The boss of LV reclaims the title of the world's richest person, thanks in part to it.
Key
- LVMH Group: The world's largest luxury goods group, which owns many well - known brands.
- Loewe: A Spanish luxury brand renowned for its leather goods and handicrafts. It has regained popularity in recent years through its youth - oriented strategy.
- Logo - free trend: Consumers are gradually preferring products without obvious brand logos, pursuing individuality and taste.
- Cost - performance ratio: When purchasing luxury goods, consumers pay more attention to the balance between product quality, design, and price.
- DTC channels: Sales channels where brands directly reach consumers, including online official websites, WeChat boutiques, and offline stores.
Abstract
Against the backdrop of the overall slowdown in the luxury goods market, the LVMH Group, thanks to the outstanding performance of its brand Loewe, helped its chairman, Bernard Arnault, regain the title of the world's richest person. Loewe has successfully attracted young consumers and achieved remarkable growth in performance through youth - oriented strategies, emphasis on handicrafts, and localized marketing. However, with the increase in brand awareness, Loewe also faces challenges such as the gradual disappearance of its niche label and cost - performance ratio challenges. This podcast deeply analyzes Loewe's rise and explores the transformation and challenges in the luxury goods industry under the new consumption trends, revealing how brands can maintain their vitality in the fierce market competition.
Insights
The content of this podcast reflects the profound transformation currently taking place in the luxury goods industry. Consumers' perception of brand value is changing. They are shifting from blindly pursuing big - logo products to focusing on the quality and personalized expression of the products themselves. Loewe's success story shows that even long - established luxury brands need to continuously innovate and adapt to market changes to stand out in the fierce competition. In addition, the importance of DTC channels is becoming increasingly prominent, and brands need to strengthen direct interaction with consumers to enhance brand loyalty.
Opinions
01 "Youth - orientation is the key to the rebirth of luxury brands"
Through innovative design, youth - oriented marketing strategies, and cooperation with influencers, Loewe has successfully overcome the brand aging crisis and attracted the attention of young consumers.
02 "Cost - performance ratio is an important factor influencing consumers' purchasing decisions"
Consumers are becoming more rational when buying luxury goods. They pay more attention to the balance between product quality, design, and price, and brand premium is no longer the only consideration.
03 "Niche branding is an effective means of differential competition for luxury brands"
In a market with severe homogenization, niche brands are more likely to attract specific consumer groups with their unique styles and personalized products and achieve rapid growth.
In - depth Analysis
LVMH Boss Reclaims the Title of World's Richest Person: Loewe's Rise and the Reshuffle of the Luxury Goods Industry
Against the backdrop of the overall slowdown in the luxury goods market, Bernard Arnault, the chairman and CEO of the LVMH Group, became the world's richest person again on January 28th. Behind this is the strong rise of Loewe, a brand under the LVMH Group. Loewe's success is not accidental. It is the result of its continuous efforts in youth - orientation, localization, and cost - performance ratio, and it also reflects a profound reshuffle taking place in the luxury goods industry.
The Slowdown of the Luxury Goods Market and the Accelerated Industry Reshuffle
In recent years, the global luxury goods market has shifted from recovery after the pandemic to a slowdown in growth. Bain & Company predicts that the global personal luxury goods market will perform weakly in 2024, with the year - on - year growth rate remaining in the low - to - mid single - digit range. In the Chinese market, although the consumption of luxury goods is still growing, the differentiation among brands is also intensifying. Some brands that have been popular for many years are losing their luster, while some relatively niche brands are coming to the forefront.
Luxury giants such as Kering Group and Burberry are facing pressure from declining revenues and downward - adjusted profit expectations. In contrast, the LVMH Group, with the help of Loewe, has achieved relatively good performance growth. In 2023, LVMH's revenue reached 86.15 billion euros, a year - on - year increase of 9 percentage points.
Loewe's Road to Success: Youth - orientation, Localization, and Cost - performance Ratio
Loewe's rise has not happened overnight but has been the result of long - term accumulation and transformation.
- Youth - oriented strategy: After being acquired by LVMH, Loewe remained in a mediocre state for a long time and was even once ridiculed as "a brand for parents". In 2013, after the new creative director joined Loewe, they continuously developed innovative and youth - friendly products and launched classic styles such as the Puzzle bag, successfully attracting a group of young fans.
- Localized marketing: Loewe attaches great importance to localization in the Chinese market in its marketing. For example, Loewe officially announced Yang Mi as its global brand ambassador and chose jade culture as the theme for its New Year series marketing, rather than the dragon element commonly used by other brands.
- Emphasis on handicrafts and cost - performance ratio: Loewe has always emphasized handicrafts, and its leather craftsmanship is well - recognized by consumers. Against the backdrop of consumers' increasing focus on cost - performance ratio, Loewe's product advantages have been further highlighted.
The Transformation of Luxury Goods Consumption Trends: Logo - free, Personalized, and Rational
Loewe's rise also reflects the transformation of luxury goods consumption trends.
- Logo - free trend: More and more consumers are abandoning brands with big logos and high public recognition, and advocating logo - free and niche brands.
- Personalization: Consumers are paying more and more attention to personalization and hope to express their unique taste and personality through the purchase of luxury goods.
- Rationalization: Consumers are becoming more rational when buying luxury goods. They pay more attention to the balance between product quality, design, and price, and brand premium is no longer the only consideration.
Challenges and Opportunities Faced by the Luxury Goods Industry
Under the new consumption trends, the luxury goods industry faces many challenges.
- Brand aging: Some established luxury brands are facing the problem of brand aging and need to attract young consumers through innovation and youth - oriented strategies.
- Cost - performance ratio challenge: Consumers are paying more and more attention to cost - performance ratio, and luxury brands need to balance the relationship between product quality, design, and price.
- Balance between niche and mass appeal: When a niche brand becomes very popular and reaches the peak of its cycle, it may be difficult to avoid becoming mainstream.
At the same time, the luxury goods industry also faces many opportunities.
- The rise of DTC channels: The rise of DTC channels provides luxury brands with more opportunities to directly interact with consumers, which helps to enhance brand loyalty.
- Personalized customization: As consumers' demand for personalization continues to increase, luxury brands can provide more personalized customization services to meet consumers' unique needs.
- Sustainable development: More and more consumers are starting to pay attention to sustainable development. Luxury brands can improve their brand image by using environmentally friendly materials and sustainable production methods.
Forward - looking Thinking
Loewe's success story provides a useful reference for the luxury goods industry. Under the new consumption trends, luxury brands need to continuously innovate and adapt to market changes to stand out in the fierce competition. In the future, the luxury goods industry will pay more attention to personalization, sustainable development, and digitalization. Only those brands that can seize opportunities and meet challenges can remain invincible in the future market competition. At the same time, we should also realize that the essence of luxury goods consumption is to satisfy people's longing for a better life, and brands should pay more attention to the quality and cultural connotation of the products themselves rather than excessive marketing and hype.