Luxury The Changing Face

of

By Angel Nicholls

2

Luxury The Changing Face

of

By Angel Nicholls N0214012

3

The Oxford English Dictionarydefines luxury as ‘costlysurroundings, possessions,food etc. (a life of luxury);something desirable forcomfort or enjoyment.’Thompson, D. ed. (1996:p.595)However, despite the definitionwe have all acquired our ownperception of what we,individually, perceive luxury tobe as it has adoptedmany facesthroughouttime.Especiallywhenwelookattoday’sclimatewhereluxurybrands suchasMercedes,Jaguar, Tiffany & Co., Bang &Olufson and Louis Vuitton tradedown—mass andmiddle‐marketbrands like Tesco, Waitrose,SelfridgesandTopshoptradeup.Merely blurring what littlecollective definition we had ofluxury.The followingdiscussion intendsto clarify how ‘high‐end’ brandsgo about holding onto theirluxurystatus,justhowtheir ‘lowandmiddle‐market’counterpartsare attempting to penetrate thesame market, all at the demandof the consumer. It further goesto determine how allof this, in turn, skewsthemeaningofluxury.Throughout the 20thcentury, the meaningof luxury has shiftedand changed. But onething has remainedconstant; the desire forconsumers to adorn andsurround themselves withproductsassociatedwithluxury,defining their place in society.This is known as ‘consumptionconstellation’ Belk, R W (2006:p.130). Although this is amodern marketing theory, it is

apparentthatthepracticeofthisconcept is something that hasalways occurred. Whether it befrom the very rich andaristocratic purchasing modelcars,pianosandornamentsfromthefirstdepartmentstoresinthe1900s. To domestic goddesseswishing to show off theirhusband’s five‐figure incomewith holidays, colour televisions,washing machines andconvertibles in the 1950s. Tonow,all typesofpeople, fromallwalks of life flaunting theirBlackBerry phones, flat‐screentelevisions, designer kitchens

and designer accessories. Onething is certain; everyone wantstheir share of luxury and theyalwayshave.Therefore we can see how themarket is fuelling and feedingthis desire by making luxurymore accessible to the everydayconsumer who otherwise couldnotaffordit.Beforeluxurybrandswerehighlysuccessful in setting themselvesapart from the rest by offeringtheconsumerwhatotherbrandscould not; an experience,

exclusivity. Thisexclusivity comes inmany forms. Forexample, Louis Vuittonoffers a bespokepersonalization serviceandcustom‐madepieces‘the pleasure of made‐to‐measure’ – as

described by them (LouisVuitton 2008: online). Exclusiveboutiques such asTamba13 onLondon’s Kings Road offerscustomized trainers specificallydesigned to the individual’srequest, embellished withSwarovski crystals for addedeffect. Then high‐end

❝The market is fuelling and feeding desire by making

luxury more accessible to the everyday consumer❞

4

department stores such asHarrods offer a personalshopping experience that claimsto make shopping ‘an effortlesspursuit’ and states that there ‘isnolimittowhatyoucanrequest.’(Harrods2008:online).High‐endretailersalsohadsomethingelsethat theothersdidnothave; thebig names. The designers whowere so sought‐after theybecame part of the definition ofluxury themselves like Chaneland Christian Dior, to name acouple.However, with the turn of thecentury and the rise of thecelebritymiddle‐marketretailershave now collaborated withvarious celebritiesandhigh‐enddesigners in bids to make abiggerclaimonluxury.Theyaretradingupbychargingmoreforthe garments created in theircollaboration. They are alsoenabling their brand to beassociated with ‘superior’names.Forexample, the famousSex and the City stylist PatriciaField has collaborated withMarks and Spencer and hasyieldedtheretailer£1millioninsales in the first five days even

afterithada34%slideinprofitsduring the second week ofNovember 2008 (DrapersRecord:8Nov2008).H&Mhasmade numerous collaborationsoverrecentyearswithcelebritiesand designers alike, namely,Madonna,Viktor&Rolfandmostrecently Comme de Garçonwhere a ‘dramatic LBD’ (littleblack dress), described as aninvestment piece can be boughtfor £199.99 (Style Finder 2008:online).DuringH&M’scollaborationwithMadonnathebrandwasreportedto have seen a sales boost of17%. (The Epoch Times: 2007).

There are also rumours of afurthercollaborationwithBritishdesigner revolutionaryAlexander McQueen. (Drapers:Nov 2008). Topshop also got inon the action in 2007 by takingon supermodel Kate Moss (BBCNews 2008: online). Thecombination of themodel‐come‐style‐icon and the Britishretailer‐come‐fashion‐dictatorconjured huge success. So muchso that Phillip Green, the ownerof Topshop, announced that hewastosetupstoresinNewYork,USAafterthe£3milliondealwascutwithMoss(TheEpochTimes:2007). Topshop now has gone astep further and introduced apersonal shopping experienceakin to Harrods in its LondonOxford Circus store. Many otherUK high street retailers havefollowed suit such as Selfridgesand Dorothy Perkins. And theluxury brand can only sit backand watch as its lower‐endcompetitorsmimicitssuccess.Buttheluxurybrandscontinuetouse celebrities, just like the lowand middle‐market, as a vehicleto maintain that desirableassociation between wealth,glamour and their luxuryproducts. This is shown throughhigh‐end labels like Versaceusing Madonna as a model in2005, (Creative club 2008:online) Louis Vuitton has beenendorsed by Uma Thurman andScarlettJohanson,whoalsolendsher face to Dior. Whilst mostrecently Eva Mendes posesscantily clad for Armani, Guccitakes on Rihanna for theiradvertising campaign to benefitUNICEF in their quest to helpchildren suffering with theHIV/AIDS virus in Africa.(Wonderland:December‐January2008‐09).

