Can the Luxury Industry Weather the Storm?

Rony Zeidan, founder & chief creative officer of RO New York Inc, believes luxury brands should take a moment to breathe in the eye of the storm.

I just returned from a long weekend trip in Iceland, meeting friends form London to explore the wild beauty of this extraordinary island in between North America and Europe.

The nature did not disappoint; the beautiful waterfalls, the volcanic landscape covered with moss, the long haired horses running in patches in the fields, and some of the best lamb dishes I’ve ever tasted.

Everything looked wonderful from behind an iphone screen or the windshield of our SUV. But behind this pristine, aesthetically pleasing façade, lay unpredictable weather conditions that can change everything in a split second, not unlike the dazzling world of luxury we revolve in and the unpredictable economic and retail climate it resides in.

Upon arrival to Reykjavic, we were greeted with weather warning signals starting at the rental counter: “ it is highly advisable not to leave the city today, and to stay at your hotel throughout the weekend.” Gusty winds, Heavy rains, white out snowstorms, and intense hail storms were to be expected any time, or all at once.

I have to admit my skepticism, especially after a pretty brutal winter season in the NorthEast; it all sounded a bit ominous and exaggerated.

Despite the warnings, we embarked on our first road trip to explore the closest volcano to the city Blafjoll, and the next day we hit the road heading 3 hours north to snaefellsjokull, followed by a 2 hour trip down to Vik on the third day, and ending it with a restful evening at the Blue Lagoon prior to our return to New York the following day.

Needless to say, we were the only car on the road and were embraced by severe gusty winds, white out snowstorms, icy roads, avalanches on the hillsides, and insane rivers mauling bridges to the point of no return. All that in a span of 2 hours on repeat mode.

I was busy maneuvering the group safely through the constant storm, and during a stop at a gas station it dawned on me the parallel lines between the Icelandic winter storm, and the every day weather patterns of the luxury industry.

In the past two years everything shifted in luxury, the Euro dropped, the Chinese economy softened the government imposed rules banning high price gifting within officials, the severe winter weather affected brick and mortar retail, and the digital landscape became so competitive and more challenging in engaging consumers non stop. All the rules suddenly changed, and they remain to do so more frequently than in the past.

So how do you navigate these times? How do you ensure constant growth and newness? How do you draw up a pipeline or long term vision and manage to execute it during the storm? How do brands like Hermes, Chanel, and Cartier remain at the top of their game, and how do smaller luxury brands continue fostering their growth and market expansion?

The first advice is take your foot off the pedal and coast to allow a reactive approach. Assess the constant changes and develop a long term goal with a series of short term decisions to tackle every change in the ecosystem. Focus on the core element of your business and maximize the marketing push behind it. Reassess your pricing strategies to balance the shift in the Euro.

Edit down your product offerings to a more curated approach. Collaborate with other brands to maximize awareness and buzz with the least financial impact, and best of all, enjoy the ride and realize that all others are in this weather too, and it shall pass.

To further investigate industry performance on Luxury Society, we invite your to explore the related materials as follows:

- Why Luxury Brands Must Replace the Illusion of Exclusivity
- 20 Predictions for the Luxury Goods Industry in 2015
- 2014’s Best Global Luxury Brands