'We're living in the age of the remix': Fashion brands are making major changes to appeal to Gen Z in a new era of luxury
Luxury brands have been partnering with streetwear brands, in part to recruit younger customers, and in part to experiment with different business models.
Most recently, Polo Ralph Lauren teamed up with London-based streetwear brand Palace for a limited-edition product line.
Trunzo told Business Insider that Polo choosing to work with Palace was a smart decision. Since Palace doesn't do collaborations very often, there is a level of exclusivity that helps it keep its luxury appeal.
Louis Vuitton has also released a streetwear line with Supreme, a brand with a cult following among teens.
And Fendi released a line with Fila that combined the two brands' logos.
Gucci has managed to connect with younger shoppers without a streetwear collaboration for a number of reasons. Creative Director Alessandro Michele has proven to have a keen awareness of what young people want, including bright, eclectic colors and patterns that are engaging and look good on Instagram.
Source: Business Insider
To an extent, the definition of luxury itself has been changing. It isn't just about price and perception as much as it is about accessibility. The less accessible a product is, the more elevated the brand becomes.
But price isn't the only thing that makes products less accessible. Limited-edition collections — or "drops" — have the same appeal, and they allow luxury brands to test new business models while attracting younger shoppers, according to Nokes.
Source: Business Insider
Luxury brands aren't only partnering with streetwear brands — they're also looking to other luxury brands. In late September, Michael Kors acquired Versace in a $2.12 billion deal.
Source: Business Insider
Both Trunzo and Nokes told Business Insider that Michael Kors appears to be gearing up to become a major fashion house like the Paris-based LVMH. Michael Kors also acquired Jimmy Choo in a $1.2 billion deal last year.
Source: Reuters
By acquiring Versace, it has begun to build a more global portfolio that will allow it to extend its reach further.
The main benefit of building a major fashion house, according to Nokes, is that it allows the company to have multiple growth platforms and avoid overextending any one brand.
Nokes said, however, that although all of these partnerships are changing the fashion industry quite a bit, people don't seem to be losing their appreciation for luxury products.
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