What tricks do big luxury brands and businesses use to make you purchase items you have never even considered buying before?
How do luxury and non-luxury brands alike try to make you part with your hard earned cash?
What marketing tricks are being employed by corporations and global businesses to attract, engage and retain their prospective and existing consumer base?
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This youtube video is all about why I decided to return my most recent purchases and serves as a reminder that the items, goods, services you see EVERYWHERE online and across social media ARE NOT necessarily what you expect in real life. Enjoy!
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Collaborations such as Gucci x Balenciaga, Fendi x Versace, Tiffany x Supreme, Tiffany x Nike, Adidas with everyone (the biggest logo hoe) are proof of the relevance of this sector in the luxury industry.
In a luxury brand, the top 5 percent of customers provide 40 percent of the sales,” explains Milton Pedraza, CEO of Luxury Institute. “The next 15 percent of customers deliver the next 30 percent of sales. That’s the top 20 percent, who are true HNW and UHNW individuals… In total, they deliver a full 70 percent of sales…”
Luxury online sales reached 22% in 2021. As a result, 30% of all luxury sales will be online by 2025. Bain & Company forecasts that online sales will become the most effective channel for personal luxury goods by 2025.
Websites and mobile apps are the new dominant sales channels for most brands. Additionally, brands are increasingly driving sales through their websites. Direct online sales of luxury brands now account for 40%, showing how important Gen Z and Millennials have become for the industry.
Brands are increasingly using a variety of methods (via technology and online marketing combined) to target their existing and/or prospective consumer base. For example, below is a SMS message (personally delivered to me!) from Gucci Client Services promoting the opening of one of their new stores in London, UK 2023.
eCommerce will permeate each purchase and by 2025 will represent 25% of the market value. It will relegate the more “traditional” channels to the background. Also, 100% of luxury purchases will be influenced by digital interactions, including 50% of luxury purchases that will be enabled thanks to the use of virtual reality and mobile payments
Luxury brands must remain agile and understand the importance of a consumer-centric approach and personalised online experiences. On top of that, luxury needs to invest in a genuine commitment to sustainability, inclusion, and social responsibility.
Lyst Insights
To compile the results, global fashion search platform Lyst analyses the online shopping behaviour of more than nine million shoppers a month searching, browsing and buying fashion across 12,000 designers and stores online.
Mugler Vs Loewe Jeans
How is the Lyst Index relevant to a pair of jeans, or more specifically a pair of designer jeans by Mugler or Loewe? The formula behind The Lyst Index takes into account global Lyst and Google search data, conversion rates and sales, as well as brand and product social media mentions and engagement statistics worldwide over three months.
From Spring/Summer 2020 onwards, brands saw changing interest in trends and consumer habits during the midst of a global crisis. During this time, the pandemic was far from over, but consumers were in a very different mindset in the second quarter (of 2021) compared to the same period in 2020. With restrictions lifting and lockdown rules being relaxed, although marginally so, with more events and performances taking place, celebrities and influencers were a key force for driving demand (in luxury consumer ready-to-wear piece, accessories, SLGs, bags, footwear etc). Among this quarter’s hottest products were Mugler’s bodycon pieces, worn by Cardi B, Kylie Jenne, Doja Cat et al.
For instance according to Lyst fashion’s Hottest Brands and Products Q2 2021: Mugler sheer panel bodysuit
Mugler
First, below is a short timeline of how Mugler as a brand shot into prominence again in the 21st century after remaining dormant throughout the 80s and 90s:
2021 – budget increases during this time – due to L’Oreal’s acquisition of Mugler, Azzaro perfumes from Clarins Group, and therefore more being invested in design, marketing and sales by the French Cosmetics giant
2022 – have their biggest show to date a year later – via online campaigning and films
2023 – and successful launch and wild reception of Hi-Low two brand collaboration – the SS23 H&M and Mugler project
Before this time essentially the brand existed in the margins for many years. Now L’Oreal, the new owners, are trying to bring Mugler back to profitability – essentially adapting their marketing and sales agendas, methodologies and strategies to appeal to a younger generation, with a global pandemic forcing them to utilise technology and online promotion and sales to remain a competitive contender in the luxury fashion industry and luxury fashion space. Mugler thong, spiral leg jeans – they’re already one of the top rated pieces in my collection…
Loewe
Loewe first appears on the Lyst Index Hottest Brands List in Q3 2019. Killing Eve’s Jodie Comer was named as the face of Loewe’s SS ’20 campaign. The brand’s sneakers and popular wicker bags boosted demand during this quarter, pushing it into the Index’ hottest brands list for the first time.
