While it is clear by now that all luxury brands across all sectors will be negatively impacted by the Covid-19 pandemic, a faster recovery depends on several key factors – desirability / exclusivity / finest quality – craftsmanship / creativity – innovation / credibility / consistency.
There is no universal recipe and this may very well depend on how consumers perceive a certain brand. This can depend on all the other elements which make up the DNA of luxury. Consistency in terms of quality may be different when it comes to design – the power of the DNA of a most desirable brand may also come from ultimate creativity not even following trends and not creating products based on marketing research.
This can be reflected in advertising campaigns which in most cases reflect sophistication through simplicity. Brands such as Hermes claim they do not have a marketing department and that its product development and advertising is driven by ‘not taking itself seriously’.
What can be more desirable than the feel that you as a consumer belong to a ‘club’. Most recent Hermes initiatives in the past years were not only most unconventional but they were also limited to the top clients and extremely select media
– a street carnival organised on Wall Street during daytime to celebrate the opening of its men’s store in New York (Hermes announced the event exclusively to attendees less than two days before, in most cases sending messages to mobile phone) – no press release
– a menswear show in London within a stunning ‘one-day’ ephemeral set-up which included not only a large space dedicated to a trunk show but also an Hermes branded restaurant / Cafe as well as a showroom – all built for one day, gone the next day – attendees received printed invitations the day before, Hermes not featuring the event o social media – no press release.
– a select group of top clients and media received a most intriguing invitation – to gather at Paris Charles de Gaulle Airport where the invitees could see the time of the flight but destination was unknown. Only minutes before take-off, invitees were told they are flying to a remote spot in Norway which was famous for its wilderness but also the fact that nights are very short – a simple laconic photo was posted on Instagram – the company not providing any information such as a press release
Desirability is not necessarily linked to the heritage or history of a brand. The best examples of well established young luxury brands which thrive on desirability, finest quality / credibility / consistency are
- fashion: Tom Ford
- fashion – haute couture: Ralph&Russo
- high-jewellery: Carnet Jewellery
- cars: Tesla
- shoes & handbags: Pierre Hardy
- hotels: The House Collective
- skincare Tata Harper
- watches: Bamford
- eyewear: Gentle Monster
Luxury brands which most sensibly draw on their heritage while consistently infusing a contemporary twist:
- fashion: Saint Laurent
- fashion – haute couture: Schiaparelli
- jewellery: Bvlgari
- cars: Rolls-Royce
- shoes women’s: Roger Vivier
- shoes men’s: Church’s
- handbags: Moynat
- hotels: Dorchester Collection
- skincare: Valmont
- watches: Vacheron Constantin
- eyewear: Matsuda
There is also a reverse example in the case of Dolce & Gabbana which made a U-turn after the major controversy and scandal they created in Shanghai, which saw their sales to Chinese (whether living in China or abroad) plunge by at least 50%, their ‘ironic’ gesture turning into a grave disrespect and mockery. The very vocal and flamboyant duo (co-owners of DG) known for being very vocal, controversial and flaunting their wealth and celebrity friends circles, went completely silent from 2018, with no public appearances or interviews.
Instead, they realised that this ‘silence’ actually leaves products speak for their brand. For the first time in its 40 year history, Dolce & Gabbana was no longer about Domenico Dolce and Stefano Gabbana. They turned to Italy and more precisely Sicily and its heritage as a source and foundation for inspiration. They redesigned or opened new store some of which resemble a cathedral, their Rome store on Piazza di Spagna being probably the most luxurious fashion stores in the world.
Their re-launched alta-moda (the Italian version of Haute Couture) as even more luxurious and debuted a high-jewellery line (Alta Gioelleria) as well as luxury mechanical watches (Ala Orologeria). Dolce & Gabbana ‘s Alta Moda epic collection, staged in the Valley of the Temples in the shadow of the Sicilian town of Agrigento validated their hard luxury positioning, with most of their communications reflecting craftsmanship especially for their fashion creations
Exclusivity / Scarcity
It usually relates to limited editions which in some cases are also collaborations. It is also about limited availability of certain products especially in the case of brands which offer for sale online only a small part of its collections. Customers would also need to make an effort to search whether other stores feature the desired product or having to place an order, which in some cases, it would take some time.
Exclusivity is also about customisation or the possibility to configure its very own version of a luxury product. Beyond placing your initials on a product, a consumer would be able to opt for a very specific colour or a raw material that is not normally used for the specific product – which could be the case of a handbag, a pair or shoes, a watch or even a car. In the case of a car examples include bespoke engine performance or customised bedding (ex. mattress, linen and pillows) in the case of hotels.
