The "Affordable Luxury" brand has made a lot of waves in the fashion industry in recent years. Well-known representative brands include Michael Kors, Tory Burch, Kate Spade, etc. In addition, some series products of Coach and Ralph Lauren also will be included in it. Roughly speaking, the biggest common feature of these brands is that they are all from the United States, except that their prices are more approachable. So, why are "light luxury" brands born in this country?

The history of the United States is not very long, and there is no royal and aristocratic tradition that has been continued in Europe, so there is no real "luxury" concept in the traditional sense. The most important first and foremost is that the United States has a huge domestic market. Look at the growth rate of Tory Burch. It was founded in 2004 and reached a small goal in 2007. The sales exceeded 100 million US dollars. In 2008, it exceeded 200 million US dollars. $500 million, joined the $1 billion club in 2014. At this price point, only the size of the U.S. market can carry such growth, with just a small slice of the original big pie. The chain department store system and mature business system in the United States allow brands to quickly expand and achieve terminal sales, of course, provided that the brand is willing to invest in it.

Tory burch

The American business model has always advocated "3M" - namely Mass Marketing (mass marketing), Mass Production (mass production) and Mass Sales (mass sales). The brand certainly doesn't mention the word "Mass". Ralph Lauren is aimed at Anglo-Saxon people in the United States, and it is necessary to bring a little British aristocratic style. Michael Kors advocates Jet Set life in terms of brand image, and travel by private jet is a Hollywood first-line star. Standards, so that the public can also have a yearning for the life of the middle and upper classes.

Selling is not difficult, as long as the sales points can be spread out, plus the ability to tell stories, marketing is not difficult, the difficulty is that the correct positioning of the market when the brand is launched will not be restricted after the brand develops to a certain stage. That is, while ensuring the brand image, it can reach the broadest consumer groups. Ralph Lauren's target customers are typically WASPs (Protestant Anglo-Saxon Americans), who make up the vast majority of the upper-middle and upper-middle classes in the United States, and the American Dream makes most people around the world want to replicate their way of life.

Both Michael Kors and Tory Burch's brands have not been launched for a long time, and they are more representative for the analysis of light luxury brands. The theme of the former advertising blockbuster Jet Set has not changed for more than ten years. Every season, only the scene, models and clothing are changed. The expression is very direct and easy to understand, but it does not feel exaggerated. Even look at ten years ago. Your ads won't feel outdated. These designers' grasp of megatrends will definitely stand the test of time and the market. Tory Burch is even more a winner in life. Her main Preppy Boho style is universal, and the Tory Sport launched in the past two years is to cut into the blue ocean of women's fitness.

Looking at the experiences of the two brand founders, both of them have been immersed in the American fashion industry for many years and are well versed in its operation mode. Michael Kors founded the current brand in 1997, and served as Celine's womenswear designer from the same year to 2003. From 1981 to 1993, Michael Kors sold his eponymous clothing line in major high-end department stores in the United States. Tory Burch has worked in Vera Wang, Polo Ralph Lauren and Loewe before, as a public relations promotion work, naturally for marketing.

In creating a "light luxury" brand, the most difficult thing is mass production. The market positioning of "light luxury" makes the product quality as close as possible to luxury brands, but the price is relatively close to the people, so you must be able to manage retail channels yourself. In order to increase the gross profit space and leave enough cost for production, the gross profit margin of several "light luxury" brands is basically around 60%, of which Coach is relatively high and can reach 70%. Compared with brands in the mass market price segment, such as Nike’s 45% and Gap’s 35%, the former uses the wholesale channel, and the gross profit margin is too high, which will affect the retail market pricing, while the latter is self-operated, market competition encourages, and can’t increase the price too much. .

The general retail price of a light luxury handbag is $300, and according to the 60% gross profit mentioned above, the 40% cost price is $120. At this price range, you will find that mass production seems to be one-stop only in China, which includes raw material supply, design and development capabilities, output, quality, capital and many other elements. 120 US dollars in European production, according to the current dollar to euro exchange rate seems possible, but the production capacity can not reach. If it is produced in other developing countries, raw materials and quality are both problems, and there are more supporting problems. Michael Kors once relied on the investment of Hong Kong tycoon Silas Chou, which brought not only capital but also a supply chain, making it possible to break through the biggest problem of mass production. Cao Qifeng has successfully won Tommy Hilfiger before. The rise of the legendary American designer brands of the previous generation, including Ralph Lauren, Calvin Klein, etc., cannot be separated from the cooperation of the East Asian supply chain.

How to explain the importance of supply chain? Just take a look at the Karl Lagerfeld brand, Cao Qifeng's next investment target, and walk into the store. Although it has the reputation of "Lafayette" and has been carefully adjusted in design, you will still find that the product has a deja vu of a "light luxury" brand. It is difficult to change in a short period of time, and of course consumers will not care about it, and may even like it.

So why don't people usually seem to place French brands like Longchamp and Agnes.b in the affordable luxury category? I think it is easy to explain with "3M", Longchamp is a French national bag, but it is not a full-category lifestyle brand, and the production is mainly produced in its own factories in France. Agnes.b is more niche. Although the products are not niche, they are aimed at consumers who have some French style and fresh literary feelings. There is no M in "3M", so it is not a typical "luxury" brand. For European brands that occupy both ends of high-end luxury goods and high street fashion, it is really difficult to make "3M" in the affordable luxury price segment.

"Light luxury" should have been a false proposition, but now a market that did not exist has been created, which is a revolution in the market. It will only appear in the United States and China, with a large original market and a large potential market. Will produce "light luxury" brand. It can be seen that although the "light luxury" brand in the United States has been ups and downs, as far as China is concerned, "light luxury" is still a theme worth exploring, so in the future, how will China with the same advantages affect the fashion world What about the light luxury brand? How is it different from its American predecessors? This is something we need to consider. ( Ye Qizheng )