It’s subjective, I know, but if you’ve bought something from a ‘luxury’ brand, recently, you will probably notice the quality isn’t quite what it once was. On the unstoppable growth trajectory of higher prices and sales, the quality hasn’t stayed consistent: no doubt increasing already inflated margins.
I’m not naive, I understand you pay a premium for a designer name or brand, but there was always a minimum quality to the product, leaving you, the customer, satisfied and at least without the feeling of being ripped off.
I’ll give you an example. I bought one of those new GG buckle Gucci belts online, 18 months ago. I hadn’t felt it, or seen it, I just ordered it online. It was a simple black belt after all. You think you know what will arrive.
What turned up felt like a free pleather school belt. I’m not being facetious, but there was no quality there. When you’re charging £250 and you can’t even offer a decent strip of leather to take the strain of holding your trousers up, there’s clearly something wrong.
Why didn’t I send it back? When it arrived at home, in insolation, seduced by the packaging, and Gucci was so-hot-right-now, you just shrug your shoulders and think, "okay, so it’s not the best, but it’s what I wanted and it’s cool ATM". (Damn you hype!)
It’s when I look back, and think about that belt, I feel, that if I’d handled and seen it in the shop, I probably wouldn’t have bought it in the first place. I would have felt the quality and moved on.
And, so to my theory - the growth of online is allowing mainstream luxury brands to get away with lower quality products. Consumers are more accepting in their own homes, they have nothing to compare it to at the time and the thought and hassle of sending something back is making people keep things they wouldn’t have necessarily bought in a physical store.
“Shopping is very much a human multi-sensory experience so it follows that we want to use as many of our senses. Emotion plays the dominant role in our buying decisions so the in-store experience will always be far superior to the online experience. As Boxpark MD Roger Wade put it ‘Shopping online is like watching fireworks on TV’ says Andrew Busby, Founder & CEO of Retail Reflections.
There’s no doubt online has contributed to the massive growth of these brands, whether on their own websites or third parties. Last year Gucci’s online sales posted triple-digit growth on their branded website and that’s without all the other online retailers. Gucci didn’t hit €6.2 billion turnover in 2017 on physical stores alone.
“This all depends on your definition of ‘Mainstream Luxury’. The word ‘Luxury’ is banded around all too often. True luxury is confined, generally, to bricks and mortar shopping, hence the resistance of major houses to enter the online market. When I consider ‘Luxury’ I think of brands such as LV, Chanel, Loewe etc,” says Darren Skey, Founder/Director of Nieuway Limited, and former Head of Menswear at Harvey Nichols.
“I wouldn’t class brands such as Off White, Amiri, Vetements as ‘Luxury’. What we are seeing is the luxury brands such as Loewe and LV seeing the growth potential of hype products and as such are designing products with this in mind. This leads to more quantity produced and a lower quality, compared to their main ranges, Fashion details are hard to produce on a large scale. Unfortunately, there is no correlation in price reductions, as you would expect with economies of scale,” says Skey.
It’s hard to prove this point, but it’s an interesting factor to think about. Net-a-Porter group recently introduced a new service for their “Extremely Important People”, where the delivery person waits to see whether you want the item or not, after they deliver it. It’s an instant reaction to the item(s) and it would be interesting to know whether this has increased or decreased returns. Obviously, they want the latter.
Quality is subjective and brands vary. But I think we’re seeing an overarching trend towards higher margins and lower quality from brands trying to still offer ‘luxury’ and compete with other brands’ stratospheric growth in turnovers.
There’s also a generational shift to think about. Since 2016, the global luxury market has grown by 5%, with 85% of this growth generated by Millennials according to a report by A LINE, a global branding & design studio. These younger consumers don't have as much experience and product to compare the quality to and brands are taking advantage of this.
“The expectation of the younger consumer is also changing and I think this is an interesting observation. For the younger consumers it is more important to have the latest hype piece regardless of the quality. And, as we know, the majority of the Millennials shop online,” says Skey.
Brands have made it easier to return products, but unless it’s the wrong size or nothing like pictured, I think people are more accepting in terms of quality.
“I don't think that shoppers are unwilling to send things back once purchased online. Fashion is not cheap and I don't believe we are in an economy where this can be an option. I also think retailers are making the process of sending product back easier,” says Skey.
‘I am predicting a backlash to the returns culture we are currently witnessing - both from retailers and environmentalists. The average returned purchase in the UK passes through seven pairs of hands before it is listed for resale. According to Iain Prince, supply chain director at KPMG, "It can cost double the amount for a product to be returned into the supply chain as it does to deliver it”.’ says Busby.
What brands have to remember: when you’re not cool or hot anymore, the thing that will keep consumers returning is quality. This lowering of quality is short-termism and greedy and will ultimately be a big factor is diminishing future sales and brand loyalty.
I’ve also written about brands which offer great value, like Fiorucci. here
Value and price are related, obviously. A high price can offer great value, and vice versa, but many designer brands are very far from this. See more here - Greedy Margins & Brand Blindness
We’re in an age where the arrogance of brands has caused many to push their prices up while lowering their quality. It’s not good enough. So, it was a nice surprise to go into the new Fiorucci store on London’s Brewer Street and see quality product at reasonable prices.
Left - Tired of shopping? Have a lie down
I’d been meaning to take a look since it opened in September. Now owned by Janie and Stephen Schaffer, who had founded the high street chain Knickerbox together in 1986, Fiorucci was one of the coolest fashion names of the 1970s. This is the first store in its rebirth.
Right - The spiral staircase up to the 1st floor in the Fiorucci store on London's Brewer Street
Founded by Elio Fiorucci in 1967, after being inspired by London’s Carnaby Street and King’s Road, the first Fiorucci store opened in Milan’s Galleria Passarella. More stores followed. In 1974, a second location in Milan, a year later in London. Then, in 1976, East 59th Street in New York. The Manhattan store becomes known as “the daytime Studio 54”. It laid down the blueprints for the concept store as we know it today.
Until recently it was just a name check in Sister Sledge’s “He’s The Greatest Dancer” song. But with Halston gone, Gucci overloaded, it’s, now, all about Fiorucci.
We’ve seen many brands from the 1970s try, and, generally, fail to make a comeback. Ossie Clark never quite made it and Biba stuttered and became an in-house brand at House of Fraser. Many brands make the mistake of trying to carbon copy what was then rather than taking the best bits and thinking about a contemporary shop or experience.
The new owners of Fiorruci have done this really well. The shop has that disco, playground feeling yet still feels sophisticated and the product all seemed to be Made in Italy of decent weighted fabric and excellently priced - £80 for a T-shirt and £140 for a sweatshirt.
Left & Right - More images of the first Fiorucci store as part of the brand's rebirth
While £80 is a lot for a T-shirt to many, when you compare it to £250 for a Gucci one that is so thin you can see your hand through it, it seems great value. I’m not sure who is doing their manufacturing, but it looked like the reason why you buy Italian-made clothes.
At these prices it’s something you can get involved and have fun with. Young consumers will be able to afford it or at least save up to it. They are positioning the brand for the long term, looking for repeat custom and offering their consumers something decent for their money. I know if I see a guy in a Fiorucci T-shirt I’ll want to go over and speak to him. It’s cool.
Go check it out next time you’re in Soho.