The NEW luxury brands

The international financial crisis which is far from over in most parts of the world is set to have diverse lasting effects on fashion retail. Long considered mid range, brands such as LACOSTE, TOMMY HILFIGER, GUESS, CALVIN KLEIN, GANT or MASSIMO DUTTI are more and more regarded as premium brands and this is the case especially in emerging markets where consumers are constantly learning. The shop fittings, the merchandising, the atmosphere and the similaries in design of the products almost create a confusion among consumers who evidently identify in pricing as the only major difference. Thefore, more and more consumers perceive these brands as premium or even luxury.

For example, there are hardly any differences between a HUGO BOSS store and  MASSIMO DUTTI one, from the fittings, furniture to the window displays. The similarity is even stronger when it comes to the products sold by the two brands which are mostly made in the same factories in Turkey, Mexico, Romania etc, using the same raw materials and finishes.   The same comparison is valid between a LACOSTE store and VILEBREQUIN one, both having almost identical furniture and displays. Take for instance RALPH LAUREN (POLO) and TOMMY HILFIGER the second being positioned lower than the first one. By using the same suppliers not only for their merchandise but also for the furniture, the two brands seem more and more alike, although differently positioned in the past. A third such striking comparison is between GANT and PAUL & SHARK, whose collections and shops look more and more alike.

The ebbing purchasing power but also a psychological desire against the all too familiar ”mix and match” trend have contributed to the luxury positioning of these brands, with an increasing number of consumers going back to the ”total look”, which was a must a decade ago. This is not only a response to the mix and match trend but it also constitutes a very practical approach, wealthy consumers being able to afford more products for less money when shopping for these brands. In the past year, I have often come accross very satisfied wealthy consumers leaving these shops with a stock of shoes, shirts of dresses, of different colours and styles.

Are these consumers forming a new intermediate target segment of those who no longer buy luxury brands or is it just a timely matter till the crisis will be completely over? I believe this is a huge opportunity for these brands on how they position themselves and how many of them understand they can win by marketing more, promoting more, although their initial core strategy was lack of promotion. If tackled strategically, these new brands also have the opportunity to attract the traditional ”mix and match” consumers, especially those who are growing dissatisfied with the poor quality of a garment from a mass market brand. I refer to ”mix and match” as the look which includes an expensive luxury branded product, especially accessories such as shoes and bags and a mass market products, usually apparel (i.e. Hermes bag with an H&M shirt).

Oliver Petcu