Louis Vuitton vs. Hermes: A Case Study

Luis Vuitton vs. Hermes Case StudyCase Study

As we think of authentic luxury brands, it is not uncommon that Louis Vuitton and one of its biggest rivals, Hermès, come to mind. Let’s cover the in’s and outs of each of these brands so you have a better understanding of LUXURY.

When consumers are deciding which brands to support, an outstanding 86% of them say brand authenticity is crucial to obtaining their business. In today’s world, we live in an age of authenticity.  Everything authentic, whether that be authentic brands, authentic relationships, or authentic communications are demanded by customers. Both Louis Vuitton and Hermès pride themselves on their success factors, and you will soon see that these two luxury brands have a similar foundation.

So let’s start out with Louis Vuitton:

Who and What is Louis Vuitton?

 On August 4, 1821, in a small hamlet located in the eastern mountains of France, Louis Vuitton was born. Now known worldwide as a French fashion designer and businessman. He was the founder of the Louis Vuitton brand of leather goods now owned by LVMH. Prior to this, he had been appointed as trunk-maker to Empress Eugénie de Montijo, wife of Napoleon III. The year was 1854. Louis Vuitton had dreams of inventing a fashion house that would change the face of accessories and luxury fashion forever. Although his quest to create trunks is what kicked off his career, Louis Vuitton created a niche in the women’s accessories market. Immediately, competitors imitated the style and design of the Louis Vuitton bags. After the death of Louis Vuitton in 1892, his son George Vuitton took on a huge role as he worked diligently to convert the company into a worldwide luxury brand. The brand launched its iconic monogram symbol pattern In 1896, which was successfully patented to prevent worldwide counterfeiting.

 As time went on, the Louis Vuitton building was created in 1913, located at Champs-Elysees in Paris, France.  The brand also expanded its reach across the world with stores in New York, Washington, Bombay, London, Buenos Aires and Alexandria. Fast forward many years and in 1987 Louis Vuitton, Moet & Chandon, and Hennessy came together to form the luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton SE which is better known as LVMH. Louis Vuitton now has more than 460 stores worldwide and operates in 50 countries selling fashion goods, especially high quality women’s bags, worldwide.

Why is Louis Vuitton so Successful?

Quality

Quality has been at the core of every single Louis Vuitton product since day one This strategy proves to be very successful amongst consumers. Louis Vuitton is constantly creating new products that are exceptional in both their design and their craftsmanship; it is because of this that they do not need to do much marketing, if any at all. Each Louis Vuitton bag is specially handcrafted and the authenticity of the brand ranks very highly in values that consumers look for. Despite being a global luxury brand, Louis Vuitton has done a wonderful job of maintaining personal relationships with their market which makes the community seem much smaller than it actually is.

Innovation

Innovation is essential to Louis Vuitton. Louis Vuitton has been and still is successful because it adapts to the needs of its customers and continues to invent itself as. The introduction and creation of new designs while staying true to their classic traditions resonates with their consumers. The brand has also worked with various designers and artists including: Jeff Koons, Takashi Murakami and Pharrell Williams who have had the privilege to create their own limited edition lines. Through numerous collaborations, the brand has an outlet to connect to new and younger generations.

Exclusivity

The third secret to the success of the Louis Vuitton brand is its exclusivity. Determined to counter mass production with short term limited edition series’, Louis Vuitton has solely built the team, brand, and clientele with the attractiveness of select, chic, products. To stand out in the public eye means being different. This means that not everyone will own the same bags, and means that those who do, get exclusive products. Products that release in small numbers, create an insane buzz between individuals and everyone is eagerly looking to grab the newest bag with the latest style. Scarcity of these products, increase the desirability of these products as wait lists become longer and so do receival times.

All in all, the combination of quality, innovation and exclusivity have made Louis Vuitton the successful brand we all know today. 

Next, let’s move on to Hermès:

Who and What is Hermès?

