Luxury Challenge for brands

LUXURY
IS CHANEL OUT-STYLING LOUIS VUITTON?

Luxury never shouts, darling…

You might think that globally-recognised luxury brands, such as Chanel
and Louis Vuitton, have no problem generating Cultural Traction™,
associated as they have long been with glamour, glitz, aspiration and
desire. But you would be wrong.
Added Value’s latest Cultural Traction™ study reveals that Chanel and
Louis Vuitton (placed #14 and #21) find themselves out-shone by technology and lifestyle brands like Apple, Samsung and even, IKEA. Most
worryingly for these purveyors of luxury, is that this proves true even
among the wealthiest cohorts interviewed for the study.
Chanel, maker of one of the 21st century’s most iconic perfume brands,
finds itself perceived to be less culturally vibrant than a manufacturer
of low-cost, flat-pack, self-assembly furniture.
How can we make sense of this?
MYTHS ARE HARD TO DEFEND AND RENEW
Globalization and the free-flow of goods and information are a challenge to luxury brands, whose appeal rests on principles of scarcity,
uniqueness and a sense of intimacy. In a world awash with counterfeit
goods – claim and counter-claim – preserving the purity of the myth
becomes significantly more difficult.
A brand’s Cultural Traction™ is defined by its ability to reshape itself,
surprise, excite, and inspire continuously. Cultural Traction™ is VIBE –
how Visionary, Inspiring, Bold and Exciting the brand is perceived to
be – over time.
So will luxury brands have to venture into new territory to retain their
desirability? Or should they stick resolutely to the defence and re-interpretation of their founding myths?
www.added-value.com/culturaltraction
culturaltraction@added-value.com

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CHANEL VERSUS LOUIS VUITTON
Maybe we can find an answer to these questions in the surprising fact
that Chanel, whose marketing tactics are currently more conservative
than the experimental Louis Vuitton, is actually generating more traction than its rival.
Family-owned Chanel is still operating in a fairly discrete and secretive fashion. Intimacy and direct consumer interactions are still the key
operational principles of a brand that refuses to be distributed online. It
favours tailored, high-end services, such as at-home trial sessions for its
VIP customers. Overall, Chanel is sustaining and nourishing the myth of
craftsmanship, intimacy, and exclusivity.


Product launches build on references to the House’s founding icons,
such as the 2012 worldwide launch of the “The Little Black Jacket”
exhibition, celebrating one of the brand’s “timeless classic” designs.
Invitation-only parties amplify the sense of exclusivity.
Chanel’s portfolio is also managed in a tighter fashion with a stronger
focus on females, resulting in higher marginal scores amongst this
target audience. Chanel is showing a clear lead over Louis Vuitton when
it comes to attracting 16-34 year old females. This is even more pronounced amongst Leading Edge consumers.




Louis Vuitton was very active in 2012, following the launch of its “L’Art
du Voyage” campaign, disseminated worldwide across many channels
from museums to online. One perceives a more audacious and ambitious approach from the brand in its marketing.
But in its effort to disseminate more widely and via more channels does
Louis Vuitton run the risk of diluting the exclusive appeal of its products? Mass availability via increasing numbers of high-street stores as
well as online ordering, puts it in the same category as other less luxurious mass-market retailer brands. Could its products become commoditized and less valued as they lose their rarity value?
Luxury, above all else, is about exclusivity, uniqueness and individuality.
Louis Vuitton may be working hard to boost brand awareness and presence, but it could be sacrificing its luxury brand essence.

ICONS AND ARCHETYPES
Chanel’s discreet but sensuous image correlates with its associated
archetype: “the Lover” – a voluptuous, passionate, sensual character
embodying a sense of intimacy, subtlety and secretiveness. The image of its feisty, pioneering founder Coco Chanel, portrayed in recent
biographical movies, has no doubt reinforced this archetype, not to
mention Marilyn Monroe’s famous quote: “What do I wear in bed? Why,
Chanel No. 5, of course.”
By contrast, Louis Vuitton scores heavily on “Ruler” traits: authoritative,
structured, flawless. The eponymous founder started out as a maker of
trunks in the 19th century – solid, practical products with their famous
unpickable locks – and the association with travel and adventure has
run through the company ever since.
It is tempting, though probably too simplistic, to view Chanel and Louis
Vuitton as respective embodiments of female and male characteristics,
although their VIBE scores do bear this out.





THE LURE OF THE EAST
Both brands have been eyeing the potentially huge, fast-growing and
newly consumerist market of China for a long time. But Chanel registers
a higher VIBE score there than Louis Vuitton, despite the fact that the
latter fashion house has been established there for longer.
It could be that Chanel is benefiting from the novelty factor, or that its
strategy of exclusivity – 12 stores in China compared to Louis Vuitton’s
43 – is more successful amongst a newly-affluent upper class looking to
differentiate themselves from the masses.
Chanel’s emphasis and subtlety and tradition, its historical pedigree, is
still firmly based on the values and activities of its founder.
DISRUPTION OR DILUTION?
Louis Vuitton’s audacious multi-channel marketing blitz may seem the
best tactic to generate Cultural Traction™ and brand vibrancy, but only
if the product lines continue to reflect the core brand values of luxury,
refinement, quality and desirability. It is harder to maintain an aura of
exclusivity within a model of mass-market distribution.
Chanel’s more conservative, organic approach – staying true to the
founding principles and trading on the company’s well-publicised history – is distinctive in a globalized marketplace dominated by low-cost
production lines churning out millions of identical units. In this context,
individuality and rarity seem to be disruptive qualities in their own
right.



The next stage for the luxury house, just as for Louis Vuitton, will be to
effect more daring reinvention from within without compromising the
principles underlying its success so far.
Both brands – French, historic, with a whiff of nostalgia for l’ancien regime – achieve their weakest VIBE scores in the “Excitement” category.
To raise this score they will have to stop trading on their pasts so much
and look to the future.


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Luxury Challenge for brands

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