Lagerfeld vs. me? Luxury brands and the pitfalls of customization
The fashion industry is increasingly giving a more active role to customers. Many brands make it possible for customers to make their own design choices when it comes to selecting colors, fabrics, and cuts. But does this approach also work for luxury brands? Hermès ties with personalized print patterns or customized Valentino dresses – is this a viable approach for the entire industry? This is the question a team of researchers headed by Martin Schreier and Silke Hieke from WU Vienna’s Institute for Marketing Management set out to answer. The bottom line: Luxury brands should be careful not to take customization too far.
New manufacturing processes open up new possibilities when it comes to customization, and consumers now place a greater value on customized than on standard products. Marketing research has shown that consumers like customized products because these unique products communicate their identity more effectively. Customized fashion allows customers to wear their tastes and preferences on their sleeve, so to speak.
But this is only true for mainstream brands. When it comes to high-end fashion, customers’ purchasing decisions are influenced by other factors. In this segment, customers pay a premium for the designer’s expertise and the status luxury brands convey. This means that the brand must remain clearly recognizable. If customization is taken too far, the consumers’ desire for self-expression can potentially erode the product’s signaling value. “It pieces” like the Hermès Birkin bag have a special value because they are exclusive and they convey a clear brand identity.
A balancing act: Just the right amount of customization choices
The authors carried out a series of experiments, showing that luxury brands can indeed benefit from customization. But there is also the risk of going too far. Especially very fashion-conscious customers – the main target group of luxury brands – place great importance on their appearance and are more sensitive to prestige. These customers are highly aware of the signal value associated with luxury brands.
Luxury brands can protect their ability to convey status by making the brand more prominent through overt means, for example through the obvious display of brand logos. By assuring luxury consumers that others can receive the status signal that they are sending, these brands are able to give their consumers greater freedom for customization decisions. In general, however, luxury brands should leave only a few design decisions to their customers to protect the signal value created by the brands and their designers.
The study has been published in the Journal of Marketing Research.
To the study
Martin Schreier, Silke Hieke, C. Page Moreau, Emanuela Prandelli: “Customization in Luxury Brands: Can Valentino Get Personal?” Available at https://doi.org/10.1177/0022243720943191