Balancing exclusivity and inclusivity through the strategic domestication of the luxury retail experience

Abstract

The mass-marketization of the luxury field results in a conundrum for brands: how to sell to the new mass of luxury consumers while continuing to conform to expectations of a singular, exclusive, and elitist experience. In contrast with prior research, which primarily focuses on understanding how luxury brands maintain their exclusivity despite market pressures toward “mass-marketization”, we draw on the institutional logics framework to explore how luxury mobilizes domestic elements in the service encounter to manage inclusivity and exclusivity imperatives in a context of massification. We show that the strategic mobilization of the domestic logic and its articulation with the market logic enable luxury brands to balance these contradictory imperatives. We identify three strategies that brands deploy in their retail stores: disguise (camouflaging the market logic under layers of domesticity), hybridization (blending domestic and market logics), and juxtaposition (partitioning domestic and market logics). Our findings suggest that domesticity can be mobilized both as an integration and a separation mechanism and that the “domestication” of the luxury retail experience enables brands to situate their customers at different levels of the consumption experience. Building on these findings, we give brands and operational managers working in luxury firms several avenues for improving the way they manage customer experience and service encounters.