The Secret to Rule the Fashion Industry

What is the world’s most attractive industry? Without a doubt it’s fashion. Imagine customers actually pay you to proudly promote your brand on their bodies. Imagine to work with 1000% + margins. Imagine that the price itself, not quality, is the main determinant of your products’ perceived value.

What a business!

To understand why fashion industry works against so many business principles, lets take a look at what’s called a “symbolic behaviour”. People have been always creating hierarchies within their communities — aristocracy and commoners, masters and slaves, alfa and beta males…

According to a Swiss sociologist Fernando Pedone, if any kind of hierarchy is present in the society, status symbols occur immediately. Status symbols are visible external possessions that represent social position, wealth or status of an individual.

In this article, status symbols are represented mostly by clothes and accessories but they can be anything — electronics, cars, homes, vacations, dinner-outs or drinks in expensive bars.

To see how symbolic behaviour implicates modern fashion industry, let’s first take a look at 3 categories of fashion brands :

  • Prestige brands
  • Middle class brands
  • Lower class brands

Prestige brands — LV, Gucci, Prada

Prestige brands are the most expensive and differentiated ones. They have extraordinary design and even more extraordinary marketing communication. The point is not to be appealing to everyone but to be distinguish enough.

They are sold in those snobbish places called boutiques; occupying some of the busiest high streets on the globe. When you come in, don’t expect anybody to smile at you. Not even the salesman. In fact, prepare to feel judged. "Can I afford it? Do I even belong here?…"

In boutiques, you rarely find price-tags and the only time it’s appropriate to ask for price is when you’re already standing in front of the cashier with a wallet in your hand. And no, you won’t get discount.

These brands usually achieve differentiation by representing a certain lifestyle. In most of their ads, you'll see various aspirational identities that are very expressive and unusual. The point is to speak to the customers' internal wishes to be someone different. With Gucci, you can be a playboy or a playgirl. With Lous Vuitton, you can be an adventurer.

Gucci uses very provocative communication — a brand certainly not for everyone
Louis Vuitton position itself as a brand for travellers and adventurous people. Again, distinguish but not for everyone.

Middle class brands — Tommy Hilfiger, Calvin Klein, Hugo Boss

This category is basically a prestige for masses, sometimes also called “masstige”. They are very similar to prestige brands but they are more accessible and less differentiated to be appealing to broader audiences.

Middle class brands offer a wide range of products with different pricing and distribution so they can target both — higher and lower classes of consumers. They are sold in shopping malls, outlets, e-shops and, again, in luxurious boutiques on world's busiest high streets.

However, the point of boutiques is not to be an important distribution channel but rather to create awareness and increase the estimated symbolic value of the brand. Boutiques often sell goods for prices multiple times higher than in retail.

It works like this — a customer, call him John, sees a Hilfiger shirt for 250€ in a boutique on the hight street. "That's too much" he thinks and leaves with an impression that he simply can't (or doesn't want) to afford it. However, when John sees the same shirt at the local outlet discounted to €100, it's almost a no-brainer.

What John bought here, however, was not the shirt. He bought the feeling of being a member of the high class. He want people to think of him as that guy who has no troubles spending 250€ on a shirt.

This is exactly how “masstige” brands work — people buy what they consider status symbols of the higher classes to be envied by their peers. To support this feeling, masstige brands often have large, expressive logos on them to make everyone see what a customer is wearing.

Hugo Boss position itself as a brand for successful men
Ralph Lauren often pictures young people with gentility of their fathers

Lower class brands — H&M, Marks & Spencer, Zara

These brands imitate the design of higher class brands, often go with the latest fashion trends and are very accessible. However, they don’t provide any symbolic value.

According to a sociologist Georg Simmel, people tend to actually avoid lower classes' status symbols. And cheap brands will always be automatically be associated with lower classes, regardless of their actual quality or appearance.

That is why cheap fashion brands like ZARA, H&M or C&A rarely have any visible logos on them.

Zara proves that fashion brands can be cool even without having the symbolic value. It’s popular even within higher classes.

Symbolic behaviour and envy

The basic principle of symbolic behaviour is that members of higher classes prefer to distinguish from lower classes. Lets face it, if anyone could wear Luis Vuitton, who would want it? The less accessible the brand is, the higher symbolic value it carries.

Great example of this is Tommy Hilfiger. According to Forbes, the first financial peak of this brand was in year 2000 hitting over $2 billion in sales thanks to huge expansion, marketing and promotions. However, the brand started to be so accessible that people lost interest in it and profits plummeted each year onwards

The company got itself into big financial troubles and almost went bankrupt. The owner was forced to sell it to European businessmen Daniel Grieder and Fred Gehring for just 1,6 billion in 2006.

New owners immediately put on a strategy that goes against all rules of modern retail. They lowered accessibility by raising prices, cutting off many stores and producing clothes in smaller sizes to make them only available for slim, attractive people (creating an aspirational identity for the rest). Tommy Hilfiger was not a brand for everyone anymore.

The brand became once again a symbol of attraction and success. As a result, their worldwide revenue hit a new record of $3,5 billion in 2013.

This is how powerful symbolic behaviour is.

Tommy Hilfiger had to sell his own company in 2006 in order to save it from bankruptcy

Envy drives people into stores because they want to be considered at least as successful as those around. Status symbols are an effective way of showcasing wealth without explicitly talking about it.

Symbolic behaviour is based on one of the most basic human characteristic— comparison with others. We don't want to be average. We want to be more successful and attractive than those around.

Why? According to an international advertising agency Young & Rubicon, we all hate being envy. And we love causing it:

“If you want to build a strong, attractive brand in your marketplace, superior product performance and service delivery — they all help. But all you really need is envy.”

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B2B growth hacker and employer branding specialist for small and medium-sized technology businesses milantibensky.com, linkedin.com/in/milantibensky/

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Milan Tibensky

Milan Tibensky

B2B growth hacker and employer branding specialist for small and medium-sized technology businesses milantibensky.com, linkedin.com/in/milantibensky/

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