Head of Supply Chain & Merchandise Director. 24+ years of retail- Supply Chain, Operations, Buying & Merchandising, Business Development. Luxury Home Furnishing, Fashion & Footwear, Toys, Mother and Child, Electronics.
Great piece here by Mathew. I am noticing that there is a generation of young professionals, 20-25 who while very trend savy.. do not care for the catchet of the aspirantional luxury brands. Is it because they simply cannot afford it, part of the cost of living crisis. The inability to access into these brands coinciding with big price point increases over past few years. Or has the buying trend for aspirational product moved on- from the traditional high end luxury brands.. to brands with a different narrative, a story behind the product/brand ( sustainability, charitable links, the product proposition Vs a clear USP). As Matt articulates it very well..Luxury brands have always hooked into the fever of the aspiring client..to increase the perception and value of their products to those clients that are on easily affordable scale..how will they get that fever back?
Partner, Luxury and Consumer Practice. Executive Search, Advisory & Leadership Consulting.
The concept of accessible luxury, which, let’s face it is an oxymoron, was declared dead years ago; You had to be at the very top of the market, or right at the bottom and certainly not in the consumer purgatory in-between. Likewise, we keep being told that China is currently a bloodbath for brands, and indeed when you look at first half sales in Asia (ex. Japan) Kering (-32%), LVMH (-10%) and Richemont (-27%) can testify to this. So, this article by Lisa N. caught my eye as it suggests a potential change in the way consumers, and in particular GenZ are not just shopping, but also engaging with brands. As she suggests, there is a real opportunity for brands such as Marc Jacobs, Coach and Longchamp to increase their market share through fresh and innovative design and crucially affordability. Other brands such as MCM WORLDWIDE are grabbing the initiative. In the article, their President Sabine Brunner discussed the smart ways they are engaging the aspiration Chinese consumer: “We do collaborations that are linked to Chinese culture, telling stories that not everybody is aware of. We partner with local bookshops for example in Shanghai, or we created a fun ride through an MCM passport in Shanghai where we would invite customers to discover several places for flowers, Mybarre dancing, and bike tours. With every stamp, you could then return to MCM and receive a surprise. It is all about traveling, physically but also digitally, the digital nomad lifestyle.” Luxury brands feel like they are on a pricing knife edge currently. For the last few years prices have increased every year, with little resistance, but suddenly as interest rates spiked, it all looked a bit out of control. I did a quick walk around Harrods the other day and looked at plain white T-shirts. Prices ranged from around £80 to a frankly ludicrous £1100, no wonder people have lost interest. Look at the criticism faced by CHANEL or Burberry over recent price hikes. Suddenly there is an opportunity for well curated accessible brands such as MCM to steal market share from above. It has always been necessary for brands to trade their runway shows to sell entry-level accessories, sunglasses and fragrances. But these items are now creeping into the unobtainable space as well. Luxury sunglasses which were recently €200-250 are now €375-€450, and fragrances from the big fashion houses are on the rapid rise, easily breaking €220. They are big psychological barriers to be breaking. Luxury brands can’t afford to lose the aspiration customer. Benjamin Voyer hit the nail on the head recently when he wrote in Forbes magazine: “Marketing to consumers who may never be able to afford these brands—but can dream about them—is crucial. This ensures that those who can afford the brand have an audience that recognises the value of what they display.” DHR Global #china #fashionbusiness Jing Daily