Hermès is a French luxury goods manufacturer that was established in 1837 by Thierry Hermès. The brand specializes in leather goods, lifestyle accessories, home furnishings, perfumery, jewelry, watches and ready-to-wear. Its logo, since the 1950s, is of a Duc carriage with horse because the original intent of the Hermès brand was to serve the needs of European noblemen by offering bridles, saddles, and other leather riding gear. The name comes from the Hermes- an Olympian deity in ancient Greek religion and mythology. Hermes is considered the herald of the gods. He is also considered the protector of human heralds, travellers, thieves,[3] merchants, and orators. Thierry’s son Charles-Émile Hermès moved the company’s shop to 24 Rue Du Faubourg Saint-Honore in Paris, in the early 20th century and it still remains there to this day. This location is now the company headquarters. Famous all around the globe, Hermès has and continues to attract consumers each season with their luxury products as well as their limited edition accessories. Best Global Brands 2020 ranked Hermès 28th (with a brand valuation of USD 18.0 billion) falling behind Louis Vuitton who ranked 17th (with a valuation of USD 31.7 billion), according to global brand valuation firm Interbrand.

The Expansion of Hermès

Hermès entered the United States by originally offering their products in the Neiman Marcus department store in New York in 1930. The company’s iconic duc-carriage-with-horse logo and signature orange boxes were not introduced until the 1950s so the company strived to create a name for itself through quality and differentiation. Later on, Hermes created a watch subsidiary La Montre Hermès in Bienne, Switzerland in the 1970s. After the company took up Puiforcat, Saint Louis and Perigord as tableware manufacturers in the 1980s, Hermès was able to consolidate its position in rapidly growing segments of the luxury market. Today, the brand operates 311 stores globally across the U.S., Russia and Asia and has over 15,000 employees. With revenues of over USD 8.3 billion and profits of over USD 1.8 billion as of 2019 Hermès is one of the largest and most admired luxury brands in the world.

Hermès Birkin Bag

The world known “Birkin bag” was first introduced in 1984 when actress and singer Jane Birkin said she needed a medium-sized bag. Today, each Birkin bag costs between USD 12,000 to USD 300,000. Hermès is able to price their products in this range because of the delicate, detailed hand work that goes into each piece. Each bag takes between 18 to 25 hours to complete using only hands to make it. If the bag is made of the more delicate crocodile skin, the time is lengthier. Today, an authentic HERMÈS Birkin 35 Bag Diamond Miel Porosus Crocodile with Gold Hardware is being promoted on The List for a price of $326,579.

This can be found here:

HERMÈS Birkin 35 Bag Diamond Miel Porosus Crocodile Gold Hardware

Why is Hermès so Successful?

Hermès’ success can be summarised by a single sentence quote from former CEO Jean-Louis Dumas – “We don’t have a policy of image, we have a policy of product”. Multiple generations of the Hermès family have held ownership, management and leadership of the company. It is because of this that the principles of the Hermès brand have never changed.

Quality

Hermès products are made almost entirely in France in workshops (Ateliers Hermès), which places a strong emphasis on quality. Hermès prides itself on the strong principle of “patience” which has allowed the team to achieve the highest quality in their products. In addition, Hermès invests time and resources into the training of all new employees and artisans. The ones who have been carefully selected to work with Hermès go through a three-day in-house training session called “Inside the Orange Box” that ties the newer generations of the company back to its roots. In this training session, the company educates employees on the founders and the history of each of its product categories. This strategy has proved to be very successful as training of this kind helps make each Hermès employee involved and makes them a part of the philosophy, values, and company.

Exclusivity

Hermès is only afforded by very few and is not easily accessible, it is because of this that Hermès is considered “ultra-premium luxury”. Customers know that when they walk into a Hermès store, they will not walk out with a Birkin bag the same day. For one to receive a Birkin bag they must place an order with an expected wait time of a few months before the bag is in their possession. In addition, the company does not have a marketing department which means that their sources of advertising and branding are simply intuition and creativity. Each employee and Hermès customer is responsible for the brand’s marketing.

Authenticity

As mentioned above, Hermès has actively stayed away from marketing and because of this, the brand does not invest in celebrity endorsements (even though this practice works quite well for LVMH). The limited availability as well as the price points for Hermès products makes it attractive to only the ultra-wealthy and A-list celebrities. Hermès follows a global product offering approach which allows the same product collections to be sold everywhere in the world, despite diverse regional preferences. The “limited edition” strategy as well as the limited distribution of the products showcases Hermès’ authenticity.

In conclusion, It is the quality, exclusivity, and authenticity that makes Hermès so successful. Each of these factors contribute to the demonstration of the company’s dedication to its brand and legacy.

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Louis Vuitton vs. Hermes: A Case Study In this post we're comparing two of the most iconic and prestigious brands in fashion: Luis Vuitton and Hermes. Enjoy!
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