Today's leading-edge luxury brands are raising the bar in brand and business transformation. Now more than ever, an opportunity presents itself for the luxury industry to set transformational standards for its own businesses and beyond.
2018 is the year that marks a series of firsts for the Best Global Brands in luxury. Chanel put its financials into the public arena and holds a commanding position in the top 100 as a new entrant. Two of the top risers in brand value across all sectors are luxury brands: Louis Vuitton at #18 and Gucci at #39. Gucci asserted its growth as one of the top five risers in Brand Value across all sectors and as the Luxury sector’s leading riser, growing its brand value by 30 percent. Hermès has been the only luxury brand to sustain a consistent double-digit increase in brand value over the past five years. And luxury exerts its unprecedented presence as the top growing sector.
It’s a remarkable year for brands born of a culture of excellence. And culture is at the heart of the work that we’re doing with brand owners and brand leadership teams who are increasingly focused on the inside of the business. If we relate that to the lens through which we value the Best Global Brands, it translates to the internal brand strength factors: Clarity, Commitment, Governance, and Responsiveness.
As we look at the brands demonstrating growth in luxury, they are the brands connecting the inside to the outside. Gucci has sustained its pivot through a hyper-focus on a culture of creativity and innovation, a commitment to talent and its Culture of Purpose, the brand’s 10-year sustainable-impact plan. At Dior, Maria Grazia Chiuri has been clear that, “Fashion today should take on the responsibility of being an activist.”
It’s a good year for luxury, and yet, “The public expectations of your company have never been greater,” as BlackRock Chairman and CEO, Larry Fink, stated in an open letter to CEOs. His call to action highlights a key question that luxury businesses should start asking this year: what does the world of luxury really want to be known for? As we charted in Meta-luxury, the origins of leading luxury brands are inherently rooted in the restlessness of their founding pioneers. These are brands born out of a relentless quest to create something better, to do something better. To recall the inimitable words from Patek Philippe, “You never actually own a Patek Philippe, you merely look after it for future generations,” we should remember that luxury brands are some of the most sustainable in the world, because they are built to last. Their craftsmanship is poised for the new economies of rental and resale, and their rarity is primed for long-term investment.
Across generations and industry, luxury brands have been seen as the North Star. They have challenged the impossible to create products, services, and experiences never before imagined. In 2015, we spoke to The Luxury Reset and the time for luxury brands to build the ecosystem. As this year’s results have demonstrated, that ecosystem is growing from strength to strength. The question now is—what if brands were to move beyond what they are doing as individual businesses to what they could achieve as a collective? In Kering, LVMH, and Richemont, there are three groups with a powerful collective of brands under their aegis. Luxury brands are unique because they have written their own rules. They have the resources, influence, and ecosystem to rally together for good, and to set the bar for us all.
There are rising generations of talent for whom a brand’s clarity, commitment, and responsiveness are defining drivers of influence. Combine this with the power of a luxury collective, and there is an opportunity to set truly transformational standards, changing the game in diversity, knowledge communities, sustainability, and a greater good.
Hope is not a thing with feathers—it is something for which we hold a responsibility, as individuals, and as businesses. We can continue to have conversations about what individual brands are doing on a siloed basis, or we can rewrite the future by driving and sustaining a collective movement for good. The game-changer will be about what we do together.
In the words of the late Kofi Annan: “Sometimes we must do what is right simply because not to do so would be wrong. And sometimes, we do what is right to help usher in a new day, of new norms and new behaviors.”