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Are Fashion Blogs Effective Marketing Tools For Luxury Brands? - Luxury Society - For and Against

Are Fashion Blogs Effective Marketing Tools For Luxury Brands? - Luxury Society - For and Against | Marketing and Communications | Scoop.it
The continued presence of digital darlings within the marketing mix of major luxury brands suggests that bloggers have not yet been rendered obsolete
Marina_T's insight:

Browsing through the (public) media kits of the some of successful fashion blogs, the audience is more often than not 70% female, between the ages of 15 and 35 years old, an age bracket that currently represents Generations Y and Z.

 

 

According to a recent study by the Intelligence Group, these generational segments are interested in everything surrounding shopping – researching products online, curating wishlists, consuming content etc. – except the “exchanging of currency for goods.” Dubbed ‘fauxsumers’ they are making a name for themselves by never converting, despite high levels of engagement across a myriad of media platforms.

 

As Scott Schuman explained to Robin Givan, “We’re getting to a tipping point. People are starting to push back. They want to be able to believe what [bloggers] are saying. Who am I to say don’t take the handbag, or don’t take advantage of the opportunities? But don’t expect people to respect what you do.”

Going back to basics, blogs rose to prominence because consumers wanted more than the print media system had to offer. But now print media has caught up online and bloggers have become part of the system where advertising and editorial are linked.

 

And nearly ten-years on, fashion blogs and bloggers don’t necessarily represent what is new and next for consumers. As Macala Wright once decreed; “While I know it’s scary for brands to engage with new tastemakers and rising affluentials, it’s necessary. The digital personality that could move your customer’s perception of your brand in the digital space is someone you probably haven’t discovered yet because you’re not looking.”

 

“You’re following, not leading. Take a stand and look for new influencers, they may not necessarily be bloggers…”

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Have You Ever Tried to Sell a Diamond?

Have You Ever Tried to Sell a Diamond? | Marketing and Communications | Scoop.it

 

 

The diamond invention—the creation of the idea that diamonds are rare and valuable, and are essential signs of esteem—is a relatively recent development in the history of the diamond trade. Until the late nineteenth century, diamonds were found only in a few riverbeds in India and in the jungles of Brazil, and the entire world production of gem diamonds amounted to a few pounds a year. In 1870, however, huge diamond mines were discovered near the Orange River, in South Africa, where diamonds were soon being scooped out by the ton. Suddenly, the market was deluged with diamonds. The British financiers who had organized the South African mines quickly realized that their investment was endangered; diamonds had little intrinsic value—and their price depended almost entirely on their scarcity. The financiers feared that when new mines were developed in South Africa, diamonds would become at best only semiprecious gems.

 

"An unruly market may undo the work of a giant cartel and of an inspired, decades-long ad campaign"

Marina_T's insight:

My favorite must read. Basically DeBrees is controlling the supply to make them seem rare. And now we also have the synthetics which are being made and are indistinguishable to natural stones that must not be good news..

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Is Zara The Newest Luxury Fashion Competitor? - Luxury Society - Speaker's Corner

Is Zara The Newest Luxury Fashion Competitor? - Luxury Society - Speaker's Corner | Marketing and Communications | Scoop.it
Call me crazy, but I think luxury fashion brands should be concerned about the increasingly sophisticated activities of Zara

 

In this day and age, I’m not sure success should always be measured by market share against competitors, but instead, by total share of wallet by individual. For the new generation of consumers, luxury is a totally different beast, free of old-money clichés, centred on relevance and convenience. The competitor to a beautiful handbag is just as likely to be an iPhone with this crowd.

When we talk about the UHNW consumer, I agree that they are perhaps not shopping at Zara, or H&M or Topshop. But when we talk about the millennial consumer or the emerging middle class consumer – two segments thought to fuel the future of luxury consumption – I think that luxury brands should be less cavalier. There are a few reasons.

 

“ For the next generation of consumers, luxury means convenience and relevance ”

 

Product

It’s no secret that the products in Zara take ‘inspiration’ from the runways. From a design perspective there is often little (perceivable) difference between the jumpsuit sashaying down the catwalk at Stella McCartney, to the ‘inspired’ garment that will retail for €59.95 in one of Zara’s 5,900 stores in 85 countries.

Luxury brands will argue that the fit won’t be as good (which really depends if you are built like a ‘normal’ human or a catwalk favourite). They will also argue the value of their in-house developed fabrics and technology, their savoir-faire, the superior quality of their goods, their ‘investment pieces’.

And they would be right. Luxury brands will always win on quality, as they should always be better than Zara. But where the competition gets a little hotter, is within the value proposition, the price-to-quality ratio, the willingness of consumers to spend their money when it comes to Zara versus spending with luxury brands.

 

Left: Zara TRF Fall Winter 2013/2014, Right: Yves Saint Laurent Fall Winter 2013/2014
Source: Intothefashion

 

Zara notoriously makes clothes that will stay intact for little more than one season, though quality is thought to be on the rise. Improvements or not, consumers seem at ease with its price-to-value proposition. The Inditex group made sales of €16.7 billion in 2013, a rise of 5% (or 8% in local currencies), registering core annual profit of €3.9 billion.

