Top 3 Trends for Luxury Fashion Brand Rankings and Signing Up For Clubs
The Fashion Brand Positioning Function, or FPC, is a strategic assessment tool used by luxury brands to measure their performance in the fashion and retail markets. The methodology is simple: brands are ranked according to their profitability, brand equity and market share. Each element of the brand ranking methodology is based on previous year’s performance. The ranking also takes into consideration future predictions for revenue growth, profit margin, cost of capital and market share gains among other elements. In most cases, fashion weeks and/or exhibitions are the main factors used to measure brand profitability. Other measures used include supply chain management, pricing, promotional budgets, advertising and market promotion activities.
The main challenge luxury fashion brands face is how to achieve sustainable long term growth with limited financial means, whilst also maintaining loyalty amongst customers, and maintaining a high level of customer satisfaction. This can be a difficult task. Luxury brands look to partners and others in the fashion industry to help them develop and manage their brands.
The Fashion Brand Partner Ranking (F BR) concept is one way of identifying promising fashion brands. The concept is not a consumer based one. The brands are evaluated on various channels and across different parameters. The objective of the partnership is to create lasting value and sustainable growth in return investment. These partners then share in the growth and profits of the brand.
Luxury fashion brands have traditionally had lower visibility in comparison to other consumer brands. Their visibility and influence are generally reserved for the high end fashion segment. As a luxury fashion brand, one has to build a strong marketing, management and development infrastructure in order to compete effectively against other brands. A key strategy adopted by luxury fashion brands is to invest in a core group of creative designers. These designers are in a position to influence the overall design philosophy and direction of the brand. By appointing creative designers, luxury fashion brands hope to recruit and retain the most talented people in the industry.
Luxury brands face different market pressures than other products in the same segment. Their product is typically seen as being more exclusive and private compared to the products sold in the mass market segment. This results in increased brand loyalty and customer loyalty in the long run. For instance, one can look at the likes of Prada, Chanel, Louis Vuitton and Lanvin to name a few of the world’s top luxury brands. All these brands have one thing in common which is they have a massive fan base in the luxury segment of the world.
Now, it is easy to identify a luxury fashion brand. But what is harder to identify is whether the brand has a real chance of growing in the near future. There are some proven strategies to identify potential growth opportunities in the luxury fashion business. The answers lies in understanding how to leverage on existing consumer trends, identifying new consumer preferences and developing a strategy that drives growth in all three areas.
Let us take a look at each of these three areas in turn. Firstly, there is a consumer shift towards organic, natural, earth-friendly and recycled fashion. People have become conscious of their ecological footprint and are actively seeking out products that promote eco-friendliness. This is especially true in the case of luxury brands like Gucci, Dior and Chanel. These brands have made great efforts in the last few years to stay environmentally friendly and green and have set standards for other luxury fashion brands to follow.
Secondly, there is a change in purchasing behavior as a whole. Luxury consumers are buying products that offer true luxury while cutting down on the price. It is no longer trendy to splurge on a fancy watch. On the contrary, luxury fashion is becoming more practical as time goes by. Celebrities like Pharrell Williams have been very prominent examples of this transformation in luxury fashion.