The noughties

The luxury fashion terrain has undergone significant developments so far in the noughties. The decade was ushered in with the negative impact of the dotcom crash of the late 1990s and early 2000s, which led luxury brands to develop an aversion to e-commerce at the beginning of the decade. LVMH, however, changed this stance with the launching of an e-retail company, elux-ury.com, which sold products from its brands, Louis Vuitton, Christian Dior, Donna Karan and several other internal and external brands in the US market. The unexpected success of eluxury.com led to the 2005 launch of e-retail operations in France and the United Kingdom for LVMH brands like Louis Vuitton and Christian Dior. Eluxury.com also spurred competitor luxury brands like Gucci, Hermès and Giorgio Armani to adopt e-retail. However, there remains a continuous debate among several luxury brands over the adoption of e-retail. The main concern of the luxury brands that are reluctant to adopt e-retail such as Chanel, is the dilution of the 'exclusive' and 'prestige' attributes of their brands, on the Internet. The advancement of e-retail strategies, which includes tactics for enhancing a brand's image and replicating a prestigious atmosphere online, however, invalidates this viewpoint.

An additional development in the luxury fashion sector since the beginning of this decade is the adoption of several non-standard strategies in product development, branding and retailing. These strategies include product extension in traditionally non-luxury goods divisions like furniture, restaurants and hotels; co-branding exercises with both luxury and non-luxury brands; and product discounting and retail outlet shopping villages. These strategies arose as a result of the current rife competition among luxury brands and the changing needs of luxury consumers.

The most visible and dramatic change of the decade has, however, been with the luxury consumer. The consumer landscape has undergone such a sweeping transformation that the existence of a typical 'luxury consumer' has been brought into question. Consumers that currently purchase luxury goods are now well-informed, individualistic, demanding and above all no longer loyal to a single brand. The change in consumers was brought about by several factors like the Internet, globalization, the advent of mass luxury, immigration, global wealth creation opportunities, the prominence of mass fashion brands, the emergence of new markets, the influence of digital television and the extension of luxury to lifestyle brands. As I write, several luxury brands are currently in the process of understanding who their consumers currently are and how to satisfy their needs.

The noughties has so far also been the decade of celebrity worship. Celebrities have greatly influenced consumers in this decade. International stars like Madonna, Beyoncé and Sara Jessica Parker have become more influential role models for consumers than political figures like Tony Blair and George Bush. This phenomenon has been prodded once again by advanced information and communications technology, including the Internet and Digital television. Global cult television shows like Sex & The City and movies like The Devil Wears Prada, which have fashion undertones, have become reference points for fashion consumers. Also several Reality Television shows in different parts of the world have encouraged the elevation of the celebrity status and the desire of consumers to become stars themselves. The implication is that luxury consumers crave personal attention through products and services, from luxury brands and expect to be treated as stars. As a result, there has been a wide adoption of the celebrity endorsement strategy in luxury goods advertising and communications. Luxury brands, however, have yet to adopt personalized services as a core aspect of their offerings, to satisfy the desire that consumers have to be treated as stars themselves.

The mass fashion brands like Zara, H&M and Top Shop have also risen in eminence and influence this decade. They have devised effective strategies that enable them to compete with luxury brands for the same consumers. These mass brands have spurred fashion phenomena like fast fashion, throwaway fashion and the democratization of luxury presented extensively in Chapter 7. They have also contributed significantly to the attitude change of luxury consumers who have also become their own stylists.

The market environment of the noughties has also steered towards unprecedented development in the globalization of luxury brands. This has been spurred by the continuous influence of the Internet and the emergence of new markets like China, Russia and India. Consequently, several luxury brands have launched rapid global expansion plans and many luxury brands now have more stores in some particular foreign countries than in their home countries. For example, American brand Coach has more than 100 stores in Japan alone. Other brands like Louis Vuitton and Giorgio Armani have launched aggressive expansions plans in several new markets.

On the level of market competition, the noughties has also seen great advancement in the concept of branding strategy as a core business aspect. The development has been most visible in the process of creating and managing the brand value as a company's asset. Great emphasis has been placed on the financial returns that a company accrues through its brand's asset. As a result, several luxury brands have made brand management central to their corporate strategies. In other words, every strategy adopted is measured against its role in the protection of the brand. The prominence of the intangible brand asset was highlighted through the annual Global Brands Scoreboard, conducted by brand consultancy company Interbrand and published by Businessweek magazine. The luxury brands that have featured in the scoreboard include Louis Vuitton, Gucci, Chanel and Hermès, among others.

An additional noteworthy emerging occurrence of the noughties is the advancement of several British luxury brands and fashion designers. While the 1990s ushered in an era of luxury fashion branding adoption in Britain, the noughties has been a decade of visible success for the British luxury brands like Jimmy Choo, Burberry, Mulberry, Ozwald Boateng, Stella McCartney, Alexander McQueen, Matthew Williamson, John Galliano and Alice Temperley, among others.

Finally, the noughties has also witnessed growth in the luxury services sub-sector. In addition to Luxury Briefing journal, which was launched in 1996, several companies that cater to the needs of luxury companies and luxury consumers alike have emerged. These include companies specializing in trend tracking, consumer insights, style reporting, exclusive clubs and private concierge services and product loaning, exchanges and auctioning.

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