Professional Thesis %22How to sell contemporary brands?%22 - Laura Hargreaves

Laura Hargreaves SMIB 2015
PROFESSIONAL THESIS
“SELLING CONTEMPORARY FASHION IN WESTERN EUROPE TODAY: WHOLESALE, RETAIL AND ONLINE RETAILING?”
Confrontation of the example of Marc Jacobs with a customer study

Laura HARGREAVES ESSEC Business School SMIB 2015
How to sell contemporary brands? 2
TABLE OF CONTENT
TABLE OF CONTENT ............................................................................................................................... 2
ACKNOWLEDGEMENT ........................................................................................................................... 4
ABSTRACT ............................................................................................................................................. 5
INTRODUCTION ..................................................................................................................................... 8
WHAT IS FASHION? ............................................................................................................................... 9
1. DEFINITION AND HISTORY OF FASHION .................................................................................................... 9
2. VALUE CHAIN AND SUPPLY CHAIN OF THE FASHION INDUSTRY .................................................................... 10
3. THE FASHION INDUSTRY: CURRENT STATE OF THE MARKET - FOCUS ON THE EUROPEAN MARKET ........................ 11
4. STRUCTURE OF THE MARKET – FASHION BRANDS CATEGORIES ..................................................................... 12
5. WHAT IS A FASHION BRAND? .............................................................................................................. 14
A. WHAT IS A BRAND? ................................................................................................................................... 14
B. WHAT IS BRANDING AND WHY IS IT IMPORTANT IN FASHION? ........................................................................... 16
A FOCUS ON CONTEMPORARY BRAND, BETWEEN LUXURY AND PROXIMITY ....................................... 18
1. DEFINITION OF LUXURY ...................................................................................................................... 18
2. HOW DOES IT WORK? ........................................................................................................................ 20
3. CONTEMPORARY FASHION .................................................................................................................. 23
A. WHAT IS A CONTEMPORARY BRAND? ........................................................................................................... 23
B. THE MARKET OF CONTEMPORARY BRANDS ................................................................................................... 28
C. THE CURRENT SITUATION AND CHALLENGES FOR CONTEMPORARY BRANDS ........................................................ 32
MARC JACOBS ..................................................................................................................................... 36
1. THE DESIGNER .................................................................................................................................. 36
2. THE BRAND IN THE RECENT YEARS ......................................................................................................... 36
DISTRIBUTING FASHION ...................................................................................................................... 39
1. DEFINITION OF DISTRIBUTION .............................................................................................................. 39
2. WHY IS DISTRIBUTION SUCH A CHALLENGE FOR CONTEMPORARY BRANDS? .................................................... 41
A. THE END OF WHOLESALE – FUTURE IS RETAIL ................................................................................................ 43
B. BUT REALLY? ............................................................................................................................................ 48
C. TOWARDS AN OPTIMAL SOLUTION ............................................................................................................... 53

CONCLUSION ....................................................................................................................................... 71
TABLE OF ILLUSTRATIONS .................................................................................................................... 72
FIGURES ................................................................................................................................................ 72
TABLES .................................................................................................................................................. 73
BIBLIOGRAPHY .................................................................................................................................... 74
APPENDIX ............................................................................................................................................ 78
CUSTOMERS SURVEY ................................................................................................................................ 78
A. QUESTIONS ............................................................................................................................................. 78
B. RESULTS .................................................................................................................................................. 83
INTERVIEWS ........................................................................................................................................... 92

ACKNOWLEDGEMENT

I would first like to thank my thesis advisor Professor Anne-Flore MAMAN LARRAUFIE, Academic Director of
the Strategy and Management of International Business Advanced Master and Professor at ESSEC Business
School for keeping me on track and getting the best out of this thesis.

I would also like to acknowledge Clémence NEUKIRCH, Retail Merchandising Director, Myriam BENNANI and
Aliénor WESTPHALEN, Retail Merchandisers and Faustine LABATUT and Marion FOY, Retail Merchandising
interns for welcoming me in the RetailMerch team.

I am extremly thankful to all the people who accepted to be interviewed at the Marc Jacobs head office:
- Hélène RYMER, Area Manager for UK and Scandinavia
- Carine HANVIC, Retail Operations Manager
- Alric BROWNE, Visual Merchandising Manager
- Giulia GASPARINI, Account Executive
- Giacomo DI FRANCESCA, Senior Visual Merchandising Manager
- Jacques DESBUISSON, Marc Jacobs’s PR Manager
- Aliénor WESTPHALEN, Retail Merchandiser
Thank you for sharing your expertise and your great insights and valuable guidance.

I am also grateful to the sales teams who supported me throught this venture. Thank you Pierre-Hubert
MOUTON, Printemps Department Manager, Lin-Baptiste ZHANG, Galeries Lafayette Department Manager
and Hugo OUALID, Galeries Lafayette Department Assistant Manager for taking the time to answer my
questions and share your vision. More generally speaking, I would like to thank the whole Galeries Lafayette
team for their help and genuine attention, for always being so welcoming and friendly: they have been great
assets to this thesis.

Finally, this accomplishment would not have been possible without everyone involved in the field survey,
especially the Marc Jacobs intern team, who offered support and spread the survey to their acquaintances.
Without their participation and input, the survey could not have been successfully conducted.

I also place on record, my sense of gratitude to one and all, who directly or indirectly, have lent their hand in
this venture.

ABSTRACT

According to the Collins Dictionary, Fashion is a “style in clothes, cosmetics, behaviour, etc, especially the latest or
most admired style, a manner of performance, a way of life that revolves around the activities, dress, interests, etc,
that are most fashionable”. But most of all, fashion trends are rooted in bigger trends that can be social, economic,
societal, and it has been from Roman ages to modern times. In 2015, the European clothing industry alone
represented a 169-billion-euro international, diverse market that follows a characteristic cyclic schedule, cadenced
by Fashion shows in major Fashion capitals. A Fashion brand is a “category of products that are all made by a
particular company and all have a particular name”, “a particular kind or type of something”. That is, it is not simply
the accumulation of tangible elements nor a trademark but what is in people’s mind, based on the product quality,
the price point, the distribution network and the brand’s image. Brands are categorized based on different criteria -
the most important of which are their price point and aesthetics - into the “Mass Market”, “Intermediaries” and the
“Higher End” Categories. Amongst each category, brands will have different strategies to establish their image and
put more or less effort on build an identity of their own based on their core values and vision of Fashion. Luxury is
part of the “High End” category and refer to brands known for their exclusivity, craftsmanship, great-quality
products and original design. In the late 1990s, as the offer in the Fashion industry widened towards an affordable,
accessible, stylish high fashion, a gap appeared that neither mass-market nor luxury brands could bridge: that is
when contemporary brands were born, with Theory in 1997 and Marc by Marc Jacobs in 2001. In 2015, the Fashion
Magazine described the phenomenon as “labels with a designer aesthetic and more accessible price points”.
Competition is now fierce on a segment that is still poorly defined. Elevating their brands can also be quite
challenging, along with affirming their positioning between luxury and accessibility. Building an adequate
distribution network is fundamental to both build strong brand identity and ensure accessibility and sustain
profitability.
A distribution channel is defined as “customer contact point”, a point of interaction between a brand and its clients
by Anthony Kent & al. (2016) and include individual stores, department stores, concept stores, online stores and
outlets. These types of stores can be classified into 2 categories: the direct (retail) distribution that belongs to the
brand and indirect (wholesale) distribution that involves a third party to manage the distribution process. How is
distribution key to find the much needed balance between accessibility and exclusivity, specific to contemporary
brands? In “The Future of Retail is the End of Wholesale” (STEPHENS, 2015, p1), online shopping is said to offer new
perspectives: brick and mortar has to reinvent itself and wholesale does not belong in this new model. The pricing
system of wholesale is much criticized because failing at establishing the optimal price would be detrimental to
either the brand’s margins or profits. Besides, brands are not in charge of their wholesalers’ discount policy, which
can lead to blundering situations where prices differ from one store to the other and fuels competition between
the points of sale, thus harming the brand’s image. Furthermore, controlling and anticipating stocks can be very
challenging. Finally, brand’s distinctiveness is drown in a myriad of brands, all struggling to stand out. On the other
hand, in retail distribution, the brand has control over the in-store universe and the message sent to the world:
retail stores carry the brand DNA with them. Yet, wholesale can sometimes be a very decent option. First, for a
brand to open its retail store requires solid financing, which is not often the case, especially for young

contemporary brands that are still trying to gain visibility and renown. Wholesale might actually make their lives
easier as they work on building up their reputation, their visibility, relieve them from managing the inventories, the
logistics etc and drive volume. For example, a contemporary brand can access the department store’s customer
base and clarifies its positioning. Finally, wholesale is sometimes the preferred option in certain regions or
countries and avoiding it would mean giving up on consequent sales. Moreover, now that online has become such a
major part the way of living and buying of the young, internet-savvy contemporary brands customers, hardly can it
be ignored by fashion brands that have been reluctant to embrace the digital revolution for many years. Contrary
to common beliefs, digital allows brands to further control their image and to increase their brand awareness. It is
also an opportunity for brands to access and keep track of valuable customers’ data. Yet, it has some limits, such as
the lack of sensory appreciation, inherent to luxury and Fashion and the lack of human contact.
At the end of the day, online, retail and wholesale have got distinct functions that all serve the overall network, to
reinforce a brand, face decreasing in-store traffic and support sales. Digital accompanies customers along their
shopping experience, from their search online and discovery of the brand to the actual act of buy products in store
that becomes brand window. Stores serve as brand enhancers, online as source of information and engagement,
wholesale as volume driver: they come together for a tailored offer delivered by a smooth, future-oriented
distribution network that feeds customer’s engagement thanks to an aligned brand story and a comprehensive
distribution strategy that promotes customer experience.

