Advertisement
Advertisement
Advertisement

Luxury brands focus on innovation and design to target millennials

Younger customers today are interested in the story behind a brand or a product. Illustrations: Craig Stephens

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.

A product, even if it has been made in two or more countries, is considered to originate in the country where the final work took place.

"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.

A Hermès artisan handstiches a handbag at its atelier in France. At Hermès, everything is made in France. Photo: Jerome Galland

"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."

As a result in the shift in thinking, brands are being forced to re-evaluate how they relate to customers, realising that it's not enough to just stick a fancy label on something - especially if, as appears to be the case, the label may not necessarily mean much. The European Customs Code says "a product which has been made in two or more countries is considered to originate in the country where the final transformation or substantial work took place". So if that US$5,000 bag was made mostly in China or Bangladesh, but at least 30 per cent of it was done in Italy, such as sewing on the logo, it's considered an Italian product. Furthermore, that same bag can be made in its entirety anywhere else in the world - but can be given the "Made in Italy" label if it is made by an Italian-based company.

"There are plenty of high-end retailers that manufacture in China, and the difference [between Chinese and European-made products] is negligible," says John Niggl, client manager of InTouch Services in Shenzhen, a US-based company that provides quality control support for prestige brands. "That leads me to believe that if you're willing to pay a little more for the quality of the materials, you can get the same quality in China as anywhere else."

Niggl agrees that younger consumers are more concerned about social compliance - that the products are not being made in degrading sweatshop circumstances - than anything else. "China has come around in many of those areas," Niggl says. "Retailers are taking a stronger stance on issues of social compliance, so a lot of the problems around ethics and safety haven't come up as much."

Consumers see social media and video campaigns. They want to connect with the brands on an emotional level.

Certainly, the growing acceptance among well-heeled consumers towards products made in countries not typically associated with prestige has forced brands to rethink where they belong - anchoring them firmly in one sector or another. When upscale swimwear and resort brand Onia was starting five years ago, co-founder Carl Cunow had to decide where to make the collections and why.

"In the last few years, there's been a big evolution in terms of product that is not made in the US but is still in the luxury or high-end sector," Cunow says.

"If you go to Barneys or Bergdorf, there are things made all over the world. It depends on what it is, and the complexity of the labour. It's not as simple as 'it's too expensive to make in the US or Europe' anymore."

His line, which retails from US$65 to US$225, is sold in prestige stores such as Saks and Lane Crawford, and resort boutiques at the Ritz-Carlton and Four Seasons. Given who the customer is, the workmanship has to be high quality. But Cunow found, for example, that the kind of construction needed for a particular pair of swim shorts - which retails for US$195 - could only be found in Vietnam.

"Elsewhere, the machine didn't exist, or it was hard to find, or there weren't enough workers trained to use it," he says.

Because Onia has set out to bridge the gap between traditional expectations of where quality products are made, and the reality of where they are actually constructed, his company has invested in educational hang-tags.

"It's a big initiative for us," he says. "We explain where the mill is that made the fabric, what's special about it, where the product was made and the process. It connects us to the customer."

Cartier promotes the brand with video campaigns that strike a chord with consumers around the world. Consumers want brands to touch them and to connect with them on an emotional level.

And indeed, there are certain brands where you know exactly what you're getting: Hermès, for example, is entirely made in France, whereas Chanel and Louis Vuitton have their own factories around the world - in France, Italy, Spain and the US - so pieces will be made in one of those places.

Handbag designer Gabriella Wimmer wanted to be in that category of luxury purveyors who made everything in one place, and located a workshop in Tuscany. For her purposes, it was what she needed: Wimmer makes very high-end custom bags from exotic skins and real gemstones, and works privately with clients to design their bags. It can take up to four months to create one piece, with prices that start at US$3,000 and can stretch to the tens of thousands. The work is so personalised that she will often fly to Italy to oversee the creation of a single bag.

But it was while sourcing the right atelier for her brand that Wimmer realised just how muddy the waters around luxury fashion production are.

"I went to a lot of the larger production houses that supply small leather goods and handbags to the major French and Italian labels," she says. "What I found was that the sample might be made on-site, but then everything gets sent to Eastern Europe to be produced there, and then comes back to Italy for quality check. So at the end of the day, that Italian bag is not really made in Italy."

Wimmer chose to make everything in the same location in Tuscany because she works with expensive alligator, crocodile and ostrich skins.

"You really have to know what you're doing to work with those. Make the wrong cut, and you lose a thousand dollars a bag. The artisan in the atelier I work with specialises in this. He will look at the fabric for a week before making his first cut. The workmanship there is centuries old. This kind of gift is in the blood of the workers who are there. It's been passed down over the generations, and they have such a pride in it. It's a rare thing to find."

This article appeared in the South China Morning Post print edition as: Made to please

'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'