Contrary to most run of the mill products, luxury items such watches, bags, shoes and jewellery have been experiencing two-figure growth since 2008. This a paradox of the times. The 2008 financial crisis was accompanied by a rush to luxury goods; growth most notably due to emerging countries in Southeast Asia and Brazil. So much so that now a day, major luxury brands launch their product there instead of Europe.
This growth is vital for luxury groups who have used this opportunity to vertically integrate sales and distribution processes. This has resulted in the acquisition and direct control of their distribution networks and the extension of their own-brand retail network. The method proved effective for market leaders (Hermès, Chanel, Louis Vuitton, etc.) who have a product pallet large enough to ensure profitability for its retail networks and substantial financial resources to undertake heavy investments.
Nevertheless, the strategy has its limits. The implementation of integrated retail networks has proven to be expensive and profitability is sometimes disappointing. Market changes have beeb under-estimated and distribution has absorbed resources that could otherwise have been invested in products innovation.
The main challenge for leading luxury brands is therefore to optimise and better control their distribution networks (corners, DFS, boutiques...) in order to increase the impact of luxury-specific environments and optimise profitability.
Numerous “outsiders” coexist alongside major luxury brand currently dominating the market. They represent a heterogeneous lot in terms of ownership, products, financial resources, and production and distribution capacity. Some have opted for niche strategies, others are positioning themselves as alternatives to established luxury brands with the aim of eventually becoming a challenger rather than an outsider. Their presence is changing the competitive environment of the luxury market. At a time when leader of the luxury industry have amassed significant capital resources, they represent opportunities for acquisition in a market bound to consolidate at one point or another.
What are the market dynamics, by area of consumption and by product segment? What are the new market niches and what of their potentials? What are the strategic impacts of the increasing competitive pressure? How is the distribution of luxury goods changing? What strategic orientations and financial flexibility do luxury companies have? What are the foreseeable scenarii of the evolutions of competitive positions?
> International product launch for a major luxury brand
> Definition of a new Duty Free concept and its positioning in Korea
> International marketing campaign plan for a major luxury brand
> Optimisation of company owned point of sales and wholesale networks
> Development of new boutique concepts in China
> Development of new point of sale services for consumers