THE LUXURY RESET: RETHINKING THE GROWTH STRATEGY
Interbrand has just launched its 17th annual Best Global Brands. As it has been a pivotal year for luxury brands, we feature the expert view from Rebecca Robins, Global Director at Interbrand and co-author of the FT acclaimed book Meta-luxury. Rebecca’s luxury report, featured in Harper’s Bazaar, looks at the ongoing change within the industry. We share an extract of her luxury review here:
“Over the past 15 years of the Best Global Brands list, the brand value amassed by luxury businesses has grown from USD $25.8 billion in 2000 to USD $143.7 billion in 2015.For well over a decade, luxury brands have been ascendant. They were hailed as haloed protectorates of double-digit growth. They reinvented relevance, as per Burberry, the first British luxury brand to become a Best Global Brand in 2006. And, when the economic crisis hit, luxury brands were the most resilient in weathering the storm.
However, 2016 is the year that marks the luxury reset – a reset first signalled by recent dips in brand values that is now showing up via a cascade of marked declines. And yet, against the slow landslide in value, certain brands have quietly been asserting sustainable growth.
So, what are these brands doing differently?
- They make decisions around extension and expansion, based on the long-term protection of the brand and health of the business. This is in sharp contrast to many brands that have fallen foul by chasing the immediate gratification of fast profits at the expense of sustainable growth initiatives, leading to brand dilution and value erosion in the long term.
- Sustainable growth has deeper resonance in the wider context of sustainability. We are in a constant reevaluation of what we value and why. The sweet spot is where integrity of product meets integrity of brand experience.
- Luxury brands have always set the standard. The challenge now is to translate their stories of excellence within a knowledge and experience economy that craves experience as much as the product itself. And that raises challenging questions about the role of every micro and macro brand touchpoint. It also has radical implications for the role of flagship retail, of the runway to retail model, of managing rarity, and of levels of access and service.
As luxury businesses continue to work through the reset and evolve their growth strategies, a single quest remains constant. Everything begins and ends with driving brand value.”