Month: August 2020

In 2005, Highsnobiety entered the fashion landscape to help consumers differentiate the new and the cool from the mainstream. Now those two categories are one in the same, according to co-founder Jeff Carvalho, as streetwear and the cultural influences from the skating and punk rock communities (among others) have bled into designer fashion houses.

Popular luxury brands now draw a lot of influence from streetwear while some of the legacy companies in the space are still figuring out how to naturally merge the two together, in order to get in front of the next generation of consumers.

Carvalho said that earlier this year, Highsnobiety found in a research study it ran with Boston Consulting Group that by 2026, millennials and Gen Z will make up more than 60% of the luxury market and will add about $500 billion to luxury sales as well.

In the latest episode of Digiday’s weekly show “The New Normal,” Carvalho discusses how legacy luxury brands need to adapt their marketing and operational structures to champion accessibility over exclusivity.

‘Hype is great, but hype does not move the needle long term.’

Carvalho said that many of the high-end brands that Highsnobiety covers and works with think that creating a lot of conversation and excitement over exclusive product drops is the only way to reach consumers.

“We disagree to some extent on that,” he said. “Hype is a moment and what we’re trying to do is … build a movement where a brand doesn’t just come out with a one hit wonder, but a brand [that] has a conversation with the consumer set that we reach.”

The drop model was originally designed to bring consumers back into stores from season to season, but now, Carvalho said that drops have more of a one-and-done usage that sometimes can be used to introduce a brand to new consumers, but mainly is used to drive immediate revenue. Now brands, he said, need to find a more consistent way to keep consumers engaging with and shopping with the brand.

“If the drop is not followed up with some energy, I don’t believe it’s that effective,” Carvalho said.

‘An equal playing field’ for Gen Z shoppers

Carvalho said that through the recent research Highsnobiety performed, his team has learned that younger shoppers don’t care about exclusivity in luxury like previous generations did. Instead, they want accessibility. And for the most part, the designer brands that have successfully attracted a younger audience no longer have closed shop doors that only allow in certain clientele. 

“Accessibility doesn’t mean that every consumer will have the means to purchase a product, but the doors are open for them,” he said. “The hope is that down the line” this 16- or 17-year-old will become a paying customer of the brand.”

In the meantime, allowing younger shoppers to come into stores and photograph themselves with the products for social media at the very least gives the brand free marketing, Carvalho said.

Why is Gucci doing well?

Over the past few years, luxury fashion brand Gucci has risen to popularity with not just its traditional middle- to upper-class, white woman clientele, but with a younger and more diverse consumer, said Carvalho, dropping its average consumer age by over a decade in just two years.

The initial strategy for breaking into this new audience was pushing its more economically priced statement pieces that can be worn regularly and show off the branding — like a Gucci belt or Gucci loafers.

But Carvalho said that now one of the top designers at Gucci, Alessandro Michele, is tapping back into his roots in the streetwear and skating communities as a creative director at the company, allowing Gucci to appeal more to that younger generation.

“What luxury houses need are individuals in their organizations that know how to speak to the younger generations on their terms,” Carvalho said. 

Sneakers to homeware

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Research from Highsnobiety and BCG

Highsnobiety research also found that during the past five or so months, there was a shift away from non-essential product purchases to home goods as people look around their spaces and realized it made more sense to dress up their homes than it did to dress up their themselves. 

“These home goods are being coveted in the way that sneakers and clothes were being coveted,” he said. Now, “a coffee table can be seen as a desirable object.”

New luxury

Like pretty much every other industry, luxury is feeling the impact of the coronavirus-induced recession. But unlike most industries, legacy luxury brands have a large pile of cash to sit on to get through this time, he said. They don’t need to be overly proactive during the recession to make sure their business gets by. 

After the recession, however, a new consumer will be coming in and “how they begin to communicate to that younger consumer is going to be very important to their success in the future,” Carvalho said. 

Part of that is because young shoppers do not care about legacy or the amount of time that brands have been around. For example, Off-White and Fear of God are two DTC brands that have emerged in the past decade and they’ve already found a lot of success with digitally native, young shoppers.

“The new definition of luxury certainly allows for upstart brands to enter that field and remain there,” he said. Legacy brands will need to adapt, or they could get replaced.

