Showfay Share ｜ How does Chanel create a more desirable luxury brand with four pronged approach?

In fiscal year 2021, Chanel's sales increased by 49.6% to US $15.6 billion compared with that in 2020, 22.9% higher than that in 2019 before the epidemic; Operating profit reached 5.461 billion US dollars, up 57.5% compared with that before the epidemic. Among them, the ready to wear and leather goods business performed particularly well. In fact, when Chanel officially released the financial report in May this year, it was clearly pointed out that this achievement benefited from the successful design of Virginia Viard.

In addition to the fashion business, Chanel's leather business is also strengthening its market position. Since 2019, the brand has raised the price of its classic handbags four times. In March this year, Chanel again raised the price of some products in Europe, South Korea and Japan, which means that the prices of some iconic handbags are twice as high as before the outbreak in 2019. Luxurynsight, a Paris based industry data analysis company, said: "Chanel may hope to make use of this scarcity to make it a more desirable brand."

Gorgeous Records "This article will discuss from four aspects: how did Chanel go hand in hand in fashion, beauty, jewelry and watches and other business lines in the past year to become a" more desirable luxury brand "?

*Virginia Viard, a female designer, "monopolizes power" and highlights women's color
*Promote the construction of beauty omni channels and strengthen the application of symbolic elements
*Deeply cultivate "creativity" and "DNA", and develop jewelry and watch business
*Strengthen store experience and maintain top customers

Virginia Viard, a female designer, "monopolizes power" and highlights women's color

In February 2019, Karl Lagerfeld, the "old Buddha" who worked for Chanel for 36 years, passed away from the world. His long-time collaborators: Virginia Viard, the director of the creative studio, and Eric Pfrender, the image director, served as the joint art director of Chanel, respectively in charge of fashion design (including Gaoding, ready to wear and accessories series) and brand image (including advertising, vision and photography).
In May 2019, Virginia Viard released the Chanel Cruise 2020 series, her first personal show. After the release of this show, it was once commented by foreign media as just a "continuation of the tradition of Laofo's catwalk", but Bruno Pavlovsky, President of Chanel Fashion, highly recognized Virginia.
Bruno Pavlovsky said in an interview with the British Guardian before the show: "Virginia works very well and she will stay here for a long time. When you have been Karl's second in command for 30 years or more, you are naturally invisible to the outside world. But Virginia, like Karl, has the ability to see new trends. She understands the atmosphere of the times, and she also knows Chanel well."

In May 2021, Chanel officially said that Eric Pfrender, the image director, would officially retire. At the end of the short two cab era, Virginie Viard became the only art director of Chanel, comprehensively leading product design and brand image. She is also the first female art director in 50 years since the death of the founder of the brand. Can Virginie Viard, who has been hiding behind the scenes for many years, successfully step onto the stage and create a Chanel that truly belongs to her? Many people in the industry expressed doubts.
Chanel pointed out in the 2021 financial report that the brand's ready to wear and leather goods business performance was "particularly outstanding", and clearly mentioned that "this is due to the success of Virginia Viard design series". In the first year after taking over power, Virginia handed over a report card that convinced everyone.
When evaluating Virginia's design works, the most frequently used word in the industry is "femininity". Bruno Pavlovsky also pointed out in an interview with overseas media in May this year that Virginie has brought a more feminine and free style to Chanel's ready-made clothing series, which is one of the main reasons for the brand's recovery in 2021.

Virginia commented on herself in an interview with the New York Times earlier this year: "I don't feel like an artist at all. Coco Chanel is the real inventor. She has got rid of the shackles of corsets on women. But now everything exists, so I am flexible. I try to adapt to many things... Whether you are rich or have nothing, in essence, it is the same, it is a way of existence."

Chanel's mature luxury supply chain also provides a solid foundation for the design team to develop their creative talents. At the end of 2021, Le19M, a brand new workshop home built by Chanel in Paris for two years, covering an area of 25500 square meters, was officially completed, with 11 permanent workshops under the brand, employing about 600 craftsmen.

Since the founder, Ms. Coco Chanel, the Chanel brand has established long-term and in-depth cooperation with craftsmen and workshops in different aspects of advanced customization. In recent years, Chanel has more closely acquired a large number of embroidery, hats, buttons, shoes and various accessories workshops that it cooperates with, ensuring the orderly inheritance of these traditional crafts, and consolidating its leading position in the field of high-end customization and high-end ready to wear.

