Establishing Luxury Status

For a Fashion Brand

By Jing Huang

April 2012

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Aim:

To analyse basic requirements to be considered as a luxury brand

To show how they exist in the current market & importance

To demonstrate patterns to create luxury brand

To study current luxury fashion market

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1. The Definition of Luxury

Industry Opinions

The following quotes are attempts to define the concept of luxury from people within the fashion industry:

‘Luxury is the business of creating and satisfying desires,’ says Belinda Earl of Jaeger

‘Luxury is something that everyone wants and nobody needs. It is an area of huge comfort. It is the best of the best. says Jewellery maker Theo Fennell.

‘Luxury has to bespeak a level of exclusivity, of unusualness.’

‘Luxury is about history. A luxury brand is a lifestyle concept, and to be sustainable it has to have history including a history of quality merchandise and of real luxury customers.’ says Joseph Wan of Harvey Nichols.

‘Luxury is about history, authenticity, depth, and being a partner. Buying a luxury product is like a love affair.’ says Christian Hafner, head of branding at Swarovski.

We can see many people have an idea of luxury, as being different from non-luxury, but there seems little agreement on what actually luxury means.

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The Definition of Luxury:

In the traditional ancient society, Luxury objects can be defined as the symbolic and hedonistic reward of success, and it is considered as a marvellous grant linking to power. Naturally, in the modern society today, the victors have been defined in a distinguished way, specifically relative to social position, they are the economic elites, the senior executives, the tycoons, the entrepreneurs, but also the artists, the celebrities and all the stars in showbiz, sports or other fields. Luxury is the distinctive sign of their own rarity. (from The Luxury Strategy by J.N. Kapferer and V.Bastien)

Luxury becomes the essential object which people are willing to pay for above their condition and financial circumstances, because it has the power to make the possibility for anyone to attain either a positive social status judgement or a sense of superiority automatically. As we associate success or distinction with luxury objects, so we attribute those qualities to people who hold luxury objects.

Nowadays, when people think of luxury in regards to fashion, several brand names immediately spring to mind. Luxury objects are objects of luxury brands. Only diamonds are luxury objects appreciated without branding. A luxury brand is a brand first, and luxury second. (from The Luxury Strategy by J.N. Kapferer and V.Bastien) In this market-oriented time, luxury brands actually present the role of luxury objects themselves. The commercial benefit people paid is far more than the usage value and exchange value.

In terms of fashion, clothing and accessories are powerful methods of self-expression and social judgement. The way we dress brings a highly accessible means to associate with the concept of luxury. Luxury brands are, of course, highly prevalent in the fashion industry and it is in the value of the brand as well as the products that brings the perception of luxury to its customers.

Luxury brand management have to be considered the case of particularity above the normal fashion brand management. There are extra significant fundamental criteria and elements needed to deliver and achieve strategically through brand image, value, and identity.

All the experienced experts above intimated that intangible experience created by Luxury is more eventful than the luxury objects itself. the shooting target of Luxury brand management is no longer functional, Its attraction is a link to ‘something special’ and uniqueness, It reinforce the feeling of difference and superiority. History gives depth to a brand, and timelessness to its objects. It does not mean imprisonment in the past, but heritage and continuity (from The luxury Strategy by J.N. Kapferer and V.Bastien).

In summary, to achieve good luxury brand management, it is vital to understand that luxury is there to set the distance and gap to signify the inequality in riches, status and culture. I would like to examine and analyse the basic requirements and criteria to be considered as a luxury brand.

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2. Examine Luxury Fundamental Criteria

Several marketing experts have divided the fashion market into a hierarchy. How these levels are defined and divided depends on certain criteria.

