The playbook for luxury fashion marketing has evolved — 6 strategies can help brands survive the industry's slowdown
Jeenah Moon for The Washington Post via Getty Images
- As the luxury slowdown continues, high-end fashion brands need resilient marketing strategies.
- Experiential campaigns and intergenerational omnichannel marketing can be effective.
- Labels are also launching more elevated collaborations, like Nike and Skims' new brand, NikeSkims.
When Lissy Von Schwarzkopf and I met on a video call in mid-February, she offered an apology within seconds.
As the chief business officer of Karla Otto, a global brand-building agency with luxury clients such as Nike, Valentino, and Loewe, Von Schwarzkopf's schedule is hectic, especially during the slew of first-quarter fashion weeks. Consequently, our meeting had to be pushed back from its initial time slot.
"I have to apologize. We had a bit of a crazy morning with a big client announcement," she said.
The announcement was that Nike and Kim Kardashian's Skims label were joining forces to create a womenswear brand called NikeSkims. The collaboration could be a game changer in the activewear space β and for Nike as it combats declining sales.
Von Schwarzkopf said NikeSkims, set to launch in April, exemplifies a marketing strategy that capitalizes on the combined renown of two major brands. This gives both businesses "a huge advantage because you're tapping into a whole new community and a whole new audience," she said.
Nike
Profit slumps hit some of the biggest high-end retailers last year, and the trend will likely persist. The luxury slowdown is forcing brands to rethink every facet of their business models, including their marketing strategies. As consumers clutch their dollars, upscale labels like Nike hope to loosen the grip by refining how they communicate their brand identity.
"Diamonds are made under pressure," Hannah Reed, a research manager at the market-research agency Walnut Unlimited, said. "The pressure is now on for luxury players, and hopefully, it'll be a time where they innovate and come back bigger and stronger."
Kubi Springer, the global marketing director of Avantgarde Brand Experience, a global brand-experience agency, put it frankly: "Brands evolve or they die," she said. "That is the reality."
A rundown on the luxury slowdown
Crafting resilient marketing strategies for luxury fashion requires a deep understanding of the economic forces shaping the industry.
Reed and Springer cited several factors contributing to luxury's waning momentum: In the US and the UK, inflation, higher taxes, and the rising cost of living have reduced consumer spending. Meanwhile, in China, a real estate crisis has affected spending power.
Reed said there's also a "reputation recession" as shoppers notice a drop in the quality of luxury products while their prices skyrocket.
President Donald Trump's big tariff push has luxury stakeholders feeling antsy as well.
"Everyone's on the edge of their seats at the moment, wondering what the trade tariffs will mean long term," Reed said. "It puts pressure on supply chains, so if you are based in Europe or Asia, those additional costs could add up to millions for luxury players."
Consumers, especially aspirational shoppers, are also shifting their spending habits and priorities. They're opting for secondhand shopping and choosing travel, dining, and other experiences over high-end-fashion purchases. In response, Von Schwarzkopf said, major fashion groups are cashing in on hospitality and travel-related ventures.
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There's a caveat, though. While luxury markets in China and Western regions have generally decelerated, the Middle East, India, and Africa are seeing an upward trend.
An October report from Henley & Partners and New World Wealth forecast that more than 800 millionaires would relocate from Britain to the United Arab Emirates by the end of 2024 β partially because of changes to the UK's tax system. Springer said: "We're seeing places like Nigeria and Ghana getting an influx of people coming from the West, too, and that's impacting how luxury goods are selling."
Sade Teyibo, the founder of Fola PR, a communications and brand-development agency, has also noticed this shift.
"There are so many brands that want to tap into what's happening in Africa," said Teyibo, whose company is based in Lagos, Nigeria. "There's a cultural renaissance. We're at the center of fashion, music, design, and art."
Fola PR, which also operates in New York, primarily works with African companies, creatives, and entrepreneurs, helping them elevate their brands through partnerships, luxury product launches, and bespoke events. It also works with global brands that want to expand their reach into Africa.
Fola PR
Springer said that luxury retailers needed to consider all these factors to position themselves favorably in front of consumers and survive the slowdown. Here's how they can craft and market a durable brand identity amid economic uncertainty.
1. Invest in research that can guide communication strategies
Karla Otto has an in-house insights and analytics division that researches market and consumer trends, including influencer and sentiment data. It also offers bespoke reports and consulting services and publishes multiple industry white papers per year.
