How Are Luxury Brands Juggling the Paradox of Exclusivity and Inclusivity?
Plus: Beauty brands go crazy for collaboration, animated luxury marketing, and our TikTok Take.
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Following the recent online debut of their collaboration on the Prada Fall/Winter 2021 menswear collection, co-creative directors Raf Simons and Miuccia Prada engaged in a livestreamed conversation with college students from around the world, with students faces projected on enormous portrait screens, dwarfing the two designers.
One student from Ghana asked whether luxury can exist in the absence of wealth, noting that in his country local artisanal craft is most valued. Miuccia Prada responded that fashion must evolve to be more open and accessible, closing with, “If you have anything to propose, stay in touch!” That exchange between a student and the head of a global fashion powerhouse illustrates a new level of approachability and inclusivity that has been emerging in the luxury industry.
Social media opened the backstage doors to the once-exclusive realm, giving luxury labels much wider audiences. Young consumers have grown up accustomed to immediacy and transparency while prioritizing meaningful storytelling as they follow their favourite brands as if they were friends. Some 83% of millennials want brands to align with their own values. In China, set to become the biggest luxury market in the world by 2025, McKinsey reports that Gen Z already spend as much as their parents on luxury goods, while Bain & Co. and Farfetch predict that millennials will represent 40% of the global personal luxury goods market by 2025.
The transparent relatability that young audiences seek from brands has spread to other demographics as more consumers have been spending extra time online due to the coronavirus. Erwan Rambourg, a luxury analyst and the author of “Future Luxe: What’s Ahead for the Business of Luxury,” says that the trauma of the pandemic has pivoted attention to purpose over products. “Many luxury brands will want to come across as being welcoming, inclusive, friendly, approachable,” Rambourg told CCI. “Just because the price point and scarcity of some luxury items makes them hard to access, that doesn’t mean that the communication and PR needs to be exclusive.”
But the traditional concept of “luxury” loses its meaning if it is readily available to anyone, so how does the current trend towards inclusivity mesh with one of the industry’s core principles? Brands are simply realizing re-conceptualizing their approaches.
In the digital space, mass-market brands exist side-by-side with top-of-the line ones. To differentiate themselves, luxury brands pride themselves on high-tech customer service features and implementation of innovative digital experiences that tap into the cultural mood. Kayla Marci, a market analyst at the market intelligence platform EDITED, explains that the pandemic has triggered widespread closures of stores — a key element of luxury’s exclusivity model — and, consequently, “brands have been experimenting with new platforms and innovations to virtually tailor that experience with consumers.”
In 2019, e-commerce accounted for 10% to 15% of global luxury sales across Europe, China and the United States, but in 2020, it increased by at least 50% in all three regions, according to McKinsey & Co. Sophisticated digital shopping experiences became a prime area of focus during the pandemic, incorporating artificial intelligence, premium shopping apps, and personalised customer service tools. British luxury retail platform Yoox Net-a-Porter (YNAP) leveraged white-label online services such as click-and-collect, return-in-store, click-from-store, book an in-store appointment, and others for brands like Armani and Montblanc.
Virtual try-ons are another shopping feature that many premium beauty brands — including MAC Cosmetics, Chanel, Benefit, and Lancôme — rolled out for their online customers. Entering the fast-growing gaming sector is another tactic gaining widespread interest. In 2019, Miu Miu launched the Miu Miu Twist fragrance inside a video game, akin to the more recent Balenciaga production of its Fall 2021 fashion show as a video game.
Overt displays of wealth through conspicuous consumption have been less welcome during this time of widespread economic contraction, and paired with rising awareness of sustainability, has led luxury to enjoy an “archival fashion boom, with ThredUP’s 2020 report noting that resale grew 25 times faster than retail in 2019.
Pre-owned items — which can range from one-off nostalgic runway pieces to late designer’ gems — not only appeal to the desire for rarity that is a trademark of luxury, but they also promote a more circular economy. Gucci now sells second-hand pieces on luxury resale platform The RealReal, which has also partnered with Burberry and Stella McCartney.
