Monthly Archives: October 2013


Not so fancy anymore: Why Luxury Brands Are Becoming More Accessible

I recently read an article about the new Mercedes CLA sedan and its affordability as being a part of Mercedes plans to  become more accessible to a  lower economic status, which got me thinking about how luxury brands, in general, have become more visible and seemingly accessible over the past few years. Either I am either making more money than I used to, or luxury brands have begun to move towards offering versions of their brand at a lower price point to capture more sales volume – and my bank statement suggest it’s the latter. So the question then is, why are luxury brands doing this, and more importantly is it a good idea?

Why move from riches to rags?

The Luxury good category has gone through a bit of an upheaval over the last few years, as more people are accumulating wealth from new parts of the world.  In addition, non-traditional luxury consumers are entering this marketplace, looking to mix and match their non-luxury goods with a statement piece to differentiate themselves (i.e. the 40 year old guy living in a bungalow with his parents who also happens to drive a Ferrari).  The traditional luxury goods customer strives to be unique, opulent, and exclusive; and the mere thought of commoners owning the same goods disgusts them.  In an effort to satisfy their core customers, while at the same time attracting the nouveau riche and the mix and match customer, luxury brands have extended their lines into lower ends and created new super high ends in an effort to satisfy this growing demand, without simultaneously alienating their core customers. [i]

Different strokes for different folks

Social Media and The Web, spaces where much of the communication between brands and consumers takes place nowadays, have also played a large role in shaping the luxury goods segment, as these mediums have invariably increased accessibility and transparency of products however that is precisely what luxury brands typically try to avoid.[ii] As a result, the need to communicate with luxury customers has opened the floodgates, where everyone now knows about the brands, and it becomes increasingly difficult to provide exclusivity for those traditional luxury goods customers. As a result, luxury brands have developed accessible luxury goods in order to provide precisely what the masses want (access to their products), while at the same time providing an opportunity to develop a supreme luxury segment (and charge even more!) to those who are squeamish of even being remotely associated with the common folk.

How available do you want to be?

So it seems as though luxury brands have in a way been forced to adapt to an evolving audience and the medium required for speaking to them; however, is extending these luxury brands to a wider audience a good idea? Well, the answer to that lies in terms of how this strategy is executed. The risk of extending the brand downstream is that it can erode the aura of exclusivity and caché that the brand has painstainkingly built. Coach, the handbag manufacturer, was hurt by this strategy when they decided to lower its average handbag price by 10% in 2008[iii]. As a result, they lost their higher end customer base and were subsequently attacked in their new segment by Michael Kors and saw a decline in revenues in the North American market for a few years. While the attack by Michael Kors was unfortunate, they would not have had to sacrifice their core audience if they had set up a brand architecture for different sub-brands to serve different customer groups. In contrast, Giorgio Armani has had consistently strong growth for over 20 years: a part of his strategy has involved the launch of sub brands in order to attract new audiences while preserving his core customer base. At one end of the spectrum is the Armani Privé line that services supreme luxury customers, while the Armani Exchange line at the other end of the spectrum services the masses.


Returning to Mercedes’ strategy of launching a lower priced vehicle in order to become more accessible, – I have mixed feelings about this move. On one hand, Mercedes is a strong and clearly defined brand that represents luxury and fine craftsmanship.The ability to offer those attributes to a larger demographic that could not normally afford a Mercedes vehicle will definitely attract growth to customers in this segment. On the other hand, I find that while the Mercedes brand is very recognizable, I cannot off the top of my head distinguish which Mercedes models are more or less expensive, nor who their intended audience is, since their naming conventions are too similar and confusing (C class, CL class, CLA class, CLS class, etc.).  As a result, I see that if Mercedes is not careful, the CLA model may run the risk of eroding the aura of its other similarly named models, and therefore, potentially the Mercedes brand as a whole, to its traditional luxury customers.

The move to attract a new audience can be difficult to manoeuvre if one does not have strong brand recognition and an architecture in place to segment their various audiences, but is a risk that many Luxury brands seem to be willing to take in order to expand their growth opportunities in a largely stagnant western market. The rewards however may prove to be very fruitful if executed properly.

[i] Corbellini, Erica; Saviolo, Stefania. (2009) Managing Fashion and Luxury Companies. Etas.

[ii] Ortved, John. (2011) Is Digital Killing the Luxury Brand?.

[iii] GoldenGirlFinance. (2011) What Happened to Coach?.


No Longer Your Grandmother’s Birks

Luxury brands do an exemplary job of showcasing their own history of excellence. A big part of the reason why luxury brands have been able to sustain success over such a long period of time is due to their ability to adapt with the times, while maintaining the essence of what made them so great in the first place. The Birks Group has been in operation for 135 years, and is one example of a luxury brand that has been a staple of elegance as the world has changed around it; due, in large part, to its ability to stay relevant.

Recently Birks & Mayor underwent a makeover to clean up its tired image and in-store experience, and I believe that the following changes will help it to continue to succeed for the foreseeable future as it commences its expansion into China.

Name Change

As a part of this makeover, Birks Group has changed their retail name to “Maison Birks” in order to closely align itself with other luxury houses such as Chanel and Dior, that also employ the use of the word “Maison”.  Personally, I like the change of name because to those who may not be familiar with the Birks name, this change further signifies luxuriousness for the brand  – a distinction that will be important as it makes its foray into China and potential future markets. Since the word “Maison” itself is also elegant and fluid sounding (even if one does not know what it means), those same attributes will be subconsciously associated with the brand in the customer’s mind, thereby softening the original “Birks” name which sounds choppy and rough.


