Sunday, October 25, 2009

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.

2 comments:

  1. Check out the section of "The personal touch' in this article. Brands are now doing somewhat close to what I mentioned in my post... :)

    http://www.business-standard.com/india/news/ridingluxury-wave/468967/

    ReplyDelete