Finland's leading marketing and advertising magazine Markkinointi&Mainonta (25.2.2017) told an interesting story concerning how a Finnish luxury brand Lumi Accessories, which makes designer bags, unlocked its growth challenges.
Finland is a young country and she has a relatively small luxury market. Despite it is a neighbor of Sweden and Russia, which have flourishing luxury markets. Sweden is an old kingdom, and the royal culture celebrates luxury. Russia is revitalizing its tsarist traditions. Finland's southern neighbor Estonia has heavily forgotten its communist past, and currently embracing the benefits a free market economy, as a small but a dynamic tech nation.
Finnish consumers tend to consume fast fashion and premium brands but there is growth potential in Finland because consumers are more aware of high-end products, and what benefits they possess. Still, Finnish luxury consumers is a very challenging consumer group because of those who want to have the latest products. They mainly go online or travel abroad. Not always but spending goes abroad.
However, the Finnish luxury market is developing too slowly because of Finland's economic challenges, and therefore, Lumi Accessories, revenue of 1.4 million euros, had to generate more sales from abroad because its clientele was mainly domestic.
The brand made a bold move by advertising in Financial Times, which has a long tradition of luxury journalism and luxury advertisers. The media group also publishes The How To Spend magazine, which has a global reach amongst lifestyle readers. Hence, the newspaper has the right target group in order to gain new customers and partners. From Saudi sheiks to Russian oligarchs and to American tech billionaires.
Lumi decided to advertise in the magazine by buying full-page advertising spaces. A very brave move from a small luxury brand. But it was the right move because it gained new clients mainly from the United Kingdom and Central Europe, and now its international reputation is growing, and the brand can be reached effortlessly by visiting the brand website and following on social media channels.
Lumi Accessories made a right strategic move by advertising in Financial Times because advertising did not just create more sales and open new opportunities. Advertising made the brand more credible.
Everyone can open social media channels and create websites with small budgets, and therefore, it is very hard for consumers and others to pick right brands, especially, when consumers are abroad, and brands are unknown. This is the reason why advertising matters because it can enhance credibility. But remember, choose your advertising vehicles carefully. It is not a coincidence that most respected luxury brands advertise in GQ, Vogue, Tatler, and others.
Another rule to remember is. If your brand has domestic challenges with growth. Try to reach to global markets by going online, reaching for new partners and expanding abroad. And if possible. Advertise inappropriate marketing channels, and use respected brand ambassadors.
Published in Luxury Sales Academy.