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brand extension
How does this make the big houses stand out?

Nowadays, fashion and luxury brands are looking to offer a complete experience to their customers by expanding their activities. The famous French fashion house Louis Vuitton, will soon celebrate art and gastronomy by opening a cultural and gourmet spot in the heart of Paris. The iconic Swiss watch brand, Jaeger-LeCoultre, also opened a café in Zurich less than two weeks ago, to offer its customers a multi-sensory experience promoting the brand's iconic Reverso watch. As for the Stockholm-based brand, Acné Studio surprised us by celebrating the American artist Larry Stanton. The company created an exhibition featuring original drawings and films. The exhibition, which took place in a kiosk in Milan, has attracted the attention of the art world and has already been a great success. So why do luxury brands need to diversify themselves and be active in other sectors?

It's true that it's debatable whether a dining experience can have a positive effect on a brand's retail sales in the long run. But, what is certain is that these experiences allow a wide range of consumers to access the experience, without having to spend hundreds of francs on a handbag. What remains very important for the big houses is not to lose their exclusivity. Indeed, brand extensions can be unsuccessful if they make the brand too accessible by risking the value of the company.

Brand extensions for large luxury houses have become a fundamental part of their business models. Indeed, it has allowed them to seize new business opportunities and reach more consumers. So, what are the areas that the big houses are trying to exploit?

Hotels and restaurants. The Bulgari brand is the perfect example of a luxury brand that has moved into the hospitality sector. Indeed, the Italian house has seven hotels and numerous restaurants in capitals around the world. In addition, five other establishments will open, starting in 2023. The cities of Rome, Los Angeles and Tokyo will host the Bulgari hotel line. The rates of these hotels are among the highest in the market. They offer their guests not only luxury rooms, but also opulent spas, upscale restaurants and breathtaking views. A personalized customer service, a total immersion in line with the brand image, and a sense of exclusivity allow the brand to increase its overall value and positively influence the perception of its customers. What is certain is that it won't be long before other brands follow in Bulgari's footsteps by creating a hospitality experience.

Virtual reality experiences. As technology rapidly evolves, grows in complexity and multiplies, luxury brands are not short of ways to tame it. Augmented reality has been a widely used tool. Several Italian fashion giants participated in Art Basel Miami 2022, which took place in early December. Giorgi Armani unveiled a non-gendered capsule collection called LOVE. By scanning the QR code that accompanies each statue in the collection, attendees had the ability to animate the animal pairs and follow them through an exciting augmented reality journey. This creates a truly interactive experience. What's also interesting to note is that the latest Metaverse Fashion Trend Report from Roblox, published in early November, tells us that Generation Z now values virtual fashion as much as physical or real fashion.

Art shows. Over the years, countless brands have chosen to extend their brands via art exhibitions in fine art museums. Chanel and its eternal love affair with the Palais Galliera; Alaïa, which exhibits its creations at its own foundation in Paris or Schiaparelli, honors the bold and inspiring works of Elsa at the Musée des Arts Décoratifs; fashion brands are not the only ones to exhibit their wares in artistic settings. Indeed, the jewellery brand Tiffany & Co. celebrated its 150th anniversary in London with an exhibition dedicated to its history, craftsmanship and creativity. This adds great value to the image of the house and maintains a perception of exclusivity and high value.

NFTs. NFTs, non-fungible tokens that are invading the world of technology, are fully digital assets that can be bought and sold on an online marketplace. However, few luxury brands have yet taken the plunge... That's not to say the most influential brand of 2022: Gucci. The house has launched digital shoes to buy with the virtual sneaker app Wanna. The sneakers can be purchased in the app, with a pack of 25 pairs costing about $12. The sneakers have no real-life equivalent, so the only source of value for consumers is to try them on digitally through their camera lens. The Swiss watchmaking pioneer wants to catch up by increasing its involvement in the sector. Indeed, Rolex filed trademark applications on the subjects of NFTs, cryptocurrencies and the metaverse last month. What do the luxury brands have in store for us regarding the main technological shift, i.e. NFTs?

To conclude, there is no doubt that when purchasing a luxury item, part of the high price tag represents the experience that comes with the purchase. Luxury brands are always looking for experiences to enhance the retail experience; hospitality, dining, art or even leveraging technology. What are the future brand extensions that will have a significant impact on not only the customer's perception of the company, but also its overall value?

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