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BY HEATHER SPENCELEY
LUXURY MENSWEAR WRITTEN REPORT Module
Tutor
N0829119
Word Count
The Contemporary Global Fashion Market 30014 Jo O’rourke 2060
CONTENTS 1
Introduction
3
Market Overview
7
Consumer
17
Market Players
19
Conclusion
21
References
24
Bibliography
29
Illustrations
30
Figures
This report
MARKET OVERVIEW
1
With the aim of exploring the luxury menswear market and how it strategically operates internationally, this report will first assess the past, present and future state of the specified market and the main factors driving or hindering its success. Next there will be an evaluation of key regional markets, which involves a demographic analysis of the consumer and the main regions in which this target consumer resides. This is followed by a psychographic consumer analysis, which considers any specific attitudes, motivations or habits impacting the growth or decline of the overall luxury menswear market. Lastly, there will be an investigation into the activity and innovations of minor and major players in the luxury menswear market with an assessment into the feasibility of those innovations and how they may progress in the future to aid any issues identified throughout the report.
MARKET OVERVIEW
2
SECTION 1
MARKET OVERVIEW
3
THE LUXURY MENSWEAR MARKET
In 2019 (Passport, 2020a) the global menswear market was worth approximately $438 billion, whilst womenswear was worth $674 billion. Passport (2020b) also reported that menswear saw a 6.9% increase in AAGR between 2014 and 2019 compared to the womenswear market which saw a 6.3% AAGR increase between the same dates. Indicating that although menswear is a lower value market, it is growing quicker than womenswear. Before COVID-19 hit, the main concern in the UK was uncertainty around Brexit. Walpole (2019) found that if the UK went ahead with a no-deal Brexit it could reduce “exports in the high-end sectors by around 36% on average per year”. Consequently, the global supply chain is left fragmented as “High-end industries alone employ over 1 million people [and] export over 60% of their production outside Europe” (European Commission, n.d.) therefore a no-deal Brexit could result in luxury redundancies and damage to local economies. Brexit was just one of many factors altering the health of the luxury fashion industry (see appendix 1). Then Coronavirus hit.
MARKET OVERVIEW
Past
4
Present
MARKET OVERVIEW
5
Travel restrictions have taken a major toll on the luxury goods market as “20 to 30 percent of industry revenues are generated by consumers making luxury purchases outside their home countries” (Achille and Zipser, 2020). This channel of luxury spending has completely ceased, and luxury brands are being forced to rethink all areas of operation, with a specific focus on their marcomms strategies; consumer engagement is key throughout this period to encourage retainment. “Men are more likely than women to have bought designer fashion in the last three years” (Sender, 2020). This is unexpected as menswear is a considerably lower value market and designer fashion has a high value per unit. In December 2019, Harrods implemented the first of a seven-phase project to expand their offering to male shoppers (Conti, 2019). Harrods’ huge investment is evidence that menswear is an increasingly profitable venture for luxury brands.
The future of luxury will be centralised around buoyancy and recovery. Luxury brands are finding themselves with “unprecedented levels” (Achille and Zipser, 2020) of unsold stock and lack of options to profit from it. Some brands are relieving this stock onto resale platforms such as Vestiaire Collective to uphold corporate social responsibility. Hesitant brands are worried this method may damage their exclusive reputation and are exploring options such as promotions, which could equally lower brand equity with investors. Menswear will undoubtedly see a slow-paced recovery. Machado (2020) described the outlook as “overall negative” and that “2019 revenue levels are unlikely to be achieved before 2023”. Purchase patterns are changing as society turns to a more casual dress code. Euromonitor (2020) forecast that “status symbols, such as formal suits and social outfits, the most expensive subcategories” will weaken because of increased demand for loungewear. These premium categories tend to be profitable and this will therefore negatively impact luxury menswear brands in the future.
MARKET OVERVIEW
Future
“status symbols, such as formal suits and social outfits, the most expensive subcategories” (Euromonitor, 2020)
6
Fig.1 Menswear market size in GBP million.