Dans le Collins, la mode est définie comme « un style de vêtements, de cosmétiques, de comportement etc. tout
particulièrement le dernier style le plus en vogue, une façon d’agir, un style de vie, des activités, une façon de se
vêtir, des centres d’intérêt à la mode ». Mais avant tout, les tendances en mode sont profondément ancrées dans
un contexte et des courants sociaux, économiques, sociétaux et ce fût le cas depuis la Rome Antique jusqu’à nos
jours. En 2015, l’industrie du vêtement en Europe s’est affirmée comme un marché internationalisé et diversifié de
169 milliards d’euros, qui suit un calendrier aux cycles caractéristiques, rythmés par les défilés dans les plus
grandes capitales de la mode. Une « marque » de mode correspond à « une catégorie de produits qui sont tous
fabriqués par une même société, sous le même nom », « quelque chose de particulier ». Autrement dit, il ne s’agit
pas seulement de l’accumulation d’éléments tangibles ou d’une marque déposée mais également de ce que la
marque évoque, ce qu’elle suscite chez les consommateurs, en fonction de la qualité des produits, de la gamme de
prix, du réseau de distribution et de l’image de la marque. Les marques sont catégorisées selon différents critères -
dont le prix et l’esthétique des produits - en « Grand public », « Intermédiaires » et « Haut-de-gamme ». Au sein de
ces catégories, chaque marque adopte une stratégie propre pour fonder son image de marque et fera plus ou
moins d’efforts pour construire leur identité autour de leurs valeurs et de leur vision de la mode. Le luxe fait partie
de la catégorie de marques « haut-de-gamme » et fait référence à des marques réputées pour leur exclusivité, leur
savoir-faire, leur artisanat, l’excellente qualité de leurs produits et leur design singulier. A la fin des années 90, alors
que l’offre de l’industrie de la mode s’élargissait vers une mode plus accessible et meilleur marché, un fossé se
creusait entre les marques de luxe et les marques grand public : les marques contemporaines étaient nées, avec
Theory en 1997 et Marc by Marc Jacobs 4 ans plus tard. En 2015, le « Fashion Magazine » a décrit ces marques
comme « des labels à l’esthétique d’un designer mais à des prix plus abordables ». La compétition est féroce sur ce
segment, qui peine encore à être défini convenablement. Magnifier une marque représente un défi, de même que

d’affirmer son positionnement, entre luxe et accessibilité. Etablir un réseau de distribution adéquat est
fondamental pour construire une identité de marque solide, assurer l’accessibilité à la marque et entretenir la
profitabilité. Un canal de distribution est défini comme étant « un point de contact avec le client », un point
d’interaction entre la marque et ses clients, par Anthony & Kent (2016) et peut prendre la forme de magasins
individuels, des grands magasins, de concept stores, des magasins en ligne et des magasins d’usines. Ces différents
types de magasins peuvent correspondre à une distribution directe (retail) quand le canal appartient à la marque,
ou indirecte si elle implique un tiers. En quoi la distribution est clé pour assurer l’équilibre entre accessibilité et
exclusivité, propre aux marques contemporaines ? Dans « The Future of Retail is the End of Wholesale », le
shopping en ligne est présenté comme offrant de multiples perspectives pour les marques : la distribution
physique doit se réinventer et le wholesale n’a pas d’avenir dans ce nouveau modèle. La politique tarifaire en
wholesale est vivement critiquée dans la mesure où ne pas réussir à fixer le prix optimal d’un produit serait néfaste
soit aux marges dégagées par la marque, soit aux volumes de ventes. Par ailleurs, les marques ne contrôlent pas la
politique de réductions de leur distributeur, ce qui peut conduire à des situations confuses où le prix d’un même
produit diffère d’un point de vente à l’autre, créant ainsi une compétition entre les magasins et nuisant à l’image
de marque. De plus, il est difficile de contrôler et d’anticiper les stocks nécessaires. Enfin, la particularité de chaque
marque risque d’être noyée dans un myriade d’autres marques, qui peinent toutes à se démarquer. D’un autre
côté, dans le cas d’une distribution retail, la marque contrôle l’univers de marque au sein du magasin et le message
envoyé au monde : les magasins retail véhiculent l’ADN de marque. Néanmoins, la distribution wholesale peut
s’avérer être une solution plus que convenable. Tout d’abord, l’ouverture d’un magasin retail nécessite
d’importants fonds dont ne disposent pas les marques contemporaines souvent jeunes et qui cherchent avant tout
à se faire connaître et à gagner en visibilité. Le wholesale peut leur faciliter la tâche afin de construire une
réputation solide, les soulageant dans le même temps de la gestion des stocks et de la logistique et garantissant un
certain volume de vente. Par exemple, les marques contemporaines peuvent avoir accès à la clientèle d’un grand
magasin ainsi que clarifier leur positionnement. Enfin, le wholesale est parfois la meilleure option dans certaines
régions ou dans certains pays et ne pas y avoir recours reviendrait à renoncer à des ventes. Par ailleurs, le digital
occupe désormais une part prééminente dans le mode de vie et d’achat de la clientèle jeune et connectée des
marques contemporains et il peut difficilement être écarté par des marques de mode, initialement réticentes à
rejoindre cette révolution digitale. Contrairement aux idées reçues, le digital permet aux marques de contrôler leur
image et d’améliorer leur reconnaissance de marque. Il est également l’occasion de toucher une nouvelle clientèle
et d’en apprendre plus à son sujet. Cependant, il présente des limites, notamment le manque de contact avec le
produit, inhérente au luxe et à la mode et le manque d’interactions avec les équipes de vente.
En fin de compte, le digital, le retail et le wholesale ont chacun des fonctions propres qui servent le réseau dans sa
totalité, contribuent à renforcer la marque, à faire face à la baisse de trafic en magasin et à soutenir les ventes. Le
digital accompagne le client tout au long de son expérience, depuis la recherche en ligne et la découverte de la
marque jusqu’à l’achat final en magasin, qui devient alors la vitrine de la marque. Les magasins retail servent
désormais d’ « intensifieurs de marque », le digital de source d’information et d’engagement, le wholesale de
moteur de ventes : ils participent ensemble à une offre personnalisée, délivrée par un réseau fluide, qui favorise
l’engagement du client grâce à une histoire de marque cohérente et une stratégie de distribution d’expérience
client.

INTRODUCTION

Amongst all the challenges the Fashion industry has to take up at the moment, as highlighted by Bain &
Company in the below table “Key strategic questions for luxury players going forward”, distribution is one of
the most relevant one contemporary brands should address. Indeed, the questions on how to rethink the
retail network and how to maximize the effectiveness of all distribution channels seem particularly relevant
for contemporary brands, divided between luxury and accessibility.

Indeed, their strategy should be aligned with their customers’ expectations. This means online is ought to
take a preeminent part of their distribution, fully integrated in a uniform omni-channel network. As
distribution in the Fashion industry is holding attention, many believes the advent of wholesale is
synonymous of the end of wholesale and it is especially for luxury brands.
But to what extend do contemporary brands face the same challenges as luxury brands, especially when it
comes to distribution? How can distribution grant contemporary brands both visibility and exclusivity? Are
wholesale, retail and online retailing really an unworkable combination?
To answer these questions, interviews of Marc Jacobs’ team members, a survey of customers and
observations made in stores are compared to get a sense of what different parties think of that distribution
issue and assess whether brands are going in the right direction.

Figure 1 : Key Strategic questions for luxury players going forward (Bain & Company, 2015, p29)

WHAT IS FASHION?

1. DEFINITION AND HISTORY OF FASHION
Georg Simmel (1957) in “The Philosophy of Fashion” said Fashion was about the “charm of newness”, about
trends and about knowing them ahead of the masses. According to the Collins Dictionary, Fashion is a “style in
clothes, cosmetics, behaviour, etc, especially the latest or most admired style, a manner of performance, a
way of life that revolves around the activities, dress, interests, etc, that are most fashionable”. In French, the
word “Mode” refers to a way of living, of behaving specific to a particular moment in time and space
(“Manière de vivre, de se comporter, propre à une époque, à un pays”), a temporary behaviour or way of
thinking deemed appropriate in a particular milieu (“Manière passagère de se conduire, de penser,
considérée comme de bon ton dans un milieu, à un moment donné”) and finally, a distinguishing feature of
pieces clothing, associated with a specific time (“Aspect caractéristique des vêtements correspondant à une
période bien définie “). Whatever the definition, it seems that what characterizes Fashion is its temporality,
the fact that it is deeply anchored in a specific time, location, population… as if contingency was an intrinsic
dimension to it. From there, we understand that a specific trend can be appropriate in a time and space but
not necessarily elsewhere or in another period. The idea of trend that is essential in Fashion directly follows
on from this and seems to echoe Georg Simmel’s importance for novelty. But most of all, fashion trends are
rooted in bigger trends that can be social, economic, societal.