For fashion, Haute Couture is the guarantee for the ultimate exclusivity. Pop-up boutiques (including seasonal ones in winter or summer resorts) are also an exceptional exclusivity exercise – some fashion brands would stock especially designed collections exclusively available in these pop-ups or they would create only a few items which are exclusive for the respective pop-ups. Chanel, Loewe and Dolce&Gabbana excel with the most innovative pop-ups.
There are also the so-called ‘department store take-overs’ – with a certain brand taking up window displays and setting up corners or shop-in-shops for a limited duration. The fashion brand would most likely design exclusive collections for such ‘take-overs
Exclusivity may also be be achieved through limited editions or collaborations with luxury brands from other sectors:
- a top luxury furniture maker – ex Hermes or Poltrona Frau sign the interiors of several ultra-luxury car brands
- a pop-up suite in a luxury hotel, usually referring to a sought-after artist / designer or a permanent suite (Bentley Suites at St Regis Hotels or a Chopard floor exclusively for women guests at the Jumeirah Emirates Towers Hotel in Dubai
- a First Class chair which turns into a flat bed on an commercial airplane designed by Loro Piana
- a celebrity Michelin star Chef which creates and oversees the menus for a First / Business Class cabin, some airlines going as far as ‘flying Chefs’ especially on long-haul flights
- Dolce&Gabbana has decorated SMEG fridges
- an exclusive Cafe (ex Paris based Pierre Herme pastry company operates Cafes at select DIOR stores), Bars (Breitling, Gucci, Dolce&Gabbana) and even a Michelin starred restaurant (Osteria Massimo Bottura at GUCCI in Florence with a second restaurant recently opened in Los Angeles); Louis Vuitton opened earlier this year its first restaurant and bar at its Osaka flagship store; Dolce& Gabbana has a partnership with Martini for Bars but also operates the GOLD Restaurant by Dolce&Gabbana in Milan
- Christian Louboutin designed straps for Jaeger-LeCoultre watches
Exclusivity in luxury also applies to the world of collectors and vintage products. This is the case mainly for watches, jewellery and cars – with brands organising regularly exclusive events (ex Concours d’Elegance at Villa D’Este; Pebble Beach Concours d’Elegance)
As for luxury hotels, few command exclusivity as reflected in scarcity – iconic resort on the French Riviera, Hotel du Cap Eden Roc, Villa d’Este on Lake Como, Cheval Blanc Courchevel, Fendi Private Suites in Rome or the Bulgari Resort Dubai are usually booked months in advance.
Finest quality / Durability
The real winners are the brands which demonstrate consistency and reliability when it comes to sourcing the best quality materials such as leather or the finest fabrics. Hermes and Louis Vuitton have their own crocodile farms while Loro Piana and Ermenegildo Zegna secure the finest wools, cashmere or vicuña by owning or financing farmers. Brunello Cucinelli is a brand which has built an exceptional reputation for securing the finest quality cashmere.
Despite advanced technology, connoisseur luxury consumers will always appreciate hand-made products, whether it is about apparel, handbags, shoes, watches or jewellery. Hand-made craftsmanship requires extensive training and major companies invest consistently in the various crafts. For instance, an Hermes bag is being hand-crafted by one artisan for all the details.
By contrast, in the case of cars utilising the ultimate technology allows for constant innovation and evolution whether it is reaching higher speeds or less consumption.
For hotels, is not only using the finest furnishings but also about the quality of finishes. Travellers expect top luxury hotels to conduct renovations more often than before. Continuous maintenance is a must, not to mention details such as soundproofing (indoor / outdoor), water pressure or the latest technologies. The fact that a luxury hotel is housed within a heritage / historical building is no longer an ‘excuse’ for poor soundproofing or noisy AC.
Finest quality in the case of hotels is about the high-thread satin cotton linen, Egyptian cotton towels (no excuse for not changing them more often). Durability is also extremely important because it reflects, for instance, the quality of the furniture – even if it is modern / contemporary or vintage which must be constantly preserved. Sourcing organic produce, whether it is your eggs for breakfast or your steak for dinner, not to mention bakery / pastry products – as consumer become more knowledgeable, they will recognise a baguette made from a frozen stack or preservative sprayed fruits which have no real taste. Quality bathroom amenities and fresh flowers are a must – top luxury hotel only charge for special floral arrangements.
In beauty, it is first and foremost about quality – skincare (brands that show results, ideally with a mix of cosmetic and organic ingredients), make-up, fragrances (concentration of fragrance and originality of the scent, including sophisticated packaging), bath&body (organic). Some of the most successful independent haute parfumerie (niche brands) are: Kilian, Amouage, Byredo, Clive Christian, Creed, Roja.
Reflecting the DNA of the brand (fashion brands) in the diversification into other product categories is not easily achieved (some brands should be careful about licensing). Armani, Missoni and Ralph Lauren are among the few which have been achieving ultimate luxury when it comes to their home collections, which become part of the lifestyle of their consumers.
