The magic formula
Luxury brands don’t start with prestige and premium – they begin with a founder who inevitably comes from the middle of society rather than the top. Madam Chanel was an orphan, Guccio Gucci a merchant’s son from Florence – founders are artisans not aristocrats.
Next you have to examine the categories where they launched their businesses. To our eyes today, a category like champagne is an ancient and established one. But back when a young monk called Pierre Perignon was experimenting with the fermentation of grapes, the name Champagne simply meant a region.
To a visionary founder working in a new category, we must next add a moment of creativity or sublime innovation. For a young draper from Basingstoke called Thomas Burberry it was the creation of a new fabric called gabardine – a water-resistant yet breathable fabric. For a middle-aged entrepreneur called Louis Vuitton it was the addition of canvas to his trunks as a means to ensure they were totally waterproof and could be produced in flat, stackable units – as opposed to having rounded peaks to ward off the rain.
And then add the final magic ingredient: time. Decades must pass. The founder must die. The clients must die. And time must move on until the brand eventually acquires a lustre of exclusivity and heritage. Where once they were radical, now they becomes classic. And there you have it – the formula for a luxury brand.
The value of provenance
The Swiss dominate the world of premium watchmaking, but the key question is not how to say ‘Swiss Made’ but rather how a specific watch justifies that premium branding.
A watch qualifies as being Swiss made if at least 50% of the components in its movement are made in Switzerland and if it is assembled and undergoes a final inspection there. However, it’s that 50% figure which is currently causing so much angst in the Alpines.
Several foreign watch manufacturers are able to claim a Swiss pedigree despite being non-Swiss owned and, for the most part, non-Swiss made. There’s the Swiss Mountaineer watch brand which, despite its name, prominent use of the Swiss flag on its packaging and the words Swiss Made on its timepieces, is actually owned by a Hong Kong company and predominantly manufactured from non-Swiss parts in China.
“Watches produced almost entirely in China are sold legally under the Swiss made label,” read a recent statement by the Federation of the Swiss Watch Industry. Almost all of the 500 Swiss watch brands that form the federation support its call for a clearer and more stringent definition of what “Swiss Made” actually means. If the federation has its way, the proportion of Swiss made components in a Swiss watch will rise to 80% of that timepiece’s total value.
Choose your partners carefully
Last year, Target launched a range of items designed by luxury Italian label Missoni but manufactured and retailed by its mainstream retail partner. The collection was meant to last until mid-October but heavy promotion combined with price points between $3 and $600 meant it sold out in most Target stores by noon.
An Italian luxury brand and a US mass-retailer might appear odd bedfellows, but look closer. According to the established theory of co-branding, this is a perfect marriage for it is built on contrasts, not similarities.
Ideally you will find a partner that will not only add new associations to your existing brand equity, but those new associations will confer strategic advantages. In the case of Missoni, this partnership was about generating awareness for a brand that has a relatively tiny US marketing budget. For Target, this was another opportunity to bolster its value message with the kind of design and premium associations that will help it trump arch-rival Walmart.
Next, your co-brand should have a different target market from your own. In Missoni’s case, a whole new generation of Americans now know and are interested in the Italian brand. For Target, this was a rare chance to entice the metropolitan fashionista back into Target.
The final piece in creating a successful co-brand strategy relates to authenticity. Both brands must have a legitimate fit within the product range being offered. Missoni and Target have strong product pedigree in clothing and homeware that made up the Missoni for Target collection.
Tick these three boxes and the success of your co-branding is usually guaranteed.