Fig 1. The Hierarchy of Fashion

That certain attributes exist to define what luxury means in the minds of consumers are important to acknowledge. A sentiment reinforced by The Luxury Institute, in its 2011 report Luxury Branding and Marketing: A Global Comparison of Wealthy Consumers in Top Markets. The study surveyed wealthy consumers in the United States, United Kingdom, France, Germany, Italy, Japan and China. Topping the list of attributes that define luxury brands were superior quality (73%), craftsmanship (65%) and design (54%)

We can see that the consumers readily acknowledge the physical aspects of the luxury products they buy, there is clearly an expectation that along with a premium price, one would expect to get superior quality. However, that is not the end of the story, from our definition we know the brand is as important as the physical product. The intangible personal emotional connection created from a luxury fashion brand is to focus on making people feel belonging to the selective clubs and public honour.

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The 7 Luxury Fashion Criteria

There are seven fundamental criteria that I have identified that I believe are required to distinguish a luxury brand. These criteria create a dream value that is the key to maintaining luxury status.

HeritageTimelessnessCreativityRarityExclusivityArtCraftsmanship

These criteria have been identified by me through others definitions of luxury, by my own interpretation of what I expect from luxury, and the training and experience I have received from my professional work experience at Christian Dior.

I intend to look at each element in turn, but first it may seem obvious that price is an important criteria for a luxury brand. It is true that luxury brands are priced differently to high street products, but the price charged is dependent on the value of the luxury brand and product in the minds of the customer. It does not create any value in itself. However, a low price would create confusion for customers anticipating a high quality product and a high priced charged for shoddy goods would damage the brand value.

Heritage

To luxury brands, heritage is the channel of communicating the past and defines its own history, it assists the brand to gain credit of non-comparability as the particularity of luxury, and it preserves the origin of brand and makes it stand out from varieties. Heritage is the one of essential elements for luxury fashion brand to remain consistent to deliver brand value. Christian Dior has invented sensational ‘The New look’ in 1947, Coco Chanel created its Chanel No. 5 in 1921 desired by every single women. The Hermes group has been found in 1837.

What is important is not simply the history, but the myth that can be created around it, the source of the brand’s social idealization. (from The luxury Strategy by J.N. Kapferer and V.Bastien). Heritage is great inspiration to create new, contemporary legend for future, to interest people involving and being part of it. Christian Dior was very superstition and started a fashion house after seeing a sign of a lucky star, Chanel No.5 s origin are as embroidered as her childhood. The secret compartment of Gucci hints at a noble origin. Hermes ‘Birkin bag’ with the story of Jane Birkin. The secret compartment inside Chanel 2.55 bag is the usage of hiding her love letter.

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Timelessness

Luxury need to be associated with time. Only unique objects could be awarded the title of timelessness which is not only speaking the history in the past, but also here at present as well as ‘to be’ in the future. Normal, a luxury brand sets an iconic product to present the facet of timelessness. Only a timeless piece could be claimed to be special and win from the crowd of the fast-paced changing fashion world, and to continue identifying itself and prove the eternal brand value which it belongs to. Gucci has its classical pieces: bamboo bag and loafers, Burberry is famous for its trench coat. ‘The bar jacket’ design has been continually seen on the runway show of Christian Dior. Hermes always make people queue for the ‘Birkin bag.

Timeless pieces like those mentioned above create a continuity in the brand from past to future

Creativity

Both Vivienne Westwood and Alexander McQueen emphasize their design through the unique rebel fashion creative sense. At some points, their brand identities not just stand out from the mass fashion market but also most of the designer labels. They devote the unparalleled creativity distance away from the art culture.

Furthermore, Haute Couture is certainly the concept to show the capability of creativity. There are tiny limit numbers of fashion houses have been qualified and recognized as true haute couturiers by the Chambre Syndicale in Pairs, such as Chanel, Dior, Jean Paul Gaultier, Valentino, Giorgio Armani, Elie Saab etc.

High Quality Craftsmanship

Would people be willing to take the pain and pay high amounts of money for poor quality products even though they may contain the intangible benefits of the brand? The answer could never be a YES. The high quality of handcrafting is a fundamental tangible requirement planted in the consumers mind from the first second when the product is picked up. Christian Dior sales team always explain and educate to the client that Lady Dior has been made in the mould just like an haute couture dress handmade on a mannequin. As an example, the Gucci official website presents the video of the detailed handcrafting process of its classic ‘bamboo’ bag.