As early as in prehistoric times, proofs were find that Fashion was part of human lives. Even if clothing’s aim
was above all functional and meant to protect the human bodies from external aggressions, quickly clothes
serve a very purpose. Tribes started distinguishing themselves with clothes – which were mainly animal skins
and furs – of different colours and shapes, adapted to their ways of living, the environment and own likings.
The search for aestheticism is slowly emerging. In both Antic Egypt and Roman Empire, clothes allow the very
different social classes to be easily distinguished. For example, in the
Ancient Rome, slaves were not allowed to wear togas, that could only
be worn by Roman citizens. Back then, even they would use different
colours for different professions: senators would wear their violet
stripped white tunica laticlavi, soothsayers their golden togas when
purple was the Emperor’s trabea colour (cf Figure 1).
Figure 2 : Examples of togas (Source: latogeetleglaive.blogspot.com)

Fashion clearly evolved in the 14th
century, especially in France where it became luxuriant – sometimes tacky.
In the king’s court, the point is to be noticed, thanks to rare and expensive fabrics, bold colours and shapes.

Trends emerge in the 18th
century and travel across the country thanks to the first “magazines”. Starting from
the French Revolution, Fashion trends embody the social changes that occur in a society that faces deep
renewal, especially the role and rights of women (Ukonkwo, 2007, p13-p57).
The premises of Fashion as we know it today appear in the early 20th
century with Worth’ Haute Couture and
the first Fashion shows. Throughout the century, as technological revolutions occur, brands are developing,
reaching more and more people. The Fashion industry is born, an integral part of our societies, with its
unbridled pace and ubiquitous advertising.

2. VALUE CHAIN AND SUPPLY CHAIN OF THE FASHION INDUSTRY

What’s called Fashion today gathers apparel, accessories – handbags, small leather and others – and shoes. In
order to offer this range of products to their customers, fashion brands rely on often internationalized supply
chains, from design and sourcing to distribution, vigorous marketing campaigns and after-sales services.
Fashion is what is called a “buyer-driven” business: this means the consumers should be put at the heart of
the value chain and is central from the strategy definition to the collection development and the performance
assessment. It is not so much economies of scale and volume that will draw profits but rather appropriate
design, marketing, distribution network (DUKE CENTER OF GLOBALIZATION, GOVERNANCE AND
COMPETITIVENESS, 2011, p11).
Creativity is so important in the Fashion industry because it constitutes the starting point of the value chain.
Nonetheless, designers now work hand-in-hand with marketing teams, trends setting agencies and their
buying department to ensure the products are feasible and meet the market’s expectations. The design of the
products is one of the most important reasons why they will stand out months later on the shelves and
participates in building a strong brand identity. Yet, this can only be achieved with appropriate quality and
thus, a performant inbound process of sourcing. The most common raw materials used are leather, textiles
that can either be natural such as cotton and linen or man-made such as polyester and viscose: either way,
the fashion houses have to keep in mind that the quality of the finished goods ensues from the quality of the
raw materials they selected, which thus determines the price points.
The production and assembly aims at assembling fabrics into the finishing good that will be sold. This step can
be fairly complex and include many different types of operations, from cutting, sewing and knitting to treating
the materials by bleaching, dyeing or printing. The vertical integration of the manufacturing step mainly
depends on the segment the Fashion brand is positioned in: because haute-couture requires highly-skilled
workers for outstanding craftsmanship, manufacture is most of the time integrated when lower-end brands –
even premium – often resorts to licensers for the whole or part of their manufacturing process (Wang, 2015,
p15).
Brands will then sell their products using either their own distribution network or resorting to other
distribution channels, such as wholesale partners, corners in department stores, websites… The degree of
control brands maintain on their distribution will necessarily affect the sense of rarity associated with their

image. Even before the product has arrived on the market and is ready to be sold, marketing campaigns aim
at supporting the sales and send a message from the brand to the customers about the collection. With the
development of media and new technologies, the ways of marketing the products are infinite and Fashion
brands have now understood the importance of social media, on which they focus on and rely more and
more. Depending on the positioning of the brand, the last step – that is services and after-sales services – can
be almost inexistent or fundamental (Wang, 2015, p15). High-fashion brands usually guarantee low prices but
minimal customer services whereas for luxury or even just high-quality brands, customer service is as
important as the quality itself: this goes from offering drinks in cosy areas in the stores to very flexible and
efficient return, replacing and repairing policies the customers feel they are entitled to ask for.

All the supply chains of the Fashion are somewhat intertwined and ultimately gather into the international,
diverse today’s Fashion market.

3. THE FASHION INDUSTRY: CURRENT STATE OF THE MARKET - FOCUS ON THE EUROPEAN MARKET

The Fashion industry has indisputably become
global and has grown into a dynamic and leading
industry of the European economy, especially in
countries such as Italy or France, where Fashion
and Luxury are part of the country’s identity and
culture. Players can be drastically different
though, from Spanish Inditex and its high-fashion
Zara to 35.7 billion euro revenues LVMH, the
French conglomerate of very diverse luxury
brands. The overall industry employs about 5
million people, dedicated to have the industry, its
savoir-faire and creativity radiate worldwide and
working together to sustain its growth.
In 2015, the clothing industry alone in Europe had
a turnover of 169 billion euros, with 4 billion
euros of investments and employed 1029
thousands people in 120 111 different companies
throughout the continent (EURATEX, 2015, p1).
The globalization of the industry can be observed
at every step of its value chain as many different
countries are involved, from the production to the selling. 36% of men and women apparels are imported
while 40% of women apparels are exported. Southern countries such as Spain and Portugal along with Eastern
Table 1 : Main Trading Partners in Textile-Clothing of the European
Union (EURATEX, 2015, p2)

Europe countries are the industry’s manufactures, even if it is worth noticing that Italy has remained as a key
manufacturer, known for its craftsmanship and high-quality raw materials (EUROPEAN COMISSION, 2011, p1).
Most distribution and retail companies are established in Western Europe and are selling up to 60% of the
production to long-standing commercial partners, such as Switzerland, the USA and Japan as well as emerging
markets. These exports accounted for a tenth of the overall European exports and represented a total of 260
billion euros in 2015 (EURATEX, 2015, p2), as detailed in Table 1.
In spite of the seemingly unwavering strength of the sector, many different challenges have arisen in the past
few years and should be grabbed with both hands. If for SMBs’ biggest challenge is accessing financing, the
industry in its entirety is facing growing pressure of counterfeiting, care for environmental considerations,
emergence of new competition in newly developed countries, unrestrained renewal of technologies and
everything that comes with a more liberal and global market. More specifically in France, a -0,4% growth was
recorded, mostly due to decreased traffic because of the terrorist threat. Another trend worth noticing is the
habit of looking for “good deals”, a direct consequence of the economic crisis: consumers have a harder time
understanding the initial prices of products and tend to wait for sales periods.

A study of the Commission’s Communication and Information Resource Centre for Administrations,
Businesses and Citizens (EUROPEAN COMISSION, 2014, p1) has shown that strategies and business models have
needed transforming, adapting to maintain their competitiveness: it is now essential to embrace
technologies, make their supply chains resilient and eco-friendlier, work towards more customers-focused
strategies and rethink their exile for a use of more local players. Competition is fierce online and the
development of cross-channel distribution should be seen as an opportunity to attract customers into stores
and enrich their customer experience.

Depending on the brand’s positioning and what it deems the most important in its value chain, supply chains
can vary a lot from one to the other thus finishing up in a diversified market, from Fashion colossus to local,
intimate labels.

4. STRUCTURE OF THE MARKET – FASHION BRANDS CATEGORIES

It can be fairly easy to gather some luxury brands under the same category label: Dior, Alexander McQueen,
Oscar dela Renta are alike and comparable. Yet, we find some other brands also considered as luxury
somewhat different from Dior or Vuitton, for example Burberry and Armani. Same applies to less expensive
brands: it can be hard to clearly define the characteristics of each category. Indeed, they are very important
because the stakes differ from one to the other, especially because customers will identify to brands
depending on their positioning and thus, the category they belong to. It is of paramount importance in
department stores for the customers to shop easily.

''We segment our store to make it easier for the customer to shop,'' - Burton Tansky, president of Saks Fifth
Avenue. ''You try to put like businesses adjacent to each other.'' (GROSS, 1987, p1)

Most likely, categories are defined depending on the price points of the products but aesthetics also comes
under consideration, as follows (APPARELSEARCH, 2014):

Mass Market
- Budget also called Mass Market corresponds to the lowest end of the Fashion industry, in terms of
prices and quality. Products are very diverse and often strongly influenced by what has been seen on
the runway. Actually, budget brands are quite frequently accused of simply copying luxury design and
then selling them at much lower price and quality to appeal to the masses. Because the consumer
base is so broad, they can produce important volumes distributed throughout the world, thus
enjoying economies of scale and despite low margins, make profits. Typical mass market brands are
Swedish giant, H&M and Spanish Zara.

- Moderate brands have a higher price point than budget, such as Gap and Levis and many department
stores carry this category as it allows them to reach a lower customer segment, who do not
necessarily want to spend too much on clothing.

Intermediaries
The following 3 categories are often mingled and found interchangeable. The lines between the 3 are fine and
blurred and tend to disappear slightly to reunite “Contemporary” and “Bridget” into a larger category:
- Better refers to products of improved quality and design compared with Moderate, at a high price
point. Bridge brands can be direct inspirations for the design of this category, sometimes considered
as the lower end of designer work (at lowest prices).

- Contemporary brands are more trendy to appeal to twenty and thirty-years-old, at relatively lower
price points. It is an expanding category, known for its street wear and fashionable products, aligned
with designer trends but more affordable.