Creativity / innovation
For over 3 years iconic luxury French fashion house LANVIN has been drifting after the departure of its star designer Alber Elbaz and then the sale of the company to China’s Fosun. It took newly appointed Creative Director Bruno Sialleli to catapult the brand only after one season to ultimate desirability by drawing on the vast archives of the house while implementing unique brand DNA features. Sialleli has subtly infused contemporary elements into iconic Lanvin
Bottega Veneta went through a creative crisis after the long tenure of Tomas Maier, going from a star brand of its parent company Kering to a financially declining brand. As in the case of Lanvin, young and unknown designer Daniel Lee completely transformed the brand re-interpreting its codes and unique heritage, with an extremely original version of the famous Bottega Veneta ‘intrecciato’. The brand still does not use a logo on its products which are very easily recognisable thanks to the new interweaving technique.
Another very interesting case is Berluti, a heritage luxury men’s shoemaker. Since acquired by LVMH and under the Creative direction of genius designer Kris Van Assche, who is transforming Berluti, exercising the creation of a brand that seems to have always had a full range product selection, while maintaining its heritage DNA. The retail design concept which reflects a timeless, classic, ‘Savile Row’ style also played an important part in the one-of-a-kind transformation process.
The booming athleisure trend which is being fed by incessant sneakers capsule collections, with major brands partnering with the most diverse designers / artists. Nevertheless, top luxury men’s shoes brands have been developing exceptional sneakers, most made in Italy and using the finest materials – most importantly, luxury brands seemed to have found that essential hype. The most successful and very desirable collections are from specialist shoemakers Pierre Hardy, Church’s, John Lobb but also full range men’s brand such as Canali, Corneliani, Tom Ford, Berluti and Brioni.
Innovation also comes in the way luxury brands communicate whether in print or on social media. Achieving the WOW factor which makes people remember a certain design feature or a reflection of certain products in lifestyle, will remain a major challenge. Addressing different markets and cultures most often requires bespoke brand communication campaigns.
In the case of watches innovation is strongly linked to design and aesthetics, for instance top luxury brands Piaget and Bulgari ‘fighting’ over how thin a most complicated watch can be, in such a way that certain features such as a tourbillon can fit into such a thin case. Innovation is also about the uniqueness of the materials used, both in terms of sustainability but also performance. As for cars, innovation is nowadays almost exclusively related to hybrid or fully electric cars – what speeds these can achieve but also the comfort they can provide.
For hotels, innovation often refers to in-room technology which can be used to control the TV, the AC, curtains, lighting but also used for ordering certain services or to communicate to hotel staff for any requirement 24 hours a day. Creativity is related to surprising guests while collecting their preferences in the smallest details – whether it is an upgrade, setting up the preferred room temperature before arrival, a complimentary airport car transfer or serving an ice-cream as a welcome amenity instead of the usual bottle of wine or champagne, with fruits and/or chocolates (knowing the guest is an ice-cream fan). Another WOW factor is a VIP ticket to a special event taking place in the respective city (car racing, exhibitions, sports competition etc
Irrelevant brand extensions can be risky – examples of the worst such initiatives include: Porsche branded residential project in Miami, Ellie Saab branded residences project in Dubai or Versace Hotels. At the opposite, most successful such product extensions are Bvlgari Hotels & Resorts and Lungarno Hotels (Ferragamo Group).
The Bvlgari Hotels are a most sophisticated reflection of the brand DNA and its Italian heritage – with an impeccably ‘hard luxury’ architectural concept perfectly conceived and implemented by Italian interior designer Antonio Citterio. The very scarce and subtle reflection of Bvlgari’s main products, jewellery and watches at the Bulgari Hotels is what lends credibility and desirability. Without even attempting to become restaurateur, the fine dining restaurants at all its hotels are overseen by Italian Michelin-starred Chef Niko Romito.
Instead of using the Ferragamo brand, the owner family decided to create a separate dedicated brand for its hotels, Lungarno Hotels, which own and operate 6 luxury hotels in Florence and Rome. None of the hotels include any reference, even the most subtle, to Ferragamo. When Missoni realised its brand extension into hotels is not credible, they decided to immediately withdraw from the partnership with Radisson Hotels, the two Missoni Hotels in Kuwait and Edinburgh being immediately de-branded.
By overtly confirming no intentions for expansion of its hotels, Giorgio Armani is most probably doubtful about how credible is the brand extension into luxury hotels. Unlike fashion, in the case of luxury hotels the finest furnishings, interior design and architecture cannot compensate for service standards as well as for developing credible dining and wellness offerings. Armani Hotels is a global joint venture with Dubai’s real estate developer Emaar which also owns the Address Hotels.
