Consultant Uche C. Okonkwo shows why the worlds of luxury fashion and business tactics can go hand in hand, for the better good of both.
In the past, high-end fashion felt its classy niche was outside of business realities, but today's fashion brands and groups have embraced everything from consumer studies to e-commerce.
Fashion is now more than ever a hot topic in the luxury field, and not just for its creative outpouring. What interests today's luxury world is the business side of that glamorous field. One example of this is the new book from Paris-based strategy and management consultant and fashion expert Uche C. Okonkwo, Luxury Fashion Branding: Trends, Tactics, Techniques. Okonkwo's book is a timely analysis that addresses the business of luxury fashion from a strategic viewpoint. Vital current themes in the field are addressed, such as e-business and the new luxury, along with traditionally key questions in the luxury sector, such as consumer behavior, retailing approaches, and branding and market strategies. Okonkwo shows that fashion is not just about flounces and flash, but has a true business edge that cannot be given short shrift. She argues that it is, like it or not, part of modern business practices and must confront the realities of our technological age. Yaffa Assouline met with Okonkwo in Paris in order to discuss her thoughts on the matter.
Why did you write this book analyzing fashion?
Many reasons. First, because I have a passion for luxury fashion and also for business. And also because of the existing gap in the market for texts that analyze the business of luxury and not only creativity or design. I talked to a lot of professionals, and everyone told me, "It is true you never find any books on business fashion." It was a type of frustration for me.
Why only fashion?
For me, fashion is the core of the luxury business. It is true that we have luxury services like travel, automobiles, etc., but for me, fashion is really the summit of luxury, because what we wear is really the foundation of the consumption culture.
What has changed in this respect in the past five years?
A lot of things have changed, starting with e-commerce. I have a chapter on e-business, which I rewrote three times, because after the first draft, three months later a lot of things had changed, and I had to change all the description. I had to remove some sections, and I had to put in more analysis. This is one area that has been evolving very quickly in the luxury business. The luxury sector is beginning to wake up, to understand that the Internet is here to stay. When I started writing this section, a lot of brands told me, "We will never be on the Internet; we will never have a web site; we will never sell our products online – never ever." The analysis I made was based on that stage, yet three months later, six months later, things had changed dramatically.
Boo.com, the biggest disaster – a financial disaster, because it was well designed – was also important?
I used Boo to provide insight into why luxury e-business could potentially fail, because there are issues to do with the reluctance of this sector to adopt e-business.
Do you think it's dangerous that the big luxury brands would like to have the whole pyramid to themselves?
It depends on the way the strategy is applied. Today everyone speaks about the fact that luxury is now for the masses, but there is a danger in mixing luxury and non-luxury. Luxury is based on a foundation of originality, of craftsmanship, of precision, of tight control, of distribution and pricing. Look at it this way instead: it is a question of bringing more consumers to experience true luxury. True luxury brands should have codes that they never compromise, no matter what the product is. Marketing, branding, putting a brand name and a logo on products for the sake of it or not paying attention to the quality is very dangerous, because consumers are smart. Today the luxury consumer is very intelligent. They have comparison points; they know the value of the product they are getting. For example, in parts of the American market, in Asia, they appreciate the logo much more than perhaps in some markets in Europe. It depends on the market. What is most important these days is to diversify the design of different product categories, to have a design with a small logo, the same design, perhaps in another color for another market, with a larger logo. But for a luxury brand, having a strategy in which a product is made without any logo at all is something that may not work in all the markets.
So, each market has an identity, and for each market one has to think differently?
Yes. For example, the Japanese market in Asia is more mature than the Chinese. The Chinese market is in an introductory phase, while the Japanese market is in a growth phase, or almost mature, depending on the segments of the market within Japan. It is the same in the USA, where luxury consumption is in a growth phase. Europe is a mature market. The UK is a little bit different, because the portion of consumption is more similar to the US than the rest of continental Europe. Then we have a market like Russia or even the Middle East. In Dubai, the market is growing fast, but it's not a mature market yet. You cannot approach an introductory market the way you treat a mature market.
Yet luxury also puts a little distance between itself and the consumer. Are we coming back to this, too?
I think that, paradoxically, the most challenging area for luxury brands is the Internet. Many see Internet sales as an enemy. But it is not a competitor, it is a complementary channel. Consumers, for example, want to use the Internet, to get the information and then go to the store and buy. And some consumers go to the store, see the product, and then when they have time, they buy on the Internet.
A recent interesting phenomenon, though, is jewelers opening websites. This is interesting because you can buy without being intimidated by the shop, and you can buy exactly what you want.
