Savannah College of Art and Design LXFM730 Winter 2017 Professor Alessandro Cannata Lauren Lockhart Kate Dingwall Katharina Wittfeld Malvika Mehta
Introduction Executive Summary Chanel: A History Mission Statement
contents
SWOT Analysis Market 2050 Target Consumer 2050 Products and Value Proposition 2050
2050 5 How will wearable technologies impact the haute couture and luxury accessories sector in 35 years?
Ever since its inception in 1918, Chanel has carried an extravagant history as one of the largest and most recognizable powers in the luxury world. The growing expansion of the digital world, however, has caused many to wonder: what will the historic house of Chanel look like in the year 2050? With this in mind, both the current climate and the future outlook for the wearables sector shall be investigated in order to develop a proposal for Chanel’s possible place in the haute couture and luxury sectors of 2050. The research is focused three key areas that best suit Chanel’s integration of technology into its haute couture strategy: the product, the production, and the service. To further define these key areas, many factors have been considered, including the luxury consumer and market of the future, the role of biotechnology and 3D printing, the changing definition of haute couture, and the importance of Chanel’s rich brand history and strong brand equity. Together, these concepts will shape the forecast of how Chanel characterizes haute couture in the future.
Welcome to Chanel 2050.
EXECUTIVE
/
One of the most iconic luxury brands in the world, Chanel embodies the art of the paradox: beautiful yet practical. Stylish yet comfortable. Elegant yet exuberant. Steeped in the heritage of Gabrielle “Coco” Chanel while unceasingly innovating under the helm of Karl Lagerfeld, Chanel expertly balances the luxury contradiction between timeless and cutting edge. Looking towards the future, the evolution of the luxury goods industry—specifically, its crown jewel of haute couture—is both intriguing and unpredictable. This report analyzes the forecast of haute couture in 2050 and envisions how Chanel will maintain its rich tradition while adapting to an increasingly high-tech future.
SUMMARY
A market analysis of the year 2050 provides insight into the future landscape of luxury. With the growing wealth gap between the upper and lower classes, the luxury market is predicted to embrace a larger consumer base. The rise of emerging markets, particularly with the BRIC countries, further indicates a greater global influence on luxury marketing and distribution in the decades to come. The definition of haute couture continues to evolve with time. The induction of two nontraditional designers—Iris van Herpen and Vetements—into the Chambre Syndicale de la Haute Couture blurs the once stringent rules on what classifies haute couture. As technology advances with time through virtual and augmented reality, biotechnology, and 3-D printing, so will the time-honored traditions of haute couture production. 2050 will welcome a new generation of consumers to the market: Generation Alpha. Much like its Millennial and Generation Z predecessors, Generation Alpha brings with it unique attitudes and behaviors that will affect the way luxury is consumed. For Chanel in 2050, its legendary heritage will fuse with digital innovation. Haute couture garments will celebrate concepts essential to the 2050 luxury consumer: social connectivity, exhibitionism, customization, and gender fluidity. It will communicate a core message iconic to Chanel: “Choose audacity, desire beauty, and be yourself—in the image of Gabrielle.” It will embody the art of the paradox on which Chanel was originally founded. The strategy for adapting Chanel haute couture to the future includes acquiring a technology atelier, increasing distribution points in emerging markets, reconciling traditional luxury marketing with growing technology usage, and thoughtfully appointing a new successor following Karl Lagerfeld. A carefully crafted marketing mix for Chanel haute couture in 2050 will also be presented.
Chanel 2050 brings with it a new paradox, where the past meets the future in beautiful harmony.