Sure, Zara products are made in Spain, Portugal, Turkey and Poland. But then again so are many of the garments made by luxury brands, a quick tour of the racks at any leading department store will confirm this. And yes designers know the difference between the fabric quality and construction, but one Made in Turkey label looks just the same on the retail floor as another. And Zara is working hard to make its value proposition even more appealing to the aspirational luxury consumer, or the lover of Jil Sander without the budget. Just as in the greater industry, branded products have all but disappeared; Zara logos erased from the arm of Tom Ford inspired sunglasses, gone from the Céline-looking cabas totes made of real leather.

 

“ Zara customers seem to be at ease with its price-to-value proposition ”

 

Then there is the availability of the products themselves. Coats are available when temperatures turn frosty, espadrilles and bikinis hit the floor ahead of summer vacation period – something many luxury brands have as-yet failed to do. Instead we have cruise and resort collections, and staggered delivery of main-season merchandise, which often means bikinis in autumn and scarves in spring.

Zara, conversely, can turn around garments in just six-weeks, matching market demand, emerging trends and climatic relevancy with a sense of immediacy. Most of their stores receive new deliveries of stock twice-per-week, and products are made in limited quantity to further enforce this sense of purchase urgency.

In short, the product is relevant, delivered often, without any outwardly-facing evidence that the product came from Zara. If the outside world thinks that the customer is wearing Céline, where is the incentive for the customer to spend their money on the real deal? On the retail floor, what makes the consumer understand why the Céline blouse costs five times more?

 

“ Zara is working hard to make its value proposition even more appealing to the luxury consumer ”

 

Place

In most major shopping cities, Zara can be found in close proximity to the retail stores of luxury brands. Their favourite type of marketing is creating exceptional stores, according to the NYTimes]. The company invests heavily in the beauty, historical appeal and location of its shops, like the $324 million invested to buy space at 666 Fifth Avenue in New York, within the famed Tishman building.

In Paris, Zara can be found on Rue-Saint Honoré between Rue Cambon and Place Vendome, surrounded by Hugo Boss, Zegna & Jimmy Choo. It shares Champs Elysees real estate with Louis Vuitton, Tiffany & Co, Guerlain and Cartier, walking distance from Tom Ford, Givenchy and Céline on Rue François 1er.

The NYC Fifth Avenue flagship sits next to The Museum of Modern Art (MoMA), across from Salvatore Ferragamo, Versace & Fendi. “Prada wants to be next to Gucci, Gucci wants to be next to Prada,” explained Masoud Golsorkhi, editor of Tank. “The retail strategy for luxury brands is to try to keep as far away from the likes of Zara. Zara’s strategy is to get as close to them as possible.”

 

Zara, Oxford Street, London UK

 

Then there is the global design concept, which debuted in New York in 2012, based on four principles: beauty, clarity, functionality and sustainability. “The store design’s primary emphasizes simplicity as part of the retailer’s on-going mission to facilitate direct contact with customers” (Dexigner). The design also intends to minimise environmental impact.

The concept takes all its cues from luxury boutiques: shiny sparse surfaces, faceless white mannequins, minimal mirrors and a monochrome colour palette. Merchandise is displayed ‘by collection’, as sales assistants move through the room in smart black uniforms. Zara branding is kept to a minimum, large campaign images are displayed on digital screens.

It’s a commendable homage, just with millions more people than you would ever find in a luxury brand flagship. But Zara has addressed this with eCommerce. No longer does the high-street consumer need to brave the crowds that make a carefully designed retail experience unbearable.

 

“ No longer does the high-street consumer need to brave the crowds ”

 

The addition of South Korea and Mexico in late 2014 will take Zara’s total number of e-commerce markets to 27. Based on functionality, Zara’s eCommerce portal and mobile shopping application is comparable to that of luxury market leader Net-a-Porter, with similarly convenient customer service policies.

Admittedly, the experience, packaging and personal shopping options are nowhere near as luxurious, but when it comes to functionality and delivery, Zara is a formidable competitor. Items are shipped between 3-5 days, either for free or for €3.95 (no matter the volume), or within 48 hours for just €9.95. Delivery prices that are unlikely to hinder a transaction. Returns can be executed in-store or one can arrange a (free) pickup. Packaging is basic but agreeable and the whole process is simple and convenient. Notably, the services offered by Zara when it comes to eCommerce are generally far superior to the majority currently offered by luxury fashion brands. As is the overall design and function of the website. Whether or not luxury brands deem eCommerce as an appropriate strategy is one thing, but the luxury consumer is undoubtedly purchasing online – Net-a-Porter proved this better than anyone. And future consumers – millennials and digital natives – as their wealth grows and they move into consuming luxury products, they will expect the same, if not superior, online experiences from luxury brands.

