Do consumers really care to know when Louis Vuitton was born or if Chanel
died in 1991 instead of in 1971? The answer to the first question is yes,
history does matter in crafting a luxury brand although in a continuously
decreasing degree. The answer to the second question is no, the current
consumers’ interest in the launch dates and milestones of a luxury brand is
declining. Consumers are more interested in a brand’s relevance to them. At
the same time, they appreciate other ‘background stories’ of the brand which
increases the brand’s appeal level. These stories could include a brand’s asso-
ciation with the environment, arts, culture and entertainment. The current
luxury consumer is also interested in brand stories related to ethics, morality,
corporate social responsibility and other ways that the brand provides
substance. These stories are however most effective when complemented
with those related to skill, craft and history.
The second reason for the credence that it is nearly impossible to develop
a luxury brand in the twenty-first century is the need for a high level of initial
capital investment, which might be a constraint to several designers. This
factor previously contributed to the existence of a high entry barrier in the
sector although this has been lowered. Other reasons are the increasingly high
failure rate of new brand launches, which currently surpasses 60 per cent, and
the saturation of the fashion market with products found in both the luxury
goods and mass fashion categories.
However, the luxury goods market has undergone several changes that
dispel these traditional beliefs related to the development of new luxury
brands. The most notable is the lowering of the previously high entry barrier
into luxury fashion, which existed for centuries. Although high capital invest-
ment is still required to set up a luxury brand, notably in product develop-
ment, manufacture and retailing, several communications and technological
breakthroughs such as the Internet have contributed to decreasing the costs of
entry and distribution. The Internet and other communications tools have also
shortened the time requirement for a new brand to gain market awareness
through providing instant and uniform information to a global market. Also,
advanced operations system techniques and product manufacturing outsourc-
ing have immense impact on cost reduction.
As a result, several luxury brands have emerged in the last decade among
the multitudes of fashion brands that are launched annually. However only a
small percentage of them make it as recognized luxury brands. Among the
successful new luxury brands launched in the last fifteen years are British
brands Jimmy Choo and Stella McCartney and French brand Paul & Joe. This
decade has also witnessed the launch of several luxury brands and the subse-
quent failures and disappearances of a large portion of them. The difficulties
these new brands face include a high level of competition and miscompre-
hension of the evolving luxury consumer and modern market structure. In
addition, the emergence of large conglomerates with growing power, influ-
ence and independence in the sector poses a problem for independent brands.304
luxury fashion branding