11
CHANEL A HISTORY
In 1883, Gabrielle “Coco” Chanel was born in Saumur, France. After her mother died and her father abandoned her and her siblings, Chanel spent most of her youth growing up in a convent orphanage. From an early age, Chanel drew inspiration from the paradoxes surrounding her: the austerity of the religious life juxtaposed against the ornate architecture and stained glass of the cathedrals. These paradoxes would eventually transform into the iconic Chanel aesthetic of the future designer. Chanel opened her couture house in 1918 at 31 Rue Cambon in Paris. Less than one year later, the Treaty of Versailles was signed, effectively ending World War I in Europe. From the turmoil that emerged post-war came a revival in arts and culture that greatly influenced the identity of the Chanel brand. Much like the Modernist art movement that focused on functionality and materiality, Chanel designed garments that celebrated simplicity and utility over frivolity and excess. From here on, the house of Chanel would embody the artful balance between real and fake, extravagance and ease, tradition and rebellion.
From the creation of Chanel No. 5 in 1921—the first perfume created from artificial fragrances—to the introduction of the Chanel suit in 1924—a garment that married masculine elements with feminine design—the Chanel brand pioneered innovation in haute couture. Each item celebrates women by empowering them to do anything they want through fashion. Over the following decades, more iconic Chanel designs emerged: the tweed jacket, the 2.55 bag, and the two-toned shoe. These coveted items helped define timeless style and craft the legacy of the brand. When Coco Chanel passed away in 1971, many wondered how the brand would shift. In 1983, the house of Chanel found its answer when Karl Lagerfeld was appointed as the chief designer. Since then, Lagerfeld has progressed the Chanel aesthetic into the modern age while maintaining the brand’s heritage and signature style that Coco Chanel ignited across the world so many years before. As the brand adapts for the future, one thing is for sure: Coco’s rebellious spirit and penchant for the paradoxes in life will carry forward.
statement
MISSION/
To be the Ultimate House of Luxury, defining style and creating desire, now and forever
threats
opportunities
weaknesses
Strengths
Pioneer of prĂŞt-ĂĄ-porter and Haute Couture Rich brand heritage Classic and timeless design Premier craftsmanship Strong brand equity Star designers Instant star brand recognition Showmanship Recognizable logo
Expanding into emerging markets Capturing younger generation Using brand recognition to boost innovation
High price limits the potential customers Distinct design could lower brand loyalty Private ownership increases risk
The counterfeit market Populux imitation Economic instability Maintaining brand image after Karl Lagerfeld Becoming irrelevant in tech-driven world
market overview market size growth potential Competitive landscape Core competencies competitve advantages Key success factors
LUXURY MARKET LUXURY MARKET
CURRENT
2050
According to Bain & Co., the market size for personal luxury goods in 2016 sits at a total of $263.4 billion. According to the report, luxury goods include clothing, leather goods and beauty and fragrances. Chanel’s current market share in terms of sales is estimated at $5.2 billion. After a relatively strong growth over the past two decades (except for the financial crisis years), the current period of flat growth of just 1% appears to be the new normal for luxury goods. A shift is seen in Asia-Pacific slowly becoming the largest market for luxury goods. This shift is seen with the region already becoming the largest market for Prada and Gucci expecting China to be its number one market in the next five years.
At $705 million, the couture market represents 1% of the luxury fashion apparel market. According to a 2015 report by ultra high net worth (UHNW)-focused research firm Wealth-X, 26,000 or 20 percent of the world’s UHNW individuals now reside in Asia-Pacific. Although Americans appear to dominate the client lists (they also house 49 percent of the world’s UHNWIs), that dominance is eroding. This geographical shift will only become more pronounced in the coming years, and with it, the growing demand for couturiers that speak to global as well as European tastes.
As income levels for the upper middle class and the upper class increase by almost six times of what they are today, discretionary spending will rise rapidly. There will also be a consumer revolution in terms of the emerging consumers changing global demand. The global clothing demand will be transformed with the emerging world accounting for 57% of the total sales versus the 35% today. China, India, the Philippines and Malaysia see a 5% annual compound growth rate in the clothing and footwear sectors between now and 2050. With the East becoming the primary consumers instead of the producers, it would be an interesting shift in the production sector with a probability of production of clothing not being limited to Asia Pacific anymore. In terms of haute couture, the changing faces attending Paris' couture week are intrinsically linked to the changing faces of global wealth. With the shift in ultra-high net worth individuals from USA to China, the demand for couturiers that speak to global tastes will increase too.
