How should brands handle Upgrade Loyalty?

New Delhi: Shoppers Stop recently announced its luxury retail ambitions, with The Collective and glorious others. Indigo has declared open its Business Class, Indigo Stretch. Brands are earnestly seeking Upgrade Loyalty - the ‘premium’ patronage of ‘historical’ customers. In the often-wishful belief that they will not automatically veer towards ‘legacy’ luxury brands. 

Maruti, famously, burnt its engines in this quest. Loyalists veered towards loftier peers, Nexa being a wishful equilibrium. Bata to Onitsuka Tiger, Lakme to Mac, Michael Kors to LVMH, Moti Mahal to Bukhara, Titan to Omega, Khandala to Tahiti, Teachers to Lagavulin, Novotel to Four Seasons. As customers get richer, they seek untarnished allies.

Arguably, this is first-generation Luxe behaviour. When consumption Shinkansen equals stature reboot. Current patronage invariably carries surrogate baggage of insufficiency, as choice is almost always defined by means. Anniversaries happen at Mainland China because Pan Asian is beyond reach. When Michael Kors is accessible, Lavie seems redundant. From being the prime annual vacation, Goa is demoted to staycation status, when the French Riviera is easily achievable.

The luxury brand thus becomes a partner in a much-coveted upward, usually forward, movement. A person in the know, whose presence makes us look good and feel better. Whose spontaneous familiarity, perceptually, with the world we are stepping into is a matter of immense delight. We have gratitude for those who facilitated our journey, but cannot patronise them any farther. Exactly why Maruti, Baleno original version and Kizashi failed spectacularly in the higher segments. Also, why, deeply uncomfortable and underpowered entry-level BMW cars preferred to the abundantly equipped top-version Skodas and Toyotas. 

However, for millennial upgraders, bred in a ‘successful’ India, experience is the secret sauce. A sensible blend of rational and emotional, influencing the decision. As they are far less influenced by demonstration values, focussing instead on a holistic value-for-engagement basis, case to case. When Indigo flies business to London, the second cohort will apply physio-psycho filters. Necessary facilities cum desirable price. But the generationally entitled will dismiss the pretender with empathic disdain, British Airways or Emirates it must unavoidably be. 

Marketers must handle this cleverly. Indigo must spend its marketing moolah in Tier Two to hawk ‘empathy’ as must Shoppers Stop. To handhold the Ellis Island immigrants of the digital age. The First Citizen rewards mechanism will encourage this mindset to shop even for the next Ambani invitation, from here and not elsewhere. Spencer’s will overshadow Nature’s Basket for similar considerations while a Toyota EV, for sustainability reasons, may overwhelm the passions of the BMW 5 Series. 

In categories where trust is the source of credibility,Upgrade Loyalty works well. The DLF continuum in Gurgaon, from pedestrian Princeton to lavish Camellias. Healthcare, as core medical expertise, rests with Fortis and Manipal, unless fleeing abroad. Private sector banks like Axis and HDFC curate First-Class products, competing stoutly with bespoke fund managers. Tanishq does the same, courtesy the karatage equilibrium. While Titan, from the same home, cannot shrug off the ego ceiling. 

Elsewhere, the branding games must thrive. For premium homestays, competing with Postcard Hotels, Ama and Storii must do the job for Tatas and ITC. Tata Cliq is experimenting with a VFM version as a catchment for higher-end custom. Taneira horizontally seeks to extend legacy values. Air India Express manfully hawks a business-class version.

Upgrade Loyalty is the wishful organic growth conduit for an ‘emerging’ economy. Legacy money is likely to seek the exclusive confines of dedicated luxury brands. Freshly minted wealth may prefer the inclusive comfort of familiarity. While the intellectually alive will look for experiential delight, demonstration be damned. There is room for everybody when thoughtfully done.