Luxury brand repositioning a high-stakes game

Throughout my career leading global brands, ensuring that brand positioning resonates with the target audience and that the core brand promise is unique has always been a critical task. While some brands require minor recalibration, many others need a complete repositioning. Repositioning a brand in the luxury space is one of the most challenging tasks a company can undertake. Interestingly, when brands aspire to elevate their positioning, most fail. This raises the question: why? What can go wrong, and what are the critical success factors to avoid being among the many brands that execute a string of relaunches, weakening brand equity instead of strengthening it? Altering a brand's positioning can either reinvigorate its appeal or lead to an erosion of its core values, often with catastrophic results. One significant factor is a myopic internal perspective about the brand, its relative strength in the competitive set, and its desirability to clients. Organizations are typically convinced that their brands possess a competitive edge, but this inside-out view can lead to blind spots. Successful brand repositioning requires not only an inside-out perspective but also a significant outside-in perspective—the same one clients have. Let's explore the common mistakes luxury brands make during repositioning and delve into strategic insights on how to execute a successful transformation. Understanding the essence of luxury The first step in any repositioning project, especially one aimed at elevating a brand, must involve a deep understanding of what makes a brand luxurious from a client perspective. Too often, brands fall into the trap of focusing on superficial changes that add no client-centric value, such as updated logos, a new corporate identity, or adopting popular marketing buzzwords similar to those of other brands in their industry. I've never seen a logo update have any tangible impact on building brand equity or creating a stronger emotional connection with clients. However, creating a deeper emotional connection with clients is what unlocks desirability. Therefore, strengthening the understanding of the psychology behind luxury purchases is critical. The critical need for better storytelling In luxury, brand storytelling is everything. The brand is more important than the products. Products matter, but they must be an expression of the brand’s story. Brand storytelling is about communicating core values, connecting emotionally with clients, and inspiring them. This should be the main focus of any brand repositioning project. Luxury brands must avoid diluting their core values. Take Louis Vuitton, for example. Despite transitioning between several creative directors over the last decade, the brand’s core values were never weakened. Each creative director interpreted the values with utmost attention to the core. Creative executions changed, but the fundamental story—the art of travel—remained intact. This precise and well-executed storytelling is the enabler of Louis Vuitton’s unprecedented success. In contrast, Burberry has focused too much on product and logo changes over the last decade, failing to clarify the brand’s role to clients. In other words, Burberry never communicated its story. Simply selling variations of the famous check pattern or making references to London does not tell a story or inspire clients. Perhaps the worst-executed brand reset of recent times is unfolding at Gucci. In the past, I praised Gucci for being the benchmark in brand storytelling. It was provocative and inspiring—a brand about the art of unapologetic self-expression. After Alessandro Michele left, all references to the past were eliminated, and a new Gucci emerged—more sophisticated from a product perspective but without a soul, without a story. The financial results over the past two years confirm what happens when brands don’t tell a client-centric story but focus too much on product. Gucci’s problem isn’t the product; it’s the story, or the lack thereof. This is a cautionary tale for any brand undergoing a reset. Breaking with your story will alienate your loyal customer base. Avoiding the pitfalls of trend-chasing One of the biggest risks in repositioning is the temptation to chase trends at the expense of the brand's identity. As many brands try to connect with the next generation of clients, Gen Z, they often focus too much on short-term trends and don’t approach the new generation strategically. It’s critical to separate noise from fundamental developments. Aligning too closely with short-term trends can lead to a loss of brand distinctiveness and long-term relevance. While staying current is important, luxury brands must do so in a way that reinforces their unique value proposition rather than eroding it. Avoiding over-reliance on creative directors Creative directors play a crucial role in shaping a brand's aesthetic and vision. However, I’ve observed an over-reliance on a single individual and their following, especially in the fashion and jewelry worlds. This is risky. The departure or change of a creative director often leads to instability and confusion if the brand’s identity becomes too closely tied to that person’s vision. For instance, when Valentino hired Alessandro Michele, I mentioned that it would be critical for the brand to maintain its identity. However, his first creative visions looked more like what he did for Gucci rather than an evolution of Valentino. Consequently, social media was full of comments like “Valentino just became Vucci,” indicating that the brand’s identity might be lost. Luxury brands must ensure that their repositioning strategies are rooted in their core values and are not overly dependent on the creative direction of one person, regardless of how talented they are. This approach ensures continuity and resilience, even when leadership changes occur. Karl Lagerfeld was a genius in this aspect, able to work on several brands simultaneously, including Chanel and Fendi, while respecting the core values of each brand and keeping them relevant. Call to action Repositioning a luxury brand is a delicate balancing act that requires a clear vision, merging internal and external views, respect for the brand’s core values and heritage, and a deep understanding of its role for the target audience. By avoiding common pitfalls and focusing on authentic storytelling, reducing dependency on any single individual, and implementing client-centric strategies, luxury brands can successfully navigate the complex task of repositioning and emerge stronger, more relevant, and more desirable in the eyes of their discerning clients. Luxury brands must approach the repositioning process with caution, ensuring that every decision is guided by a commitment to enhancing their core values. For those who do it right, the rewards can be substantial: creating a brand story that not only resonates with younger audiences but also deepens its connection with loyal customers. Are you ready? This is an opinion piece by Daniel Langer, CEO of Équité, recognized as one of the “Global Top Five Luxury Key Opinion Leaders to Watch.” He serves as an executive professor of luxury strategy and pricing at Pepperdine University in Malibu and as a professor of luxury at NYU, New York. Daniel has authored best-selling books on luxury management in English and Chinese, and is a respected global keynote speaker. Daniel conducts masterclasses on various luxury topics across the world. As a luxury expert featured on Bloomberg TV, Forbes, The Economist, and others; Daniel holds an MBA and a Ph.D. in luxury management, and has received education from Harvard Business School. Sign up for his masterclasses at the Jing Academy. Follow him: LinkedIn and Instagram. All opinions expressed in the column are his own and do not reflect the official position of Jing Daily.

Luxury brand repositioning a high-stakes game

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Published August 12, 2024

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Luxury brand repositioning a high-stakes game