The future of luxury fashion brands...

way ahead post the crisis...

Anywhere in the world, all the shops of any luxury brand look the same. The product offering is the same, the look and feel is the same... luxury brands, or should I say ‘luxury fashion brands’ have taken standardization to a different level – Over-standardization! I’m not saying that standardization is bad...in fact, it is good! But over-standardization can have a huge negative impact on the brands’ performance and sales.

Let’s take India for example. Why do luxury fashion brands present in India, not sell in India? It’s not like people don’t buy luxury fashion. But they buy the same thing abroad. Why don’t they buy it from India? Well, why should they?!!?

Is there anything that the brands provide here that they can’t get abroad??!! NO!
Plus they have much higher duties levied on them. So if the same is available in Dubai, New York or Singapore, minus the taxes, then why not buy it from there? A person, who can afford their products, can obviously afford foreign trips and chances are, is planning one at any given point in time. And when one travels, s/he is always in a better mood to shop and tends to spend money more freely than s/he would when at home. Then why should one shop in India?!? Brands give them no reason to do so...! And the same goes for all the countries and cities, the world over. The luxury stores in London have majority of their sales coming from Arabs and people from the Far East... New York has a mixture of other nationalities, Dubai from Russia, India and other Asian countries, Miami from South Americans... Hence, it’s the same story everywhere!!

However, Mumbai and Delhi are not considered as major international shopping destinations... nor has our Indian government done much in order to promote tourism in the big Indian cities. How then are these luxury brands going to survive in India?

According to me, they can only if they are able to sell to Indians!
In fact, I believe that this is something brands must look at doing as a corrective measure in the post-crisis period. Like all luxury experts say – ‘going back to the core business’... I say, also ‘going back to your own people’... the people who belong to the city that you are present in.

Brands must start generating the bulk of its revenue from the citizens of the city in which they are present. And this can only happen if brands start offering something different in each market, to cater to the local needs and cultural requirements, which is different from the offerings that they get when they travel abroad. They have to customise their offerings, experiences and services based on the local cultural requirements.

That way, a brand will keep the consumer’s interest alive in his own city and while travelling abroad. Hence, by appealing to ‘their own people’, they can appeal to the tourists even more.

Let me explain:

What is it that a brand can do in India?

Providing a customised offering does not mean that Prada should start doing Indian ethnic wear... Ethnic wear should be left to the experts – the Indian designers. But there are other cultural trends and habits that luxury fashion brands can take advantage of.

For example, Indians traditionally have a mindset whereby they appreciate their own culture better, when the western world starts to appreciate it. This probably has its roots in the century long British rule that they’ve been subjected to, but brands, especially big international fashion brands can take advantage of this and leverage this.

Why can’t a big brand like Gucci or Prada ropes in a big Indian designer to adapt Indian motifs or silhouettes for a certain special range of the brand? Again, it’s not about making ethnic wear, but more about giving an Indian touch to the international product range. The fact that a large international brand has introduced an Indian inspired line would be a big enough motivation for Indians to buy and the association of a big Indian designer is important since it provides credibility to the collection while maintaining the luxury imagery. Also, doing so will make the product twice as desirable.

Another way could be to look into the cultural needs of the client and provide offerings based on that. For example, Indian women above the age of 40yrs, the typical luxury consumers, usually wear sarees (traditional Indian drapes) to social gathering and parties. International luxury brands usually do not have accessories (bags, footwear, etc.) that match these outfits since everything is made to go with western wear or for a total look by the brand. Hence, can luxury fashion brands have a special collection of bags, footwear and accessories that go well with Indian outfits?

Indian weddings are the biggest occasion for jewellery purchase (read article on jewellery ≠ luxury brand name, but much beyond that!) but do not attract sales from international luxury brands like Cartier, Bvlgari or Tiffany. Can they do a special 22 karat gold collection for the Indian weddings?

This strategy will not only motivate the citizens of India to purchase your brand from India, but it also motivates the tourists coming in to buy from your brand, as it’s like taking back a piece of the local culture – but belonging to a luxury brand. This can act as a great motivation for being selected over the competition!

And this strategy must be implemented across markets and across cultures.

Now I’m sure the question looming large in your mind is, ‘what happens to the brand identity?’