Promote the construction of beauty omni channels and strengthen the application of symbolic elements

According to the financial report, in 2021, Chanel perfume and beauty businesses will show strong resilience, and their market shares in several major countries will increase, and the online and offline demand of local customers will increase. The brand emphasizes that the success of men's perfume Bleu de Chanel and women's perfume Coco Mademoiselle has driven the sales growth of perfume, while the performance of skin care category has helped the growth of beauty cosmetics business.

2021 coincides with the 100th anniversary of Chanel N ° 5 perfume. To celebrate this important event, Chanel specially launched CHANEL Factory 5 collection (Chanel Factory 5 Series), which contains 16 limited products, and opened a limited time experience space in several key cities in the world (London, Seoul, Chengdu, Hong Kong, Singapore, Taipei and Paris).

According to the financial report, Chanel's watch and premium jewelry business will achieve double-digit growth in all markets in 2021. Previously, some insiders speculated that Chanel's annual revenue of jewelry and watch business might be about 1.5 billion US dollars based on the number and scale of Chanel's jewelry and watch boutiques, the sales of jewelry and watches in fashion boutiques, and the global wholesale business. (If the annual sales of US $15.6 billion in fiscal year 2021 is taken as a reference, the jewelry and watch business accounts for about 10% of the total sales.)

Even for a luxury brand like Chanel, which is famous in the field of fashion and leather goods, it is not easy to cross over the jewelry and watch field and occupy a place among them.

When asked how Chanel "conquered" the jewelry and watch industry, Fr é d é ric Grangi é, president of Chanel's jewelry and watch business, said in an interview with the English media Fashionnetwork in May this year: "Creativity, femininity and boldness are always the DNA of the Chanel brand. Whether it is jewelry or watches, we have followed two key elements from the very beginning - creativity as the core and headquartered in Paris. For the watch business, we have created a technological and industrial environment that enables us to express creativity and make it nearly perfect. We have transferred the watch business to Switzerland to achieve a Balance (with the jewellery business). "

In addition to improving the professionalism of relevant fields, Chanel's accumulated craftsmanship in the fashion field provides an inexhaustible source of inspiration for the brand's jewelry creation. In 2020, Chanel launched the Tweed de Chanel premium jewelry series, which is inspired by the brand's tweed fabric. "Many companies want to use jewelry to express the texture of fabrics, but only our technology can successfully achieve this, and tweed is the key to our DNA." Fr é d é ric Grangi é said.

"Our main concern is to protect our customers, especially our regular customers." Philippe Blondiaux, the chief financial officer of Chanel, said in a recent interview with the English media BOF. In June this year, Chanel said that it planned to strengthen its exclusive strategy and open exclusive independent boutiques dedicated to serving top customers. This plan will be launched in early 2023, and Asia will become the first pilot region.

For a long time, luxury brands have invested a lot of effort in maintaining the VIP customer base. They have continuously improved the experience of these top customers by holding offline private exhibitions, creating VIP space in stores, and upgrading VIP services. Elsie Zhang, customer development director of Digital Luxury Group, a Swiss luxury research and consulting agency, pointed out that "VIP customers have higher loyalty. Their sales may not account for a high proportion of brand performance, but their high repurchase rate represents a higher input-output ratio".

Bruno Pavlovsky revealed in May this year that Chanel has plans to make major changes to its flagship stores, especially in Asia and China. The brand will open about 10 boutiques every year, and renovate 20 stores at the same time. "This will usually stimulate our interest, because we can provide more space to protect customer privacy. Many of our customers want to be isolated from the world in private space to avoid appearing in boutiques".

In the past September, Chanel opened exclusive boutique salons for VIP customers in Hangzhou Building, Shanghai Hang Lung Plaza and Beijing SKP.

In the renovated jewelry and watch boutique in Wandom Square in Paris, Chanel has set up a private non-commercial space Grand Salon. According to Fr é d é ric Grangi é, a remarkable painting by Nicolas de Sta ë l, a French abstract painter of Russian origin, was hung in the space in the 1950s.