Ikea, the manufacturer of cheap furniture, is cooperating with Louis Vuitton, US rappers are dusting off old sneakers and Cartier is flirting with punk rock. The luxury industry can only thrive if it continually reinvents itself, writes Swetha Ramachandran on finews.first.
This article is published on finews.first, a forum for authors specialized in economic and financial topics.
It is no secret that «collabs» have fuelled the luxury sector’s success in recent years, with younger consumers’ thirst for newness, in turn, sparking unexpected meetings of creative minds within the industry, to varying degrees of popular reception. Moncler is an example of a company that has adopted this collaboration culture at its core.
In 2018, the company launched the Moncler Genius project, a new creative and business model where well-known designers create distinct collections interpreting the brand’s identity which are released on a monthly basis. Now in its second year, the nine Genius collections unveiled to date have spanned a wide breadth from streetwear to haute couture to dog couture.
«Diageo capitalized on peak Game of Thrones – GoT for the uninitiated – fever»
Another collaboration that turned heads more recently was that between Virgil Abloh, the highly acclaimed artistic director at Louis Vuitton Menswear, and Ikea, on a limited edition 15 piece range fusing «functionality with street cred and high cultural references» – with a sold-out «receipt rug» in the style of an Ikea receipt now only available on resale sites.
American rapper Travis Scott collaborated with Nike to reinterpret the iconic Air Jordan 1, reversing the brand’s iconic swoosh. Following the streetwear «drop» model – where merchandise is released on strictly limited supply in order to maximize the buzz around the launch and maximize uptake by consumers, the shoes – which originally retailed for $175 a pair, now fetch many multiples of that on resale sites GOAT and Stadium Goods.
Diageo capitalized on peak Game of Thrones («GoT» for the uninitiated) fever ahead of the show’s eighth and final season, releasing its limited-edition White Walker by Johnnie Walker blend and the Single Malt Scotch Whisky Collection in March, to significant commercial success.
«Winter is here»
White Walker by Johnnie Walker, named after the iconic White Walker characters in the show, is intended to be served directly from the freezer; with the classic words «Winter is here» revealed on the bottle when frozen. In addition, Diageo also launched the GoT Single Malt Scotch Whisky Collection, featuring eight Scotch whiskeys paired with each of the Houses of Westeros, as well as the «Night’s Watch».
Italian carmaker Ferrari announced five new models last year, in a significantly stepped-up pace of innovation relative to the past. It also started to deliver the very first of its special edition «Icona» series – the Monza SP1 / SP2 car, starting late September. Every one of the 499 units of this model that will ever be produced was pre-sold at its launch a year ago.
«Cartier adopted a more punk rock ethos»
Even Cartier caught the innovation bug this year; in a departure from its conventional elegance and glamour, it adopted a more punk rock ethos with the launch of its «Clash de Cartier Collection» – including necklaces, bracelets, and rings, all featuring a mash-up of architectural design elements, as well as studs, beads and clous carrés taken from some of Cartier’s most signature creations. Feedback from millennial customers, particularly, to the bold and inclusive design of the collection has been highly positive.
Lastly, we could not write about what resonated with consumers last year without mentioning sustainability. From the days of it being merely a buzzword, the industry started to take sustainability much more seriously in 2019, with consumers voting with their wallet in favor of products and business models which capture the changing consumer zeitgeist.
In the U.S., The RealReal – a luxury resale platform that listed this year, announced a partnership with Burberry to further a sustainable circular economy in luxury fashion – customers who choose to sell a Burberry product on The RealReal’s platform will be invited for a personal shopping session and tea at one of Burberry’s retail locations. Hurry, the offer lasts until 30 January 2020.
Swetha Ramachandran is an Investment Manager in GAM's European Equity team, responsible for managing the luxury brands equity strategy and for research across the consumer sector. She has over 17 years of investment experience. Prior to joining GAM, she was with Alliance Bernstein, London, and before that, an analyst at Credit Suisse, London, and Vigeo (ESG Ratings Agency), Paris. She began her career at Goldman Sachs in Singapore. She holds a Magister in French Literature from the Université Paris – Sorbonne, Paris, and a BSc (Hons) in Economics from the London School of Economics and Political Science, London.
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