In the realm of the luxury market, satisfying the desires of very important clients (VICs) has become not just a business strategy but an art. VICs are considered Ultra High Net Worth Individuals (UHNWIs), most often defined as customers who spend more than seven figures annually. These high-net-worth individuals, representing the pinnacle of luxury consumers, are not merely seeking high-end products; they yearn for exclusive experiences that go beyond the traditional transactional model. The luxury landscape is evolving, and as it does, brands are adapting their strategies to engage, retain, and elevate the experiences of their most valued clientele.

VICs, frequently comprising the top percentage of luxury customers, play a disproportionate role in steering overall sales. According to Bain, in 2022, the top 2 percent of luxury customers contributed a substantial 40 percent to overall sales. Anticipated to be one of the strongest sectors, the luxury market was already projected to have grown between 3 and 8 percent by the end of 2023, with this trend projected to intensify in 2024. The growth wasn't just in terms of overall volumes but was marked by increased sales of higher-ticket items and strategic price hikes, reflecting a robust demand for product categories at the pinnacle of the luxury pyramid.

A noteworthy shift in consumer behavior has been observed, signaling a departure from the mindset of accumulating wealth for its own sake. The prevailing sentiment, as highlighted by Bernstein analyst Luca Solca, is a shift towards enjoying life rather than focusing solely on amassing wealth. This shift is evident in a significant rise in discretionary spending, not only on luxury goods but across various experiential domains. VICs, being at the apex of affluence, exhibit a higher propensity to spend compared to pre-pandemic levels.

Luxury brands, recognizing the changing dynamics, are intensifying their efforts to engage this exclusive consumer cohort. However, reaching and maintaining a connection with VICs has become more challenging than ever. Claudia D’Arpizio of Bain & Company notes that there's a constant war for the attention of these ultra-high-net-worth consumers. Brands are stepping up their game by organizing personalized events ranging from private shopping sessions and exclusive fashion shows to curated dinners and parties. The competition is not just limited to within the fashion industry; luxury brands are vying for attention across adjacent sectors like art, design, travel, and hospitality, as well as cars and private jets.

The challenges posed by the pandemic further elevated customer expectations. With physical stores closed and social activities put on hold, luxury brands had to work harder to engage their loyal customers. This raised the bar for the level of service VICs now expect. Crafting distinctive experiences and products tailored for these top-tier clients has become imperative for brands aiming to remain exclusive and appealing in an increasingly competitive market.

Enter the era of invitation-only stores, exemplified by Gucci's innovative "Salon" concept. This exclusive retail strategy involves appointment-only stores where the brand's most important clients can explore and purchase its most exclusive and expensive products. Gucci's Salon is not just a physical space; it's a manifestation of a broader turnaround plan aimed at upscaling the brand after a period of stagnant sales. The Salon concept strategically targets high-end customers, offering personalized experiences and a curated selection of top-tier products.

Gucci's Salon goes beyond the traditional retail environment. These spaces, resembling five-star apartments more than retail stores, feature luxurious interiors, personalized services, and total privacy. Private butlers, curated dining experiences, and fully customizable spaces contribute to an intimate and memorable interaction with the brand. The Salon strategy revolves around creating emotionally charged experiences, placing relationships at the forefront, and considering sales as a natural consequence of a deepened bond with the customer.

Mytheresa, a Munich-based luxury e-tailer, has embraced a different approach to engaging its top-tier clients. Instead of exclusive physical spaces, Mytheresa focuses on creating insider access through elaborate events. These events, often organized in collaboration with the brands it stocks, offer a unique opportunity for top spenders to meet designers, mingle with celebrities, and tour usually restricted facilities. Mytheresa's strategy not only deepens its relationship with valuable clients but also provides significant shopping opportunities, with guests often splurging on outfits tailored for these special occasions.

Tiffany & Co., an iconic name in luxury, is also redefining its approach to engage and elevate the experiences of its highest-spending customers. The reopening of its flagship store on Fifth Avenue marked a significant moment in Tiffany's strategy. The store now includes an exclusive VIP-only penthouse shopping suite, offering a private dining room and panoramic views over Central Park. This exclusive space is dedicated to Tiffany's most valued clients, where they can commission and co-design personalized pieces.

The shift in strategy at Tiffany includes a heightened focus on high jewelry, with investments in sourcing rare stones and acquiring specialist manufacturers. The brand aims to consolidate its high-end appeal by emphasizing one-of-a-kind creations and personalized, bespoke pieces. The strategy aligns with the broader industry trend of prioritizing unique and exclusive offerings to enhance the perceived exclusivity of the brand.

While the luxury market is thriving, challenges persist. The sector is keenly aware that VICs desire not just luxury products but also exclusive experiences. However, as Christopher-Jacques Morency, Chief Brand Officer of Vanguards, points out, fashion brands are yet to master loyalty or membership programs fully. Experimentations with NFTs in 2023 have often missed the true potential of the technology, which lies in membership and ownership. Morency envisions a future where luxury brands issue exclusive NFTs, like "Balenciaga Coins," providing not only a visual appeal but, more importantly, granting access.

According to Morency, "To this day, I have seen no fashion brand properly execute a loyalty or membership programme. Some have experimented with NFTs for creative purposes, leaving out the actual power of the technology, which is membership and ownership. Imagine a brand like Balenciaga issuing 10,000 NFTs or 'Balenciaga Coins' that both look incredible but, more importantly, give access. Those coins would sell for six figures each."

This perspective from Morency introduces an intriguing dimension to the discussion of engaging very important clients. As luxury brands navigate the landscape of heightened consumer expectations and increasing competition, the potential integration of exclusive NFTs as a membership and ownership mechanism could revolutionize the way brands interact with their most valued clientele. This futuristic outlook aligns with the broader industry trend of prioritizing unique and exclusive offerings to maintain the allure of luxury in the eyes of discerning consumers.

In conclusion, the pursuit of engaging very important clients is driving innovative strategies in the luxury market. From Gucci's Salon concept and Mytheresa's exclusive events to Tiffany's focus on high jewelry and bespoke experiences, brands are investing in creating emotional connections and unique experiences for their top-tier clientele. The industry's responsiveness to the changing preferences of VICs, coupled with the potential integration of NFTs for membership and ownership, paints a dynamic picture of luxury's future—one where exclusivity, personalization, and technology converge to redefine the meaning of luxury.