Is overexpansion cheapening luxury brands?
Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.
In Miami, "The Design District" — rising out of the ashes of the old Design District — is the new home of the highest of high-end luxury retailers: Louis Vuitton, Christian Louboutin, Lanvin, Hermes, Tom Ford, Bvlgari and others.
The surrounding area, while up-and-coming, in no way holds the target demographic for these stores. In fact, it’s not clear exactly where those people live or visit from. And 8.3 miles away sits Bal Harbour Shops, notable for having the highest sales per square foot of any mall in the world. Still, the Design District construction marches on.
I thought this clustering of high-end stores was something of a singularity until I visited Barcelona. Pàsseig de Gracia is the home of many of the very same shops.
Source: Miami Design District
And then there’s the model of saturation: Michael Kors. Of course the brand has a presence on the Design District and Pàsseig de Gracia. It also has a store in the Miami airport and unveiled a brand new shop on Carnival Cruise Lines’ ship Allure of the Seas (to name just two).
The ride through Barcelona left me in complete befuddlement. How can you have commoditized luxury?
The luxury shopper isn’t thinking about convenience wherever he or she may be.
"Our international customers are incredibly discerning and clued-up on product," Shadi Halliwell, group marketing and creative director of Harvey Nichols, told the Business of Fashion blog. "They are looking for one-off pieces, limited editions or bespoke items, and are prepared to pay a higher price point for this level of exclusivity."
The highest-end customer really doesn’t want a sea of sameness. They have the resources to buy the best. They want unique items. And, apparently, they want unique stores. There’s only one Harrod’s. Selfridge’s flagship location is unique, and it only has a handful of satellite locations. Harvey Nichols has a few more stores, but seems to mostly cater to Middle Eastern clientele in those few outlets.
So when does luxury expand to a point where it’s no longer interesting? After all, the brands mentioned at the start of this article are also available in high-end department stores like Saks, Neiman’s and others.
- Is Overexpansion Cheapening Luxury Brands? – RSR Research
- Over-Expansion Is Cheapening Luxury Brands’ Image – Forbes
- Miami Design District – website
- London Calling in Pre-Ramadan Rush – Business of Fashion
Do you see many luxury brands reaching market saturation with their retail expansion efforts? Do you think luxury shoppers are seeking more convenience at the expense of exclusivity?