Curb Your Luxury

From the January, 2010 Zeitgeist…

In these stringent times even Zeitgeist have had to cut corners. We have, for example, begun opting for sevruga caviar over beluga. Luxury brands know that their consumers, a large portion of whom were buying on credit, are in danger of not returning to their stores any time soon. So what have these brands been doing over the holiday period to entice people?

On the Friday before Christmas, Zeitgeist received emails from Hermès, Veuve Cliquot, Emilio Pucci and Yves Saint Laurent. Perrier Jouet, Zegna, Tod’s and Selfridges all followed suit over the ensuing days. Only Selfridges’ email was about a sale. Other emails simply promoted the new season or reminded the reader that there was still time to place an order before Christmas. Some have begun to tie their products in to the lifestyle of their prospective customers, such as Veuve with its The Season campaign. It might be thought that these emails missed a trick by not offering some kind of promotion to those people whom the brand deigned to have on their list, to reward their loyalty in the midst of a recession. No such luck, however. For most of these brands, any such indulgence would not impact the bottom line so much as it would impact the image of the brand. Keeping a semblance of dignity while reminding the shopper of their presence goes a long way. For example, Hermès holds discreet sales for loyal customers at the Dorchester Hotel rather than in-store. Moreover, Louis Vuitton never has sales. Surplus products are destroyed.

However, the recession has in some cases led to some fashionista legerdemain. On a trip to Chloé two weeks before Christmas, Zeitgeist was identified as a returning customer and offered a discreet 40% discount on any purchase.

On Christmas Eve, Zeitgeist found Harrod’s had quietly begun its sale, with 50% off a huge array of items. A significant move as Harrod’s is a stalwart for not starting sales until after Christmas. What has brought about these relatively drastic measures? Though some brands are undoubtedly suffering, the recession has more exacerbated already pressing problems, rather than being the problem itself. Some brands, such as Hermès and Louis Vuitton are doing well. Vuitton contributes some 70% of group LVMH’s profit. In truth, the principle reason for such significant discounting is due to customers expecting and demanding them.

Away from the boutiques themselves, both Gucci and Hermès are currently playing on their equestrian roots. Gucci have decided to take advantage of the rather lucrative industry that has built up surrounding used products, recently starting a venture with Christie’s. Vuitton recently began a new campaign, from Ogilvy and Mather in Paris, which shows the artisans at work. The brand is trying to tread the fine line between its brilliant, bling ready-to-wear collection designed by Marc Jacobs, and the immense heritage it has in the luggage it has been painstakingly making since 1854.

During the recession then, most brands have been sticking to their guns (or the fashionable equivalent), waiting for credit to flow once more, so the cycle can start all over again. Chanel’s new surfboards should get things going again.