Starting From the Bottom

Long-standing, reputable, and established businesses generally survive times of change in one of four ways (and forgive us as we just make the following names up):

  1. The tried-and-true strategy
  2. The go-down-with-the-ship strategy
  3. The one-night-stand strategy, and
  4. The sheer-dumb-luck strategy

Luxury brands are increasingly employing strategy iii; the one-night-stand. That is to say they change strategies/operations/procedures until they find one that optimally serves their purpose. For instance, in the fashion retail world a quick hit of financial boost (usually a short-term ordeal,) can come from a collaboration, such as the Louis Vuitton x Supreme collab, which we spoke about here. This limited capsule collection has a finite product life (within Louis Vuitton, anyway) and does not interfere with daily/regular operations or sales of either LV or Supreme. Think of it as a sort of one-off (at least that’s what we are hoping it is…). While there may be some brand marketing-related strings attached, once the money is in LV’s pocket and Supreme is content, they wake up and go their separate ways, not expecting the other to call.

That sort of relationship may satisfy a quick craving, but isn’t a sustainable strategy without cannibalizing other products or diluting the brand and brand recognition thereafter. While all perpetual establishments may need an additional financial hit every so often, this business one-night-stand does not suit the ambition of men’s fashion brand Zegna, who is looking for a more committed strategy. For them, this means taking advantage of a two-birds-one stone opportunity; forging the forces of responsibility and supply security. What began as a protective measure to secure consistently reliable and quality controlled materials became an opportunity to proactively integrate sustainability. Recognizing the changing consumer base with growing interest in the origins of product, the well-dressed people of Zegna are acquiring farms to stabilize sources of materials, thereby gaining vertical control.

Having control of their supplies means these brands are directly accountable for the treatment of animal stock, and the welfare of employees. Scrutiny on the origins of product materials, animal cruelty (just ask Canada Goose,) and working conditions is gaining momentum and not much escapes the critical eye of social media. As a matter of business, it is advisable for brands to take care in how they manage these sensitive affairs.

Beyond good conscience and good press, this type of vertical integration is beneficial for sustainability and continuity. Companies can oversee supply levels and preemptively protect exotic species such as crocodiles and alligators before they become at risk of overharvest (eventually leading to protected species restrictions or worse yet, extinction,) with minimal compromise from product manufacture. Sounds like the recipe for a happy relationship to us!

Let us know if you want us to talk about the other strategies, or want more posts like this one!

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