All that glitters is not sold: selling a luxury brand outside a luxury environment

Abstract

To reach new clientele, luxury brands make strategic extensions into new product categories with more accessible prices resulting in less selective retail strategies that also feature stores not directly operated by the luxury brands (non-DOS). Entering such stores entails challenges as the luxury brand steps outside its luxury environment and loses direct control of the salesperson that interacts with the end consumer. Furthermore, in a less selective non-DOS, a luxury brand’s sales may get impacted due to image discrepancies in the salesperson’s mind, while the luxury brand competes for the salesperson’s attention. This study proposes several motivational levers that direct the efforts of a salesperson in a less selective non-DOS: the salesperson’s perceived fit between the brand and the store, the level of identification with the luxury brand, and luxury sensitivity. With empirical support in a unique dataset, the authors show that a salesperson’s perceived fit increases effort allocation for a luxury brand, and luxury brand identification strengthens it. Counterintuitively, the results show that a salesperson with a high level of luxury sensitivity is not predisposed to sell luxury outside a luxury environment. Finally, suggestions for performance implications are offered to luxury brand managers and retailers selling luxury brands.