Comparison of Two Luxury Brands - Hermes and Gucci - Case Study Example

Comparison of Two Luxury Brands Comparison of Two Luxury Brands There are many factors to consider when starting, expanding and ensuring sustainability of business with location and visual merchandising forming part of the main consideration. Visual merchandising involves arranging product on the shop floor to provide three-dimensional views. Its main aim is to attract potential customers’ attention. Management of businesses dealing with fashion and branding take into account the location of the business to ensure prosperity. Retail businesses in the fashion business are not an exception in choosing the business location to ensure sustainability. They also rely on the profitability from the customers like other business and continuous competition from opponents needs a well-defined strategy to succeed. Most of them have a store location in leading metropolis in the world (Bohemia, Rieple, Liedtka & Cooper, 2014, p. 607). In the fashion business, some of the factors to consider apart from location may also include surrounding culture and being innovative in the new styles. The management has to be on the lookout for new business possibilities and locations where profitability will be high. Visual merchandising also plays a great part in the retail business especially in the fashion industry. It is part of marketing strategy within shops for the fashion businesses to make customers aware of their presence and brands. Any successful fashion retail store management know its contributions hence they use it to their advantage of getting customers’ attention. In the retail shops, visual merchandising adds the vital value that most retailers overlook and underestimate. VM increases selling and building of the brand in the retail shop. In known brands in the market, it helps in maintaining the customers’ loyalty in making choices as part of marketing strategy. There is a need for business personnel working in the fashion retails to realize its contributions and engage it to have a profitable business. The need for this practice has led to the creation of services that offer consultancy and design advice for obtaining the latest trends. This kind of services offers help in arranging the shop in ways that are appealing to the customers. In this article, we will look at strategic locations and visual merchandising of Gucci and Hermes retail stores in making sure their businesses prosper. Gucci is a luxury brand that has been in the market since 1921 with strategic locations of its retail stores. Gucci is an Italian origin company known for quality products. The company deals with products for all ages and both genders. It has over 400 stores worldwide, which are in strategic locations. The stores are mainly in malls and high-end streets where there are large numbers of potential customers passing. Gucci and Hermes retail store managements understand their market very well hence use both visual merchandising and location as part of a strategy to attain sustainable business. Hermes is a French Luxury Company founded in 1837 with increasing product line over time. The company also gained popularity through the influence of the actor Jane Birkin after she replaced her handbag with one from Hermes. The accessory has the waiting list of six, which is the longest wait for any other luxury accessory. The brand currently has many other accessories including home line and furniture. In Hermes’ business success, the management uses visual merchandising to play an important role in marketing their products in the stores. Visual merchandising also involves having a strategic location for the retail stores along the streets. Location of fashion retail business plays an important role in marketing the products and enabling accessibility and marketing of the goods. In the current market, fashion companies have a number of competitors to the fashion business and customers have a variety of stores to buy products. Some of the stores even offer home delivery to their customer in the bid to gain customer loyalty. Companies in the fashion and lifestyle industry also develop other means of marketing their product that may include Internet advertisement like in the case of Gucci Company. All these practices aim at improving convenience to the customer that may involve the use of modern technology. However, locations of the fashion retail stores still play a major role determining their prosperity. Locations of the stores in regions also consider country economy and the possibility of gaining more profit in the area. An example is Hermes willing to spend more of its resources in opening shops in China due to the possibility of high returns. Most of the fashion retails shops are in the center of business district of the cities. Central business district the area with the largest population and most individuals pass through these areas in their daily duty. Location of the fashion stores in these areas offer the convenience to the customers hence increased the probability of customers buying from them. The locations also provide an advantage of advertising the presence of fashion shop in the region where a large number of people pass. A store that is close to the customers is easily accessible at any time for a larger number of the customers compared to those that are inaccessible. The concentration of Hermes store is in areas where there are middle-class income individuals that include shops and airports in large cities where they pass more often. The products are not cheap, but most individuals can afford them. Gucci has around 450 stores while Hermes has over 300 stores worldwide that have location mostly in the cities. Large numbers of stores around the world