Consumers are increasingly aware of luxury goods companies' mass production methods and deceiving advertising campaigns, turning to emerging designers for products that are produced on a smaller scale - products that tell a story. Customers are looking for heritage, provenance - and embellishment."
The first trend we noticed was brand exhaustion with regard to the majors in the fashion industry. Companies like Louis Vuitton, Gucci, and Prada are backed by eponymous corporate entities that provide distribution outlets, large advertising budgets, and a worldwide presence with flagships in the largest luxury-consuming countries.
The consumers that these brands rely on for the bulk of their revenue are aspirational shoppers who typically come from lower income brackets. AdWeek conducted a study in 2009 and found that as the economy worsened, about 77% of these customers came to realize that luxury brands were less important. The study also proved that, the rise of discount shopping for the masses through sites like Gilt Group and Haute Look has been disastrous to consumer's mentality on luxury goods.
As major luxury goods companies realize this change, sale sites will likely receive blowback from the brands. Already, Cartier is suing Haute Look for selling used Cartier products. Luxury houses may have begun to realize that the once innocuous practice of holding sample sales and flash sales can now be harmful to their brand. In the past, sample sales were held in empty spaces downtown and the customers were those who worked in fashion and could not afford full retail prices. As a result, these sales did not affect the brand's target customers. This is no longer the case as most of the shoppers on the most famous sale site, Gilt Groupe, are high-income females.
