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Can any premium brand in any product category become a luxury lifestyle brand embracing the world of fashion? Belief in this proposition is driving a new era of collaborations, with the luxury auto world’s interest in fashion high on the agenda this year.
“Most luxury brands are discovering that it’s not sufficient to be on your consumer’s radar just for a specific product — be it cars or fashion,” says Anita Balchandani, senior partner at management consultancy McKinsey, who leads on fashion and luxury in EMEA. “What they’ve built up is actually a brand franchise. They’re now expanding and looking at how they can capitalise on and extend that brand franchise beyond what would be their core product.”
This enables brands to benefit from consumers buying across categories, encouraging loyalty as customers become absorbed by the brand universe. Those who can’t afford a luxury supercar can buy fashion instead — an entry point to the brand.
It’s not a straightforward process. “The challenge is to expand without diluting the core brand equity,” warns Balchandani. That’s why brands are becoming more involved in their cross-industry projects. Some carmakers are opting to develop their own clothing lines while others explore projects tied to Formula 1 to drive innovation and excitement.
The bigger the brand, the brighter the future, say analysts. High-net-worth individuals (HNWIs) are looking to the reassurance of the biggest names, a trend accentuated by the pandemic during which many consumers opted for the most trusted brands.
The luxury car sector is nearly twice as large as the luxury personal goods category, according to Balchandani. Together they have a combined market estimated at 380 to 390 million consumers worldwide, according to data from consultancy Bain as seen by Vogue Business. In theory, collaborations between the two should be a win-win, expanding brand universes for both categories.
Leveraging brand identity
Italy’s Ferrari, one of the best known brands in Formula 1, is ahead of the rest of the F1 pack in its fashion development. Its ready-to-wear line debuted in June at Milan Fashion Week for Spring 2022, showing again this February. The fashion line supports a wider brand diversification strategy to establish Ferrari as a lifestyle brand. “Ferrari is not just a car company,” says Rocco Iannone, who was appointed brand diversification creative director in 2019, after spells as creative director at Pal Zileri, head menswear designer at Giorgio Armani and designer at Dolce & Gabbana.