A smaller, stronger core of luxury — and fashion-forward — firms is likely to emerge from the recession, according to a new survey.
New York-based Abrams Research polled more than 100 luxury-industry experts — executives, designers, buyers, editors and bloggers, among others — and 36.8 percent said the luxury sector would evolve to a more streamlined but strengthened model, with 34.9 percent expressing confidence that aspirational consumers would be a key component.
“This has everything to do with how these brands are facing the challenge of marketing themselves through new channels, like social media,” said Dan Abrams, chief executive officer of Abrams Research, who also is chief legal analyst for NBC and MSNBC.
Respondents were asked to name retail and fashion brands that were best-positioned to thrive and were given the option of selecting as many as three brands.
Topshop ranked first, with 34.1 percent of those surveyed naming it as a brand that will flourish. It was followed by Chanel, 28 percent; Louis Vuitton, 21.9 percent; Forever 21, H&M and Marc Jacobs, all tied at 13.4 percent; Hermès, with 7.3 percent, and J. Crew, 6.1 percent. Other brands that got traction included Cartier, Yves Saint Laurent, Gucci, Rolex, Tiffany & Co., Diane von Furstenberg and Prada.
“There is a huge contrast between these top brands, and you see it within the top two names: It’s Topshop versus Chanel,” Abrams said. “These brands represent two business strategies that can survive the recession. You either stick with discount prices and strategically market your products, or you stay true to your loyal fan base and don’t compromise the quality of your goods, so as not to dilute your brand.”
Shopping brands online that respondents felt were best-positioned to thrive were: Net-a-porter; 33.7 percent; Gilt Groupe, 15.7 percent; neimanmarcus.com, 8.9 percent; barneys.com, 6.7 percent, and Eluxury.com, 6.7 percent. “The broad lesson here is that the luxury-brand community knows they have to make themselves relevant online,” Abrams said. “So how far do they go without losing that sense of exclusivity?”
The survey asked how the Internet will best be used by luxury brands for marketing and advertising. The results: 34 percent ranked “innovative advertising” as the most effective tool, including mini Web movies on brands’ sites — such as those that have been featured on gucci.com and tods.com. Partnerships with influential fashion-luxury bloggers followed with 27.4 percent and use of social networks such as Twitter and Facebook, 13.2 percent. And 13.2 percent of respondents also said distribution beyond high-end sites, such as neimanmarcus.com, to lower price-point sites, like Zappos.com, would be an effective tool for luxury brands.
“As marketing through social media moves to the forefront for many businesses, I think a lot of luxury brands are now saying, ‘How do we get ourselves on Twitter? Do we really want to be there? Does that cheapen us?’ ” Abrams said. “Brands need to figure out a way to still be exclusive within the social media platforms, because it’s an enormous marketing opportunity.”