[3]
West Europe £70,197.8
[3]
East Europe £13,563.9
[2] [3]
North America £78,641.6
[3]
[1]
Middle East & Africa £24,172.8
7
CONSUMER | DEMOGRAPHICS
Asia Pacific £136,637.7
Latin America £17,871.3
[2]
Values were taken from in Passport (2019) and are representative of region contribution, not current value.
Australasia £4,198.2
McKinsey & Co (2020) reported “Chinese consumers were responsible for more than half of global luxury growth between 2012 and 2018”. Asia Pacific is the highest value menswear market, illustrating this region is of great importance to luxury menswear brands. Although it is a lucrative market, brands should be regularly assessing their reliance on this region; ensuring they do not neglect potential growth regions as a result.
[2]
Second in the global menswear market is USA, where luxury “consumption was boosted by domestic confidence but tempered by reduced tourist flows” (D’Arpizio et al, Feb 2020). Although since February 2020, “over half of US consumers [are] spending less on luxury products” (The Future Laboratory, 2020). Signifying that pre-pandemic, luxury consumers living in the US were still confident in spending on higher value items despite other political issues in the region (see appendix 2).
[3]
Western Europe saw Spain and the UK as its top performers before the pandemic hit (Bain and Co, 2020). Spain, Italy, UK, and France were the most affected countries after COVID-19 hit, “seeing menswear sales shrinking 20% in 2020” (Machado, 2020). Emphasising that even top performers in the region have seen a huge contraction of sales in both luxury and menswear due to lack of tourism caused by Coronavirus restrictions.
CONSUMER | DEMOGRAPHICS
[1]
Regional Consumer
8
%
Key: regular
35
never 30 25 20 15 10
CONSUMER | GENERATIONS
9
Powerful Millennials
5
67% of consumers aged 25-44 buy luxury items regularly (Fig 2). Male Millennials also comprise 62% of the luxury market (Buckle, 2019), illustrating the growing buying power of predominantly male Millennials.
0
Fig. 2 identifies that 55% of consumers aged 45-64 have never purchased a luxury item. In the UK between 2018/19, consumers aged 45-54 had the “highest average amount of disposable income for any age group” (Statista, 2019). The luxury market could explore the opportunity of appealing to this affluent age group.
Age 16-24
25-34
35-44
45-54
Fig. 2. % Luxury purchasers by age (2019).
55-64
Gen Z are tomorrows luxury buyers, “by 2035 they could make up 40% of luxury purchases” (D’Arpizio et al, 2020). By 2035, most of Gen Z will be of professional age and receiving regular income; leaving disposable income to indulge in luxury. According to Sender (2019) 87% of males under 25 have purchased designer fashion, this is 10% more than their female counterparts. Clarifying that Gen Z males are growing the luxury market. For this reason, companies such as LVMH are investing in their menswear sectors.
CONSUMER | GENERATIONS
Generation: Future
10
“by 2035 they could make up 40% of luxury purchases”
33%
42%
54%
49%
Boomers
Gen X
Millennials
Gen Z
CONSUMER | PSYCHOGRAPHICS
11
Fig. 3. % consumers purchase decisions somewhat/significantly impacted by Coronavirus. (Thomas, 2020)
CONSUMER | PSYCHOGRAPHICS
To buy, or not to buy Millennials are acknowledged as “the worry generation” (Petro, 2020). Fig 3 supports this claim as 54% of Millennials said their purchasing decisions had been impacted Coronavirus worries. This information was recorded in February 2020, demonstrating that even in the early stages of the pandemic, Millennials initially displayed the highest level of anxiety. Following this, Petro went on to say that Coronavirus is “impacting nearly a third of men’s decisions on how much they spend on products, versus only 25 percent of women” (2020). Since male Millennials have high buying power in the luxury market, brands will need innovative strategies to encourage these consumers to invest in their high-end products.
12
Fig. 3.
