar. The term
"middle class" is applied very broadly in the US and includes people who would
elsewhere be considered “working class”. The term middle class is relevant to the standard of living of
the majority of people in the world.

Americans having a higher standard of living than many countries after the World War II, meant that middle class came with all the perks that might in other cultures have
been for the wealthier (nobility or nouveau riche); things like indoor
plumbing, refrigerators, cars, central heating.
The economic boom and educational grants assisted more blue collar
workers to allow their children a college education, thus improving the next
generations earning ability and social status by entering the middle
class. For a long time the middle class
made up the majority of the American population. This group set the base line standard of
living – the American middle class.

The upper class in the US, would be the Rockefellers and the DuPonts; although certainly educated, they worked at running their empire, but had no need to work for others. It
is from the hard working, industrious, mostly university educated, upwardly
mobile middle class that has given birth to all the new multi millionaires and
even billionaires.

America, arguable the most powerful nation on earth, prides itself on being middle class. Where as in Europe, they want to claim
connection through ancestry to anyone of nobility. The US’s upper classes are based on
wealth, not ancestry. Of the UHNW (Ultra
High Net Worth) 92% are not from the “upper class”. That means only about 8% of the wealthy world
wide actually come from the “upper class” and know luxury brands. Many of the European aristocracy have
maintain their titles but lost their fortunes.
In marketing terms this means they are upper class in European
standards, but they cannot afford to buy the yacht, jet, or exotic car, etc.

Two of the richest, most influential business tycoons in the world, America’s Bill Gates & Warren Buffett, come
from very middle class families. Warren
Buffett has claimed his great success at knowing which stocks would succeed,
was attributable to his very middle class tastes. Mr. Buffett has also donated over 54 Billion
dollars to charity, also representing the very American values of democracy and
caring for those who have less. The United States
has no royalty. It is in the
constitution that “all men are created equally.” A janitor’s son can become
president of the US. In fact, in the US, individuals with prominent
ancestral ties often would even tend to hide them, until they had proven their
own merit. An American’s perception of
ancestral titles is how incompetent someone must be, to need to rely on a DNA
similarity of a person who has been dead 300 or 400 years, for their own
success. Ancestral titles do not entitle
people in America. In stark contrast to the Europeans which toss
their titles out, Lord, Lady, Duke, Count, or Prince of some country that may
not even exist anymore, in an introduction.
Remember that Americans are Europeans that defied royal rule. They came to America because they refused to
support the decadence of the nobility with their sweat and taxes and because
they wanted freedoms religious and other wise not allowed them at home. There is a strong connection between
Americans and Europeans, but it is in the differences of the subtleties where
the marketing message is getting lost.
We all assume our own social morays as correct and dismiss that of other
cultures. As natural as this is….it is
the difference between success and failure in growing outside your immediate sphere
of reach. …going global requires a realistic perception of how others view us.

Americans feel the need to establish their own credibility before they would allow others to know of their lineage. The American culture supports the underdog, reaching the “American Dream”, rags to riches success stories. If a aristocrat from and a school teacher
were in the running for anything….America would root for the later. The bottom
line is that Americans are proud of being “middle class” and most of the UHNW in
the US still identify themselves as being middle class, despite having achieved
great wealth. To Americans, middle class
connotes: honesty, hard work, practicality, intelligence, politeness and a God
fearing back ground. Most middle class
Americans are University educated. This
requires a different marketing approach in the US
than in Europe.

This cultural distaste for entitlement has left the very wealthy with an identity crisis in the US. Many have created the “I am every man”, or “just a good old boy
billionaire” persona like Ted Turner. In
truth they live in multiple mansions around the world, fly private jets, own
yachts, dress in the most expensive clothes, wear expensive watches, drive luxury
cars, and enjoy all the beauty and luxuries that they can afford. This disconnect between the American middle
class virtues and the reality of their situation leads many of them to even
hide their great fortune. America
which encourages the creation of great fortunes, also simultaneously touts a
very middle class doctrine causing them to feel guilty about spending it. Luxury which is just now starting to come to
the internet has assisted them with discreetness. It also allows the very wealthy to learn
about brands in a non ego threatening method.