Secondhand luxury allows consumers to enjoy associations with brand heritage along with the social currency of engaging in sustainable practices. Devenyns reports that consumer considerations of the environment when making purchases rose by 7% in 2020.
In a world pushing for greater inclusivity, luxury’s focus is on the stories brands can tell and the experiences they can offer. EDITED’s Marci sums it up as follows: “The new luxury is virtual, collaborative and innovative. Successful brands will have the ability to balance referencing their history while evolving to remain aspirational to a new generation.” Rest assured, luxury’s new face will continue to prioritize progressive, taste-leading inspiration over aspiration for 2021.
- by Sadie Bargeron
Mentioned in today’s newsletter: Balenciaga, Benefit, Burberry, Chanel, Colourpop, Disney, EA, Gentle Monster, Givenchy Beauty, Gucci, KFC, Lancôme, Levi’s, Li Ning, L’Occitane, Loewe, Louis Vuitton, MAC Cosmetics, Marc Jacobs, MCM, Moschino, Nike, Nintendo, Prada, Stella McCartney, Tatcha, The RealReal, Valentino.
CollaBrands: Best Face Forward: Cosmetic Collaborations Add Sheen to Video Games
by Steven Ekstract
According to the gaming research firm NewZoo, the esports and gaming market is currently worth nearly $160 billion dollars. Sadie Bargeron’s feature in last week’s CCI Global Edition, “Fashion’s Love Affair With Gaming” was eye-opening in highlighting the number of fashion brands that have been collaborating with video games, as well as the “why” of such partnerships.
This week, the cosmetics company Colourpop announced a collaboration with Nintendo to launch the Colourpop x Animal Crossing: New Horizons” collection, which will feature 11 new products with shades inspired by the colors and characters from the world of the hit game. These include four eyeshadow palettes, three tinted lip sets, two powder blushes, a glitter gel, and a “Super Shock Shadow.”
Colourpop is the latest beauty brand to join forces with Nintendo and Animal Crossing. In August, Japanese skincare brand Tatcha collaborated with the popular game to create its own island, aptly named Tatchaland, to connect with pandemic-era consumers.
Players who visit Tatchaland will find features that reflect the products' packaging, a replica of a Tatcha lab, an avatar of its founder, and Japanese cultural elements that have influenced the brand. Virtual visitors can also learn more about products such as Tatcha’s Rice Wash facial cleanser.
Givenchy Beauty was another early collaborator with Animal Crossing, offering virtual beauty looks for players’ avatars. Givenchy Beauty understood that in partnering with Animal Crossing, they would be able to reach a younger audience that may not yet know the brand.
What makes games like Animal Crossing so attractive to beauty brands?
Animal Crossing is a life simulation game, played in real-time, in which players create customizable characters and move to deserted islands that they can transform into their homes. Released in March 2020 (just as the pandemic set in and forced social distancing), the game provides a safe and healthy distraction from the realities of Covid-19’s spread. It is also a highly social game through which players interact virtually with other players, including friends. The ability to personalize avatars with hairstyles and clothing is conceptually similar to the act of applying cosmetics.
According to the Nielsen-owned gaming research firm SuperData, more than 26 million units of Animal Crossing have been sold since it launched last year. Taken alone, that number makes it a top-selling game for Nintendo, but when multiplied by the hours gamers spend playing, a brand’s integration in the game becomes a marketer’s dream!
While three is no official data for time spent on Animal Crossing game play, the website GameLengths estimates the average time a player spends to complete an Animal Crossing game is 104 hours and 40 minutes. That’s an opportunity for a lot of brand visibility!
What makes Animal Crossing so popular, and how does it translate to cosmetics?
The use of video games as content for commerce has seen explosive interest of late. The immersive quality of gaming, the emotional connections forged in playing, the time commitments involved, and its appeal to younger demographics (increasingly including more female players) all combine to make gaming collaborations a natural fit for brands.
