Bernard Arnault recently stated that he doesn’t care about the rapid growth of Louis Vuitton, he rather believes that it’s important that Vuitton will be as prestigious as it is now in 10 years. This is a great statement and I think a great vision for an entrepreneur like him. It would be much easier to milk the cow and try to take advantage as much as possible of rapid growth rather than having the patience to let the tree grow, but this will guarantee long-term resilience for the brand, despite all the turbulences. When you have rapid growth, double-digit growth, stellar growth, it’s okay for the moment… what is troubling is that you have to keep the pace, you have to keep the moment of growth. This will not be possible in the medium and long-term so it’s much smarter to create the conditions to grow the brand for the long-term. The secret is patience and the passion for the brand and the love for the brand for what it represents and for its customers. Keeping the brand alive with some passion and some energy, some special projects and without spoiling it for the long-term.
A brand shouldn’t come to the point where it needs disruption, maintenance is much better. Daily maintenance, following old rules of branding and keeping the preserved core of the brand, refreshing the brand, keeping the language contemporary and the tone of voice—it always helps a lot for a very healthy growth. Disruption comes at a point when a brand is in desperate need of rebirth and this is not good because it requires a higher investment, lots of energy and the results are never taken for granted. It’s always a problem when you need disruption. When you keep a very good maintenance, it’s like a vintage car. If you keep good maintenance, if you keep it in shape, you don’t need to spend a lot of money to try to give life again to a brand.
In this case, I think that the best example, one that I particularly like is Dolce & Gabbana. They started with very clear brand DNA and core values and at a certain point they got lost, but they reworked their own DNA, their own values and they launched Dior Couture. So they put in place all those activities at a management level that help the brand stay healthy, safe and not needing external investments. They are a private company, they are managing the brand in a very consistent way. Like it or not, of course, we are not discussing taste, we are discussing management and in that case it’s one of the best examples of good management and good maintenance of the brand. Disruption, sometimes it works and sometimes it doesn’t, so that can be a real trouble.
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The perfect strategy for millennials, I think, is focused on the brand reputation. The higher the brand reputation is kept, the better it is for millennials and also for existing customers. Hermès is one of most interesting examples in this sense. The Birkin bag is the most sought after bag, both from generations of women in their 50s and 60s, as well as the youngest generations of millennials. This is because Hermès managed to have a proper growth to keep the exclusivity and the rarity and the authenticity of its own message.
In the greatest luxury groups, leadership is a key factor. Of course, the best performing groups are the ones that can have clear organization, proper distribution of roles and brand positioning of each single company inside the group, in order to avoid any internal competition. A strong leadership is definitely required, but it has to be a leadership that can drive all the other leaders. It’s a leadership that has to create and enable other leaders to grow the brand they are driving.