Nicola Ko, analyst at Ledbury Research, suggests that directly controlled stores and non-Chinese emerging markets will play an important role in the future of luxury brands
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Ledbury Research: Luxury Market Insight Report 2012
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Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.
PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.
In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”
The Fondation Cartier pour l’Art Contemparain building in Paris
Nicola Ko, analyst at Ledbury Research, suggests that directly controlled stores and non-Chinese emerging markets will play an important role in the future of luxury brands
The Luxury Market Insights report aims to provide a single, timely and comprehensive source of insight into the global luxury industry. Published bi-annually, it includes information regarding wealth & luxury indicators, industry dynamics, strategic themes & case studies, as well as brand benchmarking.
The purpose of the report is to aid luxury executives in tracking the performance of their relevant sector and the forces that are shaping it, and to benchmark against competitors. The case studies and themes allow readers to learn best practices from other parts of the luxury sector and to discover new markets and methods.
Conducting the report…
For the first time – based on direct feedback from a number of key luxury brands – we tracked the marketing activity of over 50 luxury brands across 12 sectors. From this information we produced a best practice matrix, looking at which brands were leading the pack when it comes to collaboration with the arts, communicating craftsmanship values, technological integration and use of social media to name a few.
We also undertook a benchmarking of brands using 5 pillars to define luxury brand strength. In addition, the report covers wealthy consumer sentiment, CEO outlook, key industry dynamics, strategic themes and challenger marketing case studies, and uncovers new and exciting emerging markets beyond BRICs.
“ We confirmed an overall decline in wealthy consumer sentiment ”
Un-surprisingly…
We confirmed an overall decline in wealthy consumer sentiment. This was largely underscored by nervousness in the US, due to the upcoming presidential elections in November, and in terms of how this impacts the luxury market.
We interviewed a number of Luxury Experts in the report, including US commentator and author of the Lure of Luxe, Jordan Phillips, who informed us that “the consistent bashing of the 1% has led to the terms ‘wealth’ and ‘luxury’ becoming somewhat derogatory”. The Eurozone turmoil and slowdown in China is also of concern, and are the prime reasons for the continued decline in our CEO Outlook Indicator.
More surprisingly…
Despite the greater economy, luxury brands continue to invest in a range of best practice activities when it comes to marketing and communications.
In the past year, Van Cleef & Arpels’ created a jewellery school, whilst Burberry collaborated with the Weather Channel to advertise during the Olympics. Gucci mounted a social campaign called Cut & Craft, where fans were invited to download patterns for papercraft copies of three iconic bags, and share their DIY creations with other users.
The luxury industry continues to have strong crossovers with the art world, as we saw with Ferragamo’s sponsorship and fashion show at the Leonardo Da Vinci exhibition at the Louvre. Hermès and Perrier-Jouët’s collaborated with a Japanese photographer and a Japanese floral artist respectively.
“ Luxury brands continue to invest in vertical acquisition ”
Additionally…
Luxury brands continue to invest in vertical acquisition, in a bid to protect the savoir-faire and supply chain that differentiates them from competitors. Louis Vuitton’s acquisition of a premium leather supplier was also a significant investment for other luxury brands to mull over, as luxury brands seek to increase their control and access to quality raw materials.
This ties in with Chanel’s recent acquisition of French glove maker Causse to add to its eight other specialist ateliers, as it seeks to protect its expertise and craftsmanship.
Our benchmarking section also revealed some surprises. The importance of having strict control over a brand’s stores was brought to light, as both of our top ranking brands, Louis Vuitton and Tiffany & Co., had the highest proportion of directly operated stores in their respective industries.
If we were to conduct this study in 12 months time…
We would expect non-Chinese emerging markets to continue to grow in importance. One component of our report looks at the major strategic themes across the luxury industry and how they evolve over time. In this edition we identified nine current themes, one of which was ‘Other emerging markets’.
“ We expect non-Chinese emerging markets to continue to grow in importance ”
If readers remember only one thing it should be…
That best practice activities can be adapted and adopted from other luxury brands in different sectors. Valuable lessons can also be learnt from indirect peers, which we have highlighted in our Challenger Case Studies.
For more information regarding the 2012 Luxury Market Insight Report please visit the following link. More detailed data and analysis is available upon request.
The report is available to Luxury Society members at the exclusive price of £895.50 (discounted from £995). To order a copy, please email [email protected]