- Bridge can correspond to the second lines of designer brands, with equivalent design but slightly less
qualitative raw materials. Their lower price point makes them more affordable, with no compromise
on style and with acceptable quality.

Higher End Categories
- The designer category is known for its remarkable raw materials, details, designs, customers must
pay the price for. Indeed, it is sold for a much steeper price points than previous categories. Because

cost is not so much of a problem when conceiving the collection, designers can give free reign to their
imagination and creativity really brings added value to the products.

- Haute Couture refers to syndicated members who manufacture made-to-measure pieces but most of
the time it extrapolates to the far upper-end of the industry. Craftsmanship and creativity are an
absolute must and explain the popularity of Haute Couture on red carpets. Haute Couture often
showcases for the other products of a house, being ready-to-wear or accessories.

The aforementioned categories being so different, they can obviously not reach the same customers and their
customer base sizes considerably vary from one to the other, as simplified on Figure 2. Amongst each
category, brands will have different strategies to establish their image and will put more or less effort on build
an identity of their own based on their core values and vision on Fashion.

Figure 3 : “Different Business Models for Each Market Tier in The Luxury Industry” (XERFI, 2015, p75)

5. WHAT IS A FASHION BRAND?
a. What is a brand?
A brand is a “category of products that are all made by a particular company and all have a particular name”,
“a particular kind or type of something” and used to refer to the “mark that is burned into the skin of an
animal (such as a cow) to show who owns the animal” (MERRIAM-WEBSTER’s LEARNER’S DICTIONARY).
In “Luxury Fashion Branding: trends, tactics and techniques”, Uche Okonkwo (2007) stresses the importance
of the name of the brand, usually considered as the brand itself. A brand name carries everything with it: it
can remind you of the creator of the house, of the country the brand was created - intimately related to its
identity - and of the brand DNA.
Nevertheless, it seems that brands are much more complex that a trademark and a set of products. When
thinking of a brand, what often comes to mind is a logo, slogan, set of colours but also quality and values that

will make a brand different from another one. Brand concept is showing through the name, the country of
origin, the origin of the brand itself, its history, its story, visual image, logo, colours, sounds, shapes, languages
and total offerings. For example, Dolce and Gabbana is known to be very luxurious, to cherish its Italian
origins and the big Italian families, especially the Italian “mama” are recurrent characters in the shows and
ads. As for Chanel, it is a typical example of a brand for which the creator is so tightly linked to the identity of
the brand that every code of the house is somewhat explained by them: Camelia was her favourite flower, for
instance.
One of the most important characteristics a brand should have – even more so today – is too cultivate its
uniqueness, the motivations behind its very own existence. It is known that Fashion deeply reflects the
changes in society and the interpretation the designer has on these evolutions will very likely influence the
brand itself. Marc Jacobs International is deeply rooted in the 90’s underground culture, when art met fashion
and the emergence of outsiders and gay and pop cultures in New York City were and remained Marc Jacobs’
favourite source of inspiration. Indeed, back then, a whole new generation did not have a voice in a Fashion
industry dominated by aging prestigious European luxury brands and dull monochrome American fashion
brands, when its ideas of art, music and culture were starting to be heard. MJ was part of it and rubbed
shoulders with this youth, its audience. This goes back to the definition of a “vision” in the strategic meaning
of the word: it is about clarify the core purpose of a brand, what it stands for, its view point of the world it has
been created in and how this will help achieve its objectives.

Knowing what comes into the definition of a brand is not sufficient, at least not in the long-run. If customers
have identified with the message a brand conveys, it has to remain the same, the brand’ values must be
consistent throughout the years, regardless of all the efforts a brand can put into being modern and how it
embraces today’s social stakes.
Going back to the Marc Jacobs example, his core values, carefully cultivated throughout the years, are
irreverence, passion for outsiders, for the odd, for the ugly, as singer Marilyn Manson, Cher and transgender
director Lana Wachowski who starred in his Fall 2016 campaign.

From here starts to grow the idea that a brand is far from being the simple accumulation of tangible elements
(logo, packaging, colours, advertising…) nor just a trademark, it is not even exactly what you want it to be: the
brand is what’s in people’s minds, it is what can be seen but also so much more, it is the entire experience
customers live when entering in contact with you.

b. What is branding and why is it important in Fashion?

Figure 4 : Elements that contribute to the success of a luxury brand
The graph above (Figure 3) sums up the necessary – yet not sufficient – criteria to make a brand prosperous
and enduring: some are inherent to luxury (delivery of homogeneous high-quality products, valued
craftsmanship, identity built around the brand’s heritage…), others are part of the company’s strategy (price
positioning, controlled distribution). Finally mastering the art of branding (creativity and innovation, kindling
emotions, visibility…) genuinely matters in the Fashion world: a strong brand identity is key to be different, to
stick in people’s mind rather than being one amongst others, be blended into the vast ocean of fashion
brands. Well-conducted branding is strategic as it is a very efficient way of communicating the brand mission
and vision, what the brand stands for, what it is best known for, the emotions it triggers…

First, branding is about delivering a message, built on 3 key elements:
- Creativity: Originality and innovation of the brand are the message that has to be driven home.
- Clarity: Simplicity and clearness of the values, the vision of the brand is key to speak directly to the
customers’ minds and hearts.
- Consistency: Everything that is brought into the brand should be questioned regarding its consistency
with what makes the brand’s identity.
In her book “Luxury Fashion Branding: trends, tactics and techniques” Uche Okonkwo (2007) explains that
branding involves strategic thinking and a will to invest in the future: by having a strong constant personality,
well-defined values and long-term vision that remain steady, desire grows in customers’ minds and brand
equity is built.

What makes a
luxury brand
successful?
Uniqueness
Consistent
premium
quality
Well-
managed
distribution
Craftmanship
Heritage
Clear brand
identity
Adequate
pricing
Appropriate
visibility

Branding then allows to build a full customer experience, to gather a community. It is about creating a sense
of belonging around common values and creating a consistent long-lasting relationship with the customers.
Customers are now overwhelmed with options and products that are alike or easily comparable. What will
make them lean towards a brand in particular is the perception they have on it, the emotional appeal for the
culture that is associated with the brand. Because they know what they are buying into, they feel
comfortable, they can trust the brand, become loyal and once they feel strongly connected to the brand, they
start promoting it themselves. Branding further involves creating an “ecosystem”, a context where customers
live a value added experience. As the ecosystem grows, more and more people enter this system and it
becomes more challenging not to drift apart from the brand personality. Yet, the identity of the brand and its
longevity are at stake and in order to make an impact, the message delivered by the brand and how it is
delivered should remain the same regardless.
For example, let’s consider a luxurious brand known for its premium quality products, sold in very fancy stores
with quality customer services. In this case, all these elements are part of the brand identity and none should
be neglected: assuming the brand opens a new store, in a new country, with new staff, the customer
experience, atmosphere, level of service, tidiness of the store have to be identical as in the original stores.
Customers are also buying this whole experience and shall it be incomplete, it would make a dent in the
overall brand image.

Ultimately, the aim is for the brand to be deeply established in consumers’ minds, who acknowledge the
consistency between the product quality, the price point, the distribution network and the image (cf Figure 4).
It is only then that the conditions of purchase are met and demand is created.

Figure 5 : “Key Purchasing Criteria for Luxury Goods” (XERFI, 2015, p75)

A FOCUS ON CONTEMPORARY BRAND, BETWEEN LUXURY AND PROXIMITY

Amongst the variety of Fashion brands, one recent category - called contemporary brands - has emerged and
is now under the spotlight. Their positioning is noteworthy because they have bridged the gap between mass
market and higher end as mentioned in “Structure of the market – Fashion brands categories”, which will be
dwelled on further on. Contemporary brands claim to be somewhat luxurious, which is why the luxury
industry and its functioning is the objet of Part 1 and 2 of this section (“Definition of luxury” and “How does it
work”). Because the definition itself of contemporary brands can be tricky and hazy, examples of the most
representative contemporary brands will support the argument and enlighten on the main characteristics of
those brands. Finally, contemporary brands are facing challenges, either common with luxury brands but also
very specific ones, including the choice of their distribution channels.

1. DEFINITION OF LUXURY

In Dr Mortelmans‘ “Sign values in processes of distinction: the concept of luxury” article (2005), the main
characteristics of luxury products are clearly identified and as follows:
Firstly, luxury products are rare: because owning luxury goods is so tightly linked with the feeling of
exclusivity, of belonging to a circle of “happy fews”, they have to be somewhat inaccessible. This relative
scarcity comes from the combination of restricted production and restrained distribution; it benefits the
brand’s image and it fuels desire and sense of composure. The need for exclusivity is sometimes taken to a
point where designers launch limited edition of often numbered products, available in limited quantities, for a
limited time only, in very specific stores. For instance, the Manolo Blahnik x Rihanna denim shoes collection
was only sold in Manolo Blahnik’s stores in London, Hong Kong and New York and in the Parisian concept
store, Colette.

