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Along with the many subjective definitions of luxury – from having time to spare to craftsmanship and rarity – somehow, for the past two decades we got used to its global expansion as an industry. Traditional fashion brands were shaken up while others were resuscitated with the same goal: make consumers, especially those in the emerging markets, desire (and buy) products that embed distinction and status.
Suddenly, stores were being open, lavish shows and events were being held, celebrities were dressed from head to toe, sitting in the front row and been featured in the campaigns, and products were being launched in a much faster pace, and in a variety that could guarantee options for different tastes and budgets. A paradox in what luxury stands for.
You don’t need to be a marketing genius to understand that something would go wrong with this formula. As disappointing news for the industry arrive almost daily, with reports predicting growth of no more than 2% this year, a trend to be followed until 2020, and companies reducing costs (Burberry and Richemont cut bonus after a slower 2015, Ralph Lauren plans to scale down on employees), let’s think beyond the traditional culprits: economic uncertainties, crisis in emerging countries, less tourist spending etc.
During the 2008-09 recession, brands started to market the concept of heritage to justify product value. Campaigns from the likes of Gucci and Louis Vuitton reinforced the craftsmanship behind each bag, or the brand history and the founder appeal in order to bring the client’s attention to the exclusivity and rarity of a piece. It worked particularly well in China, where there is a cultural appreciation for this. However, at the same time, more and more stores were popping all over the country and branded accessories and clothes became ubiquitous. Now the Chinese are rejecting logos and looking for other ways, or experiences, to consume luxury. They are following a behaviour already started in the mature markets that indicates the luxury fashion is being replaced for ‘not in your face’ purchases as meals in an upscale restaurants, spa treatments and even technology. So, what’s next?
The luxury industry needs to rethink the entire approach and face the fact that prestige fashion is not so different from fast-fashion anymore, excepting for the price point. Where is exclusivity and distinction if you have an excess of stores, products and even markdowns? Personalised service alone may not be enough to allure clients. The industry is simply too loud, too fast, too easy to access. It needs to tone down in order to be precious again. Playing the heritage card, this time with a less educational, more elusive approach can work, nevertheless the strategy must be honest and intrinsically connected with the brand identity, otherwise it will be worthless. Above all, the effort lies in turning luxury fashion into an ‘invitation-only’ party, not a ‘buy your ticket here’ event. Luxury is not covetable because it is expensive and a status symbol but because it is rare, special and unique. Who can really apply these later adjectives for their products? Unfortunately, very few brands.