fashion, luxury and affordable luxury - …...fashion-luxury industry outlook •2,4 trillion usd:...

FASHION, LUXURY AND AFFORDABLE LUXURY

Definitions and meanings

November 2017

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FASHION-LUXURY INDUSTRY OUTLOOK

• 2,4 Trillion USD: Global Fashion System Market Value in 2017

• It means like the 7th world economy after: USA, China, UE, Japan, Indian, UK

• 65.000 (Mln/USD): Italy fashion system (textile, leather goods, apparel, shoes)

Source: McKinsey, The state of Fashion

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LUXURY: POINTS OF VIEW…

“Some people think of luxury as opposite of poverty. Luxury is the opposite of vulgarity ”

COCO CHANEL

“We have to consume luxury immediately . The best thing that can happen to a dress is to be worn not to stay in a museum ”.

KARL LAGERFELD

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“I’m never shocked by an expensive dinner. Especially if I think that it costs less than a pair of shoes.”

CARLO CRACCO

“Wear a trench, and you’ll feel like Audrey Hepburn walking in Paris.” MICHAEL KORS

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http://aforismi.meglio.it/aforisma.htm?id=a997




“Being happy is a natural wealth, luxury is an artificial poverty .”

SOCRATE

“Yes it’s true, I have a BMW car, but just because BMW is the short for Bob Marley and the Wailers, not because I love luxury cars.”

BOB MARLEY

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“The true luxury, is to take our time”

PAUL MORAND

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And you? What do you think about? What’s your point of view on luxury?

WHAT DOES LUXURY MEAN?

• Which is luxury definition?

• There is a considerable number of possible answers?

• Over the times the word “luxury” became in common use and very often it has been downgraded

• It’s easy to hear about “true luxury”, “new luxury”, “affordable luxury” and other terms that made the luxury meaning more vague

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• We can approach word “luxury” from different prospectives. Let’s try with 4….

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DEMOCARTIC APPROACH ELITE APPROACH

EXPERT APPROACH EMPIRICAL APPROACH


Democratic approach Making a survey asking people what luxury means to them. But…we’ll have different or in some cases opposite answers depending on different groups or social levels

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Elite approach It’s the opposite of democratic, and it will be limited to selected groups of people such as rich. In that case different cultures could have different visions. Think of a Japanese compared to a German or a Chinese compared to a French.

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Experts approach

In this case the point is to identify the experts. Who are they? What do they do? Where are they from?

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Empirical approach Since brands are luxury markers we should limit luxury to luxury brands. But…Which are the real luxury brands? For example Lacoste represents for Chinese consumers a luxury brand for its presence in a selected distribution: Department Stores, Mono brand boutiques. In Spain on the contrary the perception is much lower.

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• Whatever is the approach method to luxury definition we can clearly say that LUXURY IS A RELATIVE CONCEPT

• It’s a relative concept that necessarily depends on SOCIOPOLITICAL LANDSCAPE OF OUR CENTURY

• Besides, provided that our society is more and more fragmented and multi-cultural WHAT LUXURY MEANS TO SOMEONE DOES NOT FOR SOMEONE ELSE

• Also from times prospective: WHAT LUXURY WAS YESTERDAY IS NOT TODAY’S LUXURY…AND IT WON’T BE TOMORROW’S ONE

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• In any case we need to set some milestones on our learning path

• So we’ll choose some definitions and meanings that can suit our educational purpose

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• A first definition could be that a luxury brand is a very exclusive brand almost unique in its category, symbol of rarity, and sophisticated taste

• Such a definition, although cane make sense it seems too limited for today’s luxury. In this case only a Rolls Royce either and Aston Martin can be considered luxury cars, if we think of automotive. A Ferrari would look “too much”.

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• A broader definition: a luxury brand is a selective and exclusive brand which carries a creative and emotional value for the consumer

• This is also a clear and valid definition but can be extended to fashion product too. We’ll see later fashion/luxury comparison

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Castiglioni lamp, 1962

Rolex Daytona with diamonds


• A third interesting definition could consider a luxury brand based on three main criteria: artistic contents, handcrafted quality, international scope

• Those three principles, despite all possible luxury definitions, can be taken as true.

