Market expansion aimed at young customers is a complex issue for established luxury/premium fashion brands. This gradually maturing market segment can potentially attract mainstream customers in the future.
Market expansion aimed at young customers is a complex issue for established luxury/premium fashion brands. This gradually maturing market segment can potentially attract mainstream customers in the future. However, the greatest challenge is presented to the heritage-rich luxury/premium fashion brands who feel pressured to make changes to their business strategy and product image in order to adapt to the new market conditions. The increasing difficulty in building new brands requires practical solutions within the context of established brands.
A proposed solution to this challenge is developing a sub-brand which can attract the younger customer without affecting the established image of the brand. This sub-brand provides the company with an independent platform through which they can communicate a new market positioning strategy and make adjustments to their product design. Likewise, the endorsement of the parent brand and the company’s aesthetic heritage can help nurture the future success of the sub-brand.
The sub-brand is a feasible approach for luxury/premium fashion brands when they face the dilemma between expanding to the young market and keeping their heritage. There are many advantages in this approach: the clear delineation for the parent brand enables the high-end fashion company to stay at a luxury/premium level; the sub-brand can also provide a more independent platform for adjustments and innovation; the interdependent relationship between the parent brand and the sub-brand facilitates the transmission of the company’s aesthetics to younger audiences; the sub-brand is a cost-effective strategy contributing higher profitability to the company.
Furthermore, based on the change in the consumption behavior of young customers, it is necessary to consider innovation in the purchasing experience in order to meet their needs. For example, for the purpose of meeting young customers’ expectations in online purchasing, a better functioning e-commerce model needs to be established, comprising of a visualised virtual store, instant video clips of models in motion and a better online shopping experience. Such sub-brands will create more innovation opportunities in marketing for luxury/premium fashion companies.
In practice, luxury fashion brands are facing more challenges in implementing sub-brand strategy than most of the premium fashion brands because of their deeply-rooted heritage and product image. However, there have been successful cases proving that luxury fashion brands have the potential to create a prosperous sub-brand with accurate positioning strategy and effective business operation. Furthermore, the relationship between a parent brand and its sub-brand also determines whether a sub-brand can bring a positive effect to the overall marketing and branding of the company. The sub-brand needs to maintain a clear differentiation from the parent brand even when it is becoming more influential in the market; otherwise, a vaguely positioned sub-brand could harm the value of the parent brand.
Meet other experts on the topic, and check out their ideas in the following video: http://bit.ly/11T7rGp
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