Fashion Notebook

Lessons in Branding: Why Going Logo-less Might Be A Good Idea For Luxury Brands During The Recession

There's an interesting  article today in the New York Times' "Thursday
Styles" section.

No, no, read on! It's not another critique of an out-of-touch story on youth trends or pandering pitch about how great the rich are and why we, the not-so-rich should thank our lucky stars they exist. Our friends over at Marx Marvelous have that end covered pretty well.

Rather, today, we're calling out a piece about the absence of logos on Bottega Veneta's luxury sportswear.

The piece, which can be read in full here, looks at how the Italian luxury label has revamped itself without going the route of high-profile monogramming or logoing.

Within the article, journo Ruth La Ferla, extolls the virtues of creative director Tomas Maier's consistent attention to high quality goods that hit the real deal in luxury, rather than merely the perception of luxury, and how his actions have driven the brand to a $500 million annual business, thereby making it the second highest earner for parent Gucci Group.

And then our favorite luxurist, Milton Pedraza, CEO of The Luxury Institute, chimes in to tell La Ferla that during a recession, the rich "don’t want to be screaming luxury right now...They don’t want something flashy that everybody else has. They are looking for unique handcrafted things that can’t immediately be reinterpreted at every level of the marketplace.”

The thing about logos, as we've long felt, is that they can cut both ways. In fact, we've been thinking about our own logo, for Fashion Notebook, which you can check out, at right, but the tech guys haven't yet gotten around to installing it. And maybe, now, we're thinking that's a good thing.

But back to the relevance.

Taking Vuitton, for example, when one of perhaps mass-affluent or aspirational means has laid down the dollars for a fashion piece that is truly of excellent quality, not to mention name recognition, it's, we think, safe to assume that we'd like others to know it. After all, that monogram tells others that we care about quality, perhaps that  we're hip to hot or established names in the industry, and, let's be honest, that we could afford to purchase it. In a sense, we want everyone else to know what that handbag, dress, or accessory was worth, and, by proxy, that we're worth something as well.

The problem, of course, is logos also tell us what everyone else is worth, too. And if we see a bunch of Louis Vuitton monograms on my friends' purses, or luggage, shoes, or, god help us, something bigger and obviously more expensive than the piece we bought, suddenly, Vuitton just doesn't seem so special anymore.

This is to ignore the further complications that arise from knock-offs. If everyone on Canal Street is rocking the monogram, and for a mere percentage point of what we paid, why we'd have a fit and would feel somewhat obligated to inform everyone we saw that, well, no, ours is in fact, real and then go into a litany about the stitching and leather quality that, at best, wouldn't gain us any friends, and, at worst, would lose us those we already count in our ranks.

And let's not forget that this isn't, obviously, just a Vuitton problem. Many other luxury brands feature highly-identifiable logos, monograms, or signature patterns on their products that identify the brand with all the subtlety of a bull horn. Think about those brands you recognize within seconds on some of the products worn by your friends: Coach, Gucci, Burberry, Chanel, Marc Jacobs, Dolce & Gabanna, DSquared, etc. 

As far as the recession, the no-logo route is probably a good idea. After all, those who can afford luxury goods without batting an eye are usually so acclimated to that lifestyle that, well, they don't need to scream it, as Milton says, like the rest of us. And those customers are precisely the ones luxury brands need to be going after in times of serious economic downturns. Sound familiar? Yeah, we've said that before.

And we've also dished with Maier on his strategy. When we were writing that tome about the opportunities and potential pitfalls of lower-tier secondary collections for high-end designers, it was Maier who said (towards the end of the article) he would never consider such an extension because he felt that it would potentially overexposure of the handbag business that is the core of Bottega's sales.

"The philosophy of Bottega Veneta is to produce innovative designs with the highest quality materials and contemporary functionality," Maier told us at the time. "All of this comes with a cost that can't be recreated at a bridge level price."

What remains to be seen, however, is whether or not Mr. Maier's activities give the brand something of a glass ceiling when we're in economic boom times, and everyone is scrambling for top-end designer merchandise. Then again, at $500 million in annual sales, I don't think he's got anything to worry about.