Loewe features on the Lyst Index, which lists fashion’s hottest brands and products, during July to September 2022:
• Awarded the Loewe Foundation craft prize to Korean artist Dahye Jeong
• Linked up with Japanese clothing boutique GR8 to create FW22 menswear campaign
• Worn by Zendaya and Dua Lipa
Despite elevated inflation worldwide, tightening global financial conditions, slowing growth in some countries, and the adverse effects of climate change which continues to shape the global economic outlook, brands and corporations are still increasing the prices of their good and services, with Loewe not being an exception to these ubiquitous and deliberate business decisions evident in the luxury fashion sphere. See the brief ultra-nerdy-RRP-adjustment analysis below:
Product: Loewe Anagram Jeans
October 2021
Loewe anagram jeans – October 2021 [Q4] – RRP 550GBP
Loewe anagram jeans – August 2023 [Q3] – RRP 825GBP [22 months gap]
Mark up of exactly – 50%
StockX listed this between 705GBP – 840GBP – still looking at a 28% markup
Vestiaire Collective Collective – resale prices 1176.64GBP to 1206.56GBP
Loewe cropped anagram jeans – July 2023 [Q3] – RRP 725GBP
SS23
These are only 100 pounds less than the full length trouser leg anagram jeans so based on this logic, these cropped anagram jeans would have cost approx. 450GBP pounds around two years ago. Similarly and (more crucially) thinking ahead, if these cropped anagram jeans are a) still in production (or not?), b) still have a growing demand for them, alongside also taking in account c) the [assumed consistant and unchanged] rate of inflation of this product, the RRP of these jeans will be approx 1,088GBP in 2025.
However, regardless of how much these pieces, goods and services cost (and if you are a savvy consumer, avoiding paying full prices on these items would be a no-brainer) what indices are they using to measure the rate of inflation of their consumer products? (Side note: I am talking about Loewe as a brand specifically here, but this can be extended to Mugler, and any other brand which has a proven track record of consistant year-on-year exorbitant price adjustments of their goods, products and services such as Chanel, Hermès, Dior, Louis Vuitton etc).
As inflation is calculated by the change in prices of a basket of goods being measured, how are these brands setting the change of prices of their items? Is the rate of inflation of Loewe’s (or any brands) services and goods pegged against CPIH or RPI? ONS claim that RPI is a poor measure of inflation because at times it greatly overestimates and occasionally underestimates changes in consumer prices… or conversely is this a $$$ grab by these aforementioned brands as they know their pieces are highly sought after and they can, not so subtly, get away with it?
Since the pandemic, which caused unprecedented shut downs, supply chain issues, and increased demand for luxury goods, all the luxury houses have increased their prices multiple times each year. Therefore it is safe to assume that they will likely continue to do so in future.
Anyway, this blog gets extremely deep and nerdy over – fundamentally – two pairs of jeans (which I bought and subsequently returned) but I wanted this blog post and the related Youtube upload to be more than just standard haul content and almost serve as a reflective exercise to figure out why Skatalie 2.0 decided to make decisions which were very out of the ordinary (I blame online marketing, advertising & social media!) which could have resulted in being left in a seriously precarious situation – namely owning a questionable pair of over priced jeans with an extremely high cost per wear and causing a massive dent to my wallet.
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