Its latest report, "Luxury's Great Reset," published in December, detailed key components it said would affect the luxury sector in the coming years. It forecast that community-driven campaigns and craftsmanship would be among the critical drivers of luxury goods purchases between now and 2027.
"Research is the starting point for everything that we do," Von Schwarzkopf said. "It influences all of our strategies that we bring back to our clients."
The key to building a creative strategy around data-driven research, she added, is to find a cultural, human-interest angle within the numbers. "Most of our brands have that interest in being a player in culture," though which cultural "playing field" needs to be carefully defined, she said.
2. Host personalized experiences for high-level and high-net-worth people
"The growth and demand around personalization is something that luxury brands need to take heed of," Springer said. On a basic level, that means analyzing shoppers' data to understand their behaviors and needs β but "personalization needs to go beyond that," she added.
Last year, the Inner Circle Experience, a company that organizes exclusive networking events, worked with Dior to host a private dinner for luxury stakeholders at the French label's Paris museum. Springer, who was a keynote speaker at the event, said there were about 70 guests, comprising high-net-worth individuals and "people like me who hold global marketing positions."
Attendees learned about the brand's history and how it wants to connect with consumers. "Somebody like me can tell this to their clients," Springer said, which could prompt collaborations with Dior or "inform PR messaging" about the label. Additionally, high-net-worth people feel more inclined to spend big bucks on a brand that has marketed to them in such a personal and exclusive way.
3. Market a brand as a force in the secondhand luxury space
Reed said "there's huge potential" in the secondhand luxury market, which Statista estimated could be worth over $3.6 billion by 2028. From a marketing perspective, she added, brands can craft resale initiatives around different target audiences. For example, a campaign highlighting circular fashion can resonate with Gen Z shoppers who care about sustainability.
Resale shopping also highlights the quality and desirability of vintage pieces. "Lots of people have been turning to archives to find old stock that isn't in circulation anymore," Reed said. "There's this excitement and treasure-hunting element to it."
Daniel Zuchnik/Getty Images
Joining the secondhand luxury space β and playing a bigger role inΒ the authentication processΒ β can also help high-end labels regain control of their products' integrity and marketability.
"You see a lot of dupes and counterfeits. That's a huge issue for brands," she said. "A few players have caught on to the fact that they need to preserve their brand."
4. Expand omnichannel marketing strategies
Omnichannel marketing is crucial right now as brands need to reach global consumers through multiple touchpoints, Springer said.
Luxury labels need to have a digital presence on platforms such as TikTok, Instagram, and Snapchat to connect with a younger demographic. "But at the same time, brands can't afford to leave out their older demographic that might still be looking at traditional marketing, like print PR or TV ads," Springer added.
She named Sephora's omnichannel marketing as a prime example. The company has in-store beauty consultants and digital smart mirrors, virtual try-on tools on its app and website, and traditional advertising in print and on TV.
"They understand if you do something like a billboard, you now need to have a QR code so that somebody can snap it on their phone, go to your website, try on a product virtually, and then go into the store on the weekend to buy it," Springer said.
5. Remain steadfast in the brand's ethos
Luxury labels need nimble marketing strategies during an economic slowdown, but they must maintain their brands' mission and core values.
Teyibo said concerns about the state of luxury are valid, but she's not particularly worried about it at her agency. "It doesn't matter what's happening or what the global climate is. Cultural currency and cultural capital are always more important," she said. "Brands and partners will find the budget for what they think is cool. Also, whatever the consumer feels is relevant and exciting, they will find the money to purchase or partake in."
6. Innovate and inspire through collaborations
Springer said the brands that are winning right now are cocreating with micro and macro influencers as well as celebrities.
Louis Vuitton has embraced this approach over the years, collaborating with the Japanese artist Takashi Murakami and tapping Pharrell Williams as its menswear creative director. Willy Chavarria and Kendrick Lamar have also developed a rapport, recently dropping a limited-edition Super Bowl collection. Then, of course, there's the forthcoming launch of NikeSkims.
This emphasis on collaboration reflects a broader shift in the luxury industry β one that calls for a deeper commitment to exciting and inventive artistry.
"Brands really need to look at design with more intention," Reed said. "Lean into craftsmanship and individuality. Focus on innovation and pushing your creative direction. That is where the luxury sector needs to regain its personality."