You are right, the Internet removes the factor of intimidation. It provides the possibility for luxury consumers to interact with the brand, to view the products, to purchase the products – but what most brands have been unable to do is create the same kind of ambiance and atmosphere as in the store on the Internet. This is a pity for most brands, because the consumer wants to feel, to sense that when they are on the web site of a luxury brand, they are really in a special place. Let's say we have a very wealthy princess who lives in a small village in Scotland, who has a lot of money but there is no Boucheron or Cartier or Dior around. She has the Internet, she can do whatever she wants – buy, view, get information, etc. – but tomorrow, if she is on a trip to Paris, she will be very happy to come to the place Vendôme and go to the Boucheron store, and she will feel comfortable in that environment. Yet, unfortunately, most brands think the Internet is taking away their consumers – in fact, it is bringing more consumers to the store.
Because they have the information. You arrive informed, not as someone who does not know, or dare; you have more self assurance.
It makes the relationship between the consumer and the brand more intimate because the more the consumer is informed about the brand, the more they are going to decide, "I like this brand. I will stay with them, I will come back, or it is time to check what they have."
Intimidation is negative, so I think it is very important that Internet breaks the intimidation. Would you say this is true?
Yes. And here, I think we should talk about issues to do with managing luxury consumers, managing the relationship between the brand and the consumer.
You mean service?
Yes. The service that is provided in the store, on the phone, or provided to consumers perhaps during special events. How do luxury brands talk to their consumers? It is now about intimacy. Luxury consumers want brands to recognize them, want brands to bring them closer to them, want to have a real interaction with the luxury brands to show that they are important. And it is even more important for the brand, because it is an education, a process. The brand needs to guide them through the process of luxury consumption for the future, and how do you do this? By utilizing different techniques, methods or even technologies that help talk to consumers on a one-to-one basis. This is a very intimate way of communicating, because it is coming directly from the brand. The consumer feels special because he or she has received this from a brand that is not accessible to everybody.
It is also simple to customize the shopping experience according to what the consumer likes – and not just in terms of the product, but the way they like to shop. Really showing, demonstrating to the consumer that we know them, we know who you are, we recognize you and we will provide what you want the way you like it – that is the message luxury consumers are looking for today. Loyalty comes from a complete experience; the relationship, not just the products.
So the important thing is making all consumers feel like VIP's. Is that the way of the future?
The experience is what stays in the mind, the feeling, and this is what consumers attach to the brand. The product is important, but every day you can switch brands. It is the relationship, the service, and the intimacy that count. This is what consumers attach to the brands, and that is what will make them loyal.
Luxury has changed today. It's an industry; you can't turn back the clock and say, I'm closed, I don't want to make any more money. That doesn't exist anymore.
That is true. What happened 20 years ago is not applicable anymore. The market keeps evolving; we have to evolve into the market. Today, consumers want different things, they want different ways of shopping, of accessing brands, and the brands keep adapting. You are right that any brand that does not do this will stay behind while others move on.
To sum up the future of luxury, you might say it lies in service and knowing its customers. Nowadays, is there a future for small brands that don't have the means of communicating throughout the world?
Absolutely. Today, in the consumer market, we live in a connector's world. In the past it was word of mouth; now, the word of mouth factor can spread ten times faster, 20 times faster, because we have the technology, so for a brand that does not have the budget for advertising in a magazine, for example, it is not a big issue. But it is a question of adopting a technique that will create a voice and will spread the word of mouth through the Internet, through wider marketing. The Internet is so powerful today, it is amazing how quickly information travels. And international travel has evolved, so that it doesn't matter if the person is living in San Francisco and has heard about this brand in Paris – the next time they are in Paris, they will come and look for it.
In fact, luxury has become a trend, and not just a trend, a true industry. There are luxury congresses cropping up right and left. How can people working in luxury be "managed," so to speak?
Today there is a committee in the European Union called the Luxury Board, which was founded by the Luxury Institute and brings together luxury professionals to talk about how to manage human resources and how to do business, how to run a luxury business from the inside. Since I am not a member of this, I can't say how it works, but I believe the philosophy of the Luxury Board is based on the Internet.
What current opportunities exist in this new industry?
There has been a real explosion of opportunities. Now there is luxury marketing, there are conferences every month. Every two weeks, we receive information, proposals for partnerships, sponsorships, and speaking. It is a real industry. For us, it is very important to be associated with professionals – luxury professionals, who are not just professionals organizing things, but organizers who understand. They have real credibility when they speak about luxury tomorrow – they are the ones who know where things are headed.