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Luxury, as much as you want!
Luxury, as much as you want!

At a time when several labels in the high fashion sector are still presenting sales results higher than foreseen, a new question arises: what assumptions are behind this concept of luxury? There is no unanimous answer and different nuances identify the times we live in.

In the past, it would have been perfectly true to say that a high volume of invoicing was in itself one of the main success indicators of a company. But, that’s not the case in the current panorama. The market has changed and with this change came the democratisation of access to luxury products, a reason for cheer in a society based on equal opportunity values.

However, for all the labels positioned in this high-level segment, this is where the headaches begin. On the one hand, they make millions in profits at the end of a business year but, on the other hand, they cannot neglect the repositioning they have to undertake if they want to continue to be known as luxury brands. This paradox is difficult to manage and can lead to the big fashion houses focusing increasingly on relationship marketing, in order to reach a fringe group of customers that actually interests them. Too snobbish? Maybe, but even more so, it is a long-term view that will guarantee the label’s positioning at the top. In line with this thought is the opinion of Jean-Noël Kapferer, Professor of Marketing at the well-known HEC Paris who, in his book, Luxury How Can Luxury Brands Grow Yet Remain Exclusive?, he says that "the more the luxury sector grows, the more this threatens the dream and the aspiration to have that product, and the meaning that the concept of luxury evokes is also beings to dissipate: the notion of rarity and of access to a privileged life, to products of exception".

China leading purchasing in the luxury sector

The winds of change came from the East, with China heading this market twist, by contributing to the growth of sales in this segment. This is according to the "Luxury goods worldwide Market Study”, published in 2015, noting that around one-third of buyers are Chinese (31%), a quarter are from the USA (24%), with Europe in third place in the ranking, determining 18% of purchasing power. Following this market trend, the Bain&Co consulting firm predicts that there will be 400 million luxury consumers in 2020 and that ten years after that, there will be an increase of 100 million more people in this segment.

This forecast obliges high fashion industry labels to do a Herculean balancing act, between maintaining exclusivity and the democratisation of access to their collections. According to this news item on the Business of Fashion (BoF) site, Louis Vuitton and Gucci are two good examples of harmony in this clear dichotomy, finding an effective formula in extending their product portfolio (including cosmetics, perfumes, leather goods): producing revenue without compromising the brand image.

Influence of the digital age

At the time when purchasing power is led by the millennial generation, it is also important not to forget the influence of e-commerce as one of the main engines of change.

On this, there is an article published on the Campaign Magazine site. The conclusion is that for a new wave of new millennium consumers, it is much faster and more comfortable to get the dress or watch they always dreamed of with just one click. But more than this, this new relationship with the labels means that the concept of luxury must be reformulated, as it also complements the offer of intangible experiences. This is proven in a 2014 study "led globally by Eventbrite, which concluded that 78% of the Millennials prefer to spend money on an experience or an event to getting a product that’s on their wishlist”.

Quality, exclusivity and extravagance Vs accessibility, democratisation and invoicing are the pieces in play on a luxury chessboard. A conflict with no end in sight and where there can only be one winner: creativity, doing justice to Coco Chanel’s motto: "Luxury isn’t the opposite of poverty. It’s the opposite of vulgarity”.