• by Nathan Richter , April 15, 2014

For premium and luxury brands, one of the biggest post-holiday stressors is the question of how to properly manage and sell unsold merchandise while not devaluing your brand. For these brands, perception is critical, and placing a $1,500 handbag on clearance doesn’t exactly scream cachet. Enter clienteling -- a trend gaining traction among high-end brands as they look for ways to “fashionably” liquidate. 

Clienteling -- the practice of turning excess inventory into a VIP experience for a select group of premier clients -- creates an air of exclusivity. By offering high-value customers exclusive and early access to reduced-priced items, brands are not only able to offload the unsold merchandise they would otherwise have to get rid of, but they are able to dramatically improve customer engagement and loyalty, as well as the overall perception of the brand. 

Many luxury brands have leveraged clienteling in-store to place VIP shoppers at the center of the sale. Ralph Lauren has been particularly successful in this effort, hosting exclusive biannual markdown events and even sending select shoppers an extra 15% discount, which can be applied on top of the already marked down prices. DSW has had similar success through its rewards program – offering members exclusive benefits and promotions – as has Patagonia, which leverages direct mail to prep customers for exclusive, bi-annual sales.  But the question is, can this strategy translate into the online shopping experience for these premium brands? 

In a word: certainly. Brands can identify and segment these high-value, loyal customers and incrementally begin extending exclusive benefits in an agile, respectful manner.  This customer-centric approach could look at shoppers with the highest average order value (AOV), or could extend to customer lifetime value through RFM (Recency, Frequency, Monetary) analysis. Whatever the measure for identifying these customers, the key for brands is that they must be diligent in ensuring the overall perception of their brand is retained and protected while creating unique customer experiences tailored to the needs of these small but important groups of buyers. 

While many brands are doing this well already, there remains a segment that continues to, in my opinion, misuse the concept. These brands are implementing clienteling for one-off events rather than integrating it into their overall marketing and merchandising strategies. Increasing visibility of these VIP perks can serve to motivate new, emerging customers; giving them a goal to strive toward while rewarding their loyalty. 

How brands go about increasing the visibility of these VIP perks varies widely from brand to brand based on the unique needs of their customers and the overall brand identity they seek to maintain. The tactics brands are finding to be the most successful include emailed promo codes, custom lightboxes promoting the sale, physical direct mail campaigns, product badging to call out VIP items online, an invite-only microsite promoted through email or social channels, or even a custom banner above the primary navigation notifying returning customers of the “super-secret” sale.  

Luxury shoppers are not unlike the average consumer who waits for the best offer and knows that a better deal will eventually come their way. However, these high-profile shoppers require more finesse and focused handling, after all they are your most valuable ones. They are powerful buyers who you don't want to upset by, frankly, treating them like everyone else.