NEW YORK — When it comes to things that influence consumers to buy luxury goods, advertising ranks dead last.

That’s one key finding in “Let Them Eat Cake: Marketing Luxury to the Masses — as Well as the Classes,” by luxury marketing specialist Pamela N. Danziger, slated to be published in January by Dearborn Trade Publishing. Danziger gave WWD an exclusive look at Chapter 10: “Promoting Luxuries — Myths and Mysteries of Luxury Branding.”

Ads placed eighth among consumers, who were asked to rank eight influences on their last purchase of personal luxuries such as fashion, home luxuries and experiential luxuries.

Indeed, Danziger, who is president of Stevens, Pa.-based consultant Unity Marketing, estimated an eye-opening 80 percent of ads in traditional mass media — including those for luxury goods — are ineffective marketing vehicles. “The whole system of mass media advertising is just not working anymore,” Danziger said in an interview.

For example, in an index with a baseline of 100, ads for personal luxuries rated a 76, meaning consumers were 24 percent less likely than average to be influenced by them in making decisions to buy such things as apparel, accessories, beauty products and cars.

The leading influence over personal luxury purchases is the reputation of a brand or a company, which indexed 133, or eight points higher than the factor’s 125 rating in Danziger’s overall Influencers Index, which also comprises influences on home and experiential luxuries. The reputation of a brand or a company was followed by price-value relationship, which rated 127; the reputation of a store where a luxury purchase is transacted, 124; information from a salesperson, 90; recommendations of friends, 86, and articles, reviews and information conveyed on the Internet, 82.

The three leading influences on purchases of personal luxuries — brand and company reputation, price-value relationship and store-dealer reputation — are also the leading influences on home and experiential luxuries, forming what Danziger has dubbed luxury’s triple play. The relative importance of those factors, which, she said, work synergistically, shifts along with the type of luxury a person is considering buying: price-value relationship is the leading consideration among purchasers of home luxuries, followed by brand-company reputation and store-dealer reputation, while store-dealer reputation carries the most clout among acquirers of experiential luxuries, followed by brand-company reputation and price-value relationship.

This story first appeared in the October 6, 2004 issue of WWD. Subscribe Today.

Recent market research has found a decline in the influence brand names have over apparel purchases, despite Danziger’s finding that it was the top consideration in purchases of personal luxuries such as apparel. However, she said in the interview that consumers buy such luxuries primarily because of their passions and desires, as reflected in a brand, rather than because of the cachet of a brand name per se. Although women surveyed by Danziger about preferred luxury brands had few strong favorites in the apparel arena, DKNY and St. John Knits were ranked highly in that segment.

“Just because most advertising doesn’t work to generate sales doesn’t mean that luxury companies should necessarily stop advertising,” Danziger writes. “Rather, they need to create ads that resonate and are relevant to the passions, desires and fantasies of the consumer.” Advertising ought to be so compelling, Danziger continues, “that the consumer becomes part of the brand story.”

Luxury advertisers, among others, can apply storytelling techniques to touch what Danziger describes as deep places in the human psyche, as she conveys the recent findings of Josephine Tyler, founder of Humanizing Business, a Lancaster, Pa.-based consultancy, and adjunct professor at Columbia University and Penn State. Such stories in advertising yield both personal relevance and a call to action, two fundamental qualities missing in most ads today, Tyler relates. Establishing a personal connection enables people to imagine themselves in an advertiser’s story, while a call to action connects consumers with the goal of the advertiser, enabling them, as Tyler puts it, to “understand how this story is important to what I have to do.”

Prime practitioners of such storytelling in their advertising include Polo Ralph Lauren and Nike. Polo Ralph Lauren ads tell a story so consumers make emotional connections to it, imagining themselves as a part of Ralph Lauren’s worlds, while Nike ads describe how the brand affects who the consumer is, how she defines herself and how other people think about her, Tyler observes.

“Ralph is famous for saying, ‘It’s not about fashion, it’s about living,’” Jeffrey D. Morgan, president of Polo Ralph Lauren’s product licensing division, says in “Let Them Eat Cake.” “Fashion often implies of-the-moment. Our sensibility is about living, and living is fundamental.”

When it comes to establishing loyalty in fashion customers — a particularly difficult feat for a business built on rapidly changing styles — the strongest influence on consumers becomes stylish design, which makes a 33 percent contribution to it, according to Robert Passikoff, president of customer loyalty specialist Brand Keys and a contributor to “Let Them Eat Cake.” Stylish design is followed by fit, which makes a 26 percent contribution to customer loyalty; reasonably priced-easy to find, 22 percent, and quality materials, 19 percent.

In a sidebar in “Let Them Eat Cake,” entitled “Personal Perspective on Luxury,” Passikoff points out, “These drivers define how the consumer looks at [a product] category and how they compare offerings within a category.”

Influences on Luxury Purchases
Influencers Index
Personal Luxuries
Home Luxuries
Experiential Luxuries
Brand-company reputation
Price-value relationship
Store-dealer reputation
Recommendations of friends
Articles and reviews
Salesperson’s information
Source: “Let Them Eat Cake: Marketing Luxury to the Masses — As Well As The Classes,” slated to be published in January 2005