COMPETITIVE LANDSCAPE
Uncertain Long-Term Potential The following designers have eponymous couture collection very much defined by the personality of the star designer. Given the age of the designers, we don’t see them being alive long enough to see 2050, which leads us to question the power of the brand sans the inaugural designer. If we look to the history of the couture market, many houses have seen the couture lines shuttered after the retirement or death, like Pierre Cardin, Andre Courreges, Ted Lapidus, of the lead designer. However, we do note that Elie Saab sits at a speculative intersection. The brand is currently thriving in the middle eastern market. If the brand is able to acquire a designer who is interested in couture after the death of Saab, there may be hope for the brand after all. Viktor&Rolf Alexandre Vauthier Jean Paul Gaultier Elie Saab Versace
Current Couturiers who offer Long-Term Potential Valentino: Founded in 1960 by Valentino Garavani, Aesthetic looks to tulle, embroidery applique on overtly feminine, almost fairy-tale-esque gowns. The couture section is heavily rooted the brand is in history, and has little to no embracement of technology, but the RTW division has been quick to adopt technology and innovations to cater to millennial tendencies. Schiaparelli: One of the oldest couture houses, started by Elsa Schiaparelli at the same time as Coco Chanel. Schiaparelli died in 1973, but her surrealist collections have been successfully adopted by several designers since.
IRIS VAN HERPEN
Maison Margiela: Initially launched by Martin Margiela, Maison Margiela is a heavily-conceptual brand. After the namesake designer left the brand, it was quickly taken over by Jean Paul Gaultier. The house has been known to use odd and found materials, as well as out-of-the-ordinary concepts, so it makes a great candidate for the adoption of technology.
DIOR
MAiSON margiela
Vetements: Vetements, designed by wunderkind Demna Gvasalia, reinterprets the definition of couture, using specialized brands for certain aspects of the collection (like Levis for denim, Manolo Blahnik for footwear ar), to create a collaborative collection. Instead of gowns, or other more traditional couture offerings, the product offerings are heavily rooted in streetwear. By allowing Vetements to show, the Chambre Syndicale de la Haute Couture is redefining the traditional restrictions of haute couture, allowing opportunities for future integration of technology.
GIVENCHY vetements
Zuhair Murad: Namesake collection after Zuhair Murad. The collections tend to be ostentatious red carpet offerings. While Murad himself may not live to see 2050, the glitterati red-carpet designs could easily be taken over by a protégé. Iris van Herpen: Iris Van Herpen is a young Dutch designer who explores the capabilities of technology and biotechnology in her collections. Van Herpen, who is currently 32, has years of opportunity in the couture industry. Dior: Dior, currently under the LVMH umbrella, was founded by Christian Dior in 1946. Dior’s couture offerings are continuously reinvented with each new designer who fills the role of creative director – from futuristic ladylike silhouettes with Raf Simons, heavily rooted in the original design sentiments of Christian Dior.More recently, Maria Grazia Chiuri has taken over the helm, designing tulle-filled ballgowns.With LVMH's constant push for creativity and Dior's ability to adapt to the visions of new creative directors, the couture division has strong potential. Armani Privé: The couture leg of the massive house of Armani, that operates across many luxury gradients. But the future of the brand relies heavily on the brand’s ability to keep saliency after Giorgio Armani dies. Givenchy: French luxury house, founded in 1927 by Hubert Givenchy. Most recent designer Riccardo Tisci breathed a new life into the brand, creating designs that are heavily rooted into the zeitgeist.
VALENTINO
ZUHAIR MURAD SCHIaparelli
ARMANI PRIVE
To Consider in the Competitive Landscape Does luxury have competitors? Considering that couture is about uniqueness, craftsmanship, and artistry, can couture houses even compare themselves to other couture houses?
