Fashion marketing has become an upward game

The world of the wealthy leads a life dictated by a social calendar that today, more than ever, includes sporting events and art collectors' festivals, from Art Basel and the Biennials to regattas like Sail GP and the America’s Cup, Formula 1, and tennis tournaments. Increasingly in recent years, fashion brands have done everything to ensure their logo is prominently displayed at each of these events. This year, however, the race may have reached its feverish peak. There was LVMH’s takeover of the Paris Olympics, a €150 million operation that surpassed both the group’s 2020 deal with the NBA and last year's Rugby World Cup partnership. In early October, LVMH also signed a ten-year deal with Formula 1, while at the conclusion of the America’s Cup, Bernard Arnault personally handed out the first prize at the award ceremony; Chanel became a sponsor of the University Boat Race, now the Chanel J12 Boat Race, Armani is the new partner of the 2026 Cortina Games, Prada sponsors the Chinese women's football team and the Luna Rossa team, Miu Miu became one of the main attractions at Art Basel in Paris with its installation, while Lacoste signed as a premium partner of the Rolex Paris Masters tournament (in addition to being a historic partner of Roland-Garros), and the Puig Group has been such an important partner of the Women's America's Cup since last year that the race is now called the Puig Women's America's Cup.

These are all high-visibility situations, but for fashion brands, these partnership deals are becoming increasingly ambitious bets and, therefore, increasingly risky. Let’s take an example: LVMH spent massively on the Olympics, but beyond supplier contracts for champagne or athlete uniforms, and the countless new ambassadors collected by its brands among superstar athletes worldwide, it’s hard to correlate the group’s investment with a sales increase. Considering the post-summer quarterly results published by LVMH, sales have actually dropped. It's clear that it’s not up to us to assess whether LVMH’s huge Olympic investment paid off – but what is certain is that, given declining sales everywhere, including Hermès, any visibility gained has not translated into short-term profits. This ambiguous equation between EMV and sales has led brands to reduce the influencers invited to their fashion shows by 75% this year, but it may have made several executives realize they are somewhat restricted in terms of commercial strategies.

The issue isn’t pressing yet, but it promises to become so. It all started with the rise in prices, which in some cases has even doubled for certain brands in two years. The price bar in luxury can only go up – when it drops, it does so quietly and slightly, without anyone noticing. As long as the world has existed, there are two ways to encourage consumers to spend: the first is to lower prices and offer discounts, which can be done through sales and parallel markets but not publicly; the second is advertising. Trapped on the hot air balloon of rising prices, the major groups are optimizing their marketing efforts because they literally have no other choice to entice the public to buy. But we are in times of spending austerity, and even marketing budgets are now tight: efforts must be focused, investing in high-profile projects with a high (though potential) return. The center spread in Vogue is no longer enough, especially in an era where all campaigns, all the most elaborate photo projects end up in the same Instagram feed. What, then, could be more reassuring for a businessman than a ten-year deal to sponsor Formula 1? What platform brings brands closer to the top 1% of the top 1% than a regatta like the America’s Cup? It is indeed curious that while investments shift to global art and sporting events, the seasonal campaigns of major brands have become increasingly anonymous and flat – but the point here is not to create an iconic image but to compete over who has the biggest showcase.

For years, fashion was not typically involved in sponsoring sporting events – or rather, it was brands tied to the aristocratic/upper-class old money world like Rolex and Hermès, Armani and Ralph Lauren, or major retail brands blending preppy and athletics like Lacoste, Tommy Hilfiger, or Boss. On the other hand, the relationship between fashion, patronage, and art was more common – even though when it first developed, brands didn’t have the same urgency to be present at all costs or the same intense commercial focus. or the same intense commercial focus. Things have clearly changed now: for smaller brands, a striking campaign might still suffice to achieve virality (think of Amina Muaddi’s latest à-la-Tom Ford campaign), but the scale reached by the large groups and brands forces them to play on a larger scale, competing at ever higher levels, renaming entire sporting events, monopolizing social calendars of art festivals, or, as in the case of LVMH, even colonizing the Olympics and Formula 1. Are we sure brands will win this bet? That views will translate into sales? Maybe it’s still true what sports marketing professor Mike Lewis explained two years ago to Forbes when referring to the sponsors of The Masters Golf Tournaments, including Rolex and Mercedes-Benz in a tournament where logos are practically invisible: «ROI in sponsorships is still very much a guessing game. It has become more quantified recently as the ability to track impressions has increased, but the value of the impressions is still a guessing game. Linking the sales of a product and increased brand equity to an event is so laden with assumptions that it’s probably more art than science».