The second element results from the uniqueness of a brand’s design and the importance of Fashion trends.
Care for aesthetics is inherent to Fashion and Luxury, in general and the brand’s style plays a huge role in
making it luxury. Alexander McQueen was known for
the richness of its design and extravaganza and even
if his – unwearable - creations were often put down,
no one ever questioned the fact that what he did
was luxury (Figures 5, 6, 7).
It goes without saying that the finest quality is an
unnegotiable requirement for luxury goods to be considered as such. Mortelmans (2005) points out that
quality is a two-tiered criteria. Indeed, high quality rests on both finest raw materials and outstanding
Figure
Figure 7 Figures 6, 6, 7 : Iconic Pieces From Alexander McQueen's Shows (Source :
http://fashion.hellomagazine.com)

craftsmanship. As an example, Chanel created the Paraffection in 1997, a subsidiary that gathers 12 “Ateliers
d’Art”, such as Michel (French milliner), Lesage (French embroidery) and Barrie (Scottish knitwear) to support
their know-how and guarantee the best quality to their customers. Besides, luxury brands now control and
trace the origin of raw materials, especially exotic leathers, to avoid quality issues and abusive use of
extinctive species skins.
Mortelmans (2005) also points out that many authors agree on price being the fourth element to describe
luxury fashion. Yet, he argues that the high prices observed in luxury are direct consequences of the
aforementioned characteristics: because raw materials are available in limited quantities, they are more
expensive, which it reverberated on the price of the finished goods. As for the sense of scarcity, it simply goes
back to the law of supply and demand: if supply is low compared to demand, prices automatically go up.
Yet, if these 3 (or 4) are undeniably common to luxury goods, they do not quite define what luxury is in
people’s minds. Marc Jacobs once said: “I think there is something about luxury – it’s not something people
need but it’s what they want. It really pulls at their heart.” This echoes PhD Anne-Flore Maman, in her
conference “The Online Semiotics of History & Heritage of Fashion Luxury Brands” at the GEMODE Institute
(2015): luxury is not about the products only but also about a life philosophy closely linked to culture, with
respect to which customers define their own personality. Luxury is an aspiration that customers share when
they relate to your history.

The historical heart of luxury is located in Western Europe, that has remained a key player in the worldwide
luxury industry. Indeed, the 62,5-billion-euros-sales global luxury apparel market is dominated by French and
Italian brands even if the USA are a key growth driver and the largest global market. Despite its stagnation
over the past few years, Western Europe still was the largest regional luxury market in 2014 with its 34% of
global personal luxury, lead by Italy (15 billion sales in 2014) and Paris (that accounts for 2/3 of the 15 billion
sales in France in 2014), as can be seen on Figure 8. Yet, luxury shopping tourism has severely suffered from
terrorist threat in Europe and luxury brands now look for new ways of creating sales opportunities: online
platforms can no longer be overlooked and should help reinforce luxury brand equity, without for all that
sinking into trivialisation (BAIN & CIE, 2015).
Figure 9 : "NYC, Paris and London each account for more than €10 billion of luxury sales" – Personal Luxury Goods Markets in € billions (BAIN &
CIE, 2015)

In the end, far from being idle fancies, these elements described by Mortelmans are central in the value
chains of today’s luxury brands and contribute to the performances described by Bain & Company (2015).
Control over both raw materials and distribution is achieved through integration, which leaves room for
manoeuvre in terms of meeting customers’ demand and helps sustain their activities, activities that follow a
peculiar cycle.

2. HOW DOES IT WORK?

As described in Chevalier and Mazzalovo’s “Luxury Brand Management: a world of privilege” (2012), one very
specific characteristic on the Fashion industry is how it works in cycles, how it is cadenced by seasons and
how it relies on cyclical trends.
As previously discussed, the entire supply cycle lasts 18 months, from choosing raw materials to removal of
the collection from the shelves. But Fashion also follows a yearly cycle, dictated by the 4 seasons. Let’s have a
closer look to the Fashion calendar, which is summarized below (Figure 9).

Fabrics are chosen 6 months prior to the show they will be used for. Shall the brand wan the exclusivity of a
design, a pattern or a fabric, they should place orders of sufficient quantities to their suppliers.
Once in the creation studio, the collection is created in the following months, until the Fashion show where
editors, buyers and celebrities will go to, during Fashion weeks. These shows usually take place in one of the 4
Fashion capitals of the world, being New-York, London, Milan and Paris, even though some brands try to drift
from norms and settle in new Fashion capitals, such as Los Angeles, Tokyo or Sydney. After the shows, buyers
look into the collection and select items they think could sell in their stores, based on budgets they decided
on, for each brands, before the shows. Pieces should be wisely chosen based on the knowledge of customers
tastes, their market in general and future fashion trends. The clothes arrive in store 6 months after the show –
which is now strongly criticized by some designers who think the lead time should be reduced. Both the
internal retail and wholesale teams and retail buyers attend a showroom, right after the Fashion show to have
a closer look at what walk the runway and pick what they think could sell. The pieces exhibited can come
Figure 10 : Fashion Cycle for a Fall-Winter Collection (Chevalier and Mazzalovo, 2012)

straight from the runway or have been made for the sole purpose of the showroom. At this time, the
production cycle for most of these pieces has not started yet. Indeed, right after the show and before the
buyers send their final buys, the clothes are made more suitable for regular body types and more wearable in
daily life. Yet, some pieces coming directly from the show are displayed in store (quite often used for Visual
Merchandising, to recreate the atmosphere of the show): ready-to-wear and collection coexist in stores. The
collections remain in store until the next sales period, which means 2 collections are sold at the same time
and Spring and Fall will be on display much longer than the other two seasons.

There can be from 2 up to 6 collections a year, depending on the Fashion house, the 4 most common ones
being:
- The Spring collection, shown in September and sold starting February/ March the next year,
- The Pre-Fall collection’s showroom usually takes place in November and is sold starting May the
following year,
- The Fall Fashion show occurs in February, collection and arrives in stores in August,
- The Resort collection is presented during a showroom in June and available on the shelves in
November.

The sketch below (Figure 10) clarifies the Fashion Calendar and the discrepancy between the shows and the
sales in the stores.

Yet, some Fashion brands have created their own calendar and present more collections, with more Fashion
shows. For example, Chanel manages to launch 2 extra collections: “Haute Couture” and “Metiers d’Art”, to
praise the Paraffection and their partners for their expertise and craftsmanship. On the other hand, some
Figure 11 : The Fashion Calendar (Image Source: https://primperfectblog.files.wordpress.com/2011/02/seasons-of-hope-
logo.jpg)

more intimate brands sometime cannot afford a proper Fashion show and resort to presentations where
models are not walking down a runway but rather standing to show the clothes to the audience.
After the Fashion month, shows are compared and recurrent styles will appear to be the coming fashion
trends. Inspirations for the shows are from being the concern of the designer only. On the contrary, a long
phase of research is needed with the brand’s marketing teams and trend forecasting agencies. Designers work
on drawing from external sources of inspiration as well as reinventing the codes of their own house. They can
reuse previous designs that are known to sell well, which helps out with building a strong brand identity.
For example, for the Fall 2016 Marc Jacobs fashion show, they reused typical Marc Jacobs features such as big
ornaments, they played with the clothes’ proportions: some pieces were exactly the same as in past seasons
except re-coloured in black, to match the goth theme of the show (cf Figure 11).
But trends can come from various external sources. Each year, Pantone, expert es colours, picks the colour of
the year. In 2013, as the crisis was coming to an end and better days were looming ahead, the Pantone colour
of the year was Emerald Green, that represented well-being, harmony and hope. This year, Pantone opted for
two colours: rose quartz and serenity, meant to bring mindfulness, protection against daily stress,
peacefulness. Also, pairing a rose and a blue represents the world going towards more gender equality and
gender blur, that are major social evolution. When Parisian trend forecasting agency, PeclersParis predicted
Caribbean inspirations strong in 2016 after the opening of Cuba and tightening of relationships with the US.
Chanel Cruise show took place in the streets of La Havana in May 2016. Also, perpetual reinvention of what
has been done in the past, for trends that are tightly associated with a decade, such as suede and the 70’s,
CK’s large sweater and minimalism of the 90’s: get inspiration from the past and make it more modern twist,
associate it with other references.
How about contemporary brands? They do follow the same schedule and share some characteristics with
luxury brands but as detailed later on, what is at stake is very unique and specific to contemporary brands.
Examples of contemporary brands and profiles of typical customers are used to let in on on this category and
to better understand its challenges.
Figure 12 : Looks from Marc Jacobs' FA16 Fashion Show (Source: https://i.ytimg.com/vi/pYJqMnOnMiQ/maxresdefault.jpg)

3. CONTEMPORARY FASHION
a. What is a contemporary brand?
If much has been written on the Fashion industry and especially Luxury, not so many papers focus on a certain
type of brands that has emerged in the fast years called contemporary fashion brands. Yet, contemporary
brands are flourishing around the globe, they now start to draw more and more attention as their success
grows.
“Contemporary can be seen as unsettling, a bit disturbing”
Pierre Mouton, Marc Jacobs Printemps Manager

In 2015, the Fashion Magazine described the phenomenon as “labels with a designer aesthetic and more
accessible price points” (SCHAEFFER, 2015, p1). By this, they were referring to brands selling products for up to
$600, making them more affordable than usually luxury goods, but mostly, a segment in the Fashion industry
more and more money is being spent in: “Enter contemporary fashion. You may never be able to afford that
$50,000 Birkin, but after a few weeks of saving, a 3.1 Phillip Lim Pashli bag may just be within reach.”

“They want exclusive quality labels that are not mass produced, yet are affordable.” Ana Canadas, visual
merchandising manager for online retailer Farfetch.com (SCHAEFFER, 2015, p1)

As emphasized by Marc Jacobs Printemps Manager, Pierre Mouton, contemporary brands to be a disruption
to the formal world of luxury Fashion. These brands are bolder and change the luxury criteria for customers to
identify with the brands, namely because of muses and brand ambassadors. According to him, customers feel
more emotionally connected to these accessible and more affordable brands.

