Fashion Strategy Weekly’s Post

❓What is Miu Miu doing right? In this Fashion Strategy Weekly piece, we present our new Shoppability Index and consider the value of customer-centric, content-first social strategy as a factor in luxury brand performance. https://lnkd.in/eZu5M87H #luxury #luxurystrategy #fashion #luxuryfashion #contentstrategy #socialmedia #shoppablecommerce #ecommerce #digitalstrategy #brandstrategy #retail #retailcommerce

New blog article 📝 How Is The Luxury Market Accelerating Growth For 2024? Prospects for luxury look better in the coming months than for the wider fashion sector in an otherwise uncertain market. The accelerated growth luxury retailers have experienced can be attributed to a few of the factors highlighted in this blog. Written by: Alexander Otto, Head of Corporate Relations at Tradebyte Read the full article here 👉 https://lnkd.in/eq5bctuD

The Psychological Impact on Consumers of unsold current stock for luxury fashion retailers. In the luxury fashion industry , Brand perception is everything. The allure of exclusivity, the promise of luxury, and the prestige of owning a limited-edition piece are key drivers of consumer behavior. Unsold inventory can inadvertently harm this delicate balance. Perception of Reduced Exclusivity When customers see the same items lingering in your store or repeatedly offered at discounted prices, it can diminish the perceived exclusivity of your brand. In a market where consumers seek unique, trendsetting pieces, the sight of unsold inventory can create the impression that your items are less desirable. This perception can lead to a vicious cycle: the longer the items remain unsold, the more they appear to be unwanted, making it even harder to sell them at full price. Impact on Brand Prestige Luxury fashion Brands rely on a carefully cultivated image of luxury and exclusivity. Overstock, especially when handled improperly, can dilute this image. Frequent sales, clearance events, or the visible presence of unsold stock can make your brand appear less prestigious, potentially alienating your core customer base who are drawn to the allure of exclusivity.

A few solid marketing facts about luxury and luxury marketing/// /Marketing luxury brands is about those that can’t afford them almost as much as it is about those that can: "It’s not for everyone, and everyone also needs to know that." /The success of some fashion labels is driven by designers, for others it’s the brand. The latter tend to be underpinned by a timeless aura and a focus on quality rather than innovation. https://lnkd.in/e8ys5e36 #marketing #luxury #fashion #luxurybrands #strategy

📉 Luxury Industry Update: LVMH's Q3 results highlight a notable slowdown, especially in the fashion and leather goods sector, which saw a 5% decline, bringing in €9.15 billion. Group sales dipped 3% overall, a contrast from the slight growth we saw in Q1 and Q2. According to CFO Jean-Jacques Guiony, brands like Louis Vuitton and Dior are facing mixed performances, with added pressure from weak consumer confidence in Mainland China. It’s eye-opening to see how external economic factors can heavily impact consumer spending in luxury. Despite these challenges, LVMH’s focus on product innovation and cost adjustments speaks to the adaptability that’s essential for resilience in luxury. As someone passionate about this sector, I’m curious to see how brands can not only recover but also innovate to maintain their allure.

Miu Miu was the world’s hottest brand in the fourth quarter of 2024, according to the latest Lyst Index, released Wednesday. The brand has held the top spot for three of the last four quarters, per the report. Saint Laurent was the second hottest brand for the period, while Prada was third. Loewe, which previously displaced Miu Miu as the top brand in Q2, moved down to the fourth spot. Searches were up 46% for the Brooklyn bag from Tapestry-owned Coach, making it the quarter’s hottest product. Ugg Classic Ultra Mini boots were the second hottest product and Miu Miu’s fleece sweatshirt was third. Coach rose 10 spots to become the fifth hottest brand, with a 65% increase in demand quarter on quarter and 332% year on year. H&M’s COS brand debuted at 17th place, with a 16% increase in demand, and its cashmere sweater was the fifth hottest product. The average retail price of the hottest products decreased by 27% year over year to $628, indicating a trend towards affordable luxury. Lyst's ranking is based on various metrics, including social media mentions, consumer searches, product views, and global engagement statistics. #hottestbrands #fashion #luxury #miumiu #saintlaurent #prada #lystsrankings

The "MASS MARKET LUXURY" The Luxury Fashion Crisis: A Self-Inflicted Wound Luxury fashion is facing a deep crisis, with brands like Gucci and Burberry experiencing double-digit declines, and even Dior and Chanel feeling the impact. The problem goes beyond excessive price hikes—declining quality and years of exploiting consumer desire through relentless marketing have alienated buyers. Once symbols of aspiration, these brands are now seen as inaccessible and arrogant, sparking a consumer rebellion. Counterfeits and dupes have become acts of defiance, eroding the exclusivity on which the industry thrives. Luxury brands must rethink their strategies, balancing exclusivity with accessibility and rebuilding trust through authenticity and quality—or risk long-term decline. https://lnkd.in/du6KJmun