FEMALES
Other Change of circumstance
13
Knowledge is power
CONSUMER | PSYCHOGRAPHICS
Routine
Men are 14% less likely to buy luxury products out of impulse (see fig 4), suggesting they make informed purchases. According to the VALs framework (see fig 5), this type of consumer would fall into the ‘thinkers’ category; driven by ideals and principles. “These consumers are best reached by marketers providing thorough information on which to base decision making” (Rath et al, 2014). Supporting the earlier point that male consumers need more encouragement, luxury brands should reflect this in their marketing strategies. By providing savvy ‘thinkers’ with thorough information they are more likely to justify a purchase.
Novelty Offer Trend Impulse
MALES
Fig. 4. Drivers of purchasing luxury goods.
INNOVATORS
THINKERS
ACHIEVERS
high resources high innovation
EXPERIENCERS
Men are shopping more both online and offline. First Insight (2019) discovered that 19% of men reported shopping 6 or more times a month at luxury stores, such as Gucci and Prada; this was compared to only 5% of women. The report also found that men felt “41% of their purchases were being made online” this is up 3% from 2018. Illustrating that luxury brands should be using omnichannel communication strategies and expanding their menswear selection in store.
CONSUMER | PSYCHOGRAPHICS
An Omni-future
14 BELIEVERS
STRIVERS
SURVIVORS
MAKERS
low resources low innovation
Fig. 5. VALS: psychographic consumer segmentation theory. (Rath, P. M. et al., 2014)
Iso-Nations
EMERGING CULTURE
15
Pre-pandemic, “feelings of loneliness and isolation were on the rise” (Mintel, 2019) due to a digitally progressive, yet emotionally dispassionate society. Physical isolation has only heightened these feelings, “forcing consumers to realise what they truly value” – human connection (Gaye, 2020). Consumers have craved entertainment and intimacy over this disheartening period and luxury brands are reflecting this in their communication strategies. A “wave of digital members’ clubs […] catering for those looking to connect with their peers in a more intimate way.” (Bishop and Houghton, 2020) are satisfying these consumer cravings. Rolls Royce launched their members only app ‘Whispers’, offering exclusive information and curated experiences to like-minded individuals. Clients are using Whispers “for solace and enlightenment during this period” (Scoop, 2020) showing consumers desire to be comforted and connected, whilst still valuing exclusivity. Luxury menswear could take inspiration from this model by providing exclusive, thorough product information and benefits. A strategy which would subsequently appeal to their ‘Thinker’ (see fig 5) consumer.
Fig. 3.
Bo Finneman (McKinsey, Podcast) Fig. 6. A/W 21/21 colour palette (WGSN, n.d.)
Soft Luxury A global shift toward sustainability is empowering ‘silent luxury’. Described as “paying more attention to classic elements […] and less to conspicuousness and ‘bling.’” (Achille & Zipser, 2020). The retreat to sophistication expected pre-pandemic was disturbed, reigniting the “dead” (Virgil Abloh, 2019) streetwear market. There has been a “focus on shopping for a daily uniform of timeless staples” (Yumi Shin, 2020), clarifying that consumers are becoming less trend driven and more concerned with building a wardrobe of timeless pieces they can style daily. For menswear this has meant neutral colour palettes, the cancellation of prints and a rise in demand for streetwear essentials such as baseball caps and hoodies. All of which encourage a more transitional, adaptable future wardrobe.
EMERGING CULTURE
“Gen Z doesn’t think of luxury as a name brand that they want to slap onto their bag or their shirt and wear as a badge.”
16
reactive
LUXURY PLAYERS
17
innovator*
laggard*
unreactive
Fig. 7. Perceptual map considering luxury brand’s humanitarian activity during the pandemic (Y) and their overall innovation strategy (X). *See appendix 2
Italy - where Coronavirus was catastrophic - accounts for “40 percent of global luxury goods manufacturing” (Adegeest, 2020). This is likely why Italian luxury brands have been distinctively reactive during this crisis; Armani, Gucci and Bottega Veneta have repurposed factories and funded scientific research to relieve medical centres and find a vaccine. Stella McCartney has been cutting staff and has “forgone her salary completely” (Hughes, 2020). Indicating that some luxury brands are forced to choose buoyancy over donation, this could impact reputation going forward, especially for McCartney whose brand is rooted in moral conduct.