The products themselves visibly show themselves in the market with additional information to reinforce the reputation of exclusivity of the quality. Every luxury object should have some part, even small but spectacular, that is handmade. (from The luxury Strategy by J.N. Kapferer and V.Bastien)

Rarity

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As the point of the book The luxury Strategy by J.N. Kapferer and V.Bastien, rarity is central in the identity of luxury, The ‘luxury market’, however, is born from the abandonment of rarity. The global sales success of so-called luxury brands attests to the fact that rarity is no longer part of the definition of luxury for the major groups that make up this market: LVHM,PPR, Richemont, etc, there are 5 types of managerial know-how critical for the so-called ‘luxury’ company.

The rarity of the ingredientsThe technical rarityThe rarity of production itselfDistribution-based rarityInformation-based rarity

The brand strategy of Christian Dior through different product being able to give further explained each criteria following as:

The rarity of the ingredient: different exotic skin limited edition made for Lady Dior as an iconic piece.

The technical rarity: Haute Couturier to emphasize the perfection of handcraft

The rarity of production itself: Special order. The customer has the chance to pay even high value to have the personalized bag production through special order.

Distribution-based rarity: Anselm Reyle collection in UK only trade in London flagship Sloane Street Boutique and New Bond Street Boutique.

Information-based rarity: the new launching handbag Diorissimo: the sales team required to deliver the message to public that the piece is only available to have a view through appointment booked in selected boutique, There is even no display available.

Christian Dior well-managed to create the gap to signify the inequality, those rarity strategy sets strengthen the luxury reputation as a brand.

Exclusivity

Exclusivity is the idea either who is only person own it or it expresses the feeling of being superior and special. Limited shared ownership confers membership of an elite group. Besides the limited edition product to offer in the market, all the luxury companies operate the special events for their regular clientele through their VIP systems, There are only few top clients who would qualify to become ‘VVIP’ and receive invitation of attending the exclusive art exhibition, only a countable number of clients will receive the exquisite gift by the end of year. The customers wouldn’t really primarily care about receiving the solid reward from their own heavy

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spending, it is the feeling of exclusivity the company create to make the customer feel they share this exclusivity. Exclusivity is not the premier factor in valuation, but its absence is a factor in devaluation.( from The luxury Strategy by J.N. Kapferer and V.Bastien), so to be considered as a luxury brand, the paradox of the understanding to fill the absence of exclusivity is absolutely crucial in the field of luxury branding management.

Art

Comparing practical utility in the daily life, like luxury, art is second in importance above the use value, art is the one concept of mental pursuit, art is always invidious piece without consensus and differs from the others. Art is one of aspect of culture able to lock the past, present and future together to achieve the value of timelessness. Luxury and art are powerful and very close interlinked sociological and psycho physiological relativity (from The luxury Strategy by J.N. Kapferer and V.Bastien).Hermes advertisement campaign is always asthetics to achieve that the product or the value of the brand is higher than the practical life. There are some many cases of luxury brands having the product relevant art exhibition associate, like Chanel, Gucci, Hermes, Christian Dior had a art exhibition of Iconic bag Lady Dior in Shanghai presented by different artists’ work, which was interlink to the Chinese culuture. Contemporary Japanese artist Takashi Murakami Creates an Anime for Louis Vuitton behind the multi-color logo bag , contemporary is the factor been taken through the art by Louis Vuitton for the branding strategy, the fact is increase the brand value with time.

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3. Luxury evaluation method for Fashion Brands.

This diagram master designed below aims to evaluate luxury brands by the 7 criteria in a visual form. By analysing the shape, we can quickly see which brands differ from the luxury template. The top luxury fashion brands, luxury fashion brands, new luxury fashion brands, middle market fashion brands and mass market (high street) fashion brands will be examined respectively.

Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

Rarity

0

5

108

8

8

88

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Luxury TemplateSeries1

Diagram1. The expected template for a luxury brand

The master template shows ideal high scores in each area, so to test that my identified criteria cover all the criteria required of a luxury brand, I will compare them to the top 5 luxury brands:

Top Luxury Fashion Brands

19th, January, 2012 World Luxury Association official released The ‘World Top 100 Most Valuable Luxury Brands’, This event commonly referred to as the ‘ Luxury Oscar Awards’. World Top five luxury fashion brands are Hermes, Chanel, Louis Vuitton, Christian Dior, Ferragamo by ranking order in the list.

It could be seen the Heptagon below just like diamond shape, all the top five luxury fashion brands entirely qualified 7 criteria.

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Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

Rarity

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Hermes Analysis

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Hermes exceeds my base template for luxury, as one may expect for the highest ranking luxury brand. I believe it has achieved this due to its near unrivalled heritage and strong reputation for craftsmanship, timelessness. As one of the top 5 luxury brands, it is clear that these seven elements are strongly present

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Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

Rarity

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Chanel Analysis

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Chanel & LV share similar shapes, Chanel slightly more creative, and LV with more heritages, but both comfortably within my luxury base score.

Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

Rarity

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Louis Vuitton Analysis

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Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

Rarity

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Christian Dior Analysis

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Further top luxury brands likewise score enough to match my base level for luxury in each category.

Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

Rarity

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Ferragamo Analysis

Series1

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We can see that these five brands have small variations in the degrees to which they score against these criteria, but overall, and most importantly, they all score highly in these seven categories. We can say that this criterion are all present in luxury fashion brands and therefore validates the template based on my analysis.

The next step is to compare the luxury standard in comparison with brands from the other categories of the fashion market; from luxury brands down to the mass market high street brands.

Luxury Brands

Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

Rarity

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Gucci Analysis

Series1

Gucci is an interesting case; it is internationally recognised as a luxury brand, but not quite in the same top tier of the other previously analysed brands. We can see that it scores highly in timelessness, craftsmanship, heritage and creativity but lacking a little in rarity and exclusivity. That it is still a luxury brand suggests certain criteria take precedence over others, or a lack of some aspects can be compensated by others.

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Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

Rarity

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5

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Jean Paul Gaultier

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These brands equally can claim belonging to the luxury ‘club’ , again though they show slight deficiencies in the rarity and exclusivity aspects.

Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

Rarity

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Bottega Veneta Analysis

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Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

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Ralph Lauren Analysis

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Ralph Lauren and Commes Des Garcons are representative of newer luxury brands that have emerged, obviously the heritage ratings are lower and they are not so exclusive. Ralph Lauren particularly does not seem to conform with our expectation of luxury

Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

Rarity

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Commes Des Garcons Analysis

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New luxury Brands

Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

Rarity

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Dolce & Gabbana Analysis

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Dolce & Gabbana has a much more similar shape to the top 5 luxury brands, although not quite excelling in each area, it is on the borders of luxury. Westwood clearly influenced from its flamboyant designer.

Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

Rarity

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Vivienne Westwood Analysis

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Heritage

Art

Exclusivity

CreativityTimelessness

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Alexander McQueen Analysis

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As the demonstration of eight charts of luxury brands above, it’s really obviously seen that different brand is strength on different criteria, which could make up rest of criteria with lower score to qualify as a luxury in the competitive market. For example, the creativity of Vivienne Westwood helps the brand to cover the lack of heritage. Alexander McQueen as a very new luxury brand is on high market demand because of its unique creativity and art impact.

I think what we can see in the luxury market these days are a separation of the renowned luxury brands that focus on being high performing in each area, and newer brands, that often rely on their creative originators creative instincts to compensate for perceived heritage and reputation.

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As a comparison, by looking at other types of sectors in the fashion industry, we can see these brands score poorly in these areas

Middle Market Fashion Brands

Following the cases of COS and Reiss below, they are very similar shape model in different proportion. It is so far way to achieve the name of Luxury.

Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

Rarity

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COS Analysis

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Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

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Reiss Analysis

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Mass Market Fashion Brands

H&M, Topshop and Zara could never be seen as a luxury if they only aim for high street brand. Although Topshop Unique collection under the brand Topshop shows in the annual London fashion week, the purpose is probably trying to be superior than its competitors.

Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

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H&M Analysis

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Heritage

Art

Exclusivity

CreativityTimelessness

Craftsmanship

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Topshop Analysis

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Heritage

Art

Exclusivity

CreativityTimelessness

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Zara Analysis

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5. Conclusion

Through the diagrams above, it is visibly to recognize that:

All the most valuable luxury brands are fully achieved seven criteria. To become a well known luxury brand, there are three essential requirements: Art, High

quality craftsmanship and creativity. The individual strength of 7 criteria is able to help to achieve the level of luxury The well known brands are more easily to work on towards to become a luxury because

something sensation already shine it to superior brands than others. All the high street brands are qualified none of seven criteria.

Besides, it could be evidently understand that a luxury brand doesn’t effortlessly establish in one day. The luxury is the concept, and it takes time to plant into consumers’ mind, while it could easily lose in the consumers’ mind if the company doesn’t continue nitrating the brands by those 7 fundamental criteria. Conversely, every single fashion brand is possibly shifted to become a luxury brand if the company wisely know the instruction of polishing it up. The brand will finally gain the age by the end, the myth could be recreate to become the heritage. The iconic timeless piece are able to invented, the talented designer could bring incredible creativity, Art collaboration is other solution if the brand haven’t been not qualified as a Haute Couture, Exclusivity and rarity are marketing tactical strategy to consolidate that the brand stand out from the crowd. The brand management team have to understand how to manage the relationship between consumption and dream skilfully. No brand is eternally a non-luxury brand; no brand is eternally a luxury brand. The luxury is the concept to set the distance from the masses in field of riches, status and culture. Every brand is potentially a next luxury brand in the unpredictable future.

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6.Thoughts

I believe my analysis has confirmed that my seven criteria are effective measures of luxury. Brand managers can use this to analyse their brands and, dependent upon their strategy, take actions to achieve their goals.

For example if Ralph Lauren wished to move up into the top-tier of luxry fashion, it would be advised to concentrate upon the perception of its heritage. It could take steps to self-mythologise aspects of its founding and emphasise this in promotions and its products, just as Dior and Chanel have done. In fact, Ralph Lauren must be fully aware of this, as they have already been emphasising this.

There also seems to have been more variety in the luxury industry than I anticipated, more recently there have been much more success for designers to establish their own brands and for them to obtain luxury status. I think this may reflect changes in what people expect from luxury, and the fact that as luxury brands have grown globally, there is an increased desire for further , higher luxury products that are not afraid to take risks.

These perceptions of luxury brands are my own, and these analyses were intended to support my idea that luxury could be defined in these seven criteria. However it would be an interesting next step to use these further to score luxury brands more precisely on how they are perceived with regards to heritage, timelessness, creativity etc. This could be done in different markets to measure perceptions and help to focus marketing efforts.

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Reference:

Bibliography:

J.N. Kapfere and V.Bstien (2009) The Luxury Strategy: Break the rules of marketing to build luxury brands, Kogan Page Limited, London, Unite Kingdom

Dana Thomas (2007) Deluxe: How Luxury Lost its Luster, The Penguin Group, London.

Radha Chadha and Paul Hushand( 2006), The Cult of The luxury Brand: Inside Asia’s Love Affair With Luxury, Nicholas Brealey Internationtal, London, UK

Kristin Knox (2010) Alexander McQueen: Genius of A Generation,A&C Black Publishers Limited, London

Marie-France Picbna (2008) Christian Dior: The Biography Overlook Duckworth, Peter Mayer Publishers, New York, N.Y.

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