What will technology’s role in couture be? We considered if couturiers would be quick to pick up on the integration of technology. If designers are able to resolve the disfluency between traditional couture and technology, will there be an arms race to get patents/newest technology?
What will the threat of new brands be? What will the threat of new brands be? As we’ve noted in our research, Generation Alpha is a motivated generation, predicted to be the most entrepreneurial generation. Will this entrepreneurial spirit translate into the couture world? Will we see new brands opening shop?
What will the definition of couture in 2050 be? The input of Vetements and Iris Van Herpen into the couture stratosphere was a mark that the Syndicale de la Haute Couture is willing to change or reinterpret the traditional definition of couture. By definition, a house must have fifteen or more in-house artisans, show biannually at the Paris-based Couture Week, and must create custom garments. These requirements have historically been defined as requiring artisans to work by hand, utilizing skilled embroidery, lace, and other traditional handiwork techniques. But Iris van Herpen utilizes digital technology. Van Herpen reinterpreted ‘artisans’ as those who are skilled in digital technology, which still requires just as many arduous hours of creation, but in a different discipline. Vetements further stretches the traditional definition of Couture, outsourcing to skilled ‘expert’ brands around the world instead of having an in-house team of experts. Vetements, lead by Demna Gvasalia, looks to brands who are expert in their field - like Juicy Couture for terrycloth, Manolo Blahnik for footwear, and Canada Goose for down jackets. All of these brands have been in practice for years, and are considered the portrayal of excellence in their respective fields.Using these two houses as an example, will other brands rise to reinterpret the definition of couture? Will we see an onslaught of more innovation-driven couture houses?
Costume Jewelry Competitors: 2050 Gucci: Gucci’s costume has two categories: more traditional pieces utilizing the brand’s historic monogramming, and offerings that relate to the theme of the house’s newest collection (for example, costume jewelry that looks to the visuals of the GucciGhost collaboration). This allows Gucci to keep salience with its established customer while playing off the hype of its most recent runway offerings. Hermes: Hermes has been creating both signature and more understated costume jewelry for decades, and given the strength of the brand to date and its ability to keep the strength of its image, we don’t see an impending change. Iris van Herpen: Iris van Herpen is still young, and her couture and ready to wear lines are thriving. Although Van Herpen doesn’t currently offer costume jewelry, giiven the digital process Van Herpen employs, the logical next step for the brand is to extend into accessories. Valentino: Rather than play off seasonal collections, Valentino’s costume jewelry is more commercially-driven, playing off its historically best selling products (like the Rockstud line).
key success factors Heritage Exclusivity Sublime aesthetics Exceptional customer service
Competitive advantage
Excellent craftsmanship
Strong brand heritage Skilled workforce and elevated craftsmanship High production value Strong brand equity and image Globally-recognized name Paradox of tradition and innovation Strong celebrity relations
2050 Demographic psychographic behavioral
TARGET CONSUMER AN OVERVIEW Three key generations have been explored as the target customer groups for Chanel haute couture in 2015: Millennials, Generation Z, and Generation Alpha. These groups will express shared and generation-specific characteristics that must be considered for Chanel’s future marketing mix.
Gender The boundaries that define gender will continue to blur in the forthcoming years. Some women will opt for more traditionally masculine aesthetics, while some men will take on traditionally feminine aesthetics, including wearing makeup and women’s apparel and accessories. Accordingly, it is expected that Chanel’s future customer base will include not only women, but also men.
As the oldest target customer group, Millennials will be more progressed in their careers, and thus, they will have the greatest wealth and leisuretime out of all three generations.
Generation Z will range in age from 39 – 52. As the first generation to never know a world without the internet and social media, this group embodies acceptance, openness, and fluidity.
Generation Alpha will range in age from 25 – 38.
As the children of Millennials, this generation will share many characteristics with its parents while also personifying unique wants and needs.