Despite the multitude of contemporary brands on the market today, common features can be brought out:
- The first and most important one is price range. As mentioned before, contemporary fashion brands
are meant to be more affordable than luxury brands and thus, their price points are set lower than
those of luxury.
- Because they are sometimes seen are somewhat luxurious, they deeply believe in high-quality fabrics
and well-made products, again not going for the same level of expertise and details than luxury
fashion but taking a stand against disposable high-fashion.
- Contemporary brands must have an added value in terms of design and aesthetic, as their visual
identity will have them stand out of the crowd. As detailed later, their customers are usually young
and fashionable, and looking for a certain, trendy style, in a brand they can still recognize the “hand”,
the signature. Actually, when asking customers to grade the words that best describe contemporary
brands from the words “luxurious”, “expensive”, “trendy”, “accessible” and “of good quality”, they
attributed a grade of 4.15 out of 5 to “trendy”.

‘Pieces will have interesting construction details and a good-quality finish. The collections are in line with
seasonal trends but also incorporate signature items that consumers immediately recognise and associate
with the brand.’
Ana Canadas, visual merchandising manager for online retailer Farfetch.com (SCHAEFFER, 2015, p1)

As the offer in the Fashion industry widened towards an affordable, accessible, stylish high fashion, a gap
appeared that neither mass-market nor luxury brands could bridge: the demand for high quality yet
affordable clothing was met. The contemporary Fashion market was born. The first contemporary brands
appeared in the late 1990s as real, identifiable brands, recognized as such, contrary to the diminished
versions of designer brands bridge brands had been in the past. Theory was created in 1997 and 4 years later,
Marc Jacobs launched his own contemporary label, Marc by Marc Jacobs. Since then, the segment has kept on
developing till the financial crisis legitimated its existence and made it one of the most promising segments of
the industry. Today, contemporary brands have broadened their targets to different customer segments and
do not limit themselves to people who cannot afford luxury brands and are tired of fast fashion. Throughout
the years, they have come up with their own touch, the own style recognised in its own right and people turn
to them no more through spite but genuinely for their identity. Some designers had even decided to fully
associate their names with contemporary brands, for instance Alexander Wang, Etienne Deroeux and
Jonathan Simhkai or create a new line dedicated to another customer segment than their usual customer
base, such as Isabel Marant Etoile or Athe by Vanessa Bruno.

When asking potential customers about contemporary brands 70% of them said they knew what this category
refers to and gave the first words that came to mind (Figure 12). The idea of modernity, freshness was
brought out along with the trendiness. The challenging positioning was also hinted because both “expensive”
and “affordable” were mentioned equally. Overall, it seems like the interviewees were able to somewhat
define contemporary brands, whether they buy from them or not.

Figure 13 : Customers brainstorming on Contemporary Brands

In the past few years, as this category of brands grew, segments within the contemporary brands emerge: it
now ranges from contemporary to advanced contemporary, sometimes called “designer contemporary”. This
accessible luxury displays slightly higher prices but still fits in the contemporary price range and match the
“spirit” of this category. On this, Marc Jacobs’ CEO Sebastian Suhl declared that Marc Jacobs International
“had opportunity in “price points above $500 in contemporary. […] There’s a market out there for that”
(FRIEDMAN, 2015, p1) regarding both clothing and handbags.

“There you have it: The white space above $500 and — I would guess — $1,200, which is usually about
where “accessible luxury” comes in, is the “advanced contemporary” space.”
Marc Jacobs’ CEO Sebastian Suhl for WWD (FRIEDMAN, 2015, p1)

If there is an opportunity, as Suhl seems to believe, what are the typical contemporary customers like? To
who does the intermediary category appeal to? To get a better understanding of the typical customers for
contemporary brands, let’s resort to personae.

“Contemporary brands appeal to both the luxury shopper and the new breed of aspirational shopper”
Shereen Basma, women’s contemporary buyer at Harvey Nichols (MDUDU, 2013, p1)

For Pierre Mouton, there is no such thing as one single typical contemporary brands because they can appeal
to many styles, different purchasing power and different age ranges. A customer who traditionally shops at
luxury brands can also be a contemporary brand customer in the same way as someone with very different
shopping habits, with a more limited budget for clothing and accessories. On that matter, interviewees were
asked to give 3 words on who they thought was the typical customers (Figure 13). The words they gave were
then gathered into consistent groups as follows:

Figure 14 : Brainstorming on contemporary brands customers

Based on collected information, two profiles of what contemporary brands customers are more likely to be
like were drawn:
Persona 1
Demographic characteristics and sociological factors
Age / Education 20-25
Subcultures Generation Y, lives a connected life
Social class Upper middle class, can be suburban sometimes but very urban lifestyle
Reference groups Bloggers, influencers, fellows, social networks, top-models
Family structure Working parents, can be divorced, siblings or not
Psychological factors
Personality Care about how she looks, extravert, do not take stylistic risks
Personal values Social recognition, style, open to the world, global, social network
Motivations
Social recognition, sense of belonging, aspirational, fitting in, “wanna be”, cannot afford
luxury but sometimes buy one of 2 pieces after saving for a while to get a sense of social
elevation
Psychographics
Person’s lifestyle Very social life, friends, « socialite”
Relevant activities Shopping, spending times with friends, travelling, going out,
Interests Fashion, trends (she follows trends carefully and waits till she is sure it is a big trend)
CB patterns for segment members
Decision-making
style
Can be compulsive in a group, only if she knows for sure it is trendy or if it is a more
expensive piece, she will save up for quite some time, set her mind to it and then by it
but in this case, it has to be a piece that will be socially recognized as trendy and
expensive
Shopping
behaviour
Follows her models and trends, mixes fast-fashion with few pieces from contemporary,
buys on sales
Media habits
Uses all the possible network she can use, will post pictures of her latest acquisitions,
uses Instagram and Snapchat then Facebook

Persona 2
Demographic characteristics and sociological factors
Age / Education 30-35, great school, successful business woman
Subcultures Generation X
Social class
upper upper middle class to upper class, either thanks to her family or she worked her
way up
Reference groups Friends and Family, sometimes popular bloggers she discovered in her late 20s
Family structure
Usually have a kid, not necessarily living with the father of the child/ children, boyfriend
or husband
Psychological factors
Personality Modern, urban, a little different, stylish, dynamic
Personal values Social recognition, style, open to the world, global, connected
Motivations
Can afford looking for a different proposition than luxury brands, more trendy
sometimes but not ready to sacrifice quality / mix and match
Psychographics
Person’s lifestyle "Socialite”, middle market store with real high fashion clout,
Relevant activities
Go out with friends, travel a lot with family and friends, on “fleek”, go on weekends to
the countryside, works a lot and has nannies but enjoy quality time with her kids
Interests Fashion, work, family and friends, art
CB patterns for segment members
Benefit sought
To be different, look for something she might be the first one in her group of friends to
discover, brag a little about it
Decision-making
style
“Love at first sight”, much more compulsive, can go for simple understated pieces even if
a bit expensive, she does not use CB as a way to affirm social status
Shopping
behaviour
Follow trends but knows what she likes and what suits her so looks for this first, mixes a
bit of fast-fashion with pieces from contemporary and luxury, does not wait till sales
period if she really loves a piece but is happy to make a good deal
Product usage Daily use
Media habits
Use social network to stay connected with her friends and family from abroad and to
follow the trends, also posts about her travels, family etc. but can be detached from it,
uses Instagram and Facebook

b. The Market of contemporary Brands
To better illustrate what contemporary brands are, identity cards were created for few examples of
contemporary brands, which are quite representative of this category. This description is not exhaustive but
covers different price points, countries of creation (as illustrated on the graph below) and designs
(SCHAEFFER, N. (2015).

Where was It
created?
Paris, in le Marais neighbourhood
When? 1984
By who?
Morrocan-born Evelyne Chetrite and husband Didier, Evelyne happens to be Maje
designer’s sister
Story? Brand’s motto?
Womanswear, Menswear and accessories - cult following with women charmed by its
insouciant, seasonless separates and rock’n’roll aesthetic. Focusing on details that are
elegant and effortless, Sandro’s specialty is personifying that coveted brand of French je
ne sais quoi and insouciant edginess.
What about now? 266 Stores worldwide, in major Fashion capitals: NYC, Japan, Covent Garden London
How much?
Separates total between 100€-400, fur goods up to 1800€, leather goods around 500 and
more affordable small accessories

Figure 15 : Countries of Origin of Contemporary Brands Examples


Where was It
created?
London
When? Created in 1978 then Relaunched in 2008
By who? Lucille and Richard Lewin then relaunched by former Topshop Director Jane Sheperdson
Womenswear, Menswear and accessories
Womenswear : Cleaner silhouettes with a more bold detailing and sophisticated palette :
main colours are olive green, camel, tea rose and black
Menswear : Contemporary design with modern utility, versatile, neat features,
appropriate for work and leisure
What about now? More than 120 stores worldwide, including France, Ireland, Switzerland, USA
How much?
57m Revenues (2013)
Tank top starting off at 50€ up to 450€ jackets and coat
2 300€ for fur pieces
Leather pieces at around 500€

