H&M Luxury Collection: A Threat to Luxe Brands or a Loss of Focus?

‘Cheap and chic” retailer may become part of trend of mass brands targeting affluent customers


Swedish retailer H&M – long considered one of the top destinations for fashionable apparel at bargain prices — may be joining the trend of mass market brands competing for the luxury consumer dollar. According to Women’s Wear Daily, H&M may be planning a new luxury line, complete with a more “luxury” price tag.


I’m not surprised to hear these rumors surface, as H&M has played on the fringes of the luxury market through their partnerships with luxury designer brands like Marni, Versace and Karl Lagerfeld. Also, we are seeing a trend of other retailers — J.C. Penney immediately comes to mind — eyeing the high-end, luxury segments of the market to pursue growth. It is a direct result of the recent recession.


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As the recession recedes, the affluent are the only ones left standing with cash to spend on things they don’t need


Mass marketers have typically relied on middle class customers as their primary market, but these customers are coming out of the recession with greatly reduced spending power. Affluent consumers, however, make up 20 percent of the overall population but are responsible for 40 percent of consumer spending, making them a sought-after target across the entire retail spectrum from discount to high-end. I expect to see more marketers and brands moving upstream in the future.


But this move is not without its dangers. If everyone positions their brand as “luxury,” then the whole idea of luxury loses its luster — if luxury is something everyone can have, it ceases to be special or something people aspire to own.


The danger in moving upscale for H&M in particular and other mass brands in general is confusing their customers. H&M has built their brand around being fast, affordable, fun fashion. If they lose their focus on this unique selling proposition in an effort to associate themselves with luxury, they may lose their core market. At the same time, they are taking a risk by perhaps positioning themselves as something they are not — a destination for true luxe items and brands.


On the other hand, heritage luxury brands have something to fear by the movement of what they perceive as their “inferiors” moving into their exalted luxury space. These upstart luxury brands don’t have any of the baggage of the historic luxury brands, and they don’t have any self-imposed restrictions on what they can and can’t do. If we are going to see true change and innovation in the luxury marketplace, it is likely to come from an “upstart” like H&M rather than a heritage luxury brand.


With this move, H&M has little to lose and much to win if they succeed. The remainder of the luxury marketplace needs to get ready for the changes that might come from these unexpected entrants into the luxury game.


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Learn more about the changing luxury landscape


To take your first step to understanding the challenges faced by luxury marketers today as they confront an all-new luxury marketplace, read my book, Putting the Luxe Back in Luxury: How New Consumer Values Are Redefining the Way We Market Luxury. 


In it you will find out have the recent global recession drained a lot of luxe right out of luxury. While the market for luxury brands has changed, but it still offers many opportunities for those who understand their customers’ changing priorities. In the past Baby Boomers were the drivers of this market and they are still important to it, but GenX and Millennials are growing in importance as they reach their peak earning years and Boomers begin their retirement life stage.


Post-recession luxury brand customers turned away from materialism in favor of luxury experiences and increased charitable giving. Previously indulgent affluents learned to say no to the allure of luxury brands. As a luxury marketer, you need to attract your recession-ravaged customers back to your fold. This book gives luxury marketers vital insights and strategies to assure success in the new luxury market through 2020. Marketers need a new understanding of their customers, their needs, desires, and aspirations in order to find the segments where their greatest opportunities lie.


Click this link to order your copy today. Also available for your Kindle reader. 


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One Response to “H&M Luxury Collection: A Threat to Luxe Brands or a Loss of Focus?”

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