Demographics
Millennials will range in age from 53 – 66.
Income According to the HSBC Global Consumer 2050 Report, the average income in 2050 will be six times what it was in 2015. With this larger income figure, luxury consumers will have preferred spending habits based on generation. Millennials and Generation Alpha prefer to spend their disposable income on experiences, while Generation Z is more productfocused. Additionally, Generation Alpha is predicted to be highly entrepreneurial, with many Alphas starting businesses early on and, if successful, entering the luxury consumer class at a younger age.
Education In 2050, an extremely high focus will be placed on education, even more so than it is today. In many countries, a graduate degree will be as expected as a high school diploma, especially for high-wealth individuals with access to top-quality education.
Geography With the emerging markets in the BRIC countries—Brazil, Russia, India, and China—the consumer market for Chanel is expected to expand within these geographical areas. Younger generations are predicted to possess a heightened global understanding, yet a reality rooted in their local geography and less desire to physically explore the world around them.
Work and leisure All three target generations in 2050 can best be described as “stressed-out multitaskers,” constantly balancing the over-influx of media and technology surrounding them. The continued increase in technology will make future consumers more digitally connected than ever, yet they will physically remain isolated. These consumers would rather spend time indoors and explore via virtual reality than go outdoors. As for work, consumers will be less motivated by money, and more motivated by the potential to advance and find purpose in their career.
Interests, opinions, and beliefs For Millennials who create families, being a parent will be an essential part of their identity. As for their Generation Alpha offspring, these consumers will grow up expecting instant gratification and “me” focused thinking. Younger generations will also embody an exhibitionist spirit—social media will have eradicated any semblance of privacy—and they will desire to live in the moment, with little regard to the past or future.
Behavioral Characteristics
PSYCHOGRAPHICS
Technology Naturally, technology is going to be integrated into the everyday lifestyle of future consumers. New developments in social media will continue to influence behavior and digitally shrink our world. Because younger generations will be so tied to technology, they will come to expect bring able to be fully customize tech to their individual needs and wants.
Media Media consumption is moving towards smaller and more portable screens, with consumers expecting instant access with arm’s reach. The rise in virtual and augmented reality presents particular interest for younger generations, and these two platforms will introduce a new normal for media consumption.
Shopping Shopping preferences will vary between different generations. While Millennials and Generation Alpha will prefer shopping online, Generation Z will prefer the sociability of the in-store shopping experience. Interestingly, Generation Z does not feel purchasing influence from celebrity endorsements—a common advertising tool for luxury brands. Rather, this generation is far more influenced by the opinions of their friends and family. Lastly, many future consumers will be wary of financial institutions, often choosing to spend their disposable income instead of investing it. They will spend not only on themselves, but also their inner circle.
Collecting art, time with family, vacation home, charity work, unique finds and experience
interests
Classic silhouette, artisanally made accessories,artistic products, aesthetic pieces
personal style
social status
goals and motivation
attention seeking
Education and opportunities
personal expression
Amanda
Age
56
job
Creative Director
income Geography Money time level of knowledge personal preference
$ 600,000 United States Ultra-high Semi-retired Luxury Native Understated
LOW
HIGH
Loves his job, traveling, socializing, fashion and beauty
interests
Over-the-top, seeks to be the center attention, love of heavily branded items
personal style
social status
goals and motivation
attention seeking
hedonistic
digital usage
LOW
Anthony
Age
45
job
Owner, Modelling Agency
income Geography Money time level of knowledge personal preference
$ 3,000,000 England King Busy Bee Luxury Native Superstar
HIGH
Politically active, sustainability
interests
Casually trendy, wearable technology, high functionality
personal style
self improvement
goals and motivation
social status
instant gratification