5

The evidence suggests that thelow‐end, the middle‐market andthe high‐end market are usingthe same tactics; wielding thepower of the celebrity to theiradvantage. This signifies thattherearesimilaritiesaboutbeinginfluenced by celebrities withinthe psychometric profile of theirconsumers. Therefore if allmarkets chose to target theirconsumer in the sameway thenhowcaneitherofthemjustifiablyretain exclusivity and that luxeassociation? This is where adivision can be foundwithin the differencebetween endorsing andcollaborating. Low andmiddle‐market brandsseek for high‐end

creativity to deliver luxury.Whereashigh‐endalready ‘havethe talent’ so merely seek forendorsement or a face to beassociated with their product.Thisrarelyoccurstheotherwayaround. Another division lieswith price. No matter whatfamous designer or Hollywoodstarlendstheirfaceorexpertiseto a middle or low‐end brand,that said brand still could not

justify selling an item with ahigh‐end price tag to itsconsumer.Thishierarchicalpricegap between them (and the300% mark up that no low‐endbrandwouldbeallowed)enablesbothmarketstoretainadivision.Inshort,H&Mwillneverbeableto charge the same price for acoatasChanel.Yet it isapparentthat these collaborations arewaysofdemocratizingfashionbymakingluxurymoreaccessible.‘As luxury becomes moreattainable brands that claim theluxury label has increaseddrastically’. Graham, P et alMatthews, M (2004: p.5).Thereforeitstillremainsthatthefear of the luxury brand losinggrip on its status is spreading.Many luxurybrandsarenoticingthe closing gap between itselfand it’s low and middle‐marketcompetitors. It feels it necessarytokeepholdon its globalUS$80billion industry. Cadha, R et alHusband, P (2006: p. 23). Someluxury brands are targeting itsassociation with exclusivity byclosingstores.Forexample,forawhile Tiffany & Co. had revelled

in its mass appeal by even‘offering affordable productsalongside its traditional ones’Silverstein, M. J et al Neil Fiske(2003: p. 4) and opening manyoutlets worldwide. However themedia has recently drawnattention to the hasty closure of260USstoresand146Europeanstores equating to a US$36million loss. Giorgio Armaniterminated the selling of itsUS$2,200 black label suits toWilkes Bashford. Even the rapsensation and entrepreneur P‐Diddy (Sean Combs) pulled his

Sean John label fromMaydepartment stores,totalling to $22million.This is reminiscent of1999 when the GuccigroupboughtYvesSaint

Laurent’s (YSL) ready‐to‐wearbusiness then focused on theonceexclusiveOpiumperfumebrand. Gucci executives saidthe fragrance was‘overdistributed’. It led themto close a quarter of outletsincluding one in Hawaii thatwas responsible for US$10million a year inprofits alone.They also rejected manydistributors. Their radical

❝Fear of the luxury brand losing grip on its status is

spreading❞

6

thinking was rewarded as YSLbeauté grew from a 5.6% shareto8%inayear.FurthermoretheOpium brand again achieved acoveted position as a top 5Frenchfragranceagain. Graham,PetalMatthews,M(2004:p.7‐8)Yet many more brands do notshare the same concern. Theyembrace luxury’s newattainability. They have showntheir own ability to master the‘paradox of charging high pricesbasedonexclusivity’Cadha,RetalHusband,P(2006:p.10)whileselling their products to themasses. This is now known as‘Mass Prestige or Masstige’.Silverstein, M. J et al Neil Fiske(2003:p.4).

Noting that the total disposableincomeofhouseholdsinAmericaalone has grown to $3.5 trillion,consumersnowaremorewillingto pay a premium for certainproducts Silverstein, M. J et alNeil Fiske (2003: p. 3) even ifthey are resident to a lowersocio‐economic class. Thereforeit cannot be denied that thedemocratization of fashion ishere. Thus, the trading down ofluxuryand the tradingupof lowand middle‐market brands isbeing caused by the consumer’sdemand for luxury products asthe gap between the rich andpoorisbecomingnarrower.Therefore, it appears that thereare many argumentsemphasizing the fading state ofexclusivity, if it has not yetalready gone, where luxury isconcerned. This fear was alsogreatlyhighlightedin2005whenKarl Lagerfeld, a man thatarguably epitomises the luxurybrand, collaborated with themiddle‐market Swedish retailerH & M. The collaboration wasknowinglydescribedas‘betrayal’in the advertisement. This mayhaveanelementoftruth.Inconclusion, it isapparent thatall sectors of the retail industry

are trying to penetrate adifferent market. The divisionsin the class system is blurring,breeding newer, wealthierconsumerswhodemand luxuryproducts tocome to them.Asaresult, a time of merging andcollaboration has emerged, inwhatseemslikeanindustryfullof competition, in order tosupply demand. However,underneaththesurfacemanyinthe industry work together toproduce profit. They allwant ashareoftheothersmarket.Asitwas eloquently stated in theadvertisement forKarl Lagerfeldfor H&M: ‘Why have a gardenwhen you can have a forest?’■ AngelNicholls..

