On paper, the brand elevation playbook is relatively straightforward: reduce excessive discounting and overexposure in outlet and wholesale channels while increasing desirability and exclusivity — all of which will allow you to raise prices and improve margins. But while many luxury brands have pursued elevation, there are fewer recent success stories.
In light of a US-China trade war, fashion executives are facing an immediate reality: price increases. How should they communicate it to consumers?
Ralph Lauren seems to be an outlier. “They’ve had multiple years of average unit retail [AUR] growth,” says analyst Dana Telsey, CEO and chief research officer of Telsey Advisory Group, referring to the average selling price of each product — a key signifier of successful brand elevation. Last month, Ralph Lauren reported that sales were up 8 per cent for the 2025 fiscal year to $7.1 billion, and gross margin was at 68.8 per cent, up from 66.6 per cent the year prior. Analysts attribute the success — in a tough market — to its elevation strategy.
This strategy has been years in the making. In the mid-2010s, Ralph Lauren was suffering from brand dilution, with excessive licensing, multiple sub-brands, heavy outlet exposure and an over-reliance on struggling department stores. Since then, the brand has enhanced the product with a focus on its core offering, added new younger customers, improved the shopping experience and reduced off-price and wholesale exposure.
It appears to have avoided the pitfalls that have befallen so many other brands over the past year to 18 months. In 2024, there was a growing perception among consumers that luxury had lost its value, as ethics, quality and creativity declined. That year, the luxury market faced its first slowdown since the Great Recession (excluding Covid). During this period, surface-level elevation had a counterproductive effect: many luxury players simply hiked up their prices in an attempt to target higher-net-worth customers, but shoppers became fatigued by the bloated prices and aspirational consumers felt sidelined.
Another mistake brands tend to make in their attempts to push upmarket is overestimating their brand’s DNA. For luxury brands specifically, often consumer perception of where that brand sits in the market is based on decades of heritage. “Sometimes, the product is too different from what the core resembles, or they try to centre on a category that is outside what the brand is known for,” says Telsey. Take Burberry, for example: the previous leadership team increased prices in categories like leather goods, where the brand had little authority, and saw sales suffer as a result — an approach the new leadership team is correcting.
Here, we unpack five lessons from Ralph Lauren’s brand elevation strategy.
Start with storytelling
How do you develop the leverage to convince customers to pay full price, especially when those prices are increasing? It starts with storytelling: how the brand is presented online and offline, and how it intersects with cultural touchpoints.
Ralph Lauren’s world-building has been the foundation of its success. Some of its most successful developments have been in hospitality and sports, which craft an image of the Ralph Lauren lifestyle. For instance, the brand has a slew of upscale coffee shops — Ralph’s Coffee — across its markets, which attract foot traffic as well as a young audience seeking to post their Ralph Lauren cappuccinos on social media. The brand’s Polo Bar in New York and restaurants in Paris and Chicago feature classic interiors with Americana and equestrian-inspired décor. The brand has also aligned itself with aspirational and heritage-rich sports, dressing tennis players at Wimbledon, the US Open and the Australian Open.
“They’ve been very much in tune with the consumer interest. They’ve gone back to sport where it makes sense. They’ve done collaborations where it makes sense. They’ve elevated in terms of experience,” says Jessica Ramírez, co-founder of advisory firm The Consumer Collective. “The consumer interest has been really good. The brand has always had an overlap with sport, but now they’re really taking advantage of that. A lot of heritage brands have that ability and should tap into that more to reinvent themselves.”
Aside from expanding in categories like sports or hospitality, there are other ways to communicate the lifestyle associated with the brand. Ralph Lauren’s campaigns sell the fantasy of an aspirational American life, from East Coast summers to Western ranches to Ivy League campuses. Elsewhere, we’re seeing Loewe communicate the value of its craftsmanship on social media and Burberry tap into storytelling with a refreshed and playful approach to marketing. The key when elevating is to focus on initiatives that remind the customer why the brand is relevant.
Refocus on core products
One of the common pitfalls of an elevation strategy is when a brand attempts to be something it’s not. Often, this manifests as an overinvestment in categories and products that stray from the core.
Ralph Lauren has not been immune to this, but experts say the brand has learnt from its experience. “Ralph Lauren has tried to sell more jeans and handbags without great success. In the past, they were probably producing too much non-core product and that was hurting their margins,” says David Swartz, senior equity analyst at financial services firm Morningstar.
Now, 70 per cent of the brand’s offering is core products (including polo shirts, knitwear, blazers, caps and button-down shirts), according to its most recent earnings call. “Ralph has been able to continue to enhance the sell through of core product, by continuing to make it the pillar of their assortment through economic cycles,” says Telsey.