offer good accessibility and awareness to customers. The stores often have the ability to remind customers of the brand name hence increase awareness. The company has its stores in specific countries that include USA, France, UK, Italy, Germany and some Asian countries (White, 2004, p. 343). Locations are in places where there are rich individuals who can manage to buy the products in some of the most expensive streets. Location of the retail stores in these streets also acts as part of the attraction to the customers. Celebrities play an important role in the marketing and increasing awareness of the brands names. The influence increase with the celebrity location while supporting the brand. An example is the promotion of Hermes handbag by Jane Birkin in acquiring new handbag. She also moved from London to Paris where there is the headquarters of Hermes Company. The activities by Jane, an actress, and singer improved the awareness of Hermes brand name despite having large number of competitors including Louis Vuitton, which is one of the biggest luxury brand company. Another celebrity influence in the Hermes Company involves Grace Kelly that led to the production of Kelly handbags. The company uses these handbags to increase the brand awareness, and part of the strategy is making them scarce. Gucci also has its celebrities that help in marketing the brand by appearing on television wearing or carrying the company designed products. These practices increase brand awareness and aspirational demand for the company products. The management of Gucci stores around the world knows how to use the locations for their advantage in visual merchandising. They also exploit seasons in their visual merchandising with respect to the location. Exploitation of seasons is evident in areas like China where their retail stores have differing messages besides the brand name during any given season like Christmas time. The use of this technique blends the stores into the environment while at the same time makes the customers notice its presence in the area. The store management uses visual merchandising also to show customers that they provide products suitable for the season. The practice is vital in capitalizing and remaining relevant in the market. The products may be gifts bought by the customer to other people or just attires for the customer during the season. Visual merchandising during certain seasons in an area also assures the customer of cultural support of the region. In areas like London where the old buildings along the street have narrow windows, there is a need to use the view effectively. The management understands the need for customers to realize the store and brand presence in the area hence use the windows in a more creative manner. This involves the proper arrangement of the product in three-dimensional manner. The management of Hermes does not need to market their product but use visual merchandising in their stores. The presence of products in the stores that the customer can notice from outside is enough to attract them. The management of Hermes does not engage in normal marketing strategy. However, they look at the production process that later market their product in the stores. In addition, celebrities and rich individuals carrying their products around offer a good marketing strategy for the company that creates aspirational demand. There are improvements in visual merchandising in the Gucci stores and with the use of the internet as part of marketing also gives the company an added advantage. However, they differ from Hermes through their management allowing direct marketing of their products. Hermes on the other side relies on the visual merchandising at their stores and rich people carrying their products in marketing. The products prices make them inaccessible some individual while at the same time provide a marketing strategy for the company. The management has a responsibility for ensuring the products meet the customer demands and meet high-quality standards. Hermes uses the strategy that not everybody can afford its product and those who have them increase their social status. Thomas Patrick as one of the leaders noted that their handbags with company brand name are investments in social status. This kind of strategy supports the company but may also limit the company’s potential customers. The brand managers use the need for people to improve their social standards to gain more demands from the middle-class people. In advertisements tools, the company mainly uses print media such as high fashion magazine to reach specific customers. The technique is quite different from other companies who want to reach the large mass of customers. Gucci and Hermes use strategic locations for the store and visual merchandising their products. Both Gucci and Hermes products stand out in the fashion market. The figure of a celebrity within the brand name adds the aspirational demand to the company. However, companies like Hermes limit their production of the goods as part of the marketing strategy. Locations of the stores play an important role in creating and maintaining awareness of the brand name. Locations also ensure the store has high number of customers. Determination of the tool used by fashion companies in advertisement comes from the targeted customers. In taking all these strategies, the fashion retail stores need to be on the lookout for factors that can affect their business. Bibliography Bohemia, E. Rieple, A. Liedtka, J. & Cooper, R., 2014, ‘Proceedings of the 19th DMI: Academic Design Management Conference: Design Management in an Era of Disruption’ Design Management Institute, 12 Sep 2014 - 3131 pages White, C., 2004, Strategic Management, Basingstoke, Palgrave Macmillan. Read More