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• Artistic contents: behind a luxury product we always need a profound aesthetic research

• Think of a fragrance bottle able to generate impression of beauty and artistic research

• Think of a cocktail dress created to enhance feminine charm and beauty

• “ Wrongly dress a woman and you’ll see the dress. Rightly dress a woman and you’ll see the woman” COCO CHANEL

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Artistic Contents


• Handcrafted quality: consumers buy Armani clothes or Gucci bags, and although they know product are manufactured on a large scale “the want to believe” that the product comes directly form designer laboratory

• We can mention Bottega Veneta where handcrafted quality is identified with the brand itself

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Handcrafted Quality


• International scope: whether a Canadian buys an Italian or French luxury brand product he/she expects the product to be considered in the same way by Japanese, Chinese or Americans : Louis Vuitton is Louis Vuitton worldwide

• Similarly if I’m an Italian, walking on 5th Avenue in New York City, and I don’t see a Prada store, I become concerned about reputation of the brand.

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International Scope


• Another important definition is the one provided by Danielle Alleres . It’s also a first introduction to accessible luxury. It defines three levels of luxury:

– Inaccessible luxury: unique models, exclusive, always handcrafted often in one or limited units: Rolls Royce limited edition

– High-End Luxury: similar styles and models of inaccessible luxury but produced in a series . Think of above mentioned Rolls Royce limited edition (inaccessible) or Rolls Royce catalogue (high-end)

– Accessible luxury: all product made on large scale like pret-à-porter by Dior or shoes by Ferragamo

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• By this definition affordable luxury would represent 90% of today market.

• This definition of accessibility is based more on culture of consumers, understanding of luxury by a very niche customer base. It is not related to affordability, it does not include really money as a key factor. Also accessible luxury in this definition includes very expensive items

• We’ll enter more in details to define what we mean today as affordable luxury, introducing a crucial segmentation variable: price

• The first “take away” is that exactly as for luxury, also inaccessible luxury is a relative concept

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Inaccessible Luxury

High-End Luxury

Accessible Luxury

A first Luxury Pyramid according to Danielle Alleres


• Let’s summarize so far….

• Luxury, expression of a brand and a product, always includes exclusivity, handcrafted quality, artistic contents, and international scope. Those elements are able to carry emotional value for consumer.

• This process can be referred to different levels: that’s why we speak about levels of luxury

• At every level of luxury we are never in the field of necessity but always in the field of emotions.

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AND NEVER FORGET…..

WHATEVER IS LUXURY LEVEL WE ARE CONSIDERING WE ARE ALWAYS TALKING ABOUT A BIG MINORITY OF THE POPULATION,

WE ARE ALWAYS TALKING ABOUT A NICHE OF COSTUMERS.

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• Our product are made to make people dreaming BERNARD ARNAULT

• Gucci is the business of

selling dreams ROBERT POLET • Luxury is the necessity

that starts when necessity ends

COCO CHANEL

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LUXURY: BRAND AND PRODUCT

• When we think of luxury we immediately link to brand, we instinctively think of brand names, logos and colours: this is explicatory itself.

• But behind a brand there is always a product

• So the question is (also): which is the process that take a product to a luxury status?

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• Often celebrities, brand ambassadors, events, “right people” play a role able to give to the brand the glamour that the product can benefit.

• Product itself sometimes is not even mentioned

• It happens sometimes that tremendous efforts in quality research or style details are not rewarded by the market if the product is not supported by a brand.

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• Why it happens? • At first, we can say that luxury assumes quality

but it’s over the quality: “luxury is a dividing line between the very good and the emotionally moving” – REMI KRUG

• And again, those brands maybe they are high quality but they don’t have their “Kelly” who represented the highest mix of richness, fame, charm, beauty, tradition and legend: Grace, the Hollywood star who becomes princess (Kelly, Hermes, icon bag)

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Beautiful but unknown

The power of awareness


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• Although luxury is strongly linked to a communication process it needs also an intimate multi-sensorial and multi-experience satisfaction depending on the beauty and values of the product itself

• Nevertheless luxury democratization process made by big logos and show-off took place , a niche of consumers who consider luxury strictly bound with product contents, still exist.

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• Luxury pass through a double valorisation process:

– Its validity as a true luxury work : time and work necessary to produce it, raw material, quality value chain

– To be addressed to a true luxury clientele, able to understand and to know it : luxury is “how to spend” not “the power to spend”

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We can come to a conclusion: true luxury is made by a strong union between brand and product, but whether sometimes brand can skip product, very rarely the opposite is true.

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AND WHAT’S YOUR OPINION ?

FASHION AND LUXURY

• It’s an ambivalent and confusing issue…let’s try to make it clearer

• By definition luxury is a social marker: in a democracy, where people are free luxury creates different social levels and influence people to belong to something higher.