innovation
LOW
miRa
Age
31
job
Technology Entrepreneur
income Geography Money time level of knowledge personal preference
$ 750,000 India Ultra-High Balanced Luxury Tourist Luxury Indifferent
HIGH
Social media, parties, shopping
interests
Over the top, feminine, loves being the center of attention, promiscuous, bright and colorful
personal style
self-improvement
goals and motivation
social status
instant gratification
innovation
LOW
YASMIN
Age
25
job
Popstar
income Geography Money time level of knowledge personal preference
$ 10,000,000 Brazil King Balanced Luxury Explorer Superstar / Opulence
HIGH
2050 goals and objective Strategy overview Unique selling proposition brand positioning price accessibility matrix marketing mix
Product
goals and objectives
Unisex and gender fluidity Non-performance-based technology Responsiveness to one’s social environment Incorporating one’s personal heritage for ultimate customization
Production Introducing a tech atelier for relevant production Preserving current ateliers
Service Reconciling customer’s need for instant gratification and the tradition of haute couture Adapting placement strategy for growing global consumer market Introducing augmented reality to enhance customer experience
blooming camellia Imagine approaching a grand ballroom, the glittering lights and melodic mix of music and chatter luring you towards the fantasy before you. You step inside, and all eyes are on you—a vision of glamour in the image of Coco Chanel. One by one, the camellia flowers on your haute couture gown bloom open, blossoming in a peal of harmonious beauty as the entire party shifts its focus to you. A juxtaposition of the purity with the cutting edge, this couture concept infuses technology to enhance the organic beauty of the camellia, an icon of Chanel history. Whether incorporated into eveningwear, bridal, or accessories as a single flower brooch, this concept serves to innovate and captivate for the attention-seeking luxury consumer of 2050.
Juxtaposing purity with the cutting edge
This product specifically targets Generation Z and Alpha members, who do not know a world without social media and crave interest from their social circles. Furthermore, its adaptability into a full gown or a single accessory appeals to both female and male customers. The blooming camellia maintains a sense of balance between tradition and innovation: the camellia itself will be produced in the long-established camellia atelier, and from there, the new tech atelier will add the blooming technology to bring it to life.
DNA TWEED Just as Coco Chanel’s history of rebellion and empowerment has been woven into the identity of the Chanel brand since 1918, you have your own unique story to tell. Chanel’s DNA Tweed explores your one-of-a-kind DNA profile coded into a mélange of luxurious, vivid yarns unlike any other. As your blend weaves together into a personalized tweed fabric, so does your story, resulting in the creation of a Chanel heirloom piece that stands the test of time. Rooted in the past while moving towards the future, this couture concept taps into the hedonistic pleasure of personal luxury, allowing each customer a deeply personal approach to customization. It can be adapted into suiting, outerwear, or accessories to activate the consumer’s desire for personal connection in our increasingly digital world.
Rooted in the past while moving towards the future
In 2050, technology will be woven into the fabric of our everyday lives, triggering many consumers to crave a social connection in the digital environment surrounding them. The DNA tweed technology connects Generation Z and Alpha consumers to their past, while allowing them to help write their own future. Visually, the DNA tweed garment appears as any other Chanel garment, thus maintaining the iconic brand aesthetic. However, it introduces a new way to celebrate our globe’s melding of cultures, histories, and traditions, providing a new opportunity for luxury customization in couture.
FLUID SILHOUETTES During World War I, Coco Chanel revolutionized the fashion industry by taking jersey – a fabric commonly used for men’s underwear – and creating fluid-flowing dresses that were comfortable and chic. As Coco Chanel said herself, “I make fashion women can live in, breathe in, feel comfortable in and look younger in.” In an ode to Coco Chanel’s core design values, Chanel’s new silk jersey would pour over the body, adapting to every woman or man’s unique body type, to create a comfortable garment that is utterly customized to each wearer’s figure. Following this initial haute couture fitting, the adapted silk jersey would be embellished or embroidered in the traditional couture artisanal processes.