The Luxury Market, The Recession and What Marketers Can Do About It

If you haven't checked it out already—and it seems many of you have since it's o ne of the most popular stories on our site this week—give a quick gloss to my story about mass affluent consumers retreating from the luxury market as we head into what analysts and the papers seems to be projecting as a certain American recession. Read the full story here. 

Raúl Martinez, CEO and  executive creative director over at AR New York (they've done worked for brands including Salvatore Ferragamo, Dolce & Gabbana, Yves Saint Laurent, Versace and the most recent ads for Valentino, post the namesake's well-publicized adieu, pictured at right) seemed to sum it up nicely.

“I think the downturn in the luxury-goods market is now trickling down to Europe and it’s been a shock to many over there," he told me. "For a while there’s been a sort of comfort-level that luxury brands have enjoyed. Consumer are cautious and luxury brands are in alert mode.”

It's an interesting time for sure, and many of the analysts and consultants I spoke to for this story told me that they see several key points emerging from the luxury market's stumble over the past few weeks:

1. That affected luxury brands were taken by surprise given that they underestimated how much of their growth over the past five years had been fueled by these mass affluent consumers;

2. That the first area where tightened budgets might force some changes will be in the marketing and advertising departments. (This is, of course, a general market theory as well, and can be extrapolated to areas far beyond the luxury market in specific.;

3. And that some of those tightened ad dollars could increasingly go towards online campaigns, which offer greater ROI than the traditional media (no big secret to anyone) and also have the additional benefit of global reach that could prompt sales in foreign markets, which are still a thriving area for luxury goods.

However, the problem is that luxury marketers will most likely not be making quick, dramatic changes to their traditional media buys.

As Pam Danziger, the head of Unity Marketing, a luxury consultancy based in Stevens, Pa., told me: "The idea that magazine and TV advertising will go away is ridiculous, but what will become more important is having a better understanding of the consumer they're looking at. It's becoming much more vertical...with some of these niche magazines providing more connection to [the luxury sector's] real target market."

This trend seemed to be confirmed by Jason Binn, CEO of Niche Media, New York. Unless you're part of the uber-wealthy for whom these magazines are as ubiquitous as McDonald's golden arches are for the rest of us, you've probably seen his titles—among them Gotham, Hamptons, Ocean Drive and Los Angeles Confidential—in the high dollar rooms you booked through the company for a recent conference in Vegas. I know that I never stay at The Hotel on my own dime.

Per Danizger's assertion, Binn's group offers luxury marketers access to the consumers who will buy their products regardless of recessionary woes, the kind of folks, who, to paraphrase a WWD headline a few days ago, are more concerned with getting their high heels wet waiting in a drizzle outside of Chanel's couture show, than they are about this "thing" called a recession.

The titles are distributed to a consumer base in which roughly 50% have annual household incomes of over $250,000, as well as liquid assets and homes each valued at over $1 million. The books are also distributed through Net Jets, the private jet company owned by Warren Buffet’s Berkshire Hathaway, where Binn says he reaches customers with an average net worth of $25 million. 

"[Luxury brands] are relying on us more than ever to vertically integrate their products and their services to these wealth markets that we’re targeting with these very unique readers and consumers that we have,” Binn told me. “The [vast majority of] mainstream consumer magazines can’t really deliver those kind of  economic demographics to these brands.”

Though he did acknowledge that luxury marketers were shifting some dollars to more non-traditional media, for his part, Martinez said that it's a time when these brands need to maintain a consistency in their messaging.

"At a time like this its more important than ever to communicate with a singular voice and a singular vision...I think the worst thing a brand can do is to deviate from who they truly are, because over the long-term consumer confidence will be lost," Martinez told me. "One thing I think we have seen over the last number of years is a movement away from the more emotional creative and towards a more product-centric messaging. More dollars are being applied to Resort and Pre-Fall which are becoming true collections in their own right, where wearability becomes much bigger.”

Looks like for now, we'll have to play a game of wait and see concerning how the ad market will change for luxury players. Saks Fifth Avenue, for example, has already said that they're looking into doing ads in foreign magazines to grab some more tourism dollars, something the luxe retailer has never done before, and soon they'll start offering international shipping on their e-commerce Web site.

Meanwhile, I'll be comparison shopping the Vogue ad pages to see if any of this media shift stuff pans out. Oh, and Vanity Fair, you're on my list too.