Ralph Lauren: from visionary luxury designer, to mass retailer and back again?
The most recent New York Fashion week took an unexpected detour to Mr. Lauren’s garage for the public debut of his multi-million dollar car collection – or so it seemed.
And although critics and celebrities both raved about the 26 cars, including the $40m star of the show, a 1938 Bugatti T-57SC Atlantic, the invited audience didn’t seem to notice the other models parading the Ralph Lauren RTW Fall 2017 line. The humans disappeared into the background, the parade of cars making the clothes seem comparatively “almost ordinary” in the words of The New York Times.
However impressive a stunt, this show does make me question which audience Ralph Lauren was trying to attract. Surely an event projecting this level of opulence and wealth was unlikely to resonate with the brand’s relatively broad consumer base and correlates poorly with the ubiquitous nature of its product? Which begs the question, who is this brand for today?
Founded in 1967, Ralph Lauren once had a clear and distinct target market: the Ivy Leaguers, athletes, influential business men and ladies of leisure. The brand achieved this by making itself synonymous with the ‘good life’ enjoyed by members of an elite high society. Ralph Lauren’s evocative imagery helped establish an intimate association between winning that round of golf in Florida, riding into sunset in Colorado or sitting down to a picture-perfect family dinner with the lifestyle symbolised by the brand.
Fast forward to 2017, however, and this once aspirational brand has become accessible to all, bought from outlet discounters and frequently seen in the clearance aisles of their wholesalers. Competition now comes from Tommy Hilfiger, Abercrombie and newer brands, such as Vineyard Vines, rather than the Louis Vuitton, Armani and Burberry of the past.
So why and how did Ralph Lauren make this leap from luxury to masstige? Over several decades, in a commercially successful effort to broaden its appeal and make the lifestyle more readily available, the house brand diversified its product portfolio into 16 diffusion lines. It’s a fair strategy in principle and produced the desired revenue growth but 16 sub-brands is a lot – too many – especially when too little was done to properly differentiate these lines on anything other than price. Too often, the result was more or less the same designs and styles all featuring the same logo while being sold at hugely divergent price points.
The move meant that more people could afford Ralph Lauren’s clothes but it made them question why they would pay £250 for a shirt they could buy for £75 in the Polo line, resulting in poor sales and excess inventory. This situation was further exacerbated by poor retail traction, combined with 15 month lead times, which made it impossible to reconcile a mismatch in supply and demand. Over a three year period ending fiscal 2016, there was a 26 per cent growth in inventory despite only a 7 per cent growth in sales. The only solution was to channel more and more items into Ralph Lauren factory stores to shift stock but this only increased the brand’s ubiquity and further undermined its luxury credentials.
If Ralph Lauren wishes to re-engage the luxury consumer, a glamorous motor show is far from the fundamental ‘re-tuning’ that’s needed. Instead, with 30 per cent of inventory across brand lines accounting for 70 per cent of sales, the 16 lines should be consolidated to focus on those that promote the brand’s former luxury status. Reconfiguring the brand lines and their corresponding product ranges will return to Ralph Lauren a core focus, stronger identity and a more clearly-defined customer. It should also reduce the excess inventory pawned off to the discounters and stem the leakage to the brand positioning.
Ralph Lauren was once praised for its consistency and adherence to the promise of the ‘American dream’ but people have woken from that particular reverie. The dream today is different but Ralph Lauren’s reluctance to wake up and smell the coffee may be terminal. The fact is that people no longer hanker after the ‘good life’ of an outdated American ideal inspired by preppies, athletes and American cowboys.
Now, if it wishes to rise again, Ralph Lauren urgently needs to become the narrator of a new fantasy, to be totemic of a truly contemporary and entirely more relevant lifestyle. Visions of Stepford wives and hoorays at regattas are more the stuff of nightmares than anything today’s luxury customer idealises. Perhaps, the new philanthropists, socially conscious millennials and HENRYs could become the new trifecta of inspiration instead?
Something needs to change or else a once great brand will surely be condemned as an anachronism and the ambiguity that its current sales and catwalk shows project will become the epitaph to a famous but late lamented name.