Luxury "Volume Win" Strategy Is Difficult To Continue

The luxury market was ideal last year in the wake of the US economic recovery, but again faced challenges this year.

The purchasing power of high consumer groups is beginning to cool down, and the American luxury brands, which also rely on the international market, can not help themselves.

In addition to economic factors, other problems also include lack of creative direction, the disorientation of lifestyle and extravagance of target customers.

The performance of the Italy luxury brand Prada was disappointing in the last fiscal year, for the first time since the financial tsunami, and even in the fastest growing Asian market, revenue fell by 5%.

Some comments have pointed out that excessive expansion is one of the reasons for Prada's performance retrogression.

Management is also aware of this problem and plans to halve the target of 65 new stores this year.

Prada specializes in high-end customers, while the off line products aim at the low-end market, but ignore the middle market products. As the high-end customers such as China and Russia reduce their consumption due to the economic slowdown, the impact of the middle market on Prada is becoming more and more obvious.

And the United States

Brand Ralph Lauren returns to the "affordable luxury" route, grabbing the middle market, but confusing its products.

Also facing the lack of creative problems.

And Ermenegildo Zegna, this year's performance is expected to be worse than last year.

The Japanese market accounted for 11% of the total sales of the American fashion brand Coach, because the Japanese yen depreciated by 12% annually.

Sales in the second quarter fell by 1%.

Jewelry brand Tiffany announced earlier that holiday sales fell by 1% year-on-year, and the outlook was equally negative.

34% of the proceeds from the American fashion brand Ralph Lauren came from the international market. Jenny capital market pointed out that the global adverse factors or damage to its sales, so the rating from "buying" to "neutral".

Reuters pointed out that Gucci, Burberry, LV (Louis Weedon) and others adopted the strategy of "win by quantity" after 2000 to take over the mass market, which brought huge profits to the company and shareholders, but also made the brand lose its aura.

So over the past 3 to 5 years, these enterprises have been working hard to rebuild the image of the high-end brand.

LV changed its strategy last year, focused on product innovation and launched a new "V" logo and a series of expensive handbags to regain brand power.

Gucci also sharply reduced the medium and low price products, and aggressively increased the price. But some analysts think that this is a bit too hasty, not as progressive as LV, and to avoid over restructuring the product line.

Canali, Max Mara and other family management brands also "quietly revolution", successfully re defined the brand image.