Celebration of History and Origins

Having a long history in itself is an asset for a company, as customers tend to believe that being around for a long time reflects a track record of success. At the same time, it is a point of differentiation that cannot be copied, since newcomers need time to develop their own history. As a result, if your company has a long and storied history, it only makes sense to exploit it to the fullest, which can help communicate the positive attributes of success, reliability, and quality to your customers. It is for this reason that I think it just makes sense for Maison Birks to also add its year of commencement to its logo, in order to help communicate such positive attributes that are especially important in the high-end jewelry industry.

Another nice touch that Maison Birks is adding is the subtle ode to its Canadian origins, with dark wood paneling and red carpeting to represent the Canadian fall, a chandelier to symbolize icicles, and the blue and white colours of the logo representing the lakes and mountain tops. I am not suggesting when someone walks into the store they will be instantly reminded of Maison Birks’ Canadian origins, but the thought process demonstrates a level of detail that can be appreciated, giving an indication of how meticulously they run their business.


Store Layout

In the past, walking into a Birks has always felt like it was a place for old, stuffy people, with an aura of elitism to it, where sales staff would serve you from behind a counter along the side walls. The service has always been spectacular, but the store layout and design did not feel inviting or friendly. Clearly I was not alone in this feeling, as the store layout is also undergoing a makeover in order to become more inviting, friendly, younger, and less formal.  The stores aim to be much brighter places, with display cases throughout the store (as opposed to along the wall) and magnifying glasses built into them in an effort to encourage the customer to interact with the products. I think this is a great approach as it encourages a more inviting experience, where the customer has more of an opportunity to participate with the brand and what it has to offer.


Maison Birks has been a successful luxury brand throughout North America for over a century, and a part of that success has been as a result of recognizing when changes need to be made before it’s too late. What the brand represents has always remained the same, however customer trends, and what customers come to expect from a brand, has changed. I am reminded of a famous quote by Heraclitus: “the only thing that is constant is change”.  While it is important to remain true to your values, the market you are operating in is always changing, and it is important to adapt with these changes. Maison Birks’ makeover is exactly what the brand needed, and coupled with its planned expansion into China, the company should remain on a successful path for many years to come.

What are your opinions on the old feel of Birks and the new Maison Birks?


Started from the Bottom (of the NBA)

Recent big news coming out of Toronto is that rap star Drake has become the global ambassador of the Toronto Raptors NBA basketball team, and a lot of people are wondering: what does this mean? and is this a good idea?

Well, for starters, the idea is similar to how Coca-Cola, Pepsi or any beauty care company signs someone famous to be the face of their brand, and that is to cash in on this person’s popularity.



The Toronto Raptors organization is a business, just like Maybelline, and having Drake as a spokesperson for the franchise will increase exposure and awareness to potential customers around the world.

I’ve seen people commenting online wondering what Drake has to do with a basketball franchise, what the point of all this is.  The answer is: so that the Toronto Raptors can benefit from Drake’s personal brand identity and help improve the franchise’s image in the media, and to its fans.  Right now, Drake is one of the most famous artists in the world, and on the surface, his mere association with the franchise should improve retail merchandise sales. More than that, however, Drake is actually a very hard working, driven individual who is intelligent, successful, and loves the city of Toronto. I believe that the attributes that Drake possesses act as a guide to the players on the team, to develop a similar work ethic and drive for success, and send a message to players throughout the league that this team stands for these values. While this may not directly translate into attracting new talent to the team, the culture that I hope Drake’s association can bring to the organization may indirectly attract players that have the same mindset (just as how every Starbucks drinker with a creative mindset wishes to work for Apple).

The downside to this agreement, as is the case of all celebrity sponsorship deals, is that Drake will not be at the top of his craft forever, and while the agreement may only last a few years, an artist’s popularity can change rapidly, either through the evolution of the industry, or from the negative attributes that the celebrity possesses . Only 2-3 years ago, Justin Bieber was the singer that all teens loved, but recently has been known more for his dumb behaviour than his singing.



Because the Toronto Raptors do not own the Drake brand, it is difficult for them to have any control over or adhere to the image they wish to present, which is a risk that every brand that uses celebrity endorsement must live with. At present, however, it would appear as though the Toronto Raptors do not have much to worry about, as Drake has so far remained gaffe-free.

Importantly, having Drake as an ambassador, and the work that he may put into this effort will not be enough to turn around the fortunes of this team on its own. Celebrity endorsements are great at increasing exposure for the brand and developing positive associations to the brand itself.  The value proposition, however, remains the same, and if the company does not deliver on its promise to customers, all the glitzy press releases in the world will be of no help. An example of this can be seen through Blackberry’s announcement of having Alicia Keys as the company’s Global Creative Director prior to the launch of their Blackberry 10 operating system. As recent news has shown, the company lost $934 million due to unsold phones post the Alicia Keys announcement showing that her presence wasn’t able to prevent Blackberry’s demise.

The association with Drake should help improve the Raptors’ image and the franchise’s culture, but at the end of the day it will all be for naught if the team does not deliver deliver on its purpose of existence – winning basketball games. Hopefully this marks the beginning of a new era for this franchise, because I am tired of watching them lose!


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