Staff Reporters
Jul 25, 2013

Louis Vuitton needs to regain its lost exclusivity

BRAND HEALTH CHECK: French luxury brand is hoping restricted availability and higher-end goods will create desire.

Louis Vuitton needs to regain its lost exclusivity

Louis Vuitton dropped seven places in Campaign Asia-Pacific’s Top 1000 Asian Brands rankings this year and likewise by 12 per cent in Millward Brown’s BrandZ study.

The slip in popularity by what was once the world’s top luxury brand is due to the shifting preference of LV’s leading consumer group — the Chinese shopper. A recent study by Bain noted a shift away from logo-mania towards a preference for unique, high-quality and understated luxury. To address this, LV has decided not to launch stores in China’s second- and third-tier cities so as to reduce accessibility and to push its higher-end products over more affordable canvas bags. 

Nevertheless, LVMH posted lower-than-expected sales growth in April due to falling demand in China and from Asian tourists. Although the group blamed China’s slowing economic growth in its financial announcement, that did not stop rival Burberry from posting 16 per cent yoy growth in quarterly sales due to strong luxury demand in China. What can LV do to regain lost popularity?


As a letter to the Financial Times put it bluntly: when even the cleaner has a Louis Vuitton handbag, the brand has a problem.

The French icon has to convince the highest spenders that the entire ‘feel’ of the brand is out of reach of everyone apart from a rarefied elite.

First, LV can use market research to ensure it does not lag behind its peers in adapting to changing trends—such as the shunning of ostentatious logos. Exhaustive focus groups among the ultra-high spending segment will anticipate maturing tastes in luxury and discover what will ensure loyalty.

Luxury is difficult to get right online and clients may not use e-commerce, but LV’s digital set-up feels cumbersome. The website is a critical brand extension, acting as a virtual storefront. The brand’s digital strategy needs a revamp to serve a world where clients research the brand online and via smartphone.

To address the perceived loss of status and to elevate itself above the merely luxury (like Burberry), LV can work harder to associate itself with artisanship and sophistication.

The trick for LV is to convince the highest spenders that despite shifting huge volumes, each product is exclusive and that each customer—whether online or brick and mortar—feels very special.

Leo Wood is a senior director in FTI Consulting’s strategic communications team

DIAGNOSIS 2 Saisangeeth Daswani

Louis Vuitton’s use of its iconic logos and patterns has reached a tipping point.

As history has shown with Burberry, restricting a brand’s logo is one way of preventing brand devaluation, but in today’s complex retail world, this is only one step in maintaining a brand’s identity. We cannot discount the major social marketing and digital efforts Burberry has taken to grow its brand into what it currently is.

Christian Louboutin once said, “Luxury is not consumerism. It is educating the eyes to see that special quality”. LV needs to tap into the craftsmanship and savoir-faire that has made it synonymous with true luxury since 1854.

In China specifically, McKinsey & Co. predicts that by 2015, China will account for 20 per cent of worldwide luxury sales.

It is in LV’s interest to develop a long-term strategy that will satisfy the multifaceted tastes of the Chinese consumer, that is, the level of maturation that first-tier cities have reached, as well as the aspirational needs of middle-income cities.

LV’s recent ‘Chic on the Bridge’ campaign is the first signs of it ushering in a new era. By marrying the brand’s rich heritage with the shifting trends of its contemporary consumers, LV will master the challenge of striking a balance between exclusivity and popularity.

Saisangeeth Daswani is a trend specialist, Asia-Pacific with Stylesight


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