Where was It created? London
When? 2002
By who?
Maia Norman, avid sportswoman and surfer from California
Creative Director Amy Powney joined Mother of Pearl in 2006
Focus technical sportswear with an inspiration from the London art for the prints
Inspiration from social photographers and fashion photography from the 80s and 90s
Strong natural femininity of the women in athleisure clothings
What about now?
80 stores worldwide – in Asia, Australia, Eastern Europe, Middle East….
300-400€ printed sweatshirts and canvas sneakers up to 1 300€ for crystal-encrusted
coats
11 – 50 employees


Where was It
created?
Stockholm
When? 1996
By who?
Founder and Creative Director Jonny Johansson has a strong interest in photography,
art, architecture and contemporary culture
Fashion house with a multidisciplinary approach that involves creation process
Acne Studio has become a well-respected ready-to-wear, footwear, accessories,
magazines, furniture, books and exhibitions brand
Care for design and attention to detail, for tailoring and a multiform use of materials and
custom-developed fabrics
What about now?
40+ Stores in addition to the Stockholm headquarters, with flagship stores in Paris,
London, New York City, Los Angeles and Tokyo.
How much?
120m euros Revenues (2013-14)
$150-250 tops, with coats for around $1200

Where was It created? Los Angeles
When? 1996
By who?
Created by Scott Sternberg
Relaunched by designers Niklaus Hodel, Florian Feder and Matthias Weber
Originally founded as a minimalist menswear collection then its success led to the launch of a
womenswear collection in 2007
Combination of American and European inspirations for a classic American athletic brand
that honour outsiders
Uniform dressing, including shrunken schoolboy blazers, narrow oxford-cloth shirts, and
impeccably cut trousers

Combination of American and European inspirations for a classic American athletic brand
that honour outsiders
How much? Prices from $125 for t-shirts to almost $2 000 for a trench coat


Where was It created? Paris
When? Created in 1945 and relaunched in 2009
By who? Carven then Guillaume Henry
Combination of hyper-femininity and urban sportiness
Attention for details such as strong cut-outs and prints
Designer Guillaume Henry recreated a “cool girl’s label du jour” without renouncing the “old
school” spirit inspired by creator Carven
How much? From $300 sweatshirts and dresses for just under $1 000

Where was It created? Milan, Italy
When? 2009
By who? 39-year-old DJ-turned-designer Massimo Giorgetti, passionate about Fashion since young
Inspiration from indie music, contemporary art and the online revolution
Strong sense of freedom and expression of creativity
“More-is-more” philosophy and design, with rich and strong colours, prints, shapes
What about now?
5 flagships (Milan, Hong Kong, Dubai, Singapore, Tokyo)
Stockists in over 110 countries
How much? Separates around $400 and dresses with elaborate printing up to $1 000

Very few studies have been conducted to evaluate the market size for contemporary brands in Western
Europe. To get a better idea of the population who could potentially buy these brands and how much their
purchases would represent, the following evaluation was led:
- Populations in the 3 main countries of interest – namely Italy, France and Great Britain – were
rounded up and an estimation of the population living in the main urban area was derived from it.
- The population is estimated to be split into 5 age groups: 0-20, 20-40, 40-60, 60-80 and above 80.
That of interest when it comes to contemporary brands is 20-40.
- The French “Observatoire des Inégalités” (2016) assesses that 20% of men in France earn more than
3000€ each month and that 10% of women do. These numbers were extrapolated to the other two
countries.
- The price range for contemporary brands is roughly between 150€ and 1500€: the average monthly
spending is thus set a 500€.

Following these hypothesis, the total customer target reaches 675 000 people, living in the 3 main markets of
Western Europe, being Italy, France and the United Kingdom; this accounts for a monthly 337,5 million €
spending in these 3 countries, as presented in the table below.

As promising and trendy as it is, the contemporary category is not yet untroubled and still has obstacles of its
own.

c. The Current Situation and Challenges for Contemporary Brands
The challenges contemporary brands are multiple and first lie in its intricate, not consensual definition.
As previously discussed, different categories have even emerged within the contemporary category, giving
evidence of the lack of clarity. Indeed, let’s go back to the three-tiered definition and criteria it was based on:
design, price and quality. Some brands seem to respect some criteria more than others, which leads to
question their affiliations to the category.
All the aforementioned contemporary brands roughly fit into the price defined; except for some extraordinary
pieces, not representative of the overall collections (for example the below oversized shearling golden jacket
from Acne on Figure 15).
Table 2 : Market Sizing for Contemporary Brands in France, Italy and the United Kingdom
Figure 16 : Fall 2016 Acne Studio Jacket (Source: www.acnestudios.com)

That’s where the shoe pinches, especially the lower-end of the category in terms of price point. The “The
French Contemporary Wave That's Reshaping Ready-to-Wear” article (Business of Fashion Editorial Board,
2016, p1) is very enlightening on the case of the SMCP group (Sandro – Maje – Claudie Pierlot). The
outstanding performances of the group – Sandro’s turnover went from 15 million in 2007 to an estimated 200
million in 2011 – are based on a well-oiled strategy identified by Business of Fashion. SMCP has build a distinct
brand image, inspired by luxury brand images, thanks to store opening on high streets and in popular
neighbourhoods, refined interior decorations and superior customer service. They have also created their
own stylistic identity that follows trends set on the runway, adapted for their own brand. The last
characteristic of their strategy is the most critical for SMCP to actually match the full definition of a
contemporary brand: the operations management. Indeed, to accomplish what they did in the past years,
SMCP has given up on high-quality production and manufacture their products in low-labour-cost countries,
including China and try to function like fast-fashion Zara and H&M in terms of supply chain management. This
applies to other brands such as Zadig et Voltaire and Michael Kors when others like Carven pay particular
attention to manufacturing locally and promote French craftsmanship, as reported by Jacques Desbuisson,
Marc Jacobs’s PR Manager. Tibi founder and creative director Amy Smilovic declared on that issue: “I told my
husband that I felt like we were driving the car through a tunnel of fog (…) Zara and Topshop were opening
up everywhere, and I didn’t want to come down on price because the quality would be compromised.”
(SHERMAN, 2016, p1).

When it comes to design, it is often accepted that a Fashion brand has a strong aesthetic signature when fast
fashion brands start copying it. This can happen in the case for contemporary brands: the Acne jacket above
has its own high-fashion cheaper version at Zara. Yet, a Business of Fashion article (SHERMAN, 2016, p1)
somewhat suggests otherwise, quoting Hugh Mullins, former Neiman Marcus VP: “There's a sameness of the
product. There isn't the differentiation that there is in the designer market”. Brands were launched in the
contemporary segment and today, it is feared that the market is reaching saturation, making it harder and
harder to catch the eyes of customers. As mentioned before, some of the lower-end contemporary brands
have succumbed to the siren’s call of choosing profits over quality, somewhat falling into fast-fashion. In this
way, another challenge, tightly linked to market saturation, is the question of positioning, which also affects
the higher-end of the category. For example, after years of dithering, Leon’s and Lim’s Kenzo is going back to
its “top of the contemporary” origin, backing down from luxury without compromising their creativity and
uniqueness. If Kenzo managed to made up its mind, the ongoing hesitations tend to confuse people and
clarification is needed not to loose the customer base.

Lastly, elevating their brands can be quite challenging, along with affirming their positioning between luxury
and accessibility. This is where the distribution dilemma kicks in, in order to find the right balance between
building strong brand identity and ensuring accessibility and sustaining profitability. 19-year-old
contemporary brand Tibi got to grips with this question, moving for fading brand to one of the swankiest

brands on the market. They gave up on prints because “It’s not a defining characteristic. We are going to be
about what I want to be about.” (SHERMAN, 2016, p1) and turn to “Clean, modern, feminine and relaxed: If
every piece we did encompassed those, then everything was going to be where our DNA was”. Their shift in
design was not welcome with open arms by buyers at first, especially department stores who would not agree
to move them into the more fashionable area of the store. But Tibi held on and started building the e-
commerce platform, a reputation, consistently with the new identity they decided on. Slowly, they built a
distribution network based on direct retail in well thought out locations, on department stores that now
promote their brand as demanded and on online retailing. Elevating their brand, making it both accessible
and somewhat exclusive took time and appeared to have been arduous but it is also not discretionary to
sustain profitability.

This delicate position, between exclusivity and accessibility, of reachable luxury was perceived when
interviewing customers. They were asked to assess the luxurious dimension of contemporary brands based on
their exclusivity, the goods quality, design and prices. If the level of design clearly matches that of luxury
brands and if 65% of the respondents agreed that the prices make contemporary brands luxurious, exclusivity
and quality collected about 60% of nos (Figure 16). Regarding the quality of the goods, the results might be
slightly flawed and worth tempering because the SMCP and the Kooples were the most widely known brands
and as seen before, the quality of their products can sometimes leave a bit to be desired.

As for exclusivity, for contemporary brands not to be as exclusive as luxury brands is actually part of their
strategy but it the brand image should not suffer from a lack of exclusivity. But this “stuck in the middle”
position can be addressed with astute distribution that lives up to the customers’ expectations. The most
recurrent elements appreciated by contemporary brands consumers are showed in Figure 17 and are related
to the stores features, the product prices, the services and obviously the product itself. This is what brands
should work towards, that is great level of personalised service, comfortable atmosphere and a wide variety
of high-quality, good-value-for-money products.
Figure 17 : Assessment of what makes contemporary brands luxurious


Figure 18 : Features of customers' favourite store

Marc Jacobs is an example of a contemporary brand that is taking up typical contemporary brands challenges,
primarily because of the recent repositioning of the brand and the merger of the two lines.