7

8

Luxury The Changing Face

of

9

BooksBelk,RW.ed.2006ResearchinConsumerBehavior,Volume10ElsevierLtdJaiPressCadha,RetalHusband,P.2006TheCultoftheLuxuryBrand:InsideAsia’sLoveAffairwithLuxuryLondon:Boston:NicholasBrealeyInternational.Thompson,Ded.1996TheOxfordEnglishDictionaryEngland:OxfordUniversityPress.ArticlesSilverstein,M.JetalNeilFiske.2003.LuxuryfortheMasses.‘HarvardBusinessReview’(2003)2008.‘Drapers’(8Nov2008)2008‘Drapers’(Nov2008)2007.TopshopPlansNewYorkStoresonKateMossSuccess.‘TheEpochTimes’.(24‐30May2007)InternetCommedeGarconsforH&M.Stylefinder.Availableathttp://stylefinder.com/items/default.aspx?id=114376accessedNovember2008Graham,PetalMatthews,M.TheChangingFaceofLuxury.Availableatwww.knowledgenetworks.com/know/2004/spring/KNOW_changingfaceofluxuryaccessedNovember2008Harrods2008:onlineKateMosstoLaunchTopshopRange.BBCNews.Availableathttp://news.bbc.co.uk/1/hi/business/5363414.stmaccessedDecember2008.LouisVuitton2008:online

References

10

IllustrationsFig1ShanghaiStorybyGregKadelinL’uomoVogue Fig2LouisVuittonwebsitesnapshotinwww.louisvuitton.comFig3OvarianDesigntrainersinTamba13Fig4KateMossandTopshopopeningflyerfromimageshack.usFig5H&MlittleblackdressbyCommedeGarçonsfromStlyefinder.comFig6MadonnaforH&MFig7MadonnamodelingforVersacefromcreativeclub.comFig8H&MwhiteteebyKarlLagerfeldfromiofferphoto.comFig9UmaThurmanmodelsforLouisVuittonFig10ScarlettJohanssonmodelsforLouisVuitton

11

BooksBelk,RW.ed.2006.ResearchinConsumerBehavior,Volume10.Elesvierltd.JaiPress.Cadha,RetalHusband,P.2006TheCultoftheLuxuryBrand:InsideAsia’sLoveAffairwithLuxuryLondon:Boston:NicholasBrealeyInternational.Jones,TetalRushton,S.2005.FashionNow2China:Tashcen.Thompson,D.ed.1996TheOxfordEnglishDictionaryEngland:OxfordUniversityPress.Watson,L.2008VogueFashion:100YearsofStylebyDecadeandDesigner,inAssociationwithVogue.China:CondéNastPublicationsLimited.Articles‘Drapers’(8Nov2008)‘Drapers’(Nov2008) ‘Drapers’(Dec2008)‘L’uomoVogue’(Nov2008)TopshopPlansNewYorkStoresonKateMossSuccess.‘TheEpochTimes’.(24‐30May2007)‘VogueItalia’(Nov2008)‘VogueParis’(Nov2008)‘Wonderland’(December‐January2008‐09)FilmsLagerfeldConfidential.2007.Dir.Marconi,R

Bibliography

12

InternetChanel’scomeback:1950sthrough1970s.LuxuryFashionBrands.Availableat:http://www.eluxurygift.info/2008/09/chanels‐comeback‐1950s‐through‐1970s/accessed29Nov2008.Hume,MetalKroll,BetalBetts,KetalPark,AetalVanDyk,DetalHui,S.Style&Design:GlobalLuxurySurvey.Time.Availableathttp://www.time.com/time/specials/2007/article/0,28804,1659346_1659333_1659199,00.htmlaccessed23Nov2008LuxuryInstitute.Marketwire.Availableat:http://www.marketwire.com/press‐release/Luxury‐Institute‐901500.htmlaccessed24Nov2008.Websiteswww.asos.comwww.chanel.comwww.creativeclub.comwww.en.epochtimes.comwww.flannelsfashion.comwww.harrods.comwww.harveynichols.comwww.hm.comwww.houseoffraser.comwww.laplash.comwww.louisvuitton.comwww.manoloblahnik.comwww.nitrolicious.com/blog/2008/09/30/full‐look‐comme‐des‐garcons‐for‐hm‐collection/www.selfridges.comwww.stylefinder.comwww.spike.com/video/karl‐lagerfeld‐for/2846865www.tonight.co.zawww.topshop.com

13

14

15