How to save luxury brands (and American capitalism)

screen-shot-2016-09-15-11-10-57-amElizabeth Segran has a nice essay in Fast Company: The Decline Of Premium American Fashion Brands. What Happened, Ralph And Tommy?

As a teen, Segran admired ads by Ralph Lauren and Calvin Klein. That’s over.

Today, at 33, none of these brands interest me. They conjure up images of outlet malls.

The problem is widespread

I’m not the only one who feels that these iconic American brands have lost their luster. Many are on a downward spiral, hit by sluggish sales. Ralph Lauren is facing plunging profits resulting in the shuttering of retail stores. Coach is in a similar boat, having lost significant market share. Michael Kors recently devised a strategy of cutting back on discounts, since markdowns appear to have killed the company’s cachet. Calvin Klein and Tommy Hilfiger, which are owned by the same parent company, have seen decreasing sales in the U.S. market.

Luxury brands are, in short, a mess.

Segran consults several experts and they roll out the probable causes:

Luxury brands:

■ were pushed by Wall Street to grow
■ growth forced offshore manufacture and this created diminished quality
■ searching for larger markets lead to production overruns
■ overruns forced brands into the bargain and outlet channels.
■ finding Ralph Lauren in a discount bin at T.J. Maxx made it seem a little less luxurious

Other factors

■ new brands rose with a new, more social, sensibility, Everlane or Warby Parker

But something is missing here from this account. We are looking at a fundamental change in sensibility.

screen-shot-2016-09-15-11-10-57-amConsider the Ralph Lauren ad that Fast Company used to illustrate this essay.

Almost everything is now wrong with this image. But not one of these errors in the image is remarked upon.

Errors in the image: 

That this picture has a center to it.
(Younger consumers are social animals. They are networked creatures. They are distributed souls. Practically, for content creators, that means dump the “focus” and go for “foci.” See recent work by Fitbit and Android for the social “foci” view, and my thoughts here.)

That the center of the picture is a white male, apparently WASP and privileged.
(Do I really need to explain the rise of diversity and what it means to the models we want to see in our ads?)

That the male in question has a woman wrapped around his arm.
(This too should be unnecessary, but everyone is now a feminist. And this posture is absurdly subordinate and subordinating.)

That this woman has the strangest look on her face.
(It’s an expressive that appears to say, “This is all I want from life, to be by my man.” I mean, really.)

That there is a steely eyed friend.
(what is this guy dressed for? A trip to his place in the country, the ancestral home, all brick, beam and ‘old money made material’?)

That the surrounding group glows with youth, ethnic specificity, and privilege
(the first motive for luxury consumption used to be upward aspiration. A consumer culture fanned the hope that we too could rise in the world, into exalted social realms, away from the ordinary, “common,” “coarse,” “little” people. But this idea is now openly ridiculed.)

Attention, sellers! The single most important idea driving your market place is dying. This idea of status is dying. It is now a recipe for ridicule.

So let’s be clear. Yes, there are plenty of “internal” reasons why luxury brands are struggling. And thank you, Elizabeth, for discovering them. But there are external, cultural ones, as well.

These cultural changes are not recent. These have been in the works for several decades. And it is a perfect storm as we rethink our ideas of privilege, status admiration, upward aspiration, sexism, and the adoration of the wealth and privilege.

imagesWhat to do? How could luxury brands have prepared themselves for this cultural disruption? At the risk of repeating myself, the single simplest strategy is to hire a Chief Culture Officer. For instructions, read this book ➼.

There’s a ton of talent out there. A few names come to mind. Tom LaForge, Barbara Lippert, Steffon Davis, Ana Domb, Philip McKenzie, Sam Ford, Joyce King Thomas, Michael Brooks, Jamie Gordon, Monica Ruffo, Rochelle Grayson, Kate Hammer, Drew Smith, Rob Fields, Parmesh Shashani, Shara Karasic, Ujwal Arkalgud, Tracey Follows, Eric Nehrlich, Bud Caddell, Barb Stark, Mark Boles, Mark Miller, Helen Walters.

