Sunday, November 20, 2011

New marketing strategies to survive for high-end fashion designers: Diffusion Lines and Designer Collaborations

As a fashion enthusiast and a fashion blogger, it is always pleasant to hear about fast fashion brands working with high-end fashion designers to create an affordable collaboration line. H&M, the world’s second-largest clothing retailer, was reported that the follow up designer collaboration will be with Tom Ford who was Gucci’s former creative director, according to the website H&M has been very active in collaborating with high-end fashion designers, and it is no surprise that Versace for H&M line will go on sale this week (Starting Nov.19th). The Versace for H&M line will be H&M’s eighth collaboration with a designer since it started selling clothing by Chanel creative director Karl Lagerfeld in November 2004. “The collections could sell out immediately and H&M never had difficulty selling them,” said Van den bosch.
This type of collaboration marketing takes place very commonly these days. Uniqlo had launched a line with Jil Sander and Target has been introducing designer lines continuously as well. This is definitely good news for customers, but is it beneficial for high-end fashion designers as well? Why are premium designers eager to sell their lines through affordable mass clothing brands? The fashion designers industry has not suffered too deeply over the five years leading to 2011. Despite revenue declines in 2008 and 2009, industry operators recovered well from expanding revenue streams through creating new customer segments and product offerings. IBISWorld estimates that revenue has grown at an average annual rate of 0.1% to about $1.0 billion. With the luxury market rebounding quickly after the recession, revenue grew 1.2% in 2010 and is expected to increase another 1.4% during 2011(See their special report).
In order to survive the recession, fashion designers have found new ways to market and sell their creations. Collaborations with mass fashion brands like Target and H&M have been at the forefront of the market’s expansion. These collaboration lines allowed fashion designers to approach mass consumers by capturing a younger and less wealthy demographic. Furthermore, they come with scarcity and emergency characteristics which make these lines more unique. Even though these strategies have decreased profit margins, fashion designers can still capture public’s attention that will lead to steadier revenue streams. Nikoleta Panteva, IBISWorld analyst said that “The increasing visibility and accessibility of fashion will bode well for industry participants, as consumers’ budgetary constraints diminish.” As diffusion lines and collaboration marketing became common in fashion industry, the critical factor is now going to be quality and consistently conveyed attractiveness of the original brand. It is time for everyone to share and enjoy luxury.

Chloe Moon

Graduate student at Northwestern University’s Medill IMC
Follow me on Twitter @chloe0227

Photo credits: H&M official site


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