How Chanel Turned An Accessory Into An Asset

When it comes to appreciating value, we usually think of stocks, commodities, and assets that increase in value over time. But what about a product that has not only sustained its value but also appreciated even more over time?

That's the story of Chanel, the iconic fashion and luxury brand that has not only survived but thrived over a century.

In fact, according to a report by Art Market Research, the value of Chanel handbags has increased by more than 70% in the last six years, outpacing the appreciation of gold, stocks, and real estate.

In this article, we'll explore how Chanel has achieved this feat and what we can learn from their branding and marketing strategies.

Mastering Branding: The Key to Increasing Brand Value Over Time

Branding is a crucial aspect of any company's success, as it sets the tone for how a company is perceived by its customers.

When a brand masters the art of branding, it can increase its value over time, creating a stronger connection with its customers and increasing its bottom line.

This section will delve into the branding lessons that can be learned from Chanel.

#1 Classic Design Powers Brand Recall

Chanel's handbags are renowned for their classic designs that never go out of style, such as the iconic "2.55" handbag, which has remained a fashion staple for decades. Other brands can learn from Chanel's approach by investing in classic designs that can stand the test of time, and become iconic in their own right.

Other brands should consider investing in iconic designs rather than following fleeting fashion trends that will quickly become outdated.

#2 High Quality Drive Loyalty

Chanel bags are widely recognized for their exceptional quality and durability, with the brand's reputation for craftsmanship being a key factor in their high resale value.

For example, a study found that Chanel bags retained an average of 63% of their retail value on the luxury resale market, compared to an average of 39% for other luxury brands.

This highlights the importance of investing in high-quality materials and ensuring products are well-made, as it can lead to a stronger brand reputation and increased customer loyalty.

#3 Scarcity Creates Desire For The Product

Chanel's limited production of bags creates scarcity and exclusivity, which is a key factor in driving up their value.

For example, the brand's highly-coveted "Boy" bag was originally produced in limited quantities, resulting in long waitlists and high demand among fashion enthusiasts.

#4 Heritage Branding Makes For Great Storytelling

Chanel's rich history and heritage are integral to the brand's success, with the story of founder Coco Chanel and her revolutionary impact on fashion being central to the company's branding and marketing.

For example, the brand's "Inside Chanel" video series explores the history of the company and its impact on fashion and culture, creating a deeper emotional connection with its audience.

#5 Brand Consistency Establishes A Stronger Brand Identity

Chanel has been successful in establishing a strong brand identity and reputation by consistently maintaining its brand image and values over time.

For instance, the brand has maintained its signature black-and-white color scheme and double-C logo for decades, which has helped create a strong visual association with the brand. According to a study by Lucidpress, consistent brand presentation can increase revenue by up to 23%, highlighting the importance of maintaining a cohesive brand image to drive business success.

Mastering branding like Chanel not only enables a business to create a strong brand identity and reputation, but allows the business to establish a loyal customer base that values its products and is willing to pay a premium for them.

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