But the inevitable ‘is it really’ question about optional returns is in the wind as Labor Day nears.

If you ask agency leaders about it, they’ll say they’re simply trying to figure out what’s best for employees. If you ask agency employees about this approach you’ll hear mixed reviews. Some believe that this is a viable approach that gives flexibility and choice to employees. Others say that it depends on the internal politics at the agency as leaving it up to employees or employees’ managers could further foster power imbalances with some left to feel as if they aren’t team players unless they return to the office. 

“Ours has been great [about it], I haven’t felt any pressure,” said a strategist who requested anonymity. However, an agency where the strategist previously worked at has also voluntarily opened its office up for employees — but it’s a different story. “Owners are ‘sad’ and ‘feel hurt’ that no one is coming back while employees feel like them not going into the office is being held against them.” 

Depending on the agency, the stress of whether or not to return can be exacerbated by the possibility of layoffs as those have continued throughout the ad world. For those worried about being laid off, deciding whether or not to return when offices are back open can be even more complex. 

For some staffers, after working for home for four plus months, having the option to go back is helping them manage this moment. “It’s the only thing keeping me sane,” said a copywriter who has been going back into his agency’s office in recent weeks. “Most of my life is tied to that office and the people in it, so I think part of me is doing all I can to grasp at normalcy to not totally lose hope.” 

And for minority employees the strain of making the decision to return to the office or not is heightened not only by coronavirus concern, but also the social injustices they’re experiencing. “Agencies opening up their offices, even on a voluntary basis, are lacking consideration for power dynamics within the workplace and putting Black talent in a tough spot,” said a buyer who requested anonymity.

The buyer continued: “Black employees, for months, have been watching Covid-19 numbers in their community surge coupled with increased police brutality in our communities, which has left many of us with severe anxiety. We will feel pressured to come into the office because of optics and fear for job security. You are asking Black employees to choose between their job security or their safety.” 

Agency employees and execs say that whether or not agencies decide to open offices, managing expectations and helping assuage any sense of pressure or guilt to come in will be key. 

“Any company, especially our creative industry — most definitely any intellectual sector — should understand that the ability to allow its talent to be happy, safe, comfortable, motivated, needs to have the employee’s personal wellbeing at the very core of their HR policies,” said Frederico Roberto, executive creative director at digital marketing agency Interweave. “Agencies that fail to do so are doomed in the long run, as this situation is not going to go away, anytime soon.”

3 Questions with Reema Elghossain, vp, 4A’s Foundation

What advice do you have for portfolio school graduates on the job hunt now? 

As you take this time to connect with agencies, partners, and leaders, opportunity will arise — and often leads you down a different path of possibilities than expected. Expand the boundaries of your expectations for what your next steps “should” look like and maintain the relationships you build as you go.

How are you helping the Multicultural Advertising Intern Program (MAIP) class find jobs in this agency job market? 

MAIP’s overarching goal is to ensure that we find, retain and grow the next generation of diverse leaders within the marketing and advertising industry today. [This] week’s Face of Talent [events], in partnership with Advertising For Change, are specifically geared towards helping the entire MAIP 2020 class of 369 fellows connect with over 75 agencies to find jobs. This year’s event will be 100% virtual and the week-long series of events include: Virtual Diversity Career Fair — one of the largest diversity Career Fairs in the industry, giving the fellows access to participating agencies and partners to network and make connections with recruiters; MAIP Greenhouse, which allows creative recruiters time with creative fellows to review portfolios; and MAIPCon, a two-day professional development conference compromised of panels, main stage discussions and workshops aimed at enhancing professional skills. 

How have you transitioned the Face of Talent to be virtual this year and why was it important to do so?

We wanted to create an experience that will allow agencies, partners, and fellows from everywhere in the country to participate and network the best way we can. In fact, the transition from in-person to virtual has elevated that agenda. Agencies each receive a virtual booth with staffed recruiters to connect one-on-one with MAIPers, host presentations and group conversations, and exchange information that leads to future opportunities.

Diversity, equity and inclusion work is more important than ever and we are committed to continue to lead the way to create truly diverse teams that mirror the societies in which our industry serves.