IDEAS

THE BATTLE BETWEEN MAN AND MACHINE

HERMES VS VUITTON

BY JIAXIN HE

Vuitton Branding

Hermes still makes their products 100% by hand, just as they did when they started. Seeing a technologically expanding world and an increase in the demand for its products, Hermes has been weighing the option of whether to expand or maintain its traditional handmade approach. In contrast, Luis Vuitton went from making handcrafted products to machine products to meet growing demand. So, in terms of annual profits, Luis Vuitton is three times bigger than Hermes. However, in the fashion world, collectors value Hermes more than Luis Vuitton. In terms of absolute profitability, Luis Vuitton is ahead of Hermes because it mechanized to scale up production to meet and increase demand. But Hermes remains more popular than Luis Vuitton, and its products are more collectible. In a world of "runaway to closet," Hermes remains contemptuous of glitz, and their old-fashioned philosophy has paid off. Other companies like Luis Vuitton that chased young customers by coming up with a bevy of entry-level has come to realize that keeping a legacy while chasing dollar is a difficult undertaking.

Vuitton’s goal has been to strike a balance between innovation and tradition. The Monogram Canvas, the Vuitton logo since 1896, has become the ultimate symbol of the company's products and representative of a certain type of luxury. The Vuitton brand and the LV monogram are the most valuable trademarks in the world. Even though Vuitton's brand image relies on the idea of excellence based on traditional craftsmanship, the brand has become more about managing its image to the general public than promoting a pure design aesthetic. The company's production approach focuses on sales and profitability. In most of its 17 factories, the production process is the same and organized into production, technical division, and logistics. The philosophy at work here is producing products according to time, cost, and quality requirements, giving the production team technical support, and controlling the supply of materials from suppliers to the factory. It’s all about ensuring consistency over craftmanship and innovation.

Hand made, like the Gods

 

For both Hermes and Luis Vuitton, the dilemma of whether to follow a passionate principle or the market is the crucial distinction here. Artists follow their hearts, but not necessarily the market. As all of us know, passions are not a guarantee of money. If by chance, the market's needs coincided with the artist's passions, then the artist will make a fortune and can give thousands of interviews about how important it is to stick to what you believe, that there’s always a pay off at the end. So, even though it is possible to benefit from passions, it is not guaranteed. In a world where competitors are intentionally studying the market and making changes to their product to satisfy consumer needs, passion might translate into lack a competitive advantage. On the contrary, if an artist follows the market, they will understand its likes and dislikes and work deliberately and intentionally to satisfy these needs, which is more of guarantee that they will make money. And what holds true for the artist holds true for the luxury brand.

Hmm, that's one expensive Teddy Bear

The idea of passions vs. the market boils down to authenticity. In the luxury fashion industry, authenticity is a high stakes affair. Consumers value heritage, craftsmanship, and quality. But in the current economy, big conglomerates like LVMH are fixated on the bottom line and quarterly returns, which threatens the very ground that authenticity stands on. In other words, when a luxury brand is seen and available everywhere, its value is diluted. It is no longer authentic or rare. Hermes understands this and has built that understanding into how the company runs, which is with the passion of an artist. On the contrary, Vuitton faces a delicate balance between exclusivity and increasing accessibility, which tears at and unravels its veneer of authenticity.

Hermes understands that belief, tradition, and trust the guiding principles for a firm wishing to become and maintain a sense of authenticity. Striving for profits is critical to an organization's survival, but true and authentic brands focus on their products rather than direct marketing. Vuitton exists on the opposite side of the spectrum and that creates a huge marketing and branding challenge for them. Its bags are lurking everywhere; they are not elusive. Hermes has a rich heritage, an eye for detail, exquisite craftsmanship, and a high level of quality and professionalism and no one can question that and so in way the process “markets” itself.

Vuitton is a perfect example of a business whose primary aim is to increase profitability. The company has already mechanized production, so that it can meet a large global demand for its products. As a LVMH subsidiary, it is part of a deliberate attempt to reduce competition by purchasing other fashion companies. For instance, it bought Christian Dior in 2017. Other companies in its portfolio include Fendi, Celine, Givenchy, and Zenith, among others. From 2002 to 2010, LVMH quietly built up a 17 percent stake in Hermes but has so far been unsuccessful in its attempt to takeover and probably transform the Hermes way.

Save this scarf! It's real value over simple dollars

Companies are like artists. They can strive for authenticity or strategize ways to sell. In the end, Hermes is worth more and any attempt to change the company will certainly make it worth less even if they manage to make more.

©Jiaxin He and the CCA Arts Review