Fashion Business Strategies and Trends

Introduction to Fashion and Luxury

• Fashion communicates social status, cultural values, and individual expression through non-verbal communication.
• Luxury focuses on exclusivity and timelessness, while fashion reflects evolving trends.
• Fashion trends are influenced by media, arts, and sociocultural evolution, reflecting how industries evolve.
• Trends are a form of planned obsolescence, needing to be regularly replaced.
• Trickle-down theory: trends start among the upper class and move down to the masses.
• Trickle-up theory: trends begin with lower-income or younger groups, moving upward.
• Trickle-across theory: fashion moves horizontally between similar social levels.
• Often spread by social media and influencers.
• "Dream Factor": Fashion communicates an image that entices consumers through emotional and visual storytelling.

Business Models in Fashion and Luxury

• Fashion reflects current trends and is accessible to a broader audience.
• Luxury emphasizes exclusivity, craftsmanship, and timeless value.
• Fashion pyramid demonstrates different brands based on price, quality and image.
• Sustainable Fashion is an emerging trend due to environmental concerns.
• Sustainable Fashion business models include Luxury brands, premium brands, and fast fashion retailers.
• Business model components include value proposition, client segment, value chain and revenue/governance model.
• Key success factors in luxury include experience, heritage, and outstanding quality.

Risk of Brand Dilution

• Fashion Designers often cover multiple segments.
• Premium Brands are primarily marketing-driven, operating between luxury and mass markets.
• Retailers are leveraging technological innovations for effective value chains.
• Direct-to-Consumer (D2C) models bypass traditional retail and directly connect with consumers.

Brand Management in Fashion

• A brand is an asset defined by consumer associations.
• Brand equity is the value a brand adds to a product based on perception.
• Tangible associations include visual language (name, logo, colors).
• Emotional associations are feelings and identities evoked by the brand.
• Trademark is legal protection of a brand, preventing its use by others.
• Differentiation creates a unique value proposition.
• Differentiation strategies include unique designs, brand imagery, or product quality
• Primary sources of competitive advantage include differentiation of complementary services, image, or quality.

The Brand Signature

• Brand signature combines heritage, style, communication, and retail identity.
• Stylistic identity encompasses distinctive codes of fabrics, textures, colors, and silhouettes.
• Communication identity refers to tone of voice, media, and models used to communicate messages.
• Retail identity involves the physical store experience, layout, lighting, and service.
• Heritage includes traditions, mythology, and history, building trust and loyalty.

Luxury and Masstige

• Experiential luxury focuses on the overall experience, rather than only the product.
• Sustainable luxury incorporates environmentally friendly practices.
• Digital luxury emphasizes online presence and digital marketing strategies.
• Uber luxury is extremely exclusive while Attainable luxury is more affordable.
• Luxury evolution is from exclusivity to diffusion. Luxury products are aimed at broad audiences.

Masstige

• Masstige blends mass-market and prestige elements, often offering luxury products at affordable prices.
• Masstige brands often leverage designer collaborations or high-profile marketing partnerships.

Nation Branding in Fashion: French Model

• France's nation branding is built on art, innovation, tradition, and individuality.
• Couture and accessories are important elements impacting the image and prestige of French fashion.
• The role of haute couture is significant as it's a display of artistry associated with prestige, heritage, and exclusivity.

The Italian Model

• Italian fashion emphasizes beauty, sensuality, and craftsmanship.
• It integrates social values, art, and culture.
• Designer-entrepreneurs have played an important role.
• The fashion pipeline represents a strong relationship between different sectors within the industry.

Fast Fashion and its Challenges (Make-to-Order vs. Make-to-Stock)

• Fast fashion relies on make-to-stock for rapid production.
• Make-to-order manufacturing involves producing goods only after receiving orders from clients.
• Make-to-stock manufacturing creates goods in advance based on expected sales.

Vertical Integration

• Vertical integration refers to control over the entire production process from product design to distribution.
• Companies like Zara have vertically integrated the production processes, enabling them to adapt quickly to consumer trends.

Ingredient Branding

• Emphasizes the value of components or materials used in the product, for example, the use of recycled or organic materials.
• Ingredient branding seeks to increase consumers' awareness of the components in products.

Sustainable Fashion

• Sustainable fashion considers ethical treatment of workers, environmental impact, and economic viability.
• Consumers increasingly prioritize these factors when making purchasing decisions.
• Sustainable fashion practices focus on eco-friendly fabric choices, minimizing waste, and fair labor practices.

Stylistic Identity and Merchandising

• Style, stylistic identity, and seasonal codes determine the brand identity and strategy.
• The style of a brand should be unique. Seasonal codes represent a stylistic identity that is communicated with temporary elements.

Collection Development and Structure

• Collection architecture specifies the collection structure to include pre-collections, main collections, and flash offerings.
• The product segmentation includes basic (low-margin, high-volume products), core (mid-priced products), and image (high-priced products).

The Beauty Industry

• The beauty industry is a diverse and significant global market.
• It includes various product categories like perfumes, makeup, skincare and cosmetics.
• Consumer behavior and trends are influenced by various factors such as social media, fashion, and cultural preferences.

Omnichannel Strategy and CRM

• Omnichannel strategy uses multiple channels to interact with customers and increase brand awareness and loyalty.
• CRM (Customer Relationship Management) system collects customer data and interactions for fostering long-term relationships.
• Customer advisors use CRM data to provide personalized experiences.

Digital Transformation in Fashion Communications

• Digital platforms are increasingly important in fashion communication.
• Fashion brands use social media, e-commerce, and user-generated content to engage with customers.
• Digital transformation enhances brand identity and memorability among consumers.

Ray-Ban Disruption

• Ray-Ban's turnaround showcases the importance of innovative strategies and new management approaches when a brand experiences decline.
• It highlights the potential for a company's turnaround with a complete shift in strategy.

Test your knowledge on the distinctions between fashion and luxury, the evolution of trends, and the roles within fashion business models. This quiz also explores the concepts of customer relationship management, sustainability, and the economic models shaping the industry today.