Fig. 8. Lil Uzi Vert wearing Pharrell X Chanel cross body bag.
John Elliott’s contemporary trend-evading approach appeals to ‘the luxury conscience’. For Elliott, “business is good” (Berlinger, 2020) despite his precarious decision not to follow the sophistication shift in AW20; it worked favourably for him during the pandemic as his focus is streetwear. This could be a future model for innovative luxury brands, allowing them to appeal to the conscious, experience driven consumer. Chanel, however, have never marketed a men’s runway ‘collection’ although illuding to it with some releases and collaborations (Fig. 8); representing a belated, safe approach to gender fluidity. Male celebrities (Fig 8) wear rare Chanel pieces, highlighting a demand for Chanel menswear. Although, the release of this may devalue the brand in celebrity consumers eyes as the pieces will be readily available.
LUXURY PLAYERS
Market response to cultural shifts
18
CONCLUSION
19
In IN CONCLUSION Conclusion The global luxury menswear market is being impacted by factors such as reduced disposable income and financial confidence, paired with limited physical channels to provide the high-level customer service their consumer is accustomed to. Despite these macro issues, menswear is growing at a faster rate than womenswear and males are still more likely to invest in luxury items; meaning that luxury brands are beginning to invest in their menswear departments. With anxiety rising in ideal target
CONCLUSION
generations, such as Millennials, and the evolution of a savvier male shopper; luxury brands will have to be more innovative and informative in their Omnichannel communication strategies. If they are to win the attention of this consumer, they must consider the influence of pandemic generated micro-factors such as a lack of intimacy and the re-evaluation of luxury. Luxury menswear should be preparing for fierce competition as brands will be fighting to regain their space in the market. This report has concluded that menswear will see a slow recovery with a more intense focus on innovative and sustainable strategy to precede competition, struggling subcategories such as suits will need extra attention post-pandemic to assist their revival into the market.
20
References Achille, A. and Zipser, D. (2020) A Perspective For The Luxury-goods Industry During--and After--coronavirus, McKinsey & Company. Available at: https://www.mckinsey.com/industries/retail/our-insights/a-perspective-for-the-luxury-goods-industry-during-and-aftercoronavirus (Accessed: 3 November 2020). Adegeest, D.-A. (2020) Italy’s Artisan Producers Are Under Threat, Fashion United. Available at: https://fashionunited.uk/news/business/ italy-s-artisan-producers-are-under-threat/2020090150654 (Accessed: 14 November 2020). Ahmed, O. (2020) How Daniel Lee Is Reinventing Bottega Veneta, Vice. Available at: https://i-d.vice.com/en_uk/article/akwa3p/how-daniellee-is-reinventing-bottega-veneta (Accessed: 14 November 2020). Berlinger, M. (2020) It’s A Good Time To Be In The Business Of High-End Sweatpants, GQ. Available at: https://www.gq.com/story/johnelliott-covid-sweats (Accessed: 14 November 2020).
21
Bishop, K. and Houghton, L. (2020) Luxtainment, LS:N Global. Available at: https://www-lsnglobal-com.ntu.idm.oclc.org/micro-trends/ article/26183/luxtainment (Accessed: 12 November 2020). Buckle, C. (2019) The Luxury Market In 2019: Consumer Trends And Behaviors, GWI. Available at: https://blog.globalwebindex.com/chart-ofthe-week/luxury-market-2019/ (Accessed: 8 November 2020). Conti, S. (2019) A Man’s World: Harrods Reveals Major Plans For Men’s Wear, Starting With Superbrands, WWD. Available at: https:// wwd.com/menswear-news/mens-retail-business/a-mans-world-harrods-reveals-major-plans-for-mens-wear-starting-withsuperbrands-1202946848/ (Accessed: 3 November 2020).
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22
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23
Achille, A. and Zipser, D. (2020) A Perspective For The Luxury-goods Industry During--and After--coronavirus, McKinsey & Company. Available at: https://www.mckinsey.com/industries/retail/our-insights/a-perspective-for-the-luxury-goods-industry-during-and-aftercoronavirus (Accessed: 3 November 2020).
