How are they catching up to Fast Fashion brands?

Zara produces five times more clothing items per year than the traditional luxury fashion brands. These brands can’t follow the same business model due to exclusivity and creativity boundaries imposed by their own business model and customer needs.

With the continuous change in consumer behavior driven by Millenials, luxury brands are trying to speed up their production cycles by dropping more collection throughout the year and applying the “see-now-buy-now” approach, which consists on having the styles displayed on fashion shows when a brand drops a collection immediately available to be purchased online.

This approach has been criticized by some designers as “vulgar” since it models fast fashion brands production cycles, therefore decreasing the exclusivity of the brand items. Designers also claim that this approach will decrease designer creativity since it will rush designers to deliver more high quality items in shorter periods of time.

“Creating in-season capsule collections in addition to traditional seasonal collections only increases the demands on the designer. The end result could be a reduction in creativity and brand dilution.”

Deborah Weinswig, managing director at Fung Global Retail & Technology | Business Insider

• Traditional retail production process takes six months to release new collections.
• Luxury brands have to change their business model due to more demanding market needs.
• Instagram and the internet are a threat to these brands, since customers want to acquire what they see online immediately.
• Burberry is the pioneer brand in adopting “See now, but now” model in 2016.
• Burberry is the most pro-technology high end brand.

Targeting Millennials

• Millennials value personal satisfaction and purpose.
• This generation has less brand loyalty and willingness to buy luxury clothes.
• Millennials prefer online shopping, leading many brands to increase their e-commerce and online presence.

Luxury Brands still struggle to connect directly with consumers through the use of data analysis, due to the lack of social media interaction and online feedback they have with their customers. Most luxury retail still rely on their physical stores to sell most of their products. Luxury brands must have a closer relationship with their customers to understand their needs and make faster decisions regarding their production and collections. Technology is the bridge between brands and consumers, who are reshaping the industry through the use of social media.

E-commerce Revenue Analytics

Gucci

Louis Vuitton

Versace

Givenchy

Source: eCommerce DB