Animal Crossing is just one of several simulation-style games embraced by beauty brands. MAC Cosmetics recently collaborated with EA’s “The Sims 4” for a new collection, following a previous in-game collaboration. Romero Jennings, MAC’s director of makeup artistry, told Nylon that “MAC and ‘The Sims’ have similar values since we create for all skin tones.” Romero noted that the shades developed were “flattering in person and online. During New York quarantine, I realized that color and highlight are important when creating a flattering, virtual makeup. This palette has both – and is easy to use."
For Beauty brands, collaborating with games like Animal Crossing and The Sims 4 is a straightforward route to reaching younger consumers who are actively engaged with the content. These partnerships also provide brands access to customers who otherwise might not have heard about them, and, in turn, helps these companies sell more products.
Steven Ekstract is Managing Director of Global Licensing Advisors, a consultancy that provides companies with insight and strategic direction to succeed in the $300 billion a year licensing business. Ekstract is the founder and former Publisher of License Global magazine, the leading information source for the consumer licensing business. He can be reached at Steven@globallicensingadvisors.com.
Luxury Marketing in 2021 Will Look (and Feel) a Lot More Animated
by Avery Booker
If there’s one trend that has exploded and become ubiquitous across consumer segments over the past few years, it’s the influence of video games and the cartoon-ification of marketing. As more brands choose to “hire” virtual ambassadors over real-life celebrities or produce virtual collections for popular video games, luxury is starting to look — and feel — a lot more animated.
Collaborations with virtual performers are where we’re seeing more investment from brands. More than two decades after the British “virtual band” Gorillaz hit the scene, a new wave of computer-generated performers now reaches audiences of millions worldwide, with East Asia arguably leading the way.
In China, top virtual performers like Luo Tianyi regularly headline sold-out shows and lead campaigns for brands such as L’Occitane and KFC, while Japan’s Hatsune Miku has been called “the world’s most famous holographic pop star.” Meanwhile, major tech companies are bringing these virtual performers on stage (often in hologram form) for events like Bilibili’s recent Bilibili Macro Link (BML) concert, which starred some 30 Chinese and Japanese virtual performers.
Virtual “idols” from popular games are becoming a go-to choice for consumer and fashion brands. Last year, Xing Tong, a character from Tencent’s QQ Dance game was named as a brand ambassador for sportswear label Li Ning, after previously working with Levi’s. Meanwhile, others such as Kentucky Fried Chicken and C-beauty brand Perfect Diary have cut out the middleman and created their own virtual idols.
In fashion, video game characters have become increasingly commonplace over the past decade, with characters from Final Fantasy appearing in a 2012 Prada campaign and 2016 ads for Louis Vuitton. In 2019, Moschino launched a capsule collection and collaboration with The Sims, and since then the pace of “fashion x gaming” collaborations has only sped up, with Nike offering virtual Air Jordan sneakers in the popular game Fortnite and players of Nintendo’s Animal Crossing able to outfit their characters in brands like Valentino, Marc Jacobs, MCM, and Gentle Monster.
Given brands’ reluctance to deal with the egos, headaches, and controversies (not to mention the massive expense) of human influencers and celebrity spokespeople, the decision to collaborate with the CGI version is something of a no-brainer in these Covid-hit times, during which in-person events are few and far between.
Arguably the most interesting activity is taking place in the luxury market, where brands are turning to limited-edition video game and cartoon collaborations as a way to reach the next generation of their consumers. Last year alone, Burberry announced a deal with Tencent Games’ Honor of Kings, Gucci’s Disney collections featuring Mickey Mouse and Donald Duck attracted global buzz, Louis Vuitton created its own character to star in Virgil Abloh’s “The Adventures of Zoooom with Friends,” and Balenciaga produced a video game, “Afterworld: The Age of Tomorrow,” to showcase its latest collection.
