Louis Vuitton has reclaimed its spot at the top of the leaderboard in the newest edition of the Vogue Business Index, having been pipped to the post in the Winter 2021 Index by Dior. Its continued digital evolution, innovation and brand favourability in the eyes of the consumer have helped it secure first place. Additionally, the return of the financial pillar has enabled Chanel to leap into the top five for the first time since the first Index. Now with six pillars, the newest Vogue Business Index combines over 160 data points across Consumer, Digital, ESG, Omnichannel, Innovation and Financial performance for each brand. And while some pillars (like Financial) might be slower to change, others (like Omnichannel and Innovation) indicate rapid adoption of new tools that are pushing the needle of consumer expectation.
Clienteling stretching into sustainability
Six brands, including Dries Van Noten, Alexander McQueen and Max Mara, have started advertising Whatsapp customer service functionality on their e-commerce pages since October 2021. Other brands are also adding to their communication channels and, currently, 35 per cent of Index brands offer some form of instant communication with an advisor. This still leaves significant room for growth, given that 60 per cent of luxury consumers globally view instant customer support like live chat as important.
Higher levels of service are also stretching into sustainability, with repairs becoming a key way to innovate. Sixty per cent of brands are widely publicising the fact that consumers can get unfit items repaired or replaced. However, in order to deliver on this promise, brands are also having to reconsider the way that products are manufactured. This means that repair offerings cannot be developed as a siloed service or an afterthought. It has to be considered much earlier in the funnel as part of the design and manufacturing processes.
In partnership with Klarna, this live deep dive will unpack the latest insights from the Summer 2022 edition of the Vogue Business Index.
Overcoming trust issues
In spite of the hype around social media and the clear opportunities it presents, it is far from the most trusted source of information. European consumers are much more likely to be influenced by legacy media (newspapers and magazines) when making luxury purchases. That gap is particularly pronounced in the UK, where nearly three-quarters of consumers cite magazines and newspaper articles as an important information source versus 38 per cent that say the same about social networks. The only exception is China, where social media is ahead at 65 per cent compared to magazines and newspapers at 54 per cent.
Moreover, lack of disclosure remains a barrier for consumers, especially when it comes to sustainability. Lack of information about provenance on product display pages means brands effectively requires customers to do additional labour to ensure their purchases are in line with their values — a risky approach, given how much competition there is for consumers’ attention.
Even riskier is avoiding disclosure on these matters in corporate communications. While many brands will claim to be doing things “behind the scenes” to improve their policies and processes, if shoppers cannot find the information easily, they will rely on secondhand sources, which are usually informed by journalists or activists who glean their information from corporate briefings. Given the importance of transparency to consumers, luxury brands need to elevate the visibility of their CSR commitments in direct-to-consumer channels, as well as report more regularly on the progress they’re making.
Investment in product and people
Drives to deliver the right kind of talent have begun in earnest. LVMH has set out to hire 30,000 people under the age of 30 by the end of 2022, while Giorgio Armani has experimented with open-call job posters on the streets of London to try and attract a more diverse workforce. The new focus on Web 3.0 also means different talent pools need to be tapped into, and brands need to accelerate work on this now to prevent a talent shortage down the line.
Other strategic moves that brands are making include shirking seasonality and experimenting with digital assets to get into new audiences and cultivate relevance in different lifestyle practices. Prada’s Linea Rossa Autumn/Winter 2021 ski wear campaign saw searches surge by 3000 per cent on Wechat, while Hugo Boss resumed winter sports marketing campaigns during the month of its relaunch. Meanwhile, Ralph Lauren continues to innovate in surprising ways, including its launch on digital world Roblox.
These are exciting times for the luxury world, but also volatile times, with the cost of living soaring and some markets still severely impacted by the lingering shadow of Covid-19. The Summer 2022 edition of the Vogue Business Index will help to sharpen the focus on what’s most likely to drive future success for luxury brands and what decision-makers need to prioritise to make the most of emerging opportunities.
Table of contents
Digital developments and the reintroduction of the financial assessment see a shuffle at the top of the latest ranking in the Vogue Business Index.
Alexander McQueen, Dries van Noten and Max Mara among brands that have introduced Whatsapp clienteling since the last index.
Chanel leaps into the top five due to stellar financial performance, while brands look to reduce dependence on wholesale.
Sixty per cent of Index brands state clearly the option to get items repaired or replaced, with the latest joiners including Acne Studios and Versace.
Dior continues to top the Digital pillar, with four times as many views on YouTube as Ralph Lauren, which places second in this area.
Collaborative co-operation, with initiatives like the Aura Blockchain Consortium across LVMH, Richemont, Prada Group and OTB Group, is accelerating the adoption of innovations.
Aided awareness for established brands like Tommy Hilfiger and Ralph Lauren is still lagging among younger shoppers, but categories that are getting a modern update like footwear have strong appeal.
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