By placing in the hotels the Armani / Casa furniture collection which is otherwise mostly available for retail too, does not necessarily reflect a credible Armani lifestyle. After almost 10 years, Armani Hotel Dubai (the first which opened) lacks a desirable concept for both dining and Spa. The same applies to Armani Hotel Milan, the only more successful component being the Armani Prive night club.
By contrast, the Armani restaurants at its Emporio Armani stores in major cities around the world have been quite successful thanks to the relevance of their menu, with affordable offers. Nevertheless, Mr Armani learned other lessons from his mistakes, especially being criticised for developing too many clothing lines some, with a rather confusion positioning. Since last year, the Emporio Armani line has been constantly upgraded to a more luxury level (reflected in the products, advertising and retail design) while the Armani/Exchange and EA7 remain at a level of affordable luxury. The Giorgio Armani line (also considered the ‘first line’ or ‘black label’ has been further established as ultra-luxury, as reflected in all advertising but also in the stunning new retail design concept of the Giorgio Armani stores – all products and store designs being fully Made in Italy.
Luxury jewellery companies such as Cartier, Bulgari and Chopard have been persistently attempting to expand into accessories, more specifically handbags. All attempts by the three brands proved to lack credibility, their expertise being into jewellery and at most, into watches. Until last year, when Bulgari’s mastermind and genius CEO Jean-Christophe Babin took the world by surprise launching a capsule collection with American designer Alexander Wang and hosting of the year’s most resounding events.
Post Covid-19 pandemic outlook
- the appetite for luxury brands will take time to recover
- there will be no such ‘revenge shopping’ as luxury stores reopen
- the ‘show-off factor’ will remain unchanged – even if purchases will continue to be driven by how recognisable a product is from a distance with the buyer completely unaware of the mechanism of the respective watch – such brands include Rolex, Cartier, Audemars Piguet or Panerai – which for the long term may be very damaging to these brands
- value and relevance will be perceived differently – consumers paying more attention to the type and quality of materials or fabrics – so they may ‘justify’ a certain purchase with its durability in time – luxury consumers are likely to appreciate a hand-made pair of shoe from the finest leather instead of a pair of shoes made from recycled materials
- the investment factor will play an even more important role especially with brands / products whose value is guaranteed to increase in time – Patek Philippe,and Hermes top the list of products with guaranteed value increased in time)
- ‘guilt shopping’ of luxury branded products will be an important disruptor – this will be dominating mature markets
- the anti-luxury sentiment will persist across all sectors – the mix & match trend will regain steam, driving the so-called ”upscale” brands such as Massimo Dutti – a cashmere sweater would cost a fraction compared to any of the luxury brands
- comprehensive safety measures regarding the smallest health hazards will become crucial across all luxury sectors, especially hotels, restaurants, cafes, bars, Spas, wellness centres, fitness centres but also department stores and travel retail (duty free shops at airports) – ideally, consumer will prefer a neutral certification, instead of the company’s own newly created ‘hygiene’ policies coordinated internally
- social responsibility will prevail, with guests being more at ease to donate especially to fund medical research or equipment
- newly opened hotels (newly built structures) and newly renovated luxury hotels will have a major safety advantage, being perceived as cleaner especially when it comes to air-conditioning, mattresses or carpets
- the word ‘renovation’ so easily used by luxury hotels, even in cases when they superficially change a carpet or the upholstery of furniture will no longer be accepted
- luxury cars will be probably the least affected luxury sector, with a preference for purchasing new cars – that is not to be confused with safety in terms of driving (ex. Volvo will not necessarily become a more desired car brand)
- worst impacted will be the First/Business Class offerings by commercial airlines – measures to ensure disinfection will likely be very costly giving an edge to private aviation which will surely adapt to become more affordable
Major luxury brands with a weak positioning, especially when it comes to desirability and creativity (predictable & lacklustre): Chanel, Gucci, Burberry, Louis Vuitton (women’s) Dior (women’s), Prada, Valentino, Miu Miu, Ferragamo, Fendi, Jimmy Choo, DVF, Carolina Herrera, Longchamp, Zegna, La Perla, Philipp Plein, Versace, Etro, Ralph Lauren, Balmain, Stella McCartney
Luxury brands which command a powerful positioning and brand DNA, delivering exceptional collections / products as well as advertising and most innovative communications campaigns include: Hermes, Celine, Bottega Veneta, Dior Homme, Louis Vuitton (men’s), Loewe, Giorgio Armani, Tom Ford, Balenciaga, Jil Sander, Tod’s, Lanvin, Pucci, Max Mara, Missoni, Maison Margiela, Off-White, Givenchy, Moncler, Alexander McQueen, Loro Piana, Brunello Cucinelli, Christian Louboutin, Isabel Marant, Jacquemus, JW Anderson, Dries van Noten, Jil Sander, Comme des Garcons.
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