luxury’. This expression means that luxury goods or goods that resemble
luxury goods are now available to an increased number of consumers. This
visible fact is also seen in the current consumer behaviour of ‘trading down’
in some categories of goods like basic consumer products in order to ‘trade
up’ to acquire luxury goods. This behaviour is more evident among the new
wealthy middle class with a higher disposable income than the middle class
of the previous centuries. This group of consumers are also called the ‘luxury
mass class’.
Having seen the causes of the redefinition of luxury and how these are
influencing the sector shifts, it is worthwhile to take a look at the effects they
have on the market. This examination will act as an indicator of how the chal-
lenge of managing a modern luxury brand can be overcome.
Effect 1: the rise of the masses
The brands formerly known as mass fashion brands, like Zara, H&M and Top
Shop, have gone through a dramatic change in the last few years. These
changes have been rapid and innovative and the brands seem relentless in
innovating new retail and branding techniques. For example, while the UK’s
Top Shop is busy taking fashion retail to the homes of fashionable Brits with
its ‘Top Shop To-Go’ service, France’s Naf Naf distributes free postcards to
consumers and tourists, with images of gorgeous models in the latest Naf Naf
creations; and Dorothy Perkins hosts special customer product discount
events in its stores, along with free cocktails served by charismatic sales
representatives. Also, low-priced UK fashion brand Primark, which for a long
time was regarded as one of the lowest status fashion brands, is now a
favourite for those attending the London Fashion Week. Top Shop also
currently has catwalk shows at the London Fashion Week, alongside major
luxury brands like Burberry.
In addition, Swedish fashion brand H&M showed retail innovation
through its co-branding collaborations with luxury fashion designers, Karl
Lagerfeld, Stella McCartney and Viktor & Rolf, as well as links with celebri-
ties like Madonna. Also, Zara, which is considered the market leader among
the mass fashion brands, is not left out in the fashion marketing innovation.
Zara is reputed to have the fashion industry’s most effective and responsive
operations techniques, which enables the production of new designs approx-
imately every three weeks. As a result, its stores have a high shopping traffic
of style-conscious consumers. Although Zara is not a luxury fashion brand, it
has achieved great success in several global markets, including France, where
more than three quarters of the population are hard-to-please luxury fashion
consumers.
On the American frontier, brands that formerly targeted the fashion mass
market like Gap, Banana Republic, Wal-Mart and Target, are also elevating
chapter 7 227le new luxe