The comfort of a second skin with the extravagance of couture
This technology would adapt into multiple incarnations – into extravagant evening gowns or simple day dresses, just as Coco Chanel envisioned her inaugural silk jersey dress. Because of the pour over technique, each garment would be personalized to the wearer’s shape. The fluidity and adaptability of the fabric has the comfort of a second skin, but still, has the grandeur and extravagance that the consumer loves about couture. Because the fabric is created exactly for one’s body type, no excess fabric is used in the process, giving Chanel a new way to integrate sustainability into its design process.
UNIQUE SELLING PROPOSITION
Looking to the Unique Selling Propositions that Chanel offers with its 2050 haute couture offerings, we have found three key USPs. Firstly, the heritage & the history of Chanel – Chanel has such a rich history - from the star power of both Coco Chanel and Karl Lagerfeld to the signature products to the easily-recognizable name to the story of Chanel’s inception. Chanel is anchored in its roots, which is of intangible value to the brand. Not only fashion followers are versed in the story of Chanel – the brand has a salience with the general public. The second USP we noted is the icon of Coco Chanel. Coco is a celebrity in and of herself, she is a hero of the brand who has created a strong reputation and a legacy for the brand with her innovation for Chanel. Her quotes and images are still just as relevant today as they were when she was alive. Lastly, Chanel has built up several signature Chanel aesthetics and products over the course of the house’s rich history, icons like the Camellia, the Tweed, the twotoned shoe. All of these creations are unique to the house – Chanel is known for these products as much as these products are known to Chanel.
BRAND POSITIONING When we speak about Chanel’s position in comparison to other brands we must consider, does metaluxury even have competition? Positioning a brand requires a brand to compare itself to other brands, and analyze how the brand can steal consumers from its competition. This is completely against what haute couture stands for – haute couture is about individuality, about uniqueness, not about comparison. Considering that haute couture depends on the timelessness, on the identity of the brand, we can only compare brands based on product offerings. In terms of product offerings, Chanel offers daywear (tweed suits, day coats, pantsuits, day dresses), and formal wear (gowns, tuxedos, bridal, etc.). If we look at competitors, Christian Dior offers daywear (more formal suits, dresses) and formal wear (gowns, bridal). Valentino offers daywear (pants, dresses, light jackets) and formal wear (dresses, bridal).
As a form of metaluxury, Chanel haute couture will maintain ultra pricing in 2050. Another aspect of metaluxury it will maintain is the lack of competition: when a customer selects a Chanel haute couture garment, it is for the beauty and uniqueness of that garment, not because of its comparable value to another brand’s haute couture. Therefore, Chanel’s haute couture will continue its high pricing strategy relevant to production and irrelevant to the pricing of other brands. Because of the custom nature of haute couture garments, the pricing structure of haute couture varies depending on the product, the complexity of the piece, the rarity of the materials, and the hours of labor required. If we look at ballpark prices, daywear (pants, tops, light jackets), can start at around $10,000 and sky-rocket from there, with Chanel offering Haute Couture pants that sell for $50,000 and up. While Chanel’s couture prices are kept secret to everyone but customers, from what we can gather from celebrities and customers who have announced the price of their pieces, gowns start at $75,000 and the sky is the limit from then on.
accessibility
price/accessibility matrix
PRICE
By 2050, the emerging markets in the BRIC countries will open up a larger base of consumers for Chanel haute couture. Accordingly, the addition of new targeted showrooms will increase access to luxury consumers in these markets without delocalizing the brand. The following showrooms are proposed for 2050:
Moscow New Delhi
Shanghai Hongkong
Abu Dhabi
Rio de Janeiro
Because projections indicate that e-commerce is growing in the forthcoming years—even for luxury consumers—a new accessibility strategy has been created to accommodate the online ordering preferences of the future consumer. Through this strategy, consumers can order haute couture either through the traditional method or through a partial to fullydigital approach, in which they never have to leave their home if they choose. The strategy is outlined below. Appointment is made traditionally or online via a private, invitation-only website
Initial consultation occurs in one of three ways: 1 Customer transports themselves to atelier 2 Chanel private airplane picks up the customer 3 Body scanner via virtual reality takes customer’s measurements and sends to atelier 4 Garment fittings may occur in person or via augmented reality in the customer’s home 5 Final garment is either picked up by the customer or shipped to them This strategy maintains the haute couture tradition of Chanel while adapting to the ever-changing needs of the wealthy, but time-poor luxury consumer of the future.