Well, most big brands, except LV, Hermes and maybe Dior, have lost their luxury status over the past 10yrs owing to excessive massification and have suffered its repercussions during the economic crisis. Hence, post the crisis all these luxury fashion brands are already planning their revamp strategies. In my opinion, if a brand were to adopt this strategy across markets, this strategy could itself become a part of its new identity.

This time is the best opportunity for brands to try something innovative like this – as innovation is now the key to gaining back the lost luxury status.

The Indian Complication: Part II

Jewellery ≠ luxury brand name, but much beyond that!

Indian Jewellery has its own character that dates back to the days of inception of jewellery. Jewellery is not only a decoration article or an ‘ornament’ for the Indians... but much beyond that. It’s about the value of the article and not about the brand...because jewellery in Indian culture itself has its show-off value, and does not need to have a brand.

What do I mean by value beyond just jewellery? Since generations, gold in India has been considered as ‘stri-dhan’ i.e. the wealth of the woman of the household. In Indian weddings, which are huge occasions for luxury consumption, maximum amount of money is spent on jewellery to be gifted to the bride by her parents, to make her financially strong before she leaves their house. And gold in India has always been synonymous with ‘purity’ and ‘savings’. Jewellery is the biggest investment that Indians have traditionally made which is also why they only prefer 22 karat gold jewellery. 18 karat gold jewellery is considered more like ‘fake’ or ‘impure’ since its value does not appreciate the same way as of the 22 karat ‘pure’ gold jewellery. Also, unlike diamonds or other precious stones and metals, gold being the only precious element whose value appreciates constantly, also makes it the best choice for investment.

Hence, unlike the western cultures, where jewellery is considered luxury and a brand name attached with it, makes it more luxurious... In India, jewellery is a cultural necessity and financial security... hence, though there is an emotional motivation to buy jewellery, the decision is usually made keeping all the basic functional aspects in mind. i.e. the purity of gold, the quality, the re-sale value, potential returns on the investment, etc...,things which are usually not the considerations while buying jewellery in the western cultures. While the western cultures focus more on design and the ornamental value of jewellery, Indians focus more on the purity and value of the materials used. It probably comes from the fact that India was the source of all precious stones and pearls centuries ago...hence; the mindset is still such that we look for purity and value... Hence, the brand name does not make that much of a difference.

If you look at the Indian jewellery market, the traditional family jewellers still rule... customisation of jewellery, bespoke and tailor made jewellery are almost like a give-in when it comes to the Indian jewellery market. It’s more about trust associated with these family jewellers over generations, rather than the brand name. In fact, India is one market, which does not trust brand names when it comes to jewellery. Why? It’s because unlike the traditional family jewellers, the brands do not give the split between the costs of materials being used and the cost of the designing and making charges. That itself, acts as a huge mental block for most Indians to buy branded jewellery.

So if that’s the case, why would an Indian buy a Tiffany or Cartier jewellery piece, at ten times the price (price of design and making, not the actual elements) of ‘real’ gold for ‘fake’ (18 karat) gold?

The Indian Complication - Part I

We all hear things like India is one of the biggest upcoming markets for luxury brands... and most people, when they say luxury brands; they’re referring to luxury fashion (apparel and accessories) brands. The growth of LV, Prada, Armani and Gucci in China and other Asian markets, has the whole industry optimistic about India too. And with the economic crisis in USA and Europe, the industry is betting a lot more, more than ever, on these two largest growing economies – India and China!

However, India, unlike the USA, has a vast ocean of history and legacy, right from the Vedas and other mythological texts. It is one of the oldest surviving cultures of the world. Hence, most of our habits, mannerisms and beliefs stem from hundreds of thousands of years ago. Obviously they have all gone though several modifications, but the roots still remain intact. Which is why, unlike the USA, which is young, and has borrowed most of its culture from Europe, India, is one of those cultures, which finds it most difficult to borrow from others. Even though religious practitioners talk about westernization and growing influence of western cultures in India, India is one of those unique nations that Indianizes all those western concepts as they enter in. The resistance to foreign concepts is very high at a subconscious level.

One of the biggest barriers that Luxury brands will face in India is to overcome the Indian mindset of ‘saving’ v/s ‘spending’. Though we’ve seen a change in this over the past few years, the current economic crisis has thrown us back into the past in terms of these values. Modern day Indians are suddenly realizing the worth of what their parents always told them, and are going back to saving.

Now I’m not saying that Luxury is a western concept that will find resistance in India. No! In fact luxury is very much an Indian concept, culturally since the age of Gods, and kings and princes. India has been used to opulence and show off forever, and hence, to consume luxury, is in our DNA. However, what kind of luxury is also in our genes.

