“If you don’t buy the culture of the brand, you’re not going to buy the product.”
A year has become a long time in luxury, and 2017 has marked one in which leadership changes became the rule rather than the exception; when brands blew up, grew up, or consolidated; when haute and street found a common language, and when the doors closed on one of the most–loved destination brands. As we reflect on change, the one thing at the heart of it is culture. Amid tectonic shifts, the brands that both uphold excellence and understand culture are those that continue to grow.
Cultivating real intelligence
The future of business intelligence is deeply artificial—and deeply human. “Data is the new marketer’s currency,” Farfetch CMO John Veichmanis attests—but it is culture that has been the lifelong currency of luxury brands. The smart ones will thrive on the right mix of people who understand both. Speaking at this year’s Financial Times Business of Luxury Summit, Hermès CEO Axel Dumas offered a missive to all, with his commitment to “recruit people from humanities, not just business.”
Creating cultural relevance
Last year, when we studied the Anatomy of Growth in luxury, we looked at sustainable growth through three core lenses: Is what you are doing as a brand remarkable? Is it real? Is it relevant? The remarkable and the real are where luxury businesses excel—these are embedded in the culture. Making them relevant is the challenge—and a brand’s moments to win are microscoping by the minute. They are microscoping already on the prime interface of mobile and are microscoping further on voice prompts to Alexa et al, which further fragment the consideration set within which your brand will (or will not) show up.
Technology is also accelerating the rise of the “luxury experience.” A market to watch is luxury travel goods, which is set to grow 16% to USD $5 billion by 2020. As the brand that owns “the journey,” Louis Vuitton has just announced its new connected watch, where the real news is in what it represents, as an appetizer to a moveable feast that will indulge the real potential of the Internet of Things. Tapping into the zeitgeist means embedding a culture of innovation within a culture of excellence.
Will this be the year that marks time on luxury brands rebalancing their absence and presence in the retail world? Louis Vuitton has just been through a rationalization of its retail network, opened its first e-commerce store in China, and headlined one of the most coveted pop-ups in its collaboration with Supreme. This is indicative of some radical rethinking of retail to come, as The New York Times preempts: will the flagship become a ghostship? And the Best Global luxury brands are up against brands breaking through from online to physical retail with increasingly agile approaches: Think Mon Purse, ThredUp and Sephora’s latest hyperlocal studio.
Connecting culture and brand
Whether 20 years old or 327 years old, it’s your brand’s purpose that keeps you culturally aligned on the inside and connected to those who demand and desire your brand. And change is the real test of a brand’s culture. We’ve seen exponential change across the platform brands, with the consolidation of Yoox Net-A-Porter Group, the fast-scaling Farfetch, and the recent launch of 24 Sèvres. Whether consolidating two brands under a new group, scaling a business at speed, or creating a new brand, success begins with culture. And those that grow thrive as strong employer brands, attracting and retaining the best talent.
This year has also raised a debate on the life of a brand, as the original concept brand Colette called time after 20 years. Meanwhile, the 327-year-old, Tokyo-born kimono business HOSOO created something both remarkable and real, and has evolved its relevance over time by connecting its original DNA to a renewed purpose and a wider ecosystem.
The blurring lines and shifting sands of customers, markets, and sectors is the status quo. The luxury brands that grow through changing and challenging times will be those that understand culture and live and breathe it inside and out. They will apply insight and innovation in ways that are relevant to the people, on both the inside and outside of their brands, who fuel their growth. They will be championed by leadership teams that act as guardians of the brand and understand that great brands begin from within.