(For a longer list, see this Pinterest page filled with candidates.}

If only Ralph Lauren had had anyone noted above as their Chief Culture Officer. How much share holder value would have been protected? How many careers saved? How much more fun would it have been to work at Ralph Lauren?

American capitalism has become a bit of a punching bag. There are so many cultural disruptions in play. A crisis now haunts CPG and Hollywood. So that’s three of the great workhorses of the American economy. And it’s at this point when we can see a crisis running right through our economy, touching things as diverse as luxury brands, CPG brands and Hollywood pictures, that’s it is time to rethink what we’re doing.

Take a smart person with good credentials, give them resources and give them power. It’s time to make our marketing, design thinking, branding, and innovation intelligence responsive to the simple truth that’s visible to most cultural creatives and virtually every Millennial. It’s time to make the organization as responsive to culture as it is to everything else in the near environment. All other options are stupid and embarrassing.

 

9 thoughts on “How to save luxury brands (and American capitalism)”

  1. There may be another dynamic here which is the ubiquity of knock-offs of these luxury brands. Also, the idea that wearing/showing a brand name is more important that the inherent quality in the product. The passion (er..mania?) of newly wealthy cohorts around the world to show their wealth by wearing brands may also have something to do with devaluing the brand they covet.

    1. Lee, agreed, there’s a psoitive brew of contributing factors. But good brands find a way to move to higher ground and protect themselves from diminishment. Unless of course they are now wedded to bad ideas that work against them. Thank, Grant

  2. An interesting area. The beginning of a cheapening of the luxury brands began about twenty years ago. The best book I’ve read on the subject is Dana Thomas’ ‘Deluxe’ .. Also relevant is Overdressed by Elizabeth Cline. The focus is more a consumer reaction to fast fashion, but the actions of the major designers look at the period after ‘Deluxe’ … Cline describes an emerging demand for a different sort of quality from brands .. one where provenance and clueful design are part of the brand. It certainly isn’t for the masses as the cost of entry is high, but it underscores what clothing means when you consider external factors.

  3. I haven’t read your book, so I’m sure it’s covered in better detail, but I figured I’d point out that the way you end this post seems to demote culture to something “obvious to every millennial” — which doesn’t really make someone want to take it really seriously or spend real money on it. Kind of like social media is often “let’s hire an intern and put him on Twitter.”

    1. Chris, you have put your finger on it. The corporation is often “stealing signals” from Millennials (or spare us interns), giving itself a cultural sophistication without honoring a formal process or the people capable of making it work. Time to promote people who get culture! Thx, Grant

  4. Here’s to those responsive organisations, Grant. I’d to like to think your readers will walk away with that as their aim, reinforced or instilled by this example. And gosh that advert is creepy…

    So many ways to bring the outside world into a corporation’s thinking & ways of doing. And yet, still such a struggle to maintain a culture of curiosity against the pressures to standardise, and in anywhere scale is understood as a demand for uniformity.

    Thank you for including me in your CCO list, Grant. Beyond the books and conversations, you gave us Patience and Fortitude which are just as essential for the CCO’s stamina.

  5. not buying your analysis of the pic’s shortcomings, grant. with the right market segments, the faults you identify may actually be strengths. i’ll bet that a consumer (millenial?) who has issues with the pic will have issues with the brand altogether.

    my issue with the pic (and with the ralph lauren brand more generally) is that it’s prissy and precious. that’s got to be deliberate. why?

  6. Fantastic analysis, only that the “steely eyed friend” and the strange woman seem more like proud parents surrounding their cub. Which makes for an even stronger case against the brand’s obsolescence: smothering privilege which would make any self respecting young person cringe – with the possible exception of Kim Jong-un’s sons.

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