How luxury brands can make collabs work
In the last few years, collaborations have become an indispensable tool for brands to raise their profile, boost their sales and expand their audience, especially among younger consumers. Over time, they have learned to better choose their partnerships, while developing a strategy articulated in terms of offer and price, according to the markets and the targeted customers. Through a study of the latest successful collabs, including Fendace, Gucci X The North Face and Louis Vuitton X NBA, Retviews by Lectra provides an insight into some of the dynamics put in place by the industry.
"The latest Lyst Index report proves just how essential collabs are for fashion houses, as many of the quarter's hottest products are part of brand collaborations and have been a driving force in the popularity of labels," reports the data analysis expert, who points out that this type of temporary partnership allows labels "to refresh their offering by exploring territories sometimes far from their usual style and range". Above all, it creates media interest around the brand between seasonal peaks, while stimulating demand thanks to the limited edition capsule concept.
While the choice of partner is crucial, the way in which the four-handed collection is constructed and its price positioning are equally important. In the case of the "Fendace" merger, great attention was paid to the range proposed. The two luxury houses, Fendi that belongs to LVMH and Versace owned by the American group Capri holdings, have two different styles but target the same type of upmarket and fashionable clientele.
The two Italian labels offered two collections, each interpreting the aesthetics of each house from a new perspective: Versace by Fendi with rich outfits playing on the double F of the Fendi monogram and Versace's iconic Greek key motif, and Fendi by Versace with mini-dresses and micro-skirts revisited in Versace's rock and punk style.
However, on closer inspection, the "Fendace" offer, unveiled in September 2021 and marketed in May 2022, has been further segmented, probably to avoid the "cannibalisation" effect between the two partners. On the one hand, Fendi's line was mainly focused on men's products, representing 71% of its assortment, compared to 39% for the Versace line. On the other hand, Versace's line offers a wider range of categories.
Retviews noted that the Versace line offers more dresses and outerwear than Fendi. Similarly, its footwear offer is more diversified. For its part, the Roman house emphasises accessories and leather goods, representing respectively 40% and 18% of its assortment, compared to 31% and 14% for Versace. A further segmentation is made within the categories, with Fendi concentrating for example on eyewear, which represents 36% of its accessories assortment, while jewellery is highlighted at Versace, making up 52% of its accessories.
In terms of price, the positioning of the two lines was similar in Europe and the US. In China, however, 81% of the Fendi by Versace prices were higher, as well as 13% of the Versace by Fendi items. The high demand for cross-brand collabs from the Chinese Gen Z explains this strategy. And both brands did not hesitate to market Fendace products at much higher prices than their normal collection.
In the case of the collaboration between Gucci, the star brand of the Kering group, and the outerwear brand The North Face, or that between Louis Vuitton and the NBA (National Basketball Association), the approach is different. It is no longer a question of exchanges between two great names in luxury, as with Fendi and Versace or as Gucci and Balenciaga have previously done, but more of bringing together two different worlds, which nevertheless share common values.
Here again, the strategies can be opposed from one brand to another, even if the typology of the collaboration is similar, bringing together a label and a sports brand. For Gucci and The North Face, the product mix appears balanced in the US, UK and Italy, while the focus is on men's fashion in China and Japan. The collaboration includes tops, representing 38% of the range, with short-sleeved pieces and sweaters dominating, and outerwear that represents 31%, with down jackets leading the way.
Accessories and leather goods, on the other hand, take the lead in Louis Vuitton's collaboration with the NBA, as the LVMH flagship label must somehow align itself with the lifestyle of an NBA basketball player, with tops coming in third place. Leather goods in particular, which represent the second most important category in the range (24%), focus mainly on wallets and travel bags.
As far as prices are concerned, approaches and logics differ here too. Retviews data shows that in all categories of Gucci's collaboration with The North Face, the price is slightly lower than Gucci's usual collection prices. The down waistcoat is also cheaper. With entry-level prices more accessible than its own, Kering's luxury house is reaching a wider audience.
Nevertheless, some prices remain very high. The highest prices for Gucci X The North Face, for example the parka, are 13% higher than the Italian company's usual prices. In this way, it can have it both ways, appealing to affluent consumers, especially in Asia, who are hungry for novelty and exclusivity through this unique limited edition offering, while also capturing the attention of new customers who might not otherwise have shown interest. Conversely, with this move upmarket, The North Face is enhancing its image, also capturing new customers.
It is clear that apart from these few more expensive pieces, Gucci does not follow the usual logic of collabs, where prices are generally higher than in the traditional collections of the houses. Louis Vuitton, on the other hand, follows the norm with a slightly higher average price in all categories of the Louis Vuitton x NBA collection. The only exception is accessories and tops, categories where Louis Vuitton's offering is usually broader with, for example, very expensive watches, which changes the basis for comparison.
As this Retviews study shows, in addition to the partners that they must choose in a targeted manner, luxury houses must also think about the right balance to establish in terms of price and range when they embark on a collaboration.
They should also be careful not to abuse the concept, as points out "Le luxe de demain, les nouvelles règles du jeu", a book written by Yves Hanania, Isabelle Musnik and Philippe Gaillochet. While collabs allow labels "to benefit from increased media exposure, to reach a different clientele, to offer new products or to test new business models, but also to boost their image", there is a risk: "weakening the desirability of a prestigious house when the latter, having become a brand, is then (over)exposed", warns the book.
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