Many fashion retailers define their strategy starting from their value proposition and key positioning levers (assortment, price, experience, speed, channels…) to differentiate themselves from competition. It’s part of their DNA but also define their purpose and business model.
The segmentation of fashion brands is illustrated on a pyramid where the more expensive brands are on the top. High price corresponds to high-quality fabrics, made-to-measure garments, exclusive customer service, and other attributes mentioned in previous posts such as Segmentation in Fashion or, in sportswear, Sports and Fashion in the Ironman era.
The Fashion Pyramid
The Fashion Pyramid corresponds to Maslow’s pyramid in many senses. Luxury fashion brands are generally covering the self-fulfillment “desire” and mass-market brands cover phisiological needs.
The pyramid is illustrative for many reasons:
• Brands are positioned in the Pyramid as corporations or conglomerates. Many of these companies compete in more accessible segments, for instance, by selling specific categories (e.g. eyewear, perfumes) or brands (e.g. Armani Privé, Giorgio Armani, Emporio Armani). Another strategy to move across segments is Capsule Collections (e.g. H&M x Moschino).
• Brands positioning or brand’s perception evolves. A clear example of how a company can move across segments is Michael Kors, that after a huge expansion across many channels (mostly department stores), the “brand” was damaged. If loyal luxury customers see their same bag everywhere, the magic is over. Also Tiffany experienced a reputation damage when selling less expensive silver jewelry.
It’s also interesting to note that brand’s positioning in Maslow’s pyramid is not a decision of the company. I’ve heard many colleagues from the business industry explaining their company’s value proposition and mentioning competitors that were totally different from reality or from customer’s perception.
In the end, customers position brands according to their experience, word-of-mouth, advertising, social media, customer service, quality of fabrics, loyalty programs, pricing and promotions, visual merchandising, amongst others. Brand awareness is decreasing, as commented in The New Fashion Retail Paradigm. According to Time Inc/YouGov Survey (2015), in 2007/08, 80% of US Customers remembered a favorite brand. In 2014/15, only 61%. Probably, new generations will embrace niche players in the long tail that are covering a mix of aesthetical and self-sulfilment need. Brands at the bottom of the pyramid will fight for a little space in customer’s brain within the infoxication era.
This is a holistic approach to how fashion brands are segmented in the Fashion Retail industry current state:
- SUPREME LUXURY: Hermés, Dior, Chanel, Bottega Veneta, Loro Piana, Versace…
Hermés Campaign © Eric Valli
- ASPIRATIONAL LUXURY: Prada, YSL, Dolce & Gabbana, Brioni, Armani, Ermenegildo Zegna, Louis Vuitton, Fendi…
Ermenegildo Zegna
- ACCESSIBLE-LUXURY: Ralph Lauren, Max Mara, Paul Smith, Stella McCartney, La Perla, Isabel Marant, CH Carolina Herrera…
Ralph Lauren
- PREMIUM: Guess, Calvin Klein, Hugo Boss, Michael Kors, Dsquared2, DKNY, Coach, Furla, Diesel…
Michael Kors
- MASS-MARKET
- Masstige: Massimo Dutti, Sisley, COS, &Other Stories, J.Crew, Twinset, Hackett…
- Mass: GAP, Zara, Bershka, H&M, Fast Retailing (Uniqlo), Mango, American Eagle, M&S, Superdry, Primark…
Mango SS19 Collection
In this segment, department stores like Target, JCP, Walmart, El Corte Inglés or Amazon are also selling private-label brands to compete to national brands, while supermarket chains like Carrefour or Lidl are increasing their apparel categories presence.
Hi, good work! Although I disagree with some aspects of the triangle. I will not considered Guess by any means in that level, nor Ralph Lauren alongside Isabel Marant or Max Mara. Maybe it would be a segment of high midrange brands: Ralph Lauren, MK, Diesel, Coach, Karl Lagerfeld, Lacoste, Purificación García, Kate Spade. Massimo Dutti also could be included here. Guess would be alongside American Eagle. Dsquared2 is also a high-end brand and it should be included in the luxury section.
Hi Mario! Thanks for your comments and recommendations! I wrote about the pyramid some months before and you will see some differences https://fashionretail.blog/2017/05/22/the-pyramid-of-fashion-social-approach/
I agree with you and I created the pyramid with two friends working in fashion luxury retailers. As you say, many of those brands have different price positionings or sub-brands in other customer segments, so it´s not easy to decide where do they belong to.
Also important to mention that some brands could start being luxury and after developing other distribution channels (e.g. wholesale), they lose attractiveness (brand perception, brand awareness…). This could be the case of Ralph Lauren and MK. I would say that american brands are having difficulties to keep their original segment (value proposition) as the retail industry in USA depends on wholesale/ department stores.
Thanks again and keep in touch!
Channel or Chanel??
Chanel 🙂 Thanks!
Really very beautifully explained! In this blog, you described the pyramid of fashion in a very good way. Thanks for helping us with fashion brands.
I never knew what fashion pyramid was. Thanks for sharing this blog is very helpful and informative as you have so amazingly describe it. looking forward to read more blogs like these, keep posting!
Thanks for your comments Sara and keep reading!
Where would ETRO fall on this pyramid?
Hi Matt!
Thanks for your question.
As I said, this is not exhaustive and people could have different opinions. Even some brands have a different brand positioning depending on the market (country). Zara, for example, is presented as a higher segment in South America and prices are higher too compared to Spain. Then, brands are segmenting their categories and sell merchandise in different segments / price points to attract more customers.
In regards to Etro, I would include it in the Aspirational Segment.
Bests,
TFR
Dsquared2 has highest quality and dsq2 products are made in Italy / Portugesee. You can not put it next to Micheal kors / Guess like a low workmanship. You know that MK, tommy, guess are made in Vietnam & India & Chineese. On the other hand; products of Isabel Marant are made in Africa. You did not search well sorry.
And I think you should edit this page again. Because people could be effected falsely. Correct your mistakes please. And places of Gucci and Versace should be changed. Price of D&G becomes near to Versace. Then, price of Gucci is higher than others.
Hi Batuhan,
Firstly, thanks for your comments.
As I commented this is not exhaustive and brands positioning is even different by country.
In my opinion, fashion is not a science. 1 + 1 does not equal 2. We could list factors that impact brands positioning (e.g. country of origin (where the company is from), quality fabrics used, customer service, price points, marketing budget, “made in”, etc). Even if we agree on the factors, the weight of each factor on the variable could differ. Then, fashion is alife and a brand that is luxury today could be premium or even lower tomorrow. The case of Michael Kors is an example.
Bests,
Hi, Versace is so above Dolce & Gabbana in every aspect. Dsquared2 is a luxury brand by all means, similar to Moschino and Off-White. Michael Kors, Coach, Kate Spade, Tory Burch and Hugo Boss would be the premium brands. Guess, American Eagle, Levi’s… are commercial brands. The only really accesible luxury brand there is CH Carolina Herrera, the others aren’t, MaxMara has prices similar to Chloé, La Perla is one of the most luxurious brands since you’re paying a very high price for lingerie. The supreme luxury is more like Carolina Herrera New York, Oscar de la Renta, Elie Saab, Brioni, Brunello Cucinelli, Loro Piana, Kiton… of course high jewerly and haute couture is this segment, for example high jewerly from Van Cleef & Arpels and Dior haute couture.
Hi Mario,
I really appreciate your comments as well other insights that I received. I already updated the image with some of the recommendations.
Best regards