The glaring disconnect in the US middle class heritage morality and the opportunity that the rich have to explore the enjoyment of culture, quality and beauty is the
challenge that luxury brands must navigate in their marketing reach. This is also why despite being one of the
wealthiest countries, the US
has not tapped (what is estimated by some studies as only 36% of their) luxury
consumption potential where as Europe has no
where to grow, they are at their luxury capacity. Luxuries come from all over the world, but
certainly Europe has been the greatest
concentration of the best luxury brands known in the world across many
categories. European marketers lack of
understanding of this cultural distinction, it is what they need to address, to
increase the American consumption. It is
about cultural exposure, brand and product familiarity, creating a feeling of
comfort in bridging the middle class American virtues of the very wealthy with
the ability to consume at the highest level. It is about finding a way to marry
American middle class virtues with increasing desire for responsible
consumption of luxuries from their growing self made wealth.

This is what Lorre White “The Luxury Guru” so eloquently does, this need, even passion by the UHNW to rectify their guilt with luxury consumption is why her shows have had such
success and had such incredible organic growth. Her shows educate and inform
(for free – very democratic) on a “peer to peer” level about brand distinctions
from a trusted luxury expert. In today’s
world, the changing global economic and environmental issues have even more
countries including Europeans wanting to bridge lifestyle quality with
responsible consumption. Her positive
image allows her to present products and services is such a way as to satisfy
the social, cultural and moral morays of the new wealthy. The gaudy gluttony
and flashy entitle approach to consumption simply does not work. This is
luxury’s future.

Why “Lorre” specifically: Lorre who is incredible socially aware, was one of the firsts to study the specific motivations of the wealthy. This is her area of expertise
and has worked with many brands in reaching this demographic. Most luxury consumption of high priced items
like yachts, jets, mansions, and exotic cars are by individuals 35 to 55 years
old. A 25 year, old not only has no
credibility, but would be perceived by Americans as not having “earned” their
wealth and so not respected. A 65 year old is likely to not have the beautiful,
youthful vibrant image that the purchasers want to perceive themselves as
having when they buy the yacht, jet, car, etc.
If you’re selling toothpaste you wouldn’t have a person with rotting
teeth as the sales person. Women are
better able to connect with more viewers than men for several reasons. Men are comfortable about learning about
exotic cars from a woman, but a woman is not comfortable about learning about
expensive lingerie from a man. Also,
another distinction between the US
and European markets is that men interested in fashion are perceived as
homosexual in the US. Attempts at men’s fashion magazines like GQ
quickly became gay men’s magazines where as in Europe
it is very excepted for men to have an interest in fashion. Women are given
much more latitude of reach between cultures.

An educated person is not likely to believe a brand telling them how wonderful they are. This is why traditional advertising is least effective in the wealthy demographic.
But they will believe an independent, trusted and vetted expert in the
luxury field. A random reporter gives a
perspective from an outsider looking in.
A celebrity endorsement is paid for and not really from knowledge. Celebrities are not a constant personality
who will always be there year after year.
A celebrity lacks credibility and consistency and is more effective in
reaching the lower classes more effected by the power of suggestion. Frequently, popular celebrities do not have
the clean image that a luxury brand wants to be affiliated with, nor represents
the value system of the UHNW luxury purchaser and what they NEED to bridge the
American middle class values and “abundance is good” disconnect. Many attempts at reaching the wealthy
demographic have failed because they have no personality connected to them. They just become perceived as a series of
long ads, running one after another paid for by the brands. They offer no credibility, not enough
changing content, and no reason to return. Lorre’s style is to bring the viewer
along on an adventure with her to experience and learn about a particular
luxury, which is more entertaining and engaging than being lectured.

The radical change of who has wealth world wide, requires luxury marketers to address the cultural changes in their reach to the wealthy. The old marketing formulas no
longer serve luxury brands.

Reaching the world wealthiest demographic is where White Light Consulting specializes. We specialize in educating “C” level employees how to reach their target market.

www.WhiteLightConsulting.net

www.LuxGuru.Typepad.com

Lorre White

"The Luxury Guru"

CEO White Light Consulting

"Those who say it can't be done...need to get out of the way of those who are doing it!"

www.LuxGuru.Typepad.com Luxury Blog

www.WhiteLightConsulting.net

Google her name for TV shows & web videos