Luxury Brands and Status

Introduction

When it comes to fashion, people intuitively have a hierarchical sense for different brands, whether or not they are aware of it. At the top there are the "high-end brands" like Hermes, Chanel, Gucci, and at the bottom there are "fast fashion brands" like ZARA, H&M, and SHEIN. What you wear is a statement, regardless if you're brand oriented or you're Professor Andrews (who only wears the same black shirt and black trousers).

From these ideas, we wanted to explore the world of luxury brands and see what has contributed to this sense of hierarchy between each brand name to see how it impacts fashion as a whole. In this visualization, we intend to answer the question through a customized visualization of three key variables - unit price, sales volume and total revenue - of each brand.

To visualize brands' hierarchy and status, we drew inspiration from the fashion concept "Pyramid of Luxury," which categories fashion brands based on their affordability and accessibility. Next, we will examine the three factors - unit price, sales volume, and revenue - respectively to see whether they all follow the pattern suggested by the pyramid of luxury.

Brand Overview

Let us start with an overview of brands' status regarding the unit price of their best-selling handbags (Y-value), estimated sales volume (X-value), and annual revenue (represented by the radii of circles). Situating in the top left corner is high-end brand Hermes, who intentionally limits volume of its leather goods circulating in the market to preserve its scarcity. In the bottom right corner, we have fast fashion brand H&M with affordable prices and a significantly large sales volume comparing with Hermes. Because of the mathematical relationship among unit price, volume, and revenue (Unit Price x Volume = Revenue), both unit price and volume play a role in the magnitude of these fashion companies' revenue.

Unit Pricing

Luxury brands are known for their expansiveness and pricing strategy. They aspire to price their products at the sweet spot of scarcity and affordability to attract costumers with different purchasing powers. On the contrary, affordable prices are the selling point of fast fashion brands. Their well-developed global supply chain and business ecosystem makes their economical prices extremely competitive.

Volume

Luxury brands leverages "artificial scarcity" by limiting both the productions and sales channels. A typical strategy involves acquiring traditional hand workshops and tightening sales quotas of popular models. Contrastingly, fast fashion focuses on "the economies of scale" by frequently releasing new products and having end-of-season flash sales. The key to their success is selling more within a shorter time frame.

Revenue

Both high-end luxury brands such as Hermes and Chanel and fast fashion brand such as H & M perform strong in their revenue. On the contrary, revenue generated by brands situating in the middle of the fashion pyramid is around one third of the high-end brands' revenue and one sixth of the fast fashion industry.

Conclusion

Though it seems that both Unit Price and Sales Volume of the brands demonstrated above follow the pattern of "hierarchy of luxury," the rule does not apply to the more comprehensive factor Revenue. This is to say the hierarchy of fashion brands does not directly reflect a company's performance, if we use revenue to measure a company's business success. In fact, this hierarchy derives more from a social instead of a financial perspective. Fashion brands favored by this concept often use it as a marketing strategy targeting consumers. Also, the pyramid suggests important facets behind consumers' buying motivations, including accessibility and exclusitivity, which helps shape the positioning of different fashion brands.