can luxury brands make a comeback by playing the “sports card”?
2024-08-31
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[global times reporter li meng, global times special correspondent in the united states zhuoran, global times special correspondent ren zhong] editor's note: at the paris olympics, luxury brands' penetration into the sports field was ubiquitous: sponsor french luxury giant lvmh appeared in various important scenes, major brand watches followed star athletes onto the podium, and top luxury brand hermès provided a full set of equipment for the french equestrian team... in recent years, luxury brands have frequently appeared in the sports field, from sponsoring various sports events, selecting star athletes to endorse, to constantly co-branding with sports brands. what are the considerations behind luxury brands' big "sports card"? and what are the results?
lv exhibited olympic medals and storage boxes. (visual china)
greatly increase exposure through the olympics
according to the u.s. website "luxury business observer", last july, a well-known italian tennis player appeared at the wimbledon championships wearing a custom gucci bag, which not only broke the 146-year tradition of all-white uniforms, but also ignited the enthusiasm of fashion brands. this iconic event made fashion brands realize that sports events can become a new stage for showcasing fashion. since then, the connection between sports and luxury brands has become closer.
take lvmh, the sponsor of the 2024 paris olympics, for example. whether it was the lvmh-owned moët & chandon champagne and hennessy cognac that the olympic guests tasted in the reception suite, the suitcases made by louis vuitton for the award ceremony, or the olympic medals designed and produced by chaumet, a french jewelry brand under the lvmh group, many brands under this luxury giant were fully displayed at this sports event. lvmh invested 150 million euros in the paris olympics and paralympics, which accounted for nearly 1% of its profits in 2023. industry insiders believe that luxury brands are reaching audiences who would not resonate with them by sponsoring sports events. events of the level of the olympics have attracted more attention from non-sports fans, greatly increasing the exposure of the brand.
according to a report by german data company statista, revenue from world sporting events is expected to reach $37 billion in 2027. this mass appeal makes sporting events an excellent opportunity for luxury brands to showcase themselves to their untapped audiences. for example, the 2023 women's world cup will have a global audience of 2 billion. prada has exposed its brand image to hundreds of millions of people by sponsoring the chinese women's football team. when the italian fashion brand announced the partnership on social media, posts featuring the women's football team wearing the brand's custom suits received more than 300 million views. in addition, louis vuitton's long-term partnership with the nba is also a vivid embodiment of this strategy. these collaborations not only bring the brand the attention of fans on site, but also attract millions of global viewers through television and the internet.
the prestige magazine website reported on the 26th that from high-impact events such as the us super bowl, wimbledon tennis open, to the recent olympics, luxury brands have deepened their cooperation with the sports industry.
from brand collaboration to athlete endorsements
jiang han, a senior researcher at pangu think tank, said in an interview with the global times that the cooperation between luxury brands and the sports sector generally includes several ways: strengthening ties through sponsoring sports events or activities; engaging in joint cooperation, which is not limited to sports shoes and clothing, but may also involve other sports-related accessories and equipment; inviting players of popular sports to serve as brand spokespersons or brand ambassadors, reaching young consumer groups through their influence and enhancing brand image and awareness.
in recent years, luxury brands and sports brands have frequently collaborated: the 530 sl sports shoes released by luxury brand miu miu and new balance at the beginning of the year became a hit; luxury brand maison margiela launched a joint series with salomon; loewe chose to launch a joint model with the emerging sports brand on; the cooperation between gucci and adidas has attracted widespread attention. in fact, it is not new for luxury brands to join hands with sports brands, but the scope of luxury brands has obviously become wider recently, from sports brand giants such as nike and adidas in the early years to "new forces" such as salomon and on today. the collaboration has also evolved from focusing on brand promotion to launching products that can be truly applied in sports scenes.
jiang han believes that the cooperation between luxury brands and sports brands is first of all to achieve brand rejuvenation and fashion transformation. with the rise of young consumer groups, their pursuit of fashion, personality and quality is increasing. cooperation with sports brands can enable luxury brands to better integrate into the lifestyle of young consumer groups. secondly, cooperation helps luxury brands expand their market coverage and audience. sports brands usually have a broad audience base, including people of different ages, genders and occupations. through joint cooperation or endorsement cooperation, luxury brands can use the audience resources of sports brands to enhance their own popularity and influence. in addition, the cooperation between the two parties can also achieve resource sharing and complementary advantages, learn from each other in product design, marketing channels and brand promotion, and jointly create more market-competitive products and services.
