Luxury Brands and the Challenge to Maintain Relevance and Differentiation Post-Recession
So, the big question remains: what can these brands do to buck the trend?
If we take a closer look at a table-stakes analysis for the luxury industry, we can see exactly which attributes are required to remain competitive and to effectively differentiate oneself in this industry. In short, users of these luxury brands want them to be high quality, stylish, prestigious, glamorous and upper class. Most of the aforementioned brands do possess these attributes.
That being said, it doesn’t seem to be enough just to own these attributes to remain competitive. To truly stand apart from the competition, brands must reach beyond the basic requisites of the industry and attempt to differentiate themselves further. Aspiring to be a leader, to be distinctive, unique and authentic may be a path to regaining on Energized Differentiation. However, to the contrary, certain brands like Gucci and Giorgio Armani are being seen as less original today as compared to 2011. Louis Vuitton is seen as less unique and Prada as less original and less unapproachable as compared to 2011. These trends seem to go against the grain of distinctiveness and leadership. One hypothesis as to why originality and uniqueness are on the decline could be due to inexpensive knock offs readily available in the marketplace or, alternatively, because the differentiating factors from brand to brand are not readily apparent and consumers have even higher expectations in today’s world of constant innovation and reinvention.
Some companies are addressing concerns about their diminishing originality by seeking to retain tighter control over their brands. On the retail front, Gucci has continued to expand its directly-operated store network through further openings, while proceeding with its strategy of taking direct control of relevant former franchise and wholesale stores. Gucci is also using social responsibility as a key differentiator. In line with a commitment to becoming an increasingly sustainable brand, Gucci recently announced that it had developed an innovative methodology to reduce the environmental impact of its leather tanning process.
Although being distinctive and representing an authentic luxury lifestyle is no small feat, it needs to be a key priority if these luxury brands want to maintain brand strength in an environment of decline and find innovative, authentic ways to tap into the new consumer ethos toward luxury in a post-recessionary landscape.