Opulence in India is mainly displayed through jewellery and property much before clothes and bags. The Indian weddings are the biggest occasion for Luxury consumption in India – more like a platform used to show off how rich you are. Even here, jewellery is what we most spend on! (However, why branded jewellery has not been successful in India is another discussion, which I shall touch upon in my next article)

Rich Indians don’t mind buying diamonds for lakhs, but would definitely think twice before buying a dress for a lakh.

In terms of hierarchical show-off values, the house and jewellery would come first, then a car, then gadgets, then clothes, and then bags, shoes and other accessories. Hmmmn... This takes us back to the Indian mindset of ‘saving’ v/s ‘spending’. Because if we look here, there is only one kind of luxury that Indians most indulge in, and most value – Luxury with an ‘investment value’.

So then what will happen of all these European luxury brands of designer clothes and accessories, hoping to make a fortune in India? They have to do something to overcome this Indian mindset, and as seen in the current figures, simply being present in India is not really helping too much.

Perhaps, to overcome the ‘saving’ mindset of the Indian, luxury brands need to portray themselves as an ‘investment’ rather than an ‘expense’.

Why can’t branded designer wear dress or a bag have an investment value? Why can’t they have a resale value?

Now, ‘resale’ has another complication in India. The concept of ‘Vintage’, unlike the way it is looked at in Europe, is considered as ‘second-hand’ items, by Indians. The concept of used clothes or rented outfits, is traditionally, seen as derogatory in India. Hence, the brands have to handle it carefully, from their own end. For example, the ‘resale’ value could be in the form of brands willing to buy back the products after 30-35yrs or in the form of auctions, organised by the brands themselves, which would give it the feel of ‘true vintage’ and not ‘second-hand’.

Are there other ways that European designer wear brands can overcome this mindset of ‘saving’ v/s ‘spending’? Post your views...

Luxury = Pain

Yeah... I know it’s a paradox many would be totally confused reading... “How can luxury ever be pain? Luxury is actually maximum comfort!!”... But the co-existence of the yin & the yang cannot be denied, even in luxury.
It’s the fear of death that makes us lust for Amrit... Our love for Lakhmi comes from our fear of pain of Alakhmi...

To understand the true worth and value of luxury, one has to know what pain is... and having undergone pain to acquire it, makes it even more precious.

People go through various troubles in life in order to acquire the luxurious lifestyle that they seek. Office ladies in Korea are known to starve for the whole month and blow up their entire month’s salaries on a LV bag. As per Radha Chadda’s book, Japanese teenagers sleep with rich executives just so that they can afford a LV or a Prada bag.
If in this case, luxury is Lakshmi, then the ache that people have gone through in order to acquire it is the alakhmi.

Looking at the noveu riche, the hardwork, struggle and hardships that one goes through to be where they are, makes the ability to be able to afford those luxuries much sweeter.

Now, one would argue, what about the old rich...who are so accustomed to luxury that it almost has become a routine for them. Well, no wonder that this section of society is now looking at going back to the basics... it’s they who take to meditation – silence is luxury... it’s they who go most on sabbaticals to ‘secret hideouts’ that are unheard of by ‘normal’ people – personal time is luxury... Ask any of these old rich people what they’d most like to have... and they’ll tell you ‘peace of mind’... And well, they do spend thousands of dollars trying to get that!!
So what’s the yin and what’s the yang here??!! Materialistic Luxury itself is the yang and that makes you value the yin – the softer, basic luxuries of life.
Just like in any relationship...where deprivation and a feeling of loss are the biggest factors that make one realize the true value of the relationship, it’s these very factors that change one’s definition of luxury making something more aspirational than something else. For a teenager who’s always lived with parents in a secure environment, living independently may seem like a luxury... but for one living abroad, away from home... luxury is that one friend who reminds him of home! People's relationships with luxury, work on that same basic principle...

Another example of co-existance of yin & yang...

... someone’s gain is somebody else’s loss... A handmade expensive embroidered leather bag, puts through pain not only the artisan sweating it out on making the bag, but also the environment. Honestly, looking at the way the luxury leather industry slaughters animals, puts me to shame. Rare animals like Ostrich and crocodiles are murdered to create one expensive bag for a rich socialite... for whom the skin of the dead animal is luxury. And the respect that the company pays for the pain it caused to the poor animal is by pricing it realllly high! Hermes recently announced that they are planning to now raise crocodiles, in-house, so that the supply of leather continues to come, now that crocodiles have entered the list of endangered species. Talk about paining the environment!