MARC JACOBS
1. THE DESIGNER
Marc Jacobs was born in a well-to-do New-York background in
1963 and raised by his grand-mother in the posh Upper West Side.
It is her who first taught him how to sew and knit, supporting his
growing interest for Fashion and Design and enrolled him in the
High School of Art and Design so he could pursue his dream.
During his high school years, he managed to get a job at Charivari,
an avant-garde concept store, with a sharp sense of trends.
Following the steps of his role model Perry Ellis, he entered the
Parsons School of Art and Design. His senior year design project – a
collection of bright pink oversized sweaters with giant smiley faces
on, hand-knitted by Jacobs’ grandmother caught the attention of
Robert Duffy, former buyer at Bergdorf Goodman and executive at
Reuben Thomas. With the same collection he won the Perry Ellis
Gold Thimble Award and Design Student of the Year award in
1984. The first Marc Jacobs label is launched in 1986 by Jacobs and
Duffy, with no significant financial support.

In 1988 they both joined Perry Ellis, as Artistic Designer and President, which reached a milestone in the
history of Marc Jacobs as a brand. Indeed, their 1992 Grunge collection provoked a public outcry, received
unanimous poor reviews in the press and in the industry in general and got the two laid off. Yet, it is now
considered as one of the most important collections of the 20th
century and set the scene for the Marc Jacobs’
legend. With irreverence, boldness and imperfection as core values, Marc Jacobs – with the unconditional
help of Duffy – launched his brand “Marc Jacobs International” in 1993 to talk to a chic and liberated youth,
under the wing of Anna Wintour, Vogue Editor in chief herself.

2. THE BRAND IN THE RECENT YEARS

In 1997, Duffy brokered a major deal with Bernard Arnault, President and founder of the LVMH group: Marc
Jacobs International became the first American LVMH investment, thus getting access to highly qualified
teams, LVMH resources and suppliers. The first Marc Jacobs store was opened in NYC on Mercer Street,
paving the way for brand expansion both in the US and abroad till the $1-billion-100-stores-worlwide
company it is today. It is worth pointing out that the two lines – Marc Jacobs and Marc by Marc Jacobs – had
been drifting away from each in the late 2010s and the much needed strategic repositioning of the collections
Figure 19 : Marc Jacobs at work (Source:
www.marcjacobs.com)

(Figure 19) led to the abandon of the Marc by Marc line and the reworking of the Marc Jacobs brand in its
entirety.

While implanting the successive strategic changes, Marc Jacobs’ image got a little complex but the brand is
trying to establish itself as a designer contemporary brand, characterised by a strong, easily identifiable story
that is reflected in emblematic pieces. Even though contemporary, Marc Jacobs’ vision has remained “luxury”
and it has kept its emotional, irreverent side, dear to the customers’ hearts.

The products sold in the Marc Jacobs corners and stores range from Ready-to-wear and Shoes to Leather
Goods, Watches or cosmetics and Fragrances, as presented in Figure 20. Woman Ready-to-wear, shoes and
accessories, jewellery and tech items are managed internally when Men RTW, kids Little Marc RTW line,
sunglasses, fragrances, cosmetics and watches are licenses, ordered to external suppliers, such as Kendo,
Coty, Fossil or Safilo.

All the Marc Jacobs products are produced and renewed as frequently as the Fashion calendar dictates so: the
two main collections, namely Fall and Spring are preceded by the Pre-Fall and Resort collections respectively.
Figure 20 : Marc Jacobs repositioning (Internal source)
Figure 21 : Marc Jacobs Product Offering

Today, the challenge for Marc Jacobs is to to deliver a reconciled and consistent offer to their customers: for
the past years, the leather goods and accessories tend to be very contemporary but out of step with the show
inspirations and a very inspired, artistic ready-to-wear collection that can sometimes be a little expensive for
the younger contemporary brands’ clients.

Finally, to distribute these products, Marc Jacobs relies on an international distribution network, on wholesale
retailers, company-own retail doors and an e-commerce platform. The 4 retail points of sales in Europe are
the Saint Honoré flagship, located on the well-known Parisian Rue Saint Honoré, the two corners in the
Galeries Lafayette Haussmann department store and the Mount Street store of the British capital in fancy
Mayfair. The most profitable store in the world – especially considering its size – is the Galeries Lafayette
Accessories corner, managed as a retail door, but far from limiting its distribution to retail stores, Marc Jacobs
relies on a well-developed wholesale network, mostly department stores corners, in the France provinces, in
Europe and Middle-East.

Distribution will now be lingered on because the most adequate combination of distribution channels is a
controversial matter and contemporary brands’ differs from luxury brands’ ideal solution.
A short description of the different types of distribution will help understand what’s at stake and what the
options are. Common beliefs will then be confronted to Marc Jacobs team views and contemporary brands
customers’ opinions.

DISTRIBUTING FASHION

1. DEFINITION OF DISTRIBUTION

Anthony Kent & al. (2016) defined a channel as a “customer contact point”, a point of interaction between a
brand and its clients. Fabrizio Mosca (2016) specifies that a distribution channel combines organizations so
the product reaches the final customer, constitutes a point of access to the product for the end consumer,
who is put in a situation favourable to a purchase. Companies in the Fashion industry can resort to different
types of channels, as described below.

Individual Stores
The first distribution channel that usually comes to mind is the store, which refers to a single-brand channel
that offers a direct access to the products of a brand, where communication is controlled from A to Z by the
brand. The stores often are flagships, known for their ideal illustrious locations. There, the brand DNA is
unrivalled and customer experience is at its utmost, since the brand controls every aspect of the journey in-
store, from the layout to the smells, the windows decorations and the staff. The first motivation for opening
flagship stores is visibility rather than reaping outstanding benefits.
Yet, for obvious financial considerations, franchises are often a preferred option since it allows the brand to
maintain its control on the assortment and the image conveyed by the store, yet it does not require heavy
investment in brick and mortar. Opening a store in malls is also possible and quite attractive – given that the
offer as it seems to ensure a minimum traffic: this is called a self-standing store. Products can also be
distributed in multi-brand stores, owned by individuals who buy from brands of their own choosing, based on
the price range and types of clothing they want to be selling.

Department Stores
Department stores are large multi-brand generalist stores, cherished by brands since they provide traffic and
visibility. Department sometimes have their own buyers in charge of picking the products sold in their stores,
amongst a wide variety of brands, usually ranging from high-end of medium-end. Otherwise, they base their
business on the management of “shop-in-shops”: this corresponds to a concession, a corner in a bigger store,
fully managed by the brand, in terms of staff, displays and assortment, in the limited space that it rents (for
example, Maje in les Galeries Lafayette, Moschino in la Rinascente).

Concept Stores
Concept stores gather a refined selection of products of many different kinds that fits their image, their
identity, their vision: they sometimes organize events and entertainment but mostly work on building a
strong identity for their own brand, rather than for the brands they sell.


Online Stores
The fastest growing channel is unsurprisingly the internet: the brand can interact directly with its customers
or sell its products via an online multi-brand selling platform, such as Net-A-Porter. Either way, the access to
information is immediate, facilitated and goes both ways as brands can also get immediate feedbacks from
their customers. The main challenge remains that browsing is often hardly turned into buying.

Outlets
As for off-price retailing, products from passed seasons are sold at a discounted price in brand outlet stores,
sometimes located in outlet villages or centres, in order to get rid of the remaining stocks.

All the aforementioned types of stores can be classified into 2 categories of channels called direct and indirect
channels. An indirect channel involved a third-party (retail companies, online retailers or department store) in
charge of managing the process of distributing the products to the customers, for the brand. Intermediaries
are now needed, adding links to the supply chain. On the other hand, a direct channel belongs to the brand
that is in charge of distributing and selling its own goods, with no intermediary of any kind between them and
their end-consumers. In reality, brands do not make a Manichean choice but rather turn to a combination of
the two, depending on their own needs in terms of distribution. The key though is to make sure the customer
experience and brand image remain consistent throughout the network, regardless of the fact that the brand
fully controls the channel or not. Further precision can be made on direct channels that can be described as
selective or exclusive, as highlighted by Chevalier and Mazzalovo (2012): it is selective when the goods and
services are distributed through a voluntarily restrained number of stores and it gets exclusive when control
over the channels is so tight the number of stores is kept very low.

An indirect distribution strategy secures steady inflow of money and limits the financial investment in the
retail network - thus freeing it up for other sources of spending sometimes more crucial for fashion brands, at
the different stages of its existence. Yet, it has been noted that brands tend to turn to direct distribution
rather (or favour it in a mixed distribution strategy) as it gives the brand full control on what is sold to their
customers and how. They are also in a position to get feedbacks directly from their customers, get to know
them and their expectations better in order to make wiser decisions in the future. In terms of selectivity, it
depends on the degree of exclusivity the brand is looking for and the challenge here is to find a balance
between product availability, brand expansion and growth and over-exposure.

Patrick THOMAS, president of Hermes declared in 2011: “I am wary of the paradox of luxury: the more one is
desired, the more one grows but the more one grows, the less desirable” (BERGHAUS, 2014, p158), giving
prominence to the critical importance of choosing the right distribution in building a long-term strategy for a
Fashion brand.

Professional Thesis %22How to sell contemporary brands?%22 - Laura Hargreaves

Professional Thesis %22How to sell contemporary brands?%22 - Laura Hargreaves

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