Nowaday, we can notice that the handicraft knows difficulties that penalize Luxury houses. Indeed, the competitiveness of the latter is in danger due to the increase of the production costs resulting from the increasing scarcity of artisans and small hands which are held expertise.
Added to this, we can notice the presence of innovative houses which are quick industrialize their production on the luxury market.
Luxury houses are therefore obligated to choose between higher prices or diversify their productions to maintain their margins but this choice is difficult because each solution to its disadvantages. In deed, higher prices may cause a lack of competitiveness and therefore lower sales means lower profits. Conversely, if luxury houses prefer to maintain margins through alternative modes of production, they will rule out their identity and may participate to the popularization of luxury goods which essentially goes along with the handicraft and the know-how.
Thus, the maintenance of handicraft in the luxury sector seems to be essential and indispensable. That’s why initiatives have been taken in favor of the preservation and promotion of the handicraft which proves to be an integral part of the historical and cultural French heritage.
To save the French heritage some initiatives have been taken nowaday by luxury participant such as: the creation of the Sorbier Endowment Fund from the famous Haute-Couture house, Franck Sorbier, the creation of the Comité Colbert or the Entreprise du Patrimoine Vivant (Living Heritage Company, or EPV). But also, the creation of handicraft schools such as L’école Van Cleef & Arpels or the creation of “Métier d’art” collections, for examplen in Couture and Watchmaking sectors.
To finish wtih, these initiatives are also the act of a State which seems to be well adivised to preserv the French heritage and to promote sales thanks to tax giveaways (tax reduction).
Otherwise, luxury houses are aware of the marketing challenge behind the handicraft and the the know-how. Indeed, it is a vector image built by the story-telling but also by the quality of manufactured products. It must respond to new expectations from luxury clients who are focusing today to traditional and authentic values. Furthermore, Haute Couture, whose handicraft is an essential condition, is the proof to be a great communication channel whose the luxury sector is dependent. Indeed, Haute-Couture raises dreams into customers minds and it is a source of inspiration for the ready-to-wear. This segment appears to be an investment that galvanizes sales from the other luxury segments.
Finally, it appears that the craft, although expensive, can be profitable for the sector; and this for several reasons. The first one is the fact tgat Luxury is a niche market whose products have a low elasticity due to their high-value price. The second one is the fact that luxury is a market boosted by the luxury tourism in France. Finally, some companies have the opportunity to invest in vertical integration to do economies of scale and to dicrease lower production costs while preserving their artisanal production.
Due to these factors, we can be optimistic about the future and the place occupied in the luxury handicraft. Jewellers, feather masters, gilders, milliners, stone-setters, tailors etc. So many businesses which define luxury since it would be the luxury without handicraft. The challenge therefore seems to preserve the handicraft to preserve the luxury sector.
However, the issue is ambivalent and sometimes difficult to define because the luxury houses must: maintain the tradition while innovating (without losing their target cores) and maintain the scarcity phenomenon while attracting new customers.
The luxury watchmaking house Frederique Constant seems to be a good example of control of this issue. Indeed, during the fair BaselWorld 2015, te luxury watchmaker reveals its connected watch. Pioneer in this traditional codes sector, the watchmaking brand shows that it is possible to combine product innovation and preservation of the handicraft know-how because the timepiece production is totaly swiss made and handcrafted.