Messages communicate availability and inclusiveness
With the steady improvement of the global economy following the financial crisis almost 10 years ago, luxury continued to become more assertive, and in some cases brasher in design. The BrandZ™ Luxury Top 10 rose 4 percent in value, with the same brands that appeared as in last year’s ranking, when value declined 5 percent.
Brands navigated the tension between widening their audiences, including the possibility of renting luxury items for special occasions, with the need to protect exclusivity. Makeup and fragrance, often the on-ramps to luxury, presented the greatest risk.
But even Hermès, renowned for its exclusivity, expanded further into fragrance marketing. It led the ranking in value growth with an increase of 18 percent. In apparel, brands designed mix-and -match separates, and customers found cultural currency in discovering quality items and assembling them in ways that expressed personal taste and individuality.
Each brand that pursued millennials faced a similar challenge. The characteristics usually associated with traditional luxury badges—wealth and taste—do not always match values millennials want to project, which, according to MindShare research, are: being friendly, social, and good citizens.
Some brands adopted positions that have been called “progressive luxury,” in which the characteristics usually associated with luxury, like craft and exclusivity, are expanded to include contributing positively to the world.
Themes of diversity and inclusiveness characterized the major fashion shows. As luxury is always sensitive to geopolitical events, London benefited from the weakening pound following Brexit. The threat of terror in Europe impacted tourism and luxury spending.
Expanding the audience
The luxury brands continued to advertise conventionally, attempting to expand their audience while retaining core customers. Under the guidance of a new design director, Gucci successfully revived a brand established in 1921 with an extensive collection featuring bold color and confident, playful designs.
In an example of populist, attention-grabbing, user-generated content, the brand produced the GucciGhost collection, incorporating into the brand the street designs of a Brooklyn artist. Gucci rose 8 percent in brand value.
Similarly, Louis Vuitton collaborated with Supreme, a New York streetwear brand, creating clothing, accessories, and travel items crafted in Supreme’s bold red color and featuring both the red and white Supreme logo and the Louis Vuitton logo.
Louis Vuitton also introduced a new line of seven perfumes. Chanel introduced L’eau fragrance, a variation of the classic Chanel No. 5 that is clear and lighter, to attract millennials, who are less likely to wear fragrance.
Along with making its fragrances more available at mass outlets, Hermès opened pop-up shops in major cities, including Tokyo and New York. And, to celebrate the 80th anniversary of its iconic silk scarves, Hermès also planned opened locations called Hermèsmatic, where people can have their vintage scarves renewed free of charge, and buy new ones
In fine jewelry, Chanel designed the Coco Fresh collection to be more accessible. Chanel also announced plans to launch a new perfume, called Gabrielle in homage to Gabrielle “Coco” Chanel, the brand’s founder. For Chanel, reinterpreting the brand for new generations meant retaining the magic by not making the brand totally accessible
Rolex resisted the trend to greater accessibility, even as the watch subcategory continued to be impacted with the pressure on extravagant gifting in China, as well a decline in relevance with the ubiquity of smartphones. Rolex continued to capture the role of watches for signifying milestone life events, with the line, “It doesn’t just tell time. It tells history.”
Telling stories in new ways
Often on the cutting edge of messaging, Burberry took product placement in a different direction using a series of films that aired during the holiday period. In one example, Burberry produced a three-minute biopic about founder Thomas Burberry, who rooted the brand’s origins in fabric functionality rather than fashion.
The film opens with a young Thomas Burberry inventing gabardine, and goes on to demonstrate the material’s ruggedness in the trenches of World War I, early aviation, and the Antarctic exploration of Ernest Shackleton. This featured some of the most exclusive and celebrated young British acting and directing talent.
Burberry typically experiments with digital communication. Burberry and Dior are among the brands with their own smartTV channels. In association with Apple TV, Burberry broadcast its runway show live, and followed it with “shoppable” moments.
Tiffany & Co worked on redefining love and love moments, and expanding gifting. Geopolitics intruded directly, as the New York Fifth Avenue Flagship store, located next to Trump Tower, was cordoned behind security barriers during the holiday shopping season. When the Trumps arrived at the White House on Inauguration Day, however, Melania Trump greeted Michelle Obama with a distinctive blue Tiffany box. Gifting does not get much more high profile.
Brand-Building Action Points
1. Update thinking
The value exchange is evolving. Brands need to think about what value they offer consumers rather than what else they can sell consumers.
2. Leverage the story
Tell the brand’s story, and make it experiential. Embrace technology to express the brand mythology in new ways.
3. Be in the moment
Every moment the consumer is engaged with a brand’s message is a sales opportunity. The moment is fleeting and the consumer may go somewhere else. Brands that do not provide the “Buy now” button are leaving money on the table.
4. Think speed dating
Luxury purchasing traditions imitate a courtship model of inspiring and seducing the customer. They require the right setting and perfect lighting. Life moves faster today, and some of those traditions will impede rather than generate sales.
5. Stay ageless
Luxury brands live in a constant tension of needing to represent the best of the past while simultaneously connecting with today’s concerns and values. The challenge for luxury brands is to remain ageless while also being provocative.