Luxury brands focus on innovation and design to target millennials
'The 50-year-old customer wants to know their lovely product is made in Italy. The 25-year-old is more concerned that it's on sale, no child labour was involved, and that there's a story in the design'
The next time you decide to pay top dollar for a handbag or pair of shoes that carry the prestigious "Made in Italy" label, you might want to take a moment to consider that maybe it wasn't.
This is because that if most of the bag was made in a factory in Portugal or Guangdong, and then shipped to a workshop in Tuscany where the handle was stitched on, by rights it is considered a "Made in Italy" product, according to the European Customs Code, which oversees the legality of labelling.
The subject is rising to the forefront of discussions about luxury retail at a time when anecdotal evidence is proving that a wide swathe of shoppers couldn't care less about where something is made.
"The 50-year-old customer wants to know their lovely product is made in Italy. The 25-year-old is more concerned that it's on sale, no child labour was involved, and that there's a story in the design," says Harriet Greenberg, co-managing partner at the US- and Beijing-based accounting and advisory firm Friedman LLP, who runs the firm's practices in fashion as well as diamonds and jewellery.
"The millennial customer is less interested in the country of origin than they are in design and innovation, so there's a push for new, innovative and quick-to-market products that are priced right and designed well, regardless of the origin." That fundamental change is especially relevant now as the offspring of the traditional luxury consumer comes into their own, with their own buying power and set of criteria.
"The older consumer is stuck in that 'Made in Italy', 'Made in France' mindset," says Mischaela Advani, who formerly worked in visual merchandising for Coach, is owner of the Haus of Labels designer consignment boutique, and sits on the board of directors of the Chicago Fashion Foundation.
"But that older consumer isn't as in touch with the brand as millenials are. We see social media campaigns [and] video campaigns. We want the brands to touch us and to connect with us on an emotional level." Advani says consumers aged 40 and younger do not really care about what the provenance of a product is.
Still, the cultural debate persists about whether it's worth paying two or three times as much for something because it's made in a prestigious centre of fashion production - Italy, France, Germany, Switzerland and the US - especially during a time when it's hard to dispute the quality of the output of certain markets. India offers the best beading and embroidery, bar none. And even a trained eye would be hard-pressed to fault the workmanship of a leather handbag made in China or Vietnam.
"I personally think that there is quality all over the world," Greenberg says. "It's not something that is exclusive to Italy or the US. Consulting firms have done studies comparing the quality of the same products from different parts of the world, and there is excellence being manufactured everywhere."