Paul Smith Mini Cooper
I was asked to come up with a design for a Chanel sofa last week. Yes, a Chanel sofa. In fact, many brands have their own furniture line already. Armani Casa is probably one of the most extensive and Hermes is following quick on their heels to set up its own furniture store. Fashion and furniture? No, there is more. Chanel also does a whole host of sports-related products such as skis, surf boards, footballs, tennis rackets, boats, including dogwear in case you wanted to bring your dog to the beach.
Brand megalomania probably exploded into the scene in the early 2000s, where the luxury consumer wanted to clothe themselves in branded items head to toe. Capitalising on this, luxury brands started expanding beyond their core competencies to perfumes, cosmetics, furniture, champagne... the list goes on. Some have done extremely well -- perfume, in particular, brings in nearly 30% of a luxury company's revenues. Others however have been accused of being unfaithful to the brand identity (debatable, but my choice example personally would be the Chanel J12 watch).
But the question is: is brand extension a thing of the past? This decade's consumers seem to be a lot more discerning. To be clad head to toe in one brand would render you a fashion victim. And street style bloggers who have the ability to mix a Versace dress with Converse sneakers have been hailed as prime examples of style. So would today's consumers really buy everything from one brand? Should luxury brands focus instead on improving their core competencies rather than expanding the brand, especially in light of intense competition with poor economic times?
Brand extension would not be so problematic if the extended range could stand on its own, i.e. a consumer, with no prior love for Chanel or indeed knowledge of it, would buy Chanel furniture simply because of its superior designs and quality. But where the extended products borrow largely from brand equity (and most of them do), I see more of a problem. This is because in the latter scenario, the target market would be consumers to whom the brand name itself carries value and while such consumers would buy more mainstream products from their favourite brand, I wonder if they would venture into clothing their houses and pets in the same brand -- these days, being labelled the 'Gucci girl' is not necessarily a compliment. So what does this mean for brand extension theories? Perhaps we need to rethink the way we evaluate a luxury company's brand extension efforts -- what we might have called 'poor' or 'unfaithful' brand extension may now perhaps be the way to go. After all, I would rather buy the Versace bubble sofa despite no one recognizing that it is Versace than the very recognizable Chanel skis that just does not convince me of its technology and safety.
Brand extension would not be so problematic if the extended range could stand on its own, i.e. a consumer, with no prior love for Chanel or indeed knowledge of it, would buy Chanel furniture simply because of its superior designs and quality. But where the extended products borrow largely from brand equity (and most of them do), I see more of a problem. This is because in the latter scenario, the target market would be consumers to whom the brand name itself carries value and while such consumers would buy more mainstream products from their favourite brand, I wonder if they would venture into clothing their houses and pets in the same brand -- these days, being labelled the 'Gucci girl' is not necessarily a compliment. So what does this mean for brand extension theories? Perhaps we need to rethink the way we evaluate a luxury company's brand extension efforts -- what we might have called 'poor' or 'unfaithful' brand extension may now perhaps be the way to go. After all, I would rather buy the Versace bubble sofa despite no one recognizing that it is Versace than the very recognizable Chanel skis that just does not convince me of its technology and safety.
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