The growth of the luxury market presents a great opportunity for many companies wishing to attract and covert a wider range of consumers. However, opportunity and risk are often synonyms, especially when looking towards the Chinese market. In this post, we are going to present some ideas on how fashion companies can adapt and challenge the new boundaries of luxury, making sure their brands are able to stand the test of time.
In this article, we are going to discuss:
For as much as we want to complicate the matter, fashion management still relies on three fundamental relationships:
However, we must not forget that any emotional or experiential element needs to be grounded upon operational efficiency. And this leads us to our next point.
Let’s now move on to identifying the core elements which define luxury. These are the elements we want to focus on, as we dive into the future of luxury brand management.
As we try to identify how we can tackle the challenges of luxury in the new decade, we might want to reflect on the foundational aspects of luxury. What does luxury mean, why does it never go out of business and why is it an expanding market?
Some say that Luis Vuitton bags in South Korea have become the “secretary’s bag” or the “three seconds bag” due to the fact that on Seol high street you can spot one every three seconds. This phenomenon means two things:
Just as in the tech industry companies thrive due to planned obsolescence, then we could argue that in luxury, companies will thrive due to planned scarcity. However, in a globalized world where brands need to be on every high street, providing a perception of scarcity is no simple task. So how can firms implement this approach? Here are some examples:
Won’t people be offended if they are not able to take advantage of these opportunities? Well, if this wasn’t luxury, probably they would, but again the competition in status is a powerful fuel. Besides, these challenges also give customers a story to tell and that word-of-mouth advertising, is nothing but collateral gold.
As we’ve seen the opportunities and problems for luxury companies discussed in this post apply to luxury firms that are not willing to take an honest look at themselves. In consideration of the fact that luxury markets are expanding in Asia, there is a challenge awaiting all of the western brand managers operating in luxury, and that is to leave the ego at the door. So much or your success will depend on understanding the value of luxury, which differs from country to country (we discuss this in more detail here: The Importance of the Country of Origin Effect).
A further complication is presented by speed. As consumers in luxury are growing younger and younger, their tastes and preferences will change faster and faster. As a result, those companies who are saying how unloyal luxury customers have become may need to realize that loyalty is not the issue, but speed is. With this, we don’t mean to suggest that brands have to pursue a fast luxury model, but instead to reflect on the needs of a different psychographic segment. This may, for instance, involve hiring younger brand managers, capable of identifying those trends which will be worth taking advantage of, and those who are not worth the time.
All in all, we tried to summarise some of our thoughts on the new trends affecting luxury, suggesting how self-awareness and flexibility are still the foundation of a successful luxury brand.
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