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Exploring the Essential Components of Chanel's Exemplary Luxury Marketing Strategy
30 May, 2023
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Chanel is one of the most valuable luxury brands in the world, worth over $100 billion. This independent French company still remains one of the best examples of luxury marketing. Chanel succeeds indeed in keeping a leading position whereas it is not a global brand, like most of its main competitors who carry women’s and men’s fashion.
Chanel’s stance is to focus on women’s fashion (except for a few men’s fragrances) and to stick to the promotion of a traditional know-how and a legacy from its founder, Coco Gabrielle Chanel. Therefore, there is no wonder why most of the brand's communication is centered about her heritage but also the strategy is to reaffirm the brand's image always reflecting its modernity.
Karl Lagerfeld, the very charismatic and mediatized designer, took care of enhancing the brand identity reinterpreting every season what made Coco Chanel famous for: the tweed jacket, the pearls, the black and white and the camellia. But always bringing them a modern twist which makes these recognition elements part of a timeless fashion, which can be worn by young and older customers. Since his demise in 2019, the Virginie Viard has taken on this role, who started working at the house way back in 1987.
Chanel has fiercely clung on to its biggest marketing strategy - Scarcity Marketing. Chanel focuses on limited production but gives the maximum importance to quality and craftsmanship.
One of the most well-known incidents highlighting this strategy is from 1974. During this period, the brand noticed a drop in demand for its perfume Chanel No. 5. To tackle this, the CEO Alain Wertheimer decided to stop selling in 6,000 US stores, out of 18,000 stores. This led to a scarcity mindset for customers and indirectly led to higher demand.
Chanel remains one of the last few luxury brands to not have an e-commerce platform. Today, most products are just a click away. But Chanel prefers to not be as easily accessible. To buy a Chanel product, one must visit one its boutiques, making it harder to acquire, but also feeds into the limited availability of the brand.
Chanel’s marketing strategy has revolved around exclusivity. The brand has always gone to great lengths to protect its luxurious image and prevent any kind of brand dilution. In recent years, Chanel’s reworked its price points, to ensure one only associates Chanel products with utmost luxury. In January 2022, Chanel increased the price of its bags by 9%. Prior to that, there were multiple price increases in 2021.
In addition to raising the prices of its bags, such as the Small Classic Flap, which went from €7,750 to €8,450, the Medium Classic Flap (up from €8,250 to €8,990), and the Jumbo Classic Flap (now €9,700, up from €8,900), Chanel is also reportedly expected to raise prices for some goods across its fashion and leather goods division by roughly 5 percent, as reported by The Fashion Law in August 2022. Thanks to these ever increasing prices, the demand for Chanel products have skyrocketed.
As of March 2023, Chanel has 55M followers on Instagram. As social media becomes the central point of advertising in the fashion industry, Chanel uses this platform to highlight stories about the brand, its history and its brand code. “Inside Chanel” is an on-going marketing campaign launched a few years ago which delves into the life of Coco Chanel and the aspects that influence the brand.
The brand has also introduced a new series called “Rendez-vous littéraires” - a podcast series which brings together women writers and friends of the House to discuss the theme of women's empowerment, through their own works or those of historical literary figures.
Story-telling content marketing has become the norm in the world of luxury, and Chanel has focussed on this theme through the recent years.
Chanel is consistently associated with the biggest stars. The SS23 show had a star-studded front row, with names like Penelope Cruz, Zoe Saldana, Whitney Peak and Tommy Dorfman seen attending the event. In 2017, Kristen Stewart was made the face of new ‘Gabrielle Chanel' fragrance. She’s also seen in the Chanel Spring-Summer 2023 Ready-to-Wear collection campaign.
In February 2023, K-Pop band NewJeans’ Minji became Chanel’s brand ambassador. The brand already had several other Korean brand ambassadors, as K-Popstars gained global popularity. Gong Yoo, Kim Go Eun, BLACKPINK’s Jennie, Park Seo Joon, Big Bang’s G-Dragon, and Lee Sung Kyung are some of the names who have worked with the brand.
To enhance the brand awareness towards its customers, Karl Lagerfeld decided to use the “Métiers d’art” fashion shows which have been paying tribute for over 20 years now to the excellence of the craftsmanship of Chanel’s suppliers. The last show took place in Dakar, Senegal, as an ode to its craftspeople. The show is named “2022/23 Métiers d'art CHANEL – DAKAR collection” and was inspired by the 1970s spirit.
The highlighting of the traditional know-how is indeed a very important issue in Chanel’s communication. The company was one of the first to emphasize this aspect, with Hermès. But for Chanel, it was so crucial that they started to take over their major suppliers and to build up from 1997 on a talent pool, named “Paraffection” whose goal is to preserve and promote the heritage, craft and manufacturing skills. Today, this Chanel subsidiary gathers a dozen of fashion artisan workshops, among them Lesage (embroideries), Lemarié (feathers and camellias), Causse (glove maker), Michel Herbelin SA (milliner) and the last acquisition in last December Bodin-Joyeux (tanner). In 2022, Chanel acquired a stake in FashionArt SpA, which has been a long-time supplier for the brand and specializes in jeans and high-end denim products.
But beyond this preservation of an endangered industry, this strategy also allows Chanel to secure its production and its supply chain integrating all the different manufacturing steps.
Chanel also aims to provide experiences that take customers into the world of the brand. For instance, it hosted an olfactory experience with an immersive exhibition called 'Le Grand Numéro de Chanel' in Paris. It was held during December 2022 and January 2023 and was open to the public for free. It was an interactive exhibition that took customers through the history of Chanel perfumes. The event made use of virtual reality and allowed visitors to experience the process of making a fragrance.
Chanel has launched its own app. Even though the brand doesn’t have an ecommerce platform, the beauty and fragrance range is available for purchase online through this app. The app also has a free virtual lip-scanner that allows users to try-on lipsticks virtually.
In 2019, Chanel opened a concept store in Paris with augmented reality experiences that brought digital and physical together. It was a virtual showroom, with tech-enabled mirrors and smart product suggestions.
In late 2022, during the holiday season, Chanel launched its first mobile game called “Chanel Moon Walk”. The game’s goal was to destroy meteorites and win beauty products. The game was designed by the agency Mazarine, and could be accessed via a QR code on the Chanel website.
Cover Image and Article Images: Chanel website