Brand value increases across categories

Part 3 | The Categories
Coach entered the BrandZ ranking of
luxury brands for the first time in part
due to strength in China, where the
brand added 30 stores, ending 2012 with
69 Chinese stores. Coach faced heated
competition in the US. It refined its use
of social media and the Internet, emailing
over 1.2 billion messages to selected
customers. Fendi also appeared for the
first time in the ranking of luxury brands.
The brand value of Gucci grew by a
healthy 48 percent. Although sales
softened in Asia, they remained strong
in North America and even in Western
Europe because of tourists from Asia and
other regions. The brand value increase
also reflects a rise in Brand Contribution,
the portion of brand value attributed
solely to brand and not to financial or
other factors.
Already available online in 27 countries,
Gucci announced its first mobile app,
increasing the brand’s accessibility.
Accessibility may have hurt the highest
valued luxury brand, Louis Vuitton, whose
customer appeal depends on exclusivity.
Hermès benefitted from its exclusivity
and appeal to the high-end of the luxury
market. Profit increased 24.6 percent on
a sales increase of 22.6 percent. Its profit
margin improved too.
A delicate balance
With consumers enthusiastic about luxury,
but mindful about spending, many brands
acted like media owners, organizing
audiences around shared interests and
creating content to suit particular audience
segments and even individuals.
Magazines and other traditional media
remained important for reinforcing
brand image. But brands developed and
distributed more story-telling content
themselves. Burberry relied on new stories
and the latest technology to create a more
personalized, twenty-first century image
for a brand established in 1856.
In a program called Smart Person-
alization, Burberry embedded digital
chips in some of its custom-made merchandise.
When customers received their
bespoke products they could activate the
chip using a smartphone and view a
video of their product being crafted and
personalized with their name.
The brand also planned to introduce a
program called Customer 360 that would
empower salespeople with tablet devices
containing customer preference and
shopping history information. Burberry’s
brand value continued to appreciate, but
at a lower pace as the global economy
impacted like-for-like sales. Asia accounts
for about 40 percent of the brand’s revenue.
Local brands emerge
At the same time, other brands appeared
at the margins of the luxury category.
Lacking heritage, and not yet of a scale
to make the BrandZ ranking, these
brands depended on compelling stories
passionately communicated. Among the
brands, mostly aimed at young people
are: Sweden’s Acne (Ambition to Create
Novel Expressions); Bree, from Germany,
and the American apparel brand
Tory Burch.
Local luxury brands also appeared in
China as the consumer attitude toward
luxury evolved from an obsession with
badge status to an appreciation of craft.
These brands include qeelin, a collection
of fine jewelry based on Chinese heritage
and sold in Paris, London and other
world capitals.
Many brands
acted like media
owners, organizing
audiences around
shared interests
and creating
content
The message is
the medium
Insight
Fashion houses are becoming media
owners. Brands used to expect the
fashion magazines to create content.
A picture in a magazine is no longer
enough to tell the full brand story.
Now brands are content creators.
The trend is evolving quickly. With
digital, brand content and brand
experience is becoming almost the
same thing.
Elaine Quirke
Director
Mindshare Luxury
Elaine.Quirke@Mindshareworld.com
Insights
BrandZ BigData
More consumers search
Internet to find luxury
Sophisticated use of modern
communications is an important driver
of luxury brand growth, as brands
increasingly democratize fashion by
expanding access on the Internet and in
other digital media. Across the category,
the number of consumers “searching
for information” on luxury brands is up
128 percent since 2006, according to
BrandZ research.
On average, consumers consider the
Top 10 brands in the BrandZ luxury
category more “sexy,” “desirable,” and
“idealistic” in their imagery—albeit also
more “arrogant.” The only apparent
vulnerability of these luxury brands is
a relative lack of differentiation among
them, although Louis Vuitton and Hermès
are exemplary in this regard.
Source: BrandZ BigData, over 2 million consumer
interviews regarding over 10,000 brands in 30-plus countries
Action Points
1. Protect the logo
Owning luxury continues to be
a source of validation for many
customers who want logos that
symbolize their membership in an
esteemed group.
2. Celebrate individuality
Younger customers in particular, are
increasingly turning to luxury brands
that enable them to express their
individuality and personality.
3. Offer intimacy
Customers seek intimacy from a
luxury brand. Both global and local
brands can achieve intimacy, which
is about reducing the anonymity of
mass production and restoring the
sense of personal craftsmanship.
4. Tell the story
Brand heritage is like sacred scripture.
Never stop retelling the brand story.
And always make it relevant.
Consumer & Retail | Luxury
Spotlight
Designer labels exert
strongest appeal in
BRICs
More than half of adults in Russia
and China, and 41 percent of
Brazilians, believe that a designer
label improves a person’s image.
That attitude compares with 30
percent in Italy, a country
associated with fashion, and only
13 percent in the US. The contrast
reflects the importance of luxury as
a symbol of personal status in fast
growing markets.
Label improves image
54 BrandZ Top 100 Most Valuable Global Brands 2013 55
52%
China
52%
Russia
India 47%
Source: Global TGI 2012
Base of 18+
Any who agree:
“Designer label improves
a person’s image”
Brazil 41%
30%
Italy
13%
US