’
Strong heritage of brand aesthetics Subtle evolution of haute couture Technology introduced to enhance customer experience Consideration of 2050 target consumers’ wants Patent on innovative materials
’ Is technology representative of Chanel’s style? Technology has a limited lifespan
’
’ Create an immersive service experience through VR/AR Reach emerging markets in MINT countries (Mexico, Indonesia, Nigeria, Turkey)
Consumer dependence on technology could surpass the desire for haute couture Possible decline of skilled labor in traditional ateliers
marketing mix Price
In developing the future marketing mix for Chanel haute couture, it is crucial to first look towards the past. Since its inception in 1918, the key traditions of haute couture have remained intact, thus indicating that in 2050, the integral components of Chanel’s strategy will not drastically change, but rather subtly and thoughtfully adapt to overall shifts in the industry and market.
In 2050, Chanel haute couture will maintain ultra pricing, meaning products will boast a high price relevant to the extreme time, work, and materials that go into creating them. Even if technology becomes a more integrated means of production, the essential human component of haute couture will remain to support this pricing method. As a Veblen good, demand for Chanel haute couture rises as price rises. Therefore, the 2050 pricing strategy will follow Jean-Noel Kapferer’s anti-law of luxury marketing on continually rising pricing; in 30 years, the price of Chanel haute couture will be comparably higher than it is today. Product All of the luxury product ingredients are imbued in Chanel haute couture: the use of rare materials, supply scarcity via limited output, excellent relevant quality, unique know-how via the ateliers, and of course, sublime aesthetics. One aspect that will adapt to the future is the proposed strategy of acquiring a tech atelier in a country outside of France in order to utilize external expertise in this field. However, in order to prevent delocalization of the Chanel identity, only the tech production will be delocalized, while the heart of research and development will remain in France. Placement In 2050, Chanel will maintain the discreet, highly-controlled availability of its haute couture. Private showroom settings will still be utilized, but the polysensual experience will be amplified through the use of virtual reality during the fitting process. In response to the increasing use of e-commerce by luxury consumers, the introduction of online access to Chanel haute couture via an invitation-only website will appeal to evolving consumer behavior. Promotion Chanel haute couture delicately balances the promotional paradox between the “push” of star brands and the “pull” of connoisseur brands. While the overall brand of Chanel is a star brand, it adopts the connoisseur archetype for its haute couture segment. Conversely, a certain level of glamour will remain through Chanel’s signature over-the-top runway shows and artistic short films in the year 2050. At its core, Chanel is a brand founded on tradition, so trendy, short-term forms of promotion should be avoided. People From the creator standpoint, Chanel will keep a stronghold on its authentic French cultural background and virtuosity of legendary brand icons Coco Chanel and Karl Lagerfeld. Depending on when a new chief designer is appointed following Lagerfeld, there is the opportunity of a third legend to be integrated into the Chanel heritage. Even with the evolution of technology, haute couture will maintain a level of human content in the production process. From the receiver end, Chanel haute couture will continue to be perceived as a social stratifier in regards to prestige and property. The sublime aesthetics, superfluous nature, and hedonistic experience it provides customers will remain an essential component. In 2050, the customer experience will be further enhanced through the implementation of online ordering and virtual fittings via augmented reality. Purpose In 2050, Chanel haute couture will exemplify two core purposes: excellence and uniqueness. The time, effort, and quality that go into each haute couture garment embody a focus on excellence, while the goal of continuous innovation and incomparability in both the design and production of these garments expresses the goal of uniquene