 

 

Promotion

This is where strategic differences become particularly interesting. Zara doesn’t advertise, in the paid sense of the word. “It hardly even has a marketing department,” revealed the NYTimes in 2012. “It doesn’t engage in flashy campaigns, as its competitors do, teaming up with fashion designers like Stella McCartney, Karl Lagerfeld, Martin Margiela and Marni.”

The brand still doesn’t advertise, absent from the glossy pages of Vogue and the bus-shelters of Paris. But it does produce campaigns each season, occasionally casting big name models such as Freja Beha Erichsen and Stella Tennant; the very same faces seen in campaigns for Chanel, Harry Winston, Versace, Valentino and Saint Laurent Paris.

The company relies largely on word of mouth and a high-lustre website to create a hunger for its wares (NYTimes). Its growing web presence suggests that there is an executive somewhere at Zara thinking about content creation. The brand is now on Instagram, Facebook, Twitter, Pinterest and YouTube, with Mobile Apps for iPhone, iPad, Blackberry, Android & Windows.

 

“ Zara doesn’t advertise, in the paid sense of the word ”

 

And said content seems to be ‘taking inspiration’ from the luxury fashion realm, fuelled by a recent wave of approval from influential members of the Internet fashion council. The NY Times recently ran an exposé confirming that magazine editors, stylists, bloggers and street-style divas tap Zara “routinely, and repeatedly, for timely, decently priced approximations of the runways’ greatest hits”.

Street-style darlings Taylor Tomasi Hill (former creative director of Moda Operandi) and Amanda Brooks (former fashion director of Barneys New York) have publicly committed to the cause, modelling in self-styled campaigns for the brand entitled ‘Pictures’. A loud stamp of approval from two women more-often photographed wearing Proenza Schouler, Balenciaga and the likes.

The founders of Albright Fashion Library, a supplier of fresh-from-the-runway looks to stylists, socialites and film companies, revealed that they are often ‘turned out top to toe in Zara’, despite having direct access to brands such as Balenciaga, Givenchy or Céline. Essentially, the stigma of wearing Zara in lieu of luxury items is fading fast. Trendsetters are even embracing it.

 

Stella Tennant for Zara Spring 2011

 

Price

The price paradigm is also an interesting one. Zara will always win on price in the sense that it is less expensive, but we all know that being expensive can be an important marketing tool when it comes to building a luxury brand.

Chanel, Hermès, Gucci and Louis Vuitton continue to raise the price of their accessories, in a bid to make their products – and therefore brands – more exclusive after a period of overconsumption and exposure. Consumers continue to buy their ‘iconic’ handbags, knowing full well that what they pay is enormously distorted when it comes to price-to-value ratio.

Here is where I think Zara has a real competitive advantage. Their pricing is not only affordable to a wide range of consumers, but the value proposition is evident – if not favourable – to the consumer. And if luxury brands agree that they should be competing for share of wallet, rather than share of market against competitors, this is where they could be set to loose.

 

“ Their pricing is not only affordable to a wide range of consumers, but the value proposition is evident ”

 

The upper age bracket of millennials either experienced or witnessed the global financial crisis. Perhaps they previously purchased some of the ‘entry-level’ luxury goods during the time that credit leaked in abundance. Post-GFC, their perception of value changed. They learnt that buying one Céline handbag does not a luxury lifestyle make and that just because something is expensive, it doesn’t necessarily mean that it is valuable.

Today, that aspirational consumer is much more wary when it comes to allocating disposable income. Recent research by the Intelligence Group suggests that Generations Y and Z are interested in everything surrounding shopping, minus “exchanging currency for goods” (The Cut). “They will only bite the bullet (and spend) if they feel something is absolutely essential.”

And these days consumers are going to weigh up their options, compare pricing, search for promotions. They will think about return & exchange policies, ease of return, the most convenient physical place to purchase this product or have it delivered. They are going to think about the value the €2,000 product will bring them over the €100 product. And with these concerns, Zara often has the advantage.

 

Zara Woman Spring Summer 2014 Campaign

 

The Future

Some will continue to believe that Zara poses no threat to the luxury industry, that I am comparing apples with oranges. For high-net-worth and ultra-high-net-worth consumer segments, I would agree. But with demanding millennial consumers, or value-conscious aspirational consumers, Zara has built itself into a formidable alternative to luxury brands.

At the end of the day, Zara has similar looking products in similar looking stores in similar locations. The eCommerce experience eclipses that of most luxury brands, with the convenience and efficiency expected from the premium players, all at a lower price.

And the fast fashion chain is delivering a new type of luxury – convenience, flexibility, purchasing power and choice. At the end of the day, Zara listens to the millennial, aspirational customer and delivers them the experience – and products – that they crave. Which is something that just a handful of luxury brands have committed to.

I’m not by any means suggesting that luxury brands take strategic cues from Zara, they must continue to follow the marketing strategies that protect their position as a luxury brand.

But if Zara can deliver all the promises of a luxury brand, compromising quality but compensating on price and delivery, I strongly believe that brands that fail to innovate or differentiate risk losing millennial business to Zara and the high street.

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