An essay on the consumer's growing control over brand identity by Lauren Henshaw
In May of this year, Abercrombie & Fitch announced that it would be undergoing a phase of re-branding in an attempt to resurrect plummeting sales figures. The change brought with it revolutionary marketing ideas such as having lights turned on in stores and clothing their workers. Their sales figures have seen a slight improvement but still remain in decline. Solution has also been sought in the company’s product offering, executive Chairman, Arthur Martinez, has argued ‘customer perception will only change when we improve the product lines and the product assortment’. Martinez is right on this of course, but the company’s issues go well beyond a style rut. Abercrombie need to lose the bad rep earned by former chairman Mike Jeffries. Originally hired in 1992 to get the company to ‘sizzle with sex’, Jeffries introduced racy catalogs and advertising in the hope of making the century-old brand a must have for teenagers. Much controversy was stirred up in the process with the underlying implication that the brand’s clothes were made for ‘cool’ and ‘attractive’ kids and not for ‘fat’ people.
Attracting young consumers to a brand in 2015 is a completely different ball game. Simply hiring ‘hot’ staff isn't going to cut it. Improving the product is the easy, potentially unnecessary, part. Mastering consumer experience and customer interaction remain the primary way of securing and maintaining sales. Burberry is living proof of this. 18 years ago Selfridges and Harvey Nichols deemed Burberry not worthy of their exclusive stores, the trademark beige and red tartan had been tainted as the uniform of football fans and the nouveau riche. Under the guidance of Angela Ahrendts and Christopher Bailey, Burberry has since grown in both prestige and value to have a stock market value of 1.8million. Their beige tartan remains the exact same.
The success story of Burberry’s cannot be discussed without reference to their highly skilled use of social media. They have managed to regain and consolidate their exclusive, aspirational stamp. This is particularly clear in China where Burberry’s reputation as a classic, traditional, British brand is immensely powerful in a culture that venerates european heritage and craft. The Chinese influence is a powerful one, not simply because of the significant market it represents, but because of the huge importance of social media in the country’s commercial landscape. More than in most markets bloggers and personal recommendations carry extreme weight with social media representing the second most influential source of luxury information.
“The young Chinese middle classes see luxury goods as a way of showing the world that they’ve made it.”
In less than a decade, Chinese luxury consumers will be on average 10 years younger than their European counterparts and more than 15 years younger than consumers in the US. If projections hold, Chinese shoppers will account for more than half of all luxury sales by 2025. Erwan Rambourg, a HBSC analyst and author noted that "They're not only much younger and super-demanding, they're also extremely well informed. If you're complacent and don't communicate the way they communicate, it's going to be difficult.”
Luxury shopping is not simply a case of going into a shop and leaving with an item. The young Chinese middle classes see luxury goods as a way of showing the world that they’ve made it. The internet is full of comments and recommendations of luxury goods as many consumers vocalise their experiences . While we may view online communication as a western and generational phenomenon, Chinese consumer culture operates with a much higher degree of integration. Websites such as Fashion Sohu , Haibao and Yoka provide a place where people can rate their shopping experiences as well the review e -commerce sites. KOLs (Key opinion leaders) have millions of followers on platforms such as Instagram and snapchat. One photo of an item from one of these pages can translate into thousands of sales. In the same way, a few elitist comments or a bad shopping experience can go viral completely tarnishing a brand’s name. The power of social media is a double edged sword, we know that if a brand gets it right it can earn them millions, get it wrong and it can be the start of their demise.
Burberry have mastered communication with this new, younger, group of shoppers. They’ve made some simple yet effective moves, including documenting their fashion shows through Snapchat, offering their younger consumers virtual behind the scenes access and cleverly selected guest lists that always include the new group of online YouTube celebrities. Burberry understand what consumers want and how to attract them. They’ve managed to balance mass appeal with luxury exclusivity while Abercrombie still seems to be struggling to find it’s feet, if anything, over focusing on exclusivity and subsequently turning themselves into a uniformed elitist gang.
Both brands show that companies have to now make sure that they’re walking the right line. They have to keep on their toes, and can no longer simply provide the product and the luxury store to match. They need a multifaceted digital experience and they need to maintain good online image. Keeping their customers happy has never been more important, one disgruntled consumer can find solace and support in the thousands online. Johann Rupert, Chairman of Net-A-Porter, Chloé and Cartier owning Richemont, has said “If you have a healthy dose of paranoia, you survive’. As we enter further into an age defined by technology and growing consumer power he has perfectly captured the trepidation of many in the industry.