The trick isn’t just to focus on the products the brand is known for, though, but to intentionally improve the design of those products. “The elevation of the product has been key. You need to offer newness in your assortment, even when focusing on the core,” says Ramírez. This has given the brand the leverage to increase prices. “If you have better designs, if you’re more in tune with the consumer, that’s where you can easily pick up the price,” says Ramírez. She also notes that the women’s collections have improved significantly. The brand has identified womenswear as a “high potential” category, witnessing sales growth in the high teens during the most recent quarter, while handbag sales outpaced expectations, up double digits.
Be selective about where and how you show up
Ralph Lauren’s challenge 10 years ago was that it was overexposed. “There were around 20 different labels, there were way too many stores selling Ralph Lauren — including lots of department stores, which had started struggling, so the product was being discounted,” says Swartz.
The brand made a conscious choice to pull back on discounting, rationalise some of the labels, reduce stores and cut products that were not big sellers, Swartz says. It also repositioned its exposure at US department stores, he says; instead of being present in every Macy’s, for instance, it would only be present at the top-performing Macy’s stores, and in those select stores the presentation of the brand would be more elevated.
In exiting portions of the business that diluted the brand, Ralph Lauren had to make intentional sacrifices along the way. “It caused a decline in sales in North America at the time, and today sales in the US are still below peak historical numbers,” says Swartz. “They have effectively sacrificed those [US] sales to improve the margins — which are now in the high 60s, the highest they’ve ever been. That’s why the valuation on the stock has increased so much.” (Ralph Lauren’s share price has more than tripled over the past five years.)
In addition to improving the quality of sales in the US, Ralph Lauren’s international business today makes up more than half of all sales, the brand said in its earnings. Analysts attribute this to two factors: there are fewer issues with department stores outside of the US, and there was less of a culture around buying discounted Ralph Lauren at outlet prices.
There may also have been an internal “cultural shift under the management team” regarding inventory efficiencies, observes Telsey. That means leadership has intentionally signalled that sell-out and inventory discipline is a priority, which has “allowed them to be disciplined in their demand forecasting”.
Give the customer a luxury experience
While Ralph Lauren has taken a more strategic approach to wholesale and outlets, analysts say leadership is still realistic that those channels play an important role in the business. “Typically, companies want to separate the experience to avoid those sales being cannibalised. But with Ralph Lauren, even the outlet stores are nicer than most so they stand out,” says Swartz. “Sometimes outlets are used as a dumping ground for product that won’t sell, so they put it on the biggest discount possible, but Ralph Lauren has avoided that so even though the outlet product is cheaper than full price, it’s not radically cheaper,” he says, pointing to the elevated merchandising in outlets, too.
The brand has taken a similar approach with its wholesale channel. “If you go into a Macy’s store in the US, the Ralph Lauren section really stands out because it’s much nicer and fancier than the rest of the Macy’s store,” says Swartz. “Ralph Lauren has been willing to do that while others might be a little more hostile. They’ve taken more initiative in making sure those channels are healthy.”
In this sense, the presentation to the customer is elevated across touchpoints. “By enhancing the store environment, they’re really capturing more dollars from the existing consumer and attracting new ones,” says Telsey.
Take a multi-generational approach
A brand’s longevity relies on its ability to tap into its patrimony in a way that appeals to the new generation while simultaneously creating newness in a way that doesn’t alienate long-time customers. Telsey says this is evident at Ralph Lauren. “They’ve been able to continue to maintain their customers who were shoppers with them many years ago, but also attract new and younger customers, which is important to maintain the relevancy of the brand,” she says. “It’s that multi-generational aspect that allows them to participate in a future path of growth.”
The emphasis on heritage chimes with the existing customer. “They’ve really talked about the heritage — that Ralph Lauren is a brand that’s trusted,” says Ramírez. For the younger customer, the brand has pushed into streetwear with its Polo line, she continues, adding that she’d like to see continued investment in digital, where the brand still has room to improve its proposition.
Swartz also highlights the brand’s engagement with the Black American community. “Ralph Lauren’s always had a [diverse] customer base, because it’s had this place in hip hop culture and African American culture that goes back to the early ’90s,” he says. The brand has ongoing scholarships to support students at historically Black colleges and universities (HBCUs) in the US, and in 2022 designed a capsule collection in collaboration with two HBCUs, Morehouse and Spelman. In this sense, Ralph Lauren has been able to modernise its Americana heritage beyond the association with WASPs (White Anglo-Saxon Protestants, the historically dominant group in the US).
An elevation strategy never stops. There will always be a new generation to appeal to, new macro conditions to contend with, pricing power to negotiate and other brands to compete with. “It takes years to build that brand loyalty, but it can be done,” says Swartz.
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