Then there’s the pain that the creator’s go through... If the designers didn’t take the pains, if these so called ‘luxury’ products weren’t ‘hand-made’, if there was any less attention to detailing, if the designers didn’t travel the world, rack their brains and innovate to come up with newer ideas every season, would they have been luxury at all?

Hence, I feel that the entire concept of Luxury is based on the simple human truth – the principle of the yin & yang... But what’s the yin & what’s the yang, is up to everyone’s own personal interpretation!

A certain bag at Prada was once the fastest selling product and gave Prada the bulk of its profits. The then management decided to, at the peak of its success, increase the price of that product by 3 times the original price! Most people disagreed with the step and called it an immature decision. But it was implemented and the sales, by volumes increased by leaps and bound...so one can imagine what would’ve happened to the revenue.

... My take on this...

This may seem over-ambitious and impulsive to some, but to me it seems like the most sensible and thought through strategy. It is based on the principle of one of the most basic human needs, lust. Just like in a man-woman relationship, when you know that someone loves you... the harder you play to get, the more you are desired and the other person will try and do anything to have you. Or in the case of a child... you show him a candy, let him taste it and then take it away and ask him to finish his/her homework. Even if s/he hates it, they will finish their homework and do whatever you want to be able to have that candy.

In exactly the same way, the Prada bag, had reached a stage where it was loved by all and people really really wanted it. In such a scenario, when you know that people want you, if you hike up the cost, and play hard to get, it will entice the consumer even more. The consumer will then stop at nothing to have you. Because when the product seems unattainable, it’s even more desirable. There’s a saying in India... “magarmach ko khoon chatana”... it means that you let the crocodile taste your blood and then try to run away...well, there’s no way the crocodile will let you go! The Prada bag was blood that people has tasted, and now, they weren’t going to let it get out of their hands!

Hence, people will now spend even more to get that bag and if need be, will justify to themselves the price, by compromising a bit on some other purchase, in a different category. But this emotion of greed at a moment like this, is far more powerful than any rational justification and hence, price ceases to become a barrier.

Luxury v/s Luxury

The future of 21st century fashion marketing?

