Only brands able to gather the best and most meaningful data, and translate their findings into a successful fashion strategy that helps them to gain a deep understanding of their customers, will be the leaders of the new fashion era.
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Opinion: Understanding Fashion and Luxury’s X-Factor in a Disrupted Age.
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Credit: This is the featured image credit
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
Only brands able to gather the best and most meaningful data, and translate their findings into a successful fashion strategy that helps them to gain a deep understanding of their customers, will be the leaders of the new fashion era.
This year is certainly one that will not be easily forgotten. A study published in November by consultancy Bain and Italian luxury manufacturing association Altagamma highlights that the sector of personal goods has been negatively impacted by the pandemic effect by 20 to 22 percent so far, with peaks on the hospitality sector where the effect recorded is even higher at around 55 to 65 percent versus previous year.
And even if it seems that many markets, in particular China, are recovering; we are still facing a wave of lockdowns all over Europe and the United States, with not enough visibility to plan a recovery.
China represents a key factor in terms of purchases to support luxury and fashion and so far, it is estimated that the level of revenues of 2019 will be recovered only starting from 2024/25. Unfortunately, a lot can happen in the next five years, making it far too early to think that the industry could clawing its way of the quicksand.
It is also very clear that focusing on China alone will not result in rescuing an industry that desperately needs a recovery, as highlighted by consultancy McKinsey in a report published this year, which addressed “rapid revenue recovery” as the quickest possible rise in terms of top line and recovery of the key performance indicators.
But the biggest uncertainty for the luxury industry is about its customers. As underlined by McKinsey, a major behavioural change is happening: “What we are seeing now –says Brian Gregg – is consumers trading. Consumers looking to only buy what they needed for the lowest price possible…(…) Not just trading down but also trading from offline physical shopping to online. Trading from brands that they used to know and trust to new brands that they might either see and discover online or ones that are offering different propositions around safety and hygiene.”
That change in the consumer behaviour has certainly ignited some trends that were buried, one of them being vintage. While vintage is not a new idea, for instance vintage products in fashion have been a prerogative of some niche customers, environmentalists and all those who loved to be “blasé” or unimpressed by the trend of the moment. Likewise, vintage stores such as A.N.G.E.L.O. on the East coast ofItaly, close to Rimini, that was founded in the ‘70s have long been a Mecca for fashion stylists and costume designers as well as the place to shop for curated shopping of vintage clothes.
However, it stands in direct contrast with the trends of late, where fashionistas show off their brand new, most à la pàge products on social media, demonstrating their purchase power or, rather, their close friendships with the brands’ PR offices. And its evolution into e-commerce platforms and marketplaces like Depop, where fashion insiders like Chiara Ferragni were invited to sell their branded “gifts” or selected pieces of their wardrobes, and then the shift in focus towards sustainability, the circular economy and second hand items, have all added to complexity for luxury brands in understanding this change in consumer behaviour.
As McKinsey highlighted, consumers are trading down and brands are doing their best to preserve the business by flying the flag of sustainability and pumping up the volume of the product value. The fashion system, so heavily impacted by the coronavirus breakdown in 2020, is trying to optimise the stocks and to avoid the destruction of unsold collections.
However the global confusion among vintage, pre-owned, pre-loved and resale is at such a level, that when Lidl recently sold its own branded Lidl sneakers, it demonstrated that a pair of plastic and rubber shoes bought at 13 euro, with the same hype as Balenciaga or Yeezy sneakers, among many others, resulted in insane resale prices of more than eleven thousand euro on eBay.
Lidl's limited edition sneakers.Credit: Photo: Courtesy.
Pre-owned, unworn items just add fuel to the fireplace. There is a demand meeting the offer and it seems that this level of bargaining is more due to an excess of liquidity in the financial system rather than real value of the traded items.
While there are some transactions like vintage cars, Hermès bags, and rare Patek Philippe watches have a solid basis of value determined by the increasing value at different auctions in the long term and are certified by experts, fashion items available in relevant numbers and with no added value in terms of materials, savoir faire and craftsmanship are subject to very short term and impulsive evaluations.
Vintage, as per the Cambridge dictionary, means “of high quality and lasting value, or showing the best and most typical characteristics of a particular type of thing, especially from the past”.
Pre-loved is the sort of mass-marketing definitions of pre-owned and used items; resale is the process focused on buying something to resell it immediately right after to realise a profit.
A vintage product has an inherent value determined by its rarity and its features; it is the symbol of a lifestyle and of a connoisseur approach. From wines and spirits, to jewellery to watches and bags, vintage means exclusivity and prestige and a uniqueness that makes the items irreplaceable.
A pre-loved or pre-owned product might include oldies but goodies as well as mass market products in acceptable conditions, and it entails more a commercial objective than a collectors’ one.
For fashion brands, fuelling the second-hand market whilst increasing volumes year after year means double the trouble and little help in terms of the industry’s sustainable efforts.
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In this sense, the trading down implemented by the consumers as per the McKinsey evaluation will focus in the direction of a polarisation between high-end, luxury products that rely on excellence, savoir faire and long-term value of products that are built to last, and high-volume expensive fashion products that are industrially produced and distributed worldwide with the objective to satisfy the buyer through instant gratification.
Those customers that are trading down because they cannot afford anymore to buy full-price will focus on re-sellable products that can guarantee them status, recognition and short-term satisfaction (sort of Instagrammable purchases): this trend will not help the equity of the brands that are positioned in this segment and sought after by this target, because they are at risk of rapid exhaustion.
Other consumers that are trading and shifting their behaviour in search of long-lasting, excellent products may be found via a variety of different channels, pushing even the most established brands to evolve and be part of new chapters of the global conversation.
In the end, the most strategic consideration for the fashion and the luxury industry will be a very specific one: marketing intelligence. This alone is what gives companies that X-factor to help them succeeded during these disruptive times.
Only brands able to gather the best and most meaningful data, who know how to precisely analyse it and summarise the key findings into a successful fashion strategy will be the leaders of the new fashion era. Those who will just invest in brand image without any deep knowledge of their customer base and their needs will seriously risk financial turmoil.
Indeed, within fashion and luxury, the X-factor is still and forever will be the deep understanding of customers, especially in this utmost disrupted age.
Cover Image: Gucci x The Real Real Partnership.
Brand Catalyst and Founder of LuxFashion
Susanna Nicoletti is a Marketing, Digital and Communication Senior Executive in the fashion and luxury industry with a track record in top global groups and brands. A Brand Catalyst helping fashion and luxury brands building authentic leadership thanks to long lasting, strong Brand Equity and successful Business Growth Management. A Business and Strategy Writer. Explorer of new luxury and fashion marketing frontiers.