BIBLIOGRAPHY
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Machado, G. (2020) Menswear in Western Europe, Passport. Euromonitor International. Available at: http://www.portal.euromonitor.com/ portal/?JvG58No2JjpRc%2fUixvwrpA%3d%3d (Accessed: 2 November 2020). Maguire, L. (2020) Streetwear Was Declared Dead. It’s Still Here, Vogue Business. Available at: https://www.voguebusiness.com/fashion/ streetwear-was-declared-dead-its-still-here (Accessed: 11 November 2020). Mark, A. (2020) Maison Margiela X Highsnobiety: Everything You Need To Know, Highsnobiety. Available at: https://www.highsnobiety. com/p/maison-margiela-highsnobiety-collaboration/ (Accessed: 12 November 2020). McKinsey & Company (2019) The State of Fashion 2020, McKinsey & Company. Available at: https://www.mckinsey.com/~/media/ McKinsey/Industries/Retail/OurInsights/Thestateoffashion2020Navigatinguncertainty/The-State-of-Fashion-2020-final.ashx (Accessed: 9 November 2020). McKinsey & Company (2020) The State of Fashion 2020 Coronavirus Update, McKinsey & Company. Available at: https://www.mckinsey. com/~/media/mckinsey/industries/retail/ourinsights/itstimetorewirethefashionsystemstateoffashioncoronavirusupdate/the-state-offashion-2020-coronavirus-update-final.pdf (Accessed: 9 November 2020). Mintel (2019) 2030 Consumer Trends. Available at: https://www.mintel.com/press-centre/social-and-lifestyle/mintel-2030-globalconsumer-trends (Accessed: 11 November 2020). Mower, S. (2019) Craig Green Spring 2020 Menswear Collection, Vogue. Available at: https://www.vogue.com/fashion-shows/spring-2020menswear/craig-green (Accessed: 30 October 2020). O’Connor, T. (2019) INTELLIGENCE Can Mytheresa Bring Its Winning Streak to Menswear?, Business Of Fashion. Available at: https://www. businessoffashion.com/articles/intelligence/mytheresa-men-launch-luxury-e-commerce (Accessed: 9 November 2020).
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Passport (2019) Global Womenswear Market growth, Euromonitor. Available at: http://www.portal.euromonitor.com/ portal/?cunSwJrcnLovGdFoczvZlA%3d%3d (Accessed: 2 November 2020). Passport (2019) Menswear Apparel and Footwear Dashboard, Euromonitor. Available at: https://www.portal.euromonitor.com/portal/ dashboard/index (Accessed: 2 November 2020). Passport (2020b) Global Menswear Market growth, Euromonitor. Available at: http://www.portal.euromonitor.com/ portal/?cunSwJrcnLqBbXl%2b0OQ2Rg%3d%3d (Accessed: 2 November 2020). Passport (2020a) Menswear in World. Euromonitor International. Available at: https://www.portal.euromonitor.com/portal/analysis/tab (Accessed: 2 October 2020). Passport (no date) Region Definitions, Euromonitor. Available at: https://www.portal.euromonitor.com/portal/help/definitionstab (Accessed: 8 November 2020).
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Pelloux, C. (2019) The Future Of Luxury? A Conversation With CEO Of LVMH Fashion Group Sidney Toledano, Forbes. Available at: https://www.forbes.com/sites/ceciliapelloux/2019/12/16/the-future-of-luxury-a-conversation-with-ceo-of-lvmh-fashion-group-sidneytoledano/?sh=4b349cbd3cb5 (Accessed: 8 November 2020). Petro, G. (2020) Coronavirus And Shopping Behavior: Men And Women React Differently, Forbes. Available at: https://www.forbes.com/ sites/gregpetro/2020/03/13/coronavirus-and-shopping-behavior-men-and-women-react-differently/?sh=708ba7674737 (Accessed: 7 November 2020). Rahilly, L., Spagnuolo, E. and Finneman, B. (2020) ‘Meet Generation Z’. McKinsey. Available at: https://itunes.apple.com/podcast/ id285260960 (Accessed: 14 November 2020).