When I think fashion, there are several things that come to my mind - Clothes, shoes, bags, watches, exotic holidays, automobiles, jewellery, and other such things. When I think fashion brands, what comes to my mind is Louis Vuitton, Gucci, Armani, Chanel, Burberry, BMW, Tiffany, etc. But if I were to zoom out and look at all these brands, am I not thinking only about luxury brands? I thought that maybe, I was confused. Hence, I asked my friends and colleagues about what came to their minds and surprisingly, I got very similar responses. This led me to believe more strongly that there exists a captivating confusion between fashion and luxury. Going by the sheer meaning of the two words, they are vastly different. When we look for the synonyms of ‘fashion’, they are style, trend and craze. When we look up for ‘luxury’, the synonyms are lavishness, comfort, opulence and extravagance. Both, vastly different from each other and yet, when we think of fashion, we think of luxury.
Perhaps, this is because luxury is something which is attractive, extremely desirable but not attainable. The fact that luxury brands can be purchased by only a few at the top of the socio-economic classification ladder, makes it all the more aspirational and sought-after. Hence, the want and craving for the brand becomes high and it becomes fashionable to own that particular brand. On the other hand, if we look at all the designer fashion brands like Gucci, Armani and Versace, what makes them so special and desirable, is the fact that each of their pieces are a creation of an artist, in this case a designer, who spends days, weeks and months crafting together the perfect amalgamation of the best cut, colour, design, fabric and silhouette, only to produce very few pieces of the ideal dress, bag or shoe. The fact that it is exclusive and exquisite makes it highly desirable and unattainable which makes it a luxury only few can have. In fact, if a fashion brand makes its products easily available and becomes mass, it no longer remains a fashion brand but is simply referred to as an ‘apparel’ brand. Hence, for a fashion brand to remain fashionable it has be exclusive and exclusive, is luxury.
One simple underlying commonality between both, fashion and luxury is that if either of them becomes easily available and finds mass acceptance, it becomes common and hence, there arises a need to reinvent and innovate. Hence, their marketing and how it too, needs to be innovative.
Earlier, the characteristics of luxury were based on a hierarchy of wealth and income. People believed that the more expensive your brand, the more refined and better it is. Hence, the fashion brands appeal to this popular belief and cater only to this definition of luxury. Exclusivity, expensive, out-of-reach are the key values that most fashion brands are built on and the symbols of success, grandeur and discernment that match perfectly well with these brand values are played up to reinforce their luxury status. Today, however, attitude of people towards luxury is changing which has led to a complete change in consumer motivations for luxury. Therefore, luxury, which was earlier about hierarchy of wealth and income, is today about experiences and emotions. It is more about attitude, and less about money. It is more about innovation and less about tradition. Earlier, people would buy into a fashion brand if they could afford it. Today, people buy a brand if they can identify with it. Stephen King once said, “Consumers choose brands in much the same way they choose friends…on the basis of whether they connect with them and trust them…and in the case of luxury, whether they aspire to be like them.” Hence, in my opinion, fashion brands will have to start moving towards appealing to mindsets and attitudes of people rather than catering to social classes.
Most fashion brands today, have a huge fan following. That’s because people look up to them and aspire for them. However, like in any other field, competition is increasing rapidly and with all brands playing the exclusivity game, there is soon going to be differences only in the brand names and logos. All else will be at parity. In such a scenario, it is only brands that consumers are able to connect with that will truly acquire a cult status. Brands must stand for a personal belief. They must resonate with an attitude that their consumer is driven by. It is only then that brands acquire followers and not just fans. There’s an example of a great brand that successfully converted a common attitude shared by a ‘special’ few into a cult and branded that attitude – Harley Davidson. Another niche fashion brand that is purely built on attitude is the Spanish brand ‘De Puta Madre’ which was started by a Spanish mafia don while serving his sentence in prison. These aren’t just brands, they are stories. They are stories not just by way of their origin, but also stories, that people share and live by. They stand for attitudes that are not resonated by the mass, but only a niche set of consumers. But the belief of this niche in the values and attitude of the brand is so deep that it proves to be enough to give the brand a cult status.
Hence, I believe that the future of fashion brands and fashion marketing lies in identifying strong consumer beliefs, attitudes and emotions and deeply rooting your brand in that cause so that the consumer feels one with it. Even our history has many such fantastic examples where an attitude became a fashion, that too, without any marketing support. The best example of this would be the early 1960’s, when the hippie culture came into existence and soon also became one of the biggest fashion movements of all time. The hippie culture was nothing but an attitude. It was a common belief of a few individuals in their teens and early twenties, who were tired and saturated by the stringent socio-political environment in the USA at that time, believed in pure freedom of expression, nature and going back to the basics to be able to achieve the simplest and purest forms of happiness. The rejection of traditional societal norms and rebellion against a set pattern of rules and governance by a few, resonated with a million others and soon, through writings and poems by Beatkins like Allen Ginsberg and through songs and music by the likes of The Beatles, Bob Dylan and Jimmy Hendrix this sub-culture and the fashion associated with it, spread across the globe and became one of the biggest fashion revolutions, the world has ever seen. This does not mean that brands must change their core. An Armani will be an Armani only if it maintains its values of success and discernment. However, it can have other brands, which rather than simply targeting a different age group can target a different attitudinal segment altogether.
Even if we look at the luxury consumers and how they have evolved over a period of the last 20years, we’ll notice a stark change in not just their lifestyles but also in their attitude towards life. While a 40year old man, 20years ago, was all about success, power, business and family, a 40year old today is also about partying hard with a close group of friends, standing up for a social cause, traveling and adventure, giving media interviews and going for a secret bike ride on his Ecosse Heretic Titanium. So if an Armani appeals to his work life, can there be other brands from the house of Armani, that appeal to his other sides? According to me, a brand will become a phenomenon only it they starts appealing to the various aspects of an individual’s personality rather than trying to woo only his or her most visible side. Becoming a phenomenon does not mean coming in the reach of people. It only means more and more people falling in love with your brands, wanting your brand and becoming followers of your brand while you still continue to maintain your luxury status.
To conclude, there is a strong need for luxury fashion marketing to breakaway from a set definition of luxury and explore different facets of human behavior, attitudes and beliefs and thereby, appeal to different personality traits in unique ways. Hence, I see fashion brands, in the future, moving from being fashion houses, to a house of fashions.