Vera Wang has little to lose and far more to win in the venture into ‘cheap chic’ branding.
The new ‘cheap chic’ fashion line from Vera Wang, called “Simply Vera” is slated to hit Kohl’s 800-some stores and its website in early September 2007. This is a major effort for Kohl’s, supported by an 8-page print ad in leading fashion publications, a Times Square billboard in association with New York’s fashion week and thirty-second television spots.
This is also a turning point for the Vera Wang brand. Pundits are lining up with doom-and-gloom predictions about Vera Wang’s descent to the masses and its subsequent loss of luxury allure. But my response to the ney-sayers is “Get over it.”
Today’s shopper is too savvy. They won’t confuse the more affordable $100 items in the ‘Simply Vera’ line at Kohl’s with the upscale ready-to-wear line at Neiman Marcus, Nordstrom, Saks Fifth Avenue and other luxury retailers.
The mistake so many of the Vera Wang-Kohl’s critics make is to assume that only middle- and lower-income shoppers are drawn to Kohl’s. But the facts speak for themselves: Many high-income luxury shoppers also frequent discounters and the mass marketers looking for bargains. In Unity Marketing’s latest survey of luxury consumers, over one-fourth (26 percent) of luxury shoppers shopped in Kohl’s in 2006, which is more than shopped at Nordstrom (23 percent), the top ranked luxury retailer. (see Unity Marketing’s Luxury Report 2007, unitymarketingonline.com/cms_luxury/luxury/Luxury_Report_2007.php )
Vera Wang’s branding strategy for the future – Target the Young Affluents, the Want-It-All Generation
The Vera Wang partnership with Kohl’s aims squarely at the most promising opportunity in the luxury market today – capturing the loyalty of the young affluent market – who will become the core of the luxury market in the near future as the Baby-Boom generation starts to retire.
Taking a luxury brand and spreading it across a wider spectrum of price points is a key branding strategy to target the young affluents. In a Unity Marketing study of the 40 year old and under luxury consumers, called Generations of Luxury, we found that the younger affluents, despite their high incomes, are far more frugal in their day-to-day purchasing than the more indulgent older affluents.
The young affluents are called the ‘Want-It-All Generation because they have a ravenous appetite for the good life and spend freely for luxury goods and services, spending nearly one-third more on luxuries than the over 40 year old luxury consumer in 2006. At the same time, their luxury shopping list is far longer than the Baby Boomers’. Their high incomes have to stretch further, so the young affluents, in particular, are drawn to mass merchants and discount venues where they can search out the best-for-less.
The luxury market will become more competitive in the near future, as today’s Baby Boom generation passes into their senior years. Luxury brands that don’t make the transition to the young affluents will be left out in the cold. The Vera Wang partnership with Kohl’s is perfectly positioned to build loyalty among young affluents for the Vera Wang brand that will translate into more future sales of the upscale Vera Wang ready-to-wear line. Targeting the young affluent market is the big opportunity — and challenge — for luxury marketers worldwide.