The new year has already witnessed the unveiling of a three-way collaboration between Pokémon Go and the buzzy Gucci x North Face collection, Gucci x Doraemon, and the highly anticipated Loewe x My Neighbor Totoro line. On collaborations, Loewe CEO Pascale Lepoivre told CCI last month that “We typically choose who we work with based on shared values, and a partner who we feel will add something exciting to a particular project.”
It is that last point that perhaps indicates why luxury brands are becoming more comfortable launching lighthearted collections that feature video game or cartoon characters —they have the potential to excite. For all their history and heritage, a growing number of luxury brands are looking to shake stodgy images and branch out beyond their existing older core consumers to drive long-tail sales for decades to come.
Younger millennial and Gen Z consumers, more resistant to traditional advertising, are excited by limited-edition drops featuring their favorite virtual characters. With the growing spending power and influence these younger shoppers will wield, expect this trend to continue well beyond 2021.
TikTok Take
TikTok drives Olivia Rodrigo’s “drivers license” to break streaming records: The 17-year-old singer’s debut hit number one on the Billboard Hot 100 singles chart in its first week of release and set streaming records on both Spotify and Amazon Music, but TikTok was where it took off first.
IMG named TikTok’s editorial fashion partner. The deal covers content from New York, Milan, London, and Paris fashion weeks. IMG’s senior vice president April Guidone told WWD that “The TikTok community will be able to engage with fashion week content through dedicated hashtags promoted on TikTok’s discover page, which will amplify global coverage of fashion month and reach TikTok’s diverse and global audience.”
New feature alert: TechCrunch reports that TikTok is testing a new video Q&A feature that would allow users to answer their audience's questions via text or video. It’s a move that could boost engagement between creators and their fans, and coincides with tests of another feature that would notify users when people they follow go live.
Is Trump’s war on TikTok over? It appears that the former U.S. president lost the 2020 battle to ban TikTok. Whether due to a lack of urgency or the president’s distraction over his election loss, Adweek notes that Bytedance-owned app may have “escaped” largely unscathed in the U.S. market.
TikTok can also claim a victory over Instagram for now. In a podcast interview with The Verge, Instagram head Adam Mosseri says TikTok is doing a lot better than Reels. Mosseri says he’s not satisfied with how Reels is doing, stating that Instagram now has too many video formats competing for attention (Reels, stories, the feed and IGTV), with the implication that there will be some housekeeping in order to simplify things.
Despite the ban, TikTok still has users in India: Data shared by web analytics service SimilarWeb found that in December 2020, TikTok had more monthly active users in India than Instagram, despite the former having been banned by the government back in June as part of a major crackdown on Chinese-owned apps.
Global News
Apple is reportedly working on VR headset that will be a very expensive precursor to more mainstream AR glasses that are still several years away. Bloomberg
The “picture-in-a-picture” shared-screen ad format could become more common for streaming video, whose audiences have come to loathe interruptions to the viewing experience. Wall Street Journal
Fortnite announced a partnership with soccer legend Pelé and 23 clubs from around the world to bring the sport into the game’s universe through skins, emotes, and virtual tournaments. Ad Age
Snapchat is trying to lure top creators from TikTok by offering big money for posts to Spotlight, its new short video feature. New York Times
Nine retail industry trends for the year ahead. Retail Dive
The success of Ben & Jerry’s dog treats and Porsche’s SUV show that brands don’t need to be too cautious about staying true to a fixed image. Marketing Week
And from chili sauce to cosmetics, brands everywhere are extending into merch as a way of promoting consumer loyalty and keeping them buying even when they don’t need core products. Thingtesting
The future “post-digital landscape”: Virtual influencer Ruby Gloom has collaborated with leading brands to diversify representation. The Popular Times
The coronavirus pandemic has given the movie industry an opportunity to transform its business models to meet the needs of audiences who are staying in. Deloitte
Japan’s government has reportedly concluded there will be no Summer Olympics this year, and will shift its focus to a bid to host the Games in 2032, the next available year. The Times