• Fashion, more and more chaotic, represents the the strong reaction to urbanization and raise people from their condition of anonymity, it represent an effort to get back your lost time.

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FASHION AND LUXURY

• In ananonymous environment, fashion creates a horizontal differentiation not vertical as luxury. Therefore, there is more than one fashion; there are enough fashion for everyone to differentiate themselves and to integrate themselves into their tribe, even at a low price

• Luxury cerates a hierarchy cleared by democracy

• Fashion creates a social differentiation to escape the anonymous urban crowd

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FASHION AND LUXURY • Said that….

• Luxury needs innovation, need to be fashionable

• Fashion and its products can become aspirational for some consumer segments, representing a dream an “affordable luxury”

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FASHION AND LUXURY

• Two more aspects of difference between fashion and luxury are

- Relationship with time: luxury is timeless fashion flies away…

- Relationship with ourselves: luxury is for us fashion is to show to the others

One example that can include the two concepts is Haute Couture that should represent top of fashion and luxury at the same time…although today Haute Couture is not profitable any more, while H&M and Zara street-wear is growing so fast..

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AFFORDABLE LUXURY

• We anticipated the “accessible luxury” in Danielle Alleres definition of levels of luxury

• We proceed introducing the concept “Premium” which matches with Danielle Alleres definition of accessible luxury: in this case we talk about Premium brands when communication wise and distribution wise we refer to large consumer base (we are not talking about mass but large segments)

• Talking about clothes and accessories, Premium would include for example all pret-à-porter, all is not included in Haute Couture

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AFFORDABLE LUXURY

• We also mentioned “affordable luxury” as aspirational fashion purchase

• A more modern concept, closer to fashion luxury industry language, includes a key variable of accessibility: the price.

• That’s why we talk more about affordable luxury than accessible luxury. The accessibility is not a matter of communication or distribution visibility, it’s a matter of spending chances.

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AFFORDABLE LUXURY

• Regarding fashion industry for instance Giorgio Armani first line or Versace first line will be not part of affordable luxury, while the diffusion lines by the same company such as Versace Jeans or Armani Jeans may be included

• At the same time Furla, Michael Kors, Twin Set are part of affordable luxury, while Zara, H&M, Uniqlo can represent the entry level of this segment.

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AFFORDABLE LUXURY

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Inaccessible Luxury

High-End Luxury

Accessible Luxury

Going back to Pyramids…do you remember Danielle Alleres Pyramide?


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Luxury

Premium

Moving to Premium Pyramid


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Luxury

Affordable Luxury (Entry Level)

Affordable Luxury Pyramid

Affordable Luxury


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And your Pyramid?

AFFORDABLE LUXURY • In the recent past (last 20 years) we observed a

lot of “trading up” cases, low-medium price product that thanks to fashion trend research, and the ability to create good fitting and right shapes, try to elevate themselves to fashion and luxury brand.

• On the other hand luxury brands that try to conquer new lower markets due to big difficulties in getting profit in their original niche.

• We’ll go back on those topics

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AFFORDABLE LUXURY • In summary…

• We can talk about accessible luxury when we refer to goods, in the field of fashion and luxury, addressed by companies communication and distribution strategy to a relatively large segment of consumers.

• We can talk about affordable luxury when we introduce price as an argument of a further segmentation, and this factor starting approximately from early 2000 created an increasing demand (and an offer), of aspirational goods at reasonable prices.

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LUXURY OR AFFORDABLE LUXURY?

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ZARA Christina Dior


HERMES

FURLA

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ASTON MARTIN

KIA

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MINOTTI

IKEA

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AFFORDABLE LUXURY

We said that affordable luxury is also relative exactly as luxury.

But luxury and affordable luxury can correspond?

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LUSSO O LUSSO ACCESSIBILE?

WHO KNOWS…

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Bibliography

- The Luxury Strategy – Kapferer/Bastien – Kogan Page

- Luxury Brand Management – Chevalier-Mazzalovo- Franco Angeli

- Luxe, Strategie, Marketing – Danielle Alleres – Ecomica, Paris

- Le procedure de qualification de produits de luxe – Teil G. – Edition du Regard Paris

- Le Luxe: essais sur la fabrique de l’ostentation -Teil G. – Edition du Regard Paris

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fashion, luxury and affordable luxury - …...fashion-luxury industry outlook •2,4 trillion usd:...

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