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Case Study | Selling Luxury to the 1%

The ultra-wealthy are spending more on luxury than ever before — and, amid a broader market slowdown, winning them over is becoming a competitive battleground for brands. BoF breaks down how strategies from Gucci, Mytheresa and Tiffany & Co. are successfully building closer relationships with top clients.
Case study cover, Selling Luxury to the 1%
Introducing BoF's latest case study, Selling Luxury to the 1% (Gucci)

Key insights

  • The top 2 percent of luxury customers drive 40 percent of luxury sales, according to Bain.
  • Engaging and retaining these very important clients (VICs) will remain critical to brands that want to continue to flourish amid the broader market slowdown. Doing so, however, is only becoming more challenging, as competition for their attention intensifies.
  • Carefully executed strategies that fuse elevation, emotion and experience will foster greater loyalty among this consumer cohort and increase their spending in the long term.
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Since the world emerged from 2020′s coronavirus lockdowns, spending on luxury goods has gone into overdrive. This spelled good news for high-end brands, which experienced explosive growth fuelled by stimulus packages, deferred student loan schemes and fewer opportunities to spend money on experiences.

But during 2023, aspirational consumers hit by the rising cost of living finally sobered up. As growth of the broader luxury market slows, attracting the top 1 percent of earners, whose well-padded budgets are more insulated from global uncertainty, will be key to driving sales. Already, courting “VICs” — very important clients — has become a strategic focus for brands. However, engaging this consumer cohort is only becoming more challenging, as competition for their attention intensifies. The dynamic is pushing retailers and megabrands to implement more sophisticated, differentiated strategies to foster relationships.

This case study will examine strategies adopted by Gucci, Mytheresa and Tiffany & Co. that are designed to build closer relationships with top clients, foster greater loyalty and increase their spending in the long term.

Gucci opened its first by-appointment store exclusively for servicing the brand’s most important clients in Los Angeles, dubbed “Gucci Salon.” Here, the brand’s most exclusive product ranges are on display, while each appointment is carefully tailored to the needs and desires of each customer. The brand has replicated the concept with dedicated private floors at flagship stores in London and Tokyo.

Mytheresa ratcheted up its calendar of elaborate events (often hosted in collaboration with its clients’ favourite brands) offering exclusive access that money alone can’t facilitate: from intimate dinners at designers’ private residences to starry, insider-only shows and parties.

Meanwhile, Tiffany & Co. has rapidly expanded its ultra-exclusive high-jewellery division, with a particular emphasis on personalisation. This includes sourcing unrivalled gemstones and inviting clients to commission bespoke pieces from chief artistic officer Nathalie Verdeille at its newly renovated experiential flagship in New York.

These strategies offer valuable lessons on how cultivating personal relationships and crafting memorable experiences for shoppers can foster an emotional connection to brands, helping them to stand out among competitors and build loyalty among luxury’s most sought-after customers.

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