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A move away from luxury branding is forecast to be a major fashion trend |
It's tough in any environment to start a new company or fashion brand, but ask the experts, and they say to stick with what you know, and you should fare well.
"Building a brand is a tough task in any country, especially in the current financial meltdown," said Suzy Menkes, Fashion Editor of the International Herald Tribune (IHT) newspaper. Speaking at a March fashion conference in New Delhi, Ms Menkes said, "The smart move is to start at home."
Asian designers and manufacturers, she advised, should look more to "greening" their products and moving away from the "luxury" moniker if they want to make headway in the years ahead.
"These are tough, rough times in the luxury world as elsewhere in the global economy," she said. "The days of gilded crocodile coats snapped up by oligarchs are over, and personally, I am not sorry to see bling and glitter slink away. But there is a big industry out there dependent on an upturn. And those sensitive to the shifting mood doubt that the 15 years of expansive growth can return in the same heady, crazy way," she added.
Sustainable Luxury
How, Ms Menke asked, can the pace of luxury possibly be sustained. "The world is waking up to the idea that tending to a planet messed up by greedy consumerism is a luxury that we must all be able to afford."
She said that the idea of "sustainable luxury" was sparked by comments from American fashion designer Tom Ford, founding father of the "it" bag. At a keynote speech at the IHT's Moscow conference, Mr Ford said that he was uncomfortable with the concept of "supreme luxury." He suggested that a discreet tab announcing a green product would speak louder to the consumer than a branded logo.
In another sign of the trend towards conscious consumption, some companies, such as Japan's Uniqlo, have formed their brands successfully by "putting people before brand," according to Martin Roll, a brand strategist and consultant.
People First Brand
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Branding 101
In interviews with fashion experts in Hong Kong and elsewhere, the following tips were offered for up-and-coming designers.
Invest in customer service
With modern communications networks such as Facebook and MySpace, it takes only one dissatisfied customer to spread the word worldwide about a bad experience. Investing in customer service will help a brand maintain customer loyalty.
Invest in brand credibility
If a brand won't defend its own name and reputation, the experts ask, who will? Much like the Four Seasons Hotel, which refuses to lower its room rates in a global economic recession, fearing such a move will negatively affect its brand, a fashion house must go after those who pirate its goods and invest in protecting its brand. This also includes investing in protecting a brand's intellectual property.
Invest in employee loyalty
Constant employee turnover eats away at the company's bottom line and customer loyalty. Having employees "eat what they cook" (wearing the brand, for example), shows the company believes in itself and in its people. Building employee loyalty also ensures that those employees have a voice in promoting the brand.
Don't skimp on quality control
Nothing cuts into a brand's image more than shoddy workmanship. Loose threads, faded colours and other flaws will quickly erode customer loyalty.
Consider financial options
Small and medium-sized enterprises often feel that their financial options are limited, but today's banks and financial institutions often cater specifically to those businesses. There are also increasing options beyond a company's normal operations. A US business may not consider using a Chinese bank, although the Chinese bank may offer better terms as a way to win additional business. |
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Uniqlo, a name formed by the fusion of two words – "unique" and "clothing" – is often seen as the Japanese version of US apparel giant Gap, according to Mr Roll. The company, founded in 1995 by Tadashi Yanai, has risen to become the number-one brand among Japanese retailers, with more than 700 stores and revenue of US$3.5 billion in 2005.
"Uniqlo's brand philosophy makes for a really intriguing case. When the brand entered the US market in 2005, it did so by opening three stores in a New Jersey shopping mall. The brand created the initial awareness in the marketplace by using newspaper inserts that displayed its clothing lines and its low price. But to create a distinctive position, the company focuses on the customer before the brand, Mr Roll said.
According to Uniqlo USA CEO Nobuo Domae: "We are selling jeans, not style. We don't want to push our brand logo, and you can combine our clothing with other brands."
"By not emphasising the brand image and identity aspects, Uniqlo might be making a mistake," said Mr Roll. Strong brand identity, he noted, is key in a sector where style, self-expression and symbolic value are seen as critical.
"By emphasising low price and high quality, Uniqlo is hoping to win the race. Time will tell whether this strategy will be successful and can sustain pressure from new brands and tough competition."
Follow the Process
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INSEAD's Professor Amitava Chattopadhyay says process is key to brand-building |
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The fashion industry often makes missteps because "it can't seem to separate the brand from the designer," said Professor Amitava Chattopadhyay, L'Oreal Chaired Professor of Marketing-Innovation and Creativity at INSEAD in Singapore.
"So what happens is the designer holds the company to a ransom. You might have a brilliant engineer at Intel designing chips, but no one ever hears about it. It's the Intel brand," Professor Chattopadhyay said. "You might not be able to mass-produce creative people like a Steven Spielberg, but you can hire talented people. There's no reason to make them bigger than the brand. They need to deal with each of them as an individual as opposed to the brand."
The INSEAD professor also said that young fashion designers and companies need to follow the process of any other good business, one that includes gathering consumer feedback, doing market studies and all the other common-sense tactics that make for a successful business.
"If they came to INSEAD for their MBA , we would tell them to follow the process or develop a process. Rules need to be broken, but not the process. It works, it has worked in the past and it will work
a long, long time in the future. Process will not change."
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