BIBLIOGRAPHY
Rath, P. M. et al. (2014) The Why of the Buy. Bloomsbury Publishing. Rogers, E. (2003) Diffusion of innovations, ProQuest . Available at: https://teddykw2.files.wordpress.com/2012/07/everett-m-rogersdiffusion-of-innovations.pdf (Accessed: 15 November 2020). Scoop News (2020) Rolls-Royce Whispers – Inspiring Greatness, At Home. Available at: https://www.scoop.co.nz/stories/BU2006/S00095/ rolls-royce-whispers-inspiring-greatness-at-home.htm (Accessed: 11 November 2020).
Sender, T. (2020) Menswear UK Report, Mintel. Available at: https://reports.mintel.com/ display/1012230/?fromSearch=?freetext=luxurymenswear (Accessed: 29 October 2020). Statista (2019) Men‘s And Women’s Luxury Apparel Market Value By End User U.S. 2015-2025 | Statista, Statista. Available at: https://www. statista.com/statistics/1068664/luxury-apparel-market-value-us-by-end-user/ (Accessed: 6 November 2020).
BIBLIOGRAPHY
Sender, T. (2019) Designer Fashion - UK. Available at: https://reports.mintel.com/display/925108/ (Accessed: 10 November 2020).
Tashjian, R. (2019) Behind Chanel’s—Chic, Discrete, And Very Chanel—Move Into Menswear, GQ. Available at: https://www.gq.com/story/ chanel-menswear-pharrell (Accessed: 14 November 2020). The Future Laboratory (2020) Luxury and Hospitality Futures 2020. Edited by K. Bishop. LS:N Global, p. 6. Available at: https://wwwlsnglobal-com.ntu.idm.oclc.org/downloads/b87eaa236148f319 (Accessed: 9 November 2020). Thomas, L. (2020) Millennials Are The ‘worried’ Generation, CNBC.com. Available at: https://www.cnbc.com/2020/03/05/millennials-worrychanging-spending-most-amid-coronavirus-study.html (Accessed: 10 November 2020). Walpole (2019) Economic contribution to the UK and policy recommendations, Walpole. Available at: https://www.thewalpole.co.uk/wpcontent/uploads/2019/06/Economic-and-financial-contribution-of-high-end-creative-and-cultural-industries-to-the-UK-economy.pdf (Accessed: 3 November 2020).
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Illustrations Schmidt, M. (no date) Grid and model in LV jacket, SICKY. Available at: https://sickymag.com/qaher (Accessed: 15 November 2020). Windle, M. (2016) Bally Store front. Mike Windle Studio. Available at: https://la.racked.com/2016/2/23/11094928/ballyrodeo-drive (Accessed: 15 November 2020).
OJEDA JIMÉNEZ, C. (no date) Man in puffer hood up, SICKY. Available at: https://sickymag.com/do-not-touch (Accessed: 15 November 2020).
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Alfuhigi, Y. (2017) Man in airport with suitcase, Unsplash. Available at: https://unsplash.com/photos/bMIlyKZHKMY (Accessed: 14 November 2020).
The Lady Like Leopard (2017) Luxury airport duty free. The Lady Like Leopard. Available at: https://www. theladylikeleopard.com/2017/11/23/luxury-airport-shopping/ (Accessed: 14 November 2020).
ILLUSTRATIONS
Gelwich, V. (2020) MELLOW DRIVE | CLOSED, CLOSED. Available at: https://ch.closed.com/fr/men/mellow-drive/ (Accessed: 14 November 2020). S, C. (2018) Man in white Ralph Lauren cap, Unsplash. Available at: https://unsplash.com/photos/nj66JIFw0Ls (Accessed: 14 November 2020).
Extreme Cashmere (no date) Man in blue cashmere sweater, WGSN. Available at: https://www-wgsn-com.ntu.idm.oclc. org/fashion/article/89079 (Accessed: 15 November 2020).