luxury brands are also constantly seeking market expansion by collaborating with sports stars. us media said that the market influence of sports celebrities should not be underestimated. in addition to market influence, athletes usually follow a disciplined and low-key lifestyle. they are less involved in scandals than ordinary celebrities, making them ideal candidates for brand ambassadors. even american socialite kim kardashian chose football, basketball and rugby stars such as neymar, alexander and nick bosa to shoot advertisements for her skim brand men's clothing series instead of her celebrity friends who were embroiled in scandals.
carly duguid is the creative director of evolve, the agency of japanese tennis player naomi osaka. in her opinion, luxury fashion and sports are a perfect combination. she told cnbc in an interview: "there is a strong similarity between athletes and brands in their commitment to quality and excellence." in the era of social media, fashion quickly embraced the sports world and promoted athletes as trendsetters. these star athletes help brands connect with a whole new fan market and potential buyers.
naomi osaka has a long-term brand cooperation with louis vuitton. since 2021, louis vuitton's official ambassadors or spokespersons also include chinese snowboarder su yiming, spanish tennis player alcaraz, basketball player victor wenbanyama, etc. lvmh is not an isolated case. gucci hired british football player grealish to cooperate as a brand ambassador. in 2024, caitlin clark wore a full set of prada clothing to participate in the women's professional basketball league (wnba) draft, becoming the first professional basketball player to wear the brand's clothing to participate in the draft.
according to prestige magazine, luxury companies are aware of the huge potential of hiring sports celebrities and icons as brand ambassadors. although athletes will not completely replace stars and influencers, they do bring a whole new fan base to luxury brands. in addition to their influence on fans on the sports field, these athletes can also help promote brands and their products by participating in sports events.
it is not easy to completely reverse the decline
behind the luxury goods' big push into the "sports card" is the global luxury industry's cold reception. kering group's revenue in the first half of the year fell 11% year-on-year, with gucci down 20% and saint laurent down 9%. similarly, lvmh's overall sales in the first half of the year also fell 1%. on the 27th, it was revealed that the well-known british luxury brand burberry might be kicked out of the ftse 100 index. affected by the slowdown in demand across the industry and the slow transformation of the brand, burberry's stock price has fallen by 1/3 in the past three months, and the company recently issued a profit warning. these data and information show that luxury brands are facing huge challenges in the current market environment.
according to forbes magazine, sales of tapestry, lvmh, capri group and ralph lauren in north america are all slowing down. bain reports that personal luxury goods sales in the united states will slow down every quarter in 2023, and will eventually fall by 8% compared with 2022. the impact of reduced consumption by american consumers is significant because american consumption contributed about 30% of the nearly $400 billion personal luxury goods market last year.
according to reports, the affluent consumer research corporation (acrc) of the united states has tracked and found that the number of wealthy american consumers who intend to spend more money on luxury goods has been declining month by month, while the number of wealthy american consumers who plan to spend the same or less money has been on the rise. this is reflected in their expectations of the upcoming economic recession. about 24% of people believe that the economy has fallen into a recession, and 45% expect that the economy will fall into a recession in the next 12 months, which has weakened the willingness of wealthy americans to enjoy luxury goods. "as the frequency of purchases decreases, people's desire for luxury goods is fading. more than half of the wealthy people surveyed rarely or only occasionally choose luxury goods, and 10% said they never spend money on luxury goods." mount believes: "luxury consumption momentum has weakened. the situation may be worse next year."
cnbc analysis said that sponsoring the world's top sporting events could give lvmh a boost amid a slowdown in overall luxury consumption. the group failed to achieve its second-quarter sales and revenue targets, and the luxury industry has also been struggling due to falling global demand, mainly due to increased financial instability and a shrinking market for young consumers who are buying luxury goods for the first time. pedraza, ceo of the new york consulting firm luxury institute, said that luxury brands used to focus mainly on expensive sports such as tennis and sailing, but now sell "inclusiveness and uniqueness." pedraza said: "today, many of the newly wealthy are athletes, actors, and influencers on social media. people believe that regardless of race, belief, gender or other background, as long as they have the financial strength, they can enjoy luxury goods."
so can the "sports card" help luxury brands recover from their decline? jiang han said that as a marketing strategy for luxury brands, playing the "sports card" can indeed enhance brand image and popularity to a certain extent, and expand market coverage and audience groups. however, this does not mean that it can completely save its decline. the decline of luxury brands is the result of the combined effect of multiple factors, including the global economic situation, changes in consumer demand, and the brand's own problems. it is not enough to rely solely on sports. brands need to comprehensively consider factors such as the market environment, consumer demand, and brand positioning, formulate comprehensive market strategies and product strategies, and strengthen brand building and marketing promotion through continuous innovation and improvement of product quality, in order to maintain a leading position in the fierce market competition and achieve sustainable development.
