LVMH’s peerlessly successful approach to luxury is that it should be built from the middle-up.
Widen the top of the funnel so that middle class families are drawn in — noticing the group’s brands through celebrity endorsements; storytelling that highlights history and heritage; and a retail experience that makes people fantasise about shopping in the exquisite showrooms of Bond Street, Rodeo Drive or Dubai Mall.
It is a democratisation at the entry point to luxury, which slowly lures people into irrational purchases of once unaffordable treasures as a way of signalling their success.
The relaunch of Tiffany & Co. under Alexandre Arnault — maintaining its venerable status while attracting a new money millennial customer base — is a case study of this process that should be taught to MBA students.
LVMH’s controlling family, the Arnaults, reportedly gather for breakfast every week to share their experiences of what is working.
This is where, I suspect, the idea of relaunching the TAG Heuer Formula 1 Series 1 watches from the late 1980s came to Frédéric Arnault, who was CEO at the watchmaker until late last year.
He would have given the green light to the colourful collection’s comeback as a collaboration with Kith, a disruptive American streetwear brand and retailer that burst onto the scene in 2011.
TAG Heuer and Kith
Kith may be the perfect partner for a Swiss watchmaker needing to improve its customer acquisition by attracting both a younger audience while — by virtue of the Series 1’s cult status with gentlemen of a certain age — still connecting with its core demographic.
The watches, which even have a corruption of the TAG Heuer logo as Kith Heuer on the dial, were unveiled yesterday and have already created more hype than anything launched at Watches and Wonders.
Reactions have been a little mixed, but mainly positive, ahead of the watches going on sale tomorrow (May 3) exclusively in-store at select TAG Heuer and Kith locations in Miami before rolling out more widely to TAG Heuer boutiques around the world, all Kith shops, and online at Kith’s ecommerce sites on May 6.
Limiting physical points of sale for the watches’ launch looks like taking a page out of the MoonSwatch playbook. We will see on Friday if there are scrums in Miami with fifty-something-year-old men competing with sharp-elbowed flippers for the first pieces.
The release at Kith stores will be first come, first serve. The Kith.com launch will be via a sort of raffle draw, which you can only enter from the Kith App.
TAG Heuer Formula 1 Kith
In case you missed yesterday’s launch, the TAG Heuer Formula 1 Kith collection is a family of ten watches, all in bold colour combinations, that are based on the late 1980s Series 1 designs.
Like the originals, they have quartz movements in 35mm steel cases.
Dials carry the “KITH HEUER” shield logo top and centre and Kith’s collaboration logo, “Just Us” at 6 o’clock.
Each colourway is a limited edition of 350 pieces on a steel bracelet and an additional 250 pieces on rubber straps.
Colour combinations include bright yellow and black; red, yellow and green; blue and black; red and black; all green, all black and all beige.
An eggshell-yellow, black, white and red version is described as the highlight of the collection because it is an homage to a piece that was bought by Kith founder Ronnie Fieg’s as his first-ever watch. TAG Heuer is making 1,350 of this reference.
While reaction to the collection has been largely positive, questions have been raised over the £1,350 price tag, which is felt to be a little steep for a quartz-run steel watch with more than a little of the Seiko 5 Sport or Baby-G about it, particularly when you can buy an original for £350 on the secondary market.
How successful will the launch be? I expect there will be queues and a quick sellout when the first pieces go on sale in Miami. Thereafter, we will be able to judge how far demand is running ahead of supply when we see where prices settle for pieces that are resold online.
One early hint is that dealers are already “selling pictures” of the watch.
This is the practice of advertising a watch on a platform like eBay or Chrono24 using PR pictures and then sourcing it from a flipper (or the increasingly sophisticated secondary wholesale market) once a customer has been secured.
A quick look on eBay today finds the Kith founder’s favourite style being advertised for £2,500, an instant £1,050 profit if it sells.
Optimistic? Time will tell.
Rob,
Nice job on the succinct write-up. From a business point of view, I agree with your synopsis of the Arnault family’s vision, and the sheer brilliance of collaborating with Ronnie Fieg at Kith to broaden that funnel. It fortifies appeal to a younger audience as well, while reigniting the passion of those first-time collectors from the 80’s. I cannot doubt that there will be a line to acquire a piece of this fun eye-candy, nor that it will segue into more interest and a spike in sales for TAG in general.