Luxury retailers are that companies that sell high-end products and sevices through multiple channels of retail distribution. The biggest designer brand retailers have huge worldwide retail distribution networks. Luxury retailers have big marketing and promotional budgets to create demand for luxury goods. A designer brand retailer counts with numerous retail point of purchase displays located in strategic geographic locations that draw affluent consumer traffic and sales. The biggest designer brand luxury retailers have a sales and marketing network which may include luxury retail stores, luxury online retailers, and luxury selective retailing.
DEMAND FOR LUXURY PRODUCTS
Luxury brand companies create demand for luxury products using diverse target markets and promotional tactics. The top luxury brands carefully satisfy consumer desire for their products by keeping their supply chain lean in order to maintain a high perceived value, control their prices, and maintain their profit margin.
LUXURY RETAIL STORES
Luxury retail stores are shops usually located on exclusive residential streets or inside specialized high-end shopping malls. Most of the time luxury brand stores are located close to one another in order create the critical mass needed to attract enough affluent shoppers to these select destinations.
LUXURY ONLINE RETAILERS
An increasing amount of luxury goods are now being sold by luxury online retailers on secure websites, using electronic forms of payment, and providing delivery of their products to consumers via the use of shipping couriers or the postal mail service. Other terms for online retailing on the world wide web are electronic commerce, ecommerce, business-to-consumer (B2C) transactions, and mail order.
LUXURY SELECTIVE RETAILING
Luxury selective retailing is a retail distribution strategy that involves making a product or group of products available only in certain markets or stores. This retail approach is employed by designer brand manufacturers as means of limiting potential competition and minimizing distribution costs to increase net profits.
RETAIL DISTRIBUTION PROCESS
The luxury selective retail distribution process is focused on identifying specific niche markets where the designer brands products might be highly likely to be favored by consumers in the area. At the same time the process of luxury selective retailing consciously avoids distribution to areas where the designer brands have less of a chance of gaining significant market share.
LIMIT THE NUMBER OF RETAILERS
One approach that luxury goods companies use to position and protect their product brand equity is to limit the number of retailers that are allowed to sell their designer brand products inside their stores. Many luxury designer product companies market their products through high-end department stores, while withholding distribution of the same products to supermarkets, drugstores, and big box discount retailers.
LUXURY MARKETING DEMOGRAPHICS
Luxury companies rely on luxury marketing demographics and statistical studies to pinpoint the best high-end retail stores where consumers can buy their exclusive and prestigious designer goods and where they can command the highest per unit price.
LUXURY GEOGRAPHICAL SEGEMENTATION
In addition to limiting the number of retailers a luxury goods company may limit in which stores an approved retailer may display and sell their goods in. This luxury geographical segmentation is often used for designer products that might have certain ethnic following but would not produce enough sales if displayed in retail locations outside of those specific ethnic neighborhoods.
Luxury retailers draw an important distinction between what is known as exclusive distribution and selective distribution. Exclusive distribution involves identifying a single retailer and giving them exclusivity to sell specific products or brands. The caveat to exclusivity is often a restriction on the participating retailer to not to carry competing brands. A selective distribution approach does not prevent the luxury retailer from selling similar products or competing brands and does not prevent the manufacturer from distributing the same goods or brands through competing retailers.
BESPOKE OR MADE-TO-ORDER
Bespoke or made-to-order luxury goods are ultra-luxury fashion goods for the elite few that can afford the luxury lifestyle.