Over the last few years, the luxury market has been increasingly important to the leather industry. But, like leather, luxury is a term constantly modified by a wide range of adjectives, most of which are meaningless and often misleading.
Throughout history, a luxury item was thought of as exquisite and exclusive, made valuable by the fact that owning it was difficult, because of legal or financial barriers.
This began to change towards the end of the last century. The fundamentals of brand marketing began to evolve, and Bernard Arnault took over at Louis Vuitton, accelerating a shift away from primarily manufacturing fine articles into more aggressive retailing. Arnault took this further by making acquisitions and putting stores first onto high streets and then into airports at major cities around the world.
Through this change, luxury goods immediately became more accessible. In most cases, the only real barrier left was price, and occasionally a waiting list. Since then, luxury brands have upped their marketing and promotional spend to drive sales and relentless growth, with hardly a hiccup even through the Covid-19 pandemic.
Throughout this, luxury has become steadily more important for leather, as almost all areas of luxury use leather. LVMH recently passed €20 billion in sales, of which its leather and fashion division makes up over 50%. Luxury leather goods have been the strongest driver in luxury but upholstery for cars, yachts and private jets along with top hotels and restaurants and simpler items such as watch straps all add to leather’s strong involvement. It is no surprise that luxury brands have acquired tanneries to secure high-quality supplies and access to what they see as critical raw stock.
Recently, we have seen a significant slowing down of demand, first seen in e-commerce. This alone is not surprising, as a wealthy buyer of luxury items usually enjoys the in-person purchasing experience – being looked after by well-trained, respectful staff and talking about it after – but the fall has been much larger than anticipated and reports show that the “accessible luxury” sector is starting to struggle.
“Accessible luxury” is ridiculous
Accessible luxury is of course an impossible piece of terminology. When marketing people began to stretch the definition of luxury, one definition that started to appear was “anything that is not a necessity”, intended to cover the curious choices consumers were making to forego apparent necessities in order to buy a Starbuck’s coffee, Häagen-Daz ice cream or an iPhone.
Companies that were considered good quality brands with well-made leather products that looked good and lasted a decent length of time – a kind of old-fashioned view of value – decided to chase the opportunity. So, handbag brands such as Coach and car makers like Volvo started to position themselves in that space. Some brands began adding lower cost items such as scarves or support for second hand products to create entry points for younger, not yet well-off customers.
These brands, who sought to edge up into what became a lively retail circus, have mostly done well but they have allowed themselves to become part of a bigger problem. This has split consumer behaviour into buying ultra-cheap disposable items at one end and the “luxury” at high prices, killing the middle value market, where quality was assured. Even worse, to cover the high cost of marketing and retail, a few luxury brands have combined their higher price with cutting corners on quality.
Get back to buying real value
A reset would be no bad thing. Consumers need to be educated back into buying products that offer true value for the current times. Items whose cost they will measure over a long period and in cost per use. We must push them away from buying into overpriced false luxury or the planetary catastrophe of low-cost plastic, which rushes from fossil fuel to landfill at incredible speed.
Leather should fill that middle ground, where consumers can find products made from natural materials that will offer longevity and the chance to extend an already long life through repair. Tanners, artisans and consumers need to force greedy brands to realise that economic security lies with the sustainable route of great products made of good materials that last a long time – a mark of true quality.
Follow Dr Mike Redwood on Twitter: @michaelredwood
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