ILLUSTRATIONS | FIGURES
Siedentopf, M. (2020) Max Siedentopf Apologises For Offence Caused By Images Of Coronavirus Masks Made Of Everyday Items, Dezeen. Available at: https://www.dezeen.com/2020/02/19/max-siedentopf-apology-coronavirusmasks/ (Accessed: 14 November 2020).
Hahn, R. (2019) Lil Uzi Vert in Chanel bag, Getty Images. Available at: https://www.vogue.com/vogueworld/article/liluzi-vert-chanel-pharrell-instagram-collaboration-collection (Accessed: 15 November 2020).
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List of figures Fig 1. Menswear market size in GBP million (Passport, 2019). Fig 2. Luxury purchasers by age (Buckle, 2019). Fig. 3. % consumers purchase decisions somewhat/significantly impacted by Coronavirus. (Thomas, 2020) Fig. 4. drivers of purchasing luxury goods (Deloitte, 2019). Fig. 5. VALS: psychographic consumer segmentaion theory. (Rath, P. M. et al., 2014) Fig. 6. A/W 21/21 colour palette (WGSN, n.d.) Fig. 7. Perceptual map (Spenceley, 2020) Fig.8. Lil Uzi Vert in chanel bag Hahn, R. (2019)
Appendix 1: PESTLE assessing macro-climate.
[P]
APPENDICES
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• Tighter trading restrictions due to pandemic, affecting distribution and deliveries • Brexit outcome will have major impacts on all international luxury brands who rely on importing and exporting goods • US Election will again have impacts on trading policies - for example Biden may have a better professional relationship with China than his predecessor. • UK net zero target
[E] • Consumers shopping locally to boost the local economy and help independent businesses • Inflation - if costs are higher, retail prices are higher • Rising cost of prime store locations • The financial impact of salvaging and amending unsold stock could be huge
[S] • Feelings of isolation and loneliness are on the rise (Mintel, 2019) • Sustainability is high on consumer agenda before covid but this has emphasised the movement to a circular economy • Rise of ‘call out culture’, especially in younger generations, is holding luxury brands accountable and forcing traditional brands to change in order to stay relevant • Just as athleisure was starting to fade and sartorial was returning, the pandemic caused society to move back into a casual dresscode - meaning forecasts and collections will have to be altered • Movements such as BLM are impacting shopping habits and
[L]
• Tech innovation in areas such as distribution is creating new, potentially more efficient methods of operation • Male consumers turning more to online/ app shopping during pandemic, causing difficulty for luxury brands selling big ticket items online • Companies incorporating “digital members’ clubs” as part of their comms strategy, hoping to appeal to
• Travel restrictions affecting where consumers are spending • Threat of “trademark infringement, counterfeiting, false advertising and unfair competition” from resale companies • Sale of Goods Act 1979 • The General Data Protection Regulation (GDPR) • Corporate social responsibility
[E] • “unprecedented levels” (Achille and Zipser, 2020) of unsold stock and less channels to distribute it, in the past luxury brands have been called out for unsustainable disposal of this stock. • Sustainability is high on consumer agenda before covid but this has emphasised the movement to a circular economy.
APPENDICES
[T]
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Appendix 2: Rogers (1962) Diffusion of innovation. Rogers diffusion of innovation ranks from innovators to laggards. Below are descriptions of each end of the curve according to Rogers (1962). This theory was applied to the luxury market to evaluate luxury brands (pg 17).
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APPENDICES
INNOVATORS
EARLY ADOPTERS
“The salient value of the innovator is venturesomeness. He or she desires the hazardous, the rash, the daring, and the risky. The innovator must also be willing to accept an occasional setback when one of the new ideas he or she adopts proves unsuccessful,”
EARLY MAJORITY
LATE MAJORITY
LAGGARDS “Laggards are the last in a social system to adopt an innovation. They possess almost no opinion leadership.” and “When laggards finally adopt an innovation, it may already have been superseded by another more recent idea that is already being used by the innovators.”
MARKET OVERVIEW
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MARKET OVERVIEW
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