How to Manage a Luxury Brand
Thinking through what elements of luxury brand management I would take from the traditional model to build something fresh. In principle, the luxury model provides a means for using branding to engage in cultural commentary. These are my strategic considerations.
There is no approach to cultural brand strategy that does not first consider the tenets of the luxury market. But, for its faults, and given Gen Y and Gen Z consumer trends, the current model is outdated with ideals that underscore social hierarchy. Growth strategies, hard-to-get product and declining quality have dampened customer sentiment. Inklings of innovation eke into ways of working. A signal that the industry will always innovate to survive.
There’s a close link between the economy and the luxury market. During the Great Recession, for example, luxury shrunk by 9 percent (Vox 2023). Macroeconomic trends in China, Europe and the U.S. signal a slowdown in consumer spending. Brands have rushed to make up for the shortfall of inflation with increased investment in VIP customers, experiential retail tactics, and buzzier media activations.
Still, the downturn in luxury is also connected to a general overcast of pressing need for innovation. It’s time for something fresh. Note all of the swaps in creative director at storied houses over the last few years.
New perspective and new creative energy have worked in the past. The way forward is through iconoclastic pursuits.
In principle, the luxury model provides a framework with which to engage in cultural commentary through strategic brand management. Remember always that luxury is a patron of the arts. I’ve made the case before that brands of the future are niche, self-sustaining ecosystems rooted in specialized craftsmanship (blog post). These are my considerations for re-envisioning the luxury model in fashion retail.
Defining Luxury
Luxury is above all a social dynamic. Storied heritage produces culture and codes.
Even though they’re centered around product, luxury brands are not socially neutral (Kapferer and Bastien 2012). Luxury and fashion intersect at the point of social stratification. Fashion was first luxury when only the wealthy could afford it.
Luxury and art emphasize the importance of aesthetics. It’s a mutually beneficial synergy because the luxury market creates massive revenue potential for artwork. Meanwhile, artists provide the social context and aesthetic for luxury in the art world.
The modern context of luxury is maintained by democratization (of fashion), increased consumer spending power and globalization. Accessibility changed Bordieu’s meaning of taste by changing the dynamics of social stratification (The Sociology of Business 2020). Beyond access to the products themselves, there is more information sharing because of the Internet.
With culture, quality and experience in mind, we look to previous inflection points to gather insights about how to innovate. Product and service are interlinked to provide a fully sensory experience. Craftsmanship is table stakes so quality matters.
Past Cases for Innovation
My two primary references are Chanel by Karl Lagerfeld in the 1980s and Virgil Abloh’s take on luxury in the 2010s. During both time periods there were larger sociopolitical and economic trends that created white spaces for innovation. Strong examples of aligning creative vision with the spirit of the times.
Lagerfeld developed a business model (Business of Fashion 2019). Abloh explored the polarities between streetwear and luxury to deconstruct and reimagine both.
I’m using these moments to inform a design-led approach for a 360 lifestyle brand. A lifestyle brand must have: 1) a strong conceptual universe 2) clearly defined brand values that influence management decisions 3) a customer base of reciprocal community. Customers who engage the brand beyond purchases. Post-2020 newness will come from the effort of creating culture-specific work that is more experimental (Serdari 2020).
Management Principles to Build On
Even as the most established houses operate for growth, they still represent an ethos of regional, cultural impact through the usage of consistent brand codes and stories. Inventive companies like Hanifa and Telfar offer varying representations of what the future of luxury could be.
The spirit of these innovations welcome in opportunities for structural change. These are my considerations:
Product & Retail Strategy: True luxury brands have an absolute product offering rooted in specialized craftsmanship (No Best Practices 2020). They are known for and experts of a hero product. Where you’d lose money doing this, I’d have questions about scale of operations. The goal is a self-sustaining ecosystem – so breakeven as we grow. Vertical integration allows for complete control of the supply chain (LinkedIn).
Brand Strategy: Going back to this big picture idea of investing in a strong conceptual brand universe. Developing brand culture through world building. Always considering the potential for 360 lifestyle.
Customer Loyalty: In luxury there is no product without service. Affinity comes from experiences (full report here).
Marketing: World building gets you to immersive brand storytelling. Fully sensory moments that build cultural relevance. Showing up in relevant contexts with relevant messaging, tailored to the setting.
