Luxury Brands Have Been Increasingly Active In Cross-Border Activities, And Have Extended Their Tentacles Beyond Traditional Fields.

For luxury goods users, I'm afraid I'm not only satisfied with Hermes's package and Mercedes Benz nowadays.

(Chanel) suits.

Now the new sign of luxury goods is sitting on the sofa of Hermes, watching the TV of Giorgio Armani (Giorgio Armani) and riding a Chanel bike.

The brand has become more and more active in crossing the boundary. To date, almost all luxury brands have extended their tentacles beyond traditional fields.

In the fields of home, hotel, industrial design, and even automobile, we can see the figure of luxury brand.

Why are luxury brands so keen on "crossover"? What rules should be followed in the extension of luxury brands? If you know that luxury brands are not going to pay the bills, they will also damage the image that luxury brands have in their minds.

"Cross boundary" busy

Cross boundary has become the most popular way of luxury brands nowadays.

In the retail store in Milan, Hermes has graciously displayed soft porcelain, exquisite cloth and household items, including kitchen furniture, porcelain, sofa and so on, and everything in indoor display comes from the design and production of Hermes.

The original harness maker has been ubiquitous in the home series today. From the living room, study room, bedroom, workroom to the dining room and even the balcony, Hermes can provide you with all the things you need for your family. The data show that the earliest luxury brand crossover with the vehicle is also from Hermes.

There are also luxury brands such as Robeto Cavalli, Bottega Veneta and so on.

The hotel industry is another place for luxury brands to get together.

Louis Weedon (LVMH) is expanding its chain hotel and catering business, which is named after the Cheval Blanc, the top winery of St. Mary's producing area. Leonardo Ferragamo and Versace (Varsace) also started the hotel early; Giorgio Armani has not only set foot in the hotel industry but also recently introduced LCD TV.

Cross boundary luxury brands are numerous.

Why luxury brands are so keen on "cross boundary"? "Creating more and more complete categories for customers with the same concept of life is the development trend of luxury goods industry," an industry expert said in an interview with reporters. "If the product line is not abundant, it will be at a disadvantage in market competition, especially in Xingxing market.

In the view of Zhou Ting, President of the Institute of wealth and quality, the cross-border brand of luxury brands is driven by the "80/20 rule".

"The luxury market is very much in line with the 80/20 rule. Developing a new customer takes several times more energy than retaining an old customer.

Therefore, many luxury brands hope to extend their product lines and let their consumers repeat the purchase of the brand products. In order to develop them into loyal customers, luxury brands will provide consumers with a full range of products that cover customers' lifestyles.

Zhou Ting analyzed this in an interview with our newspaper reporters.

In addition, the industry believes that the extension of luxury brand product line is also a natural consideration of capital investment, because high-end brands basically have the core brand culture that has been recognized by the market, so the dissemination of this brand culture requires great capital investment. Once the brand assets reach a certain height, they naturally hope to improve the efficiency of capital use and enter other industries at low cost.

Beware of running away from the topic.

But luxury brands can not extend and cross borders without borders.

Where are the boundaries of extended products? From the perspective of the existing laws of luxury brands development, they usually start from people's clothing, to the way of home life, and then extend to social consumption, and then to leisure, travel and other products.

"But it depends on the actual size, production capacity and brand connotation of the brand, but also combines the preferences of consumers and different markets to make a series of strategic step decisions."

Zhou Ting pointed out.

For example, Bvlgari (Bvlgari) first sold jewelry and sold watches in China, and has just tried the water industry. In different countries, the expansion of luxury brand product lines will also have different deviations and strategic trade-offs.

Chen Zhilong, chief executive of Paris Mercure China, summed up the rules of luxury brand extension product line with "sequential derivatives", that is, closely linked to the product line of their own advantages, and gradually derived from related products. The higher the correlation degree, the higher the efficiency of market capital utilization.

"Bvlgari watches and hotels are doing very well, but the market reaction of bags is not so good, and similarly, the Louis Weedon brand is good at making costumes and accessories, but it is the next time to make watches."

Chen Zhilong gave an example in an interview with our reporter.

In addition, Chen Zhilong found that when the luxury brand has not yet reached the market level, the extension of the perfume product line will basically fail. Although the Louis Weedon brand has a high market position, its launch on perfume product line is still very cautious.

And careless, luxury brands have the risk of "running away".

Zhou Ting is more impressed by the Louis Weedon brand specially designed mahjong box, although this is just to create an event marketing to attract everyone's attention, but the negative evaluation followed, the brand finally won't appreciate it, but was perceived by consumers as "this brand like an upstart".

Chen Zhilong believes that without taking into account the proportion of return on investment in brand equity is also a "off the point", for example, he observed in the Chinese market, Gucci (Gucci) watch product line sales are relatively general.

How to avoid the luxury brand? Zhou Ting suggests: "brand value should be balanced with the sales volume of the market. It can not be spread without restriction for sales and market. Do market research and assessment, understand what extension can give the brand bonus points; have a deep understanding of consumers in different regions, such as the Japanese Cherry Blossom bag LV sells well, but in China is the classic style selling better, and finally make strategic adjustment according to the actual size, production capacity and brand connotation of the brand."