Luxury fashion is struggling in 2024... But is “affordable luxury” having a moment? Due to a slowdown in economic growth in key countries such as China aswell as global economic downturns, the luxury sector is being hit. Forbes show a 23% drop in sales for Burberry across Asia Pacific & Americas, as well as Richemont (Cartier) and Swatch (Omega, Tissot) seeing a 27% and 11% drop in sales in China respectively: https://lnkd.in/eBNEwbVg Business of Fashion are reporting an 11% drop in luxury sales in USA: https://lnkd.in/eFYQYysA with luxury leather goods falling by 19% and ready-to-wear by 15%. China are also cracking down on “wealth-flaunting” across social media too which is said to be having some impact. Some users with multiple million followers have seen their accounts removed completely. There are outliers in luxury, for example Miu Miu who have come off the back of an incredible year saw 90% YoY growth over the first quarter (Forbes). However even in a struggling economy we are actually seeing a rise in some cases of “affordable luxury”, or “premium” brands seeing strong growth. Charlie Turner, Menswear Buyer at FLANNELS (and my school friend), posted yesterday about the growth in some of the more premium streetwear brands here: https://lnkd.in/eb_B_peB and how growth is being seen in brands such as Represent, Stussy & more. I think that the premium fashion brands are in an interesting space right now, navigating a tough economic climate, however with a drop in luxury sales, it may mean that buyers look to these challenger brands instead. Charlie also mentions brands such as About Blank, Cole Buxton & Aime Leon Dore too, who could all be contributing to a more positive future within “affordable luxury”. Is there a space for premium-but-not-luxury brands to perhaps capitalise on some of this downturn in spend? I think so. And it will be interesting to see how luxury brands navigate the current market conditions, especially in China, where they have been so reliant on. Image from Aime Leon Dore.

Alright, LVMH group released its H1 2024 results yesterday. The group missed earnings by a meagrely 1%. In a world where we want growth all the time and expect the Blue Chip names like LVMH to set the tone, them missing sales and net profit estimates is seen as huge. I have been reading some articles saying the "Good Days for Luxury are Over". I will try to debunk this myth and sensational headlines. First, let us look at the immediate issues: 1. China has slowed down - not only for LVMH, but for Hermès, Kering, Richemont. Every luxury group on the planet. China is a black box, there are certainly signs that the Chinese economy may be slowing down. Interesting things to note though - LVMH Asia ex. Japan revenue went down by 14% in Q2 2024,. But guess what, Japan sales rose 57% during their period. 🙆♀️ The favourable exchange rates including YEN is causing this shift to "buy from Japan" Phenomenon 2. Price hikes - All luxury brands have gone on an overdrive when it comes to prices hikes. I know a thing or 2 about watches. An IWC Schaffhausen Pilots watch has more than doubled in Price in the past 5 years. A Jaeger-LeCoultre Reverso steel has gone up 2.5x in the past 6 years. I can name brands in leather goods (Hermès ++). Similar sights everywhere. High prices are starting to hurt. Most definitely. Watches and Jewellery is down 19% by the way!! 3. 1% revenue growth with ~8% price increase means if there were no Price hikes, the sales is 7% down. essentially, compression on Volumes. 4. Challenging Geopolitical environment and certain expectation of slowdown causing customer to exercise caution and delay purchases Now, WHY I think this is a passing phenomenon and that Luxury is still in good stead if they were to do the following, and some of the following were to come to reality: 1. UBS global Wealth Report - 9TR USD worth of wealth is going to be transferred to women within the next few years (Horizontal wealth Transfer). Millennials are going to inherit 84 TR USD in the net 2-3 decades. These are great signs in terms of sheer buying power in the hands of the right kind of consumer 2. Brands should get their act together when it comes to ESG. A recent raid by the Authorities in Italy revealed sweat shops being run outside Milan, these concerns around wages, quality of materials used, and a lot more need to be quelled by the brands 3. Price Hikes - Yikes. Simple, just control the price Hikes for god's sake! Just because COVID was a time when people were home, didn't travel, or spent on food and other experiences, all their money went to buying luxury goods. That phenomenon is over. Brands need to get back to Volume increases in the next result cycles. Over reliance on price Increases is dangerous #lvmh #richemont #luxury https://lnkd.in/d_wQPuey.