Some firms like premium ad company RGM grew through the economic crisis. Most were not as lucky. Falling sales are proving game changers in the luxury business. In a bid to maintain high profits, luxury brands are changing tactics and working on becoming accessible. From joining social networking sites to designing cheaper lines and launching into e-commerce, high-end brands are wooing even the not-so-wealthy these days.
According to Cecile Simon, MD of public relations company Sidhu & Simon, the luxury industry needs to overcome the challenge of becoming accessible without losing out on exclusivity. In a changing world, firms that deal in luxury must quickly learn the art of balancing accessibility with exclusivity. Jimmy Choo and Karl Lagerfeld have already joined the accessibility bandwagon. They have created ranges for high street stores attracting disapproval from various quarters. Even high-end jewelers Theo Fennell and Tiffany have created cheaper lines. But not everyone is selling out. Former Gucci designer Tom Ford who barred photo and video cameras from his spring/summer 2011 show in a bid to protect exclusivity.
LVMH seems to have hit upon a winning formula. The luxury conglomerate has turned Louis Vuitton into an accessible brand. However, Louis Vuitton’s Bond Street store is still a study in luxury. Pernod Ricard’s MD of creativity and luxury, Vadim Grigorian, believes that the luxury industry will have to develop better shopping experiences, if it is to maintain its exclusivity.
The Internet is connecting luxury brands with many more people. But these people may not be the “ideal consumer” group for the brands, admits Martin Jobin, digital marketing director of luxury car brand Infiniti. These are changing circumstances for the luxury industry. And the exclusivity-accessibility debate is likely to stick.