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Executive Summary:
In a striking departure from tradition, luxury brands are no longer confining their sports marketing strategies to ‘old money’ institutions like polo, tennis, and golf. Instead, they’re making a bold leap into the world of mass-appeal athletics like basketball and soccer.
So, why the change?
According to a new BoF report, global sports-sponsorship is expected to grow from $63.1 billion in 2021 to $109.1 billion by 2030. Now encompassing a much broader and more diverse audience than before, luxury consumers can be found at unexpected intersections: cross-industry (Louis Vuitton x NBA), cross-dimension (Ralph Lauren x Fortnite), or in-house but cross-category (Ferrari’s making luxury handbags now). Riding this wave, brands are making an effort to meet sports fans in these new—and in turn, relatively unpopulated—collaborative spaces. By associating with sports that have such diverse and passionate fan bases, luxury brands are able to tap into varied tastes.
In our opinion, ‘leaps’ like these signal a brand’s acknowledgment that their audience is human, operating at a constant intersection of interests, rather than at one interest at a time. Think of it this way: have you ever gone into a store intending to buy one thing, but walk out with something else? It’s a phenomenon that exists with equal strength across all marketplaces, physical and digital, from designer boutiques to convenience stores. In short, a luxury buyer can be met and enticed outside of a luxury arena.
Take for example LVMH’s sponsorship of the 2024 Olympic Games in Paris. Announced one year ahead of the lighting of the Olympic Flame, the sponsorship has generated an influx of media coverage, much of which highlights the unprecedented nature of luxury sponsorship in many of the involved sports: basketball, BMX, surfing, and taekwondo, for example.
Indeed, risks are involved.
Recalling the recent Rugby World Cup x Tudor debacle, ReflexHongKong partner Wilfred Lau stresses the vital role of a symbiotic relationship in these collaborative efforts:
As with all sponsorship deals, not every sports collaboration is a dream come true. Watch brand Tudor has been forced to weather a storm of negative press after referees were seen with bare wrists at this year’s Rugby World Cup, with which the brand has an ongoing sponsorship deal. If brands are to avoid this sort of blunder, the utmost importance should be placed on cultivating a blossoming relationship between the collaborating entities, from Day 1.
Beyond these relationship-based risks, LVMH had to reconcile essential differences between its maisons and those aforementioned sports. It could be said that two opposing worlds, one characterized by elegance, the other by strength, were being set up to collide on the sports world’s biggest stage.
But with a clear space for collaboration—a shared pursuit of excellence—and the potential to reinforce their maisons’ aspirational status to the world’s most diverse audience, the risk was eclipsed by opportunity. If this partnership’s strategic foundation is any sign, LVMH x Olympic Games 2024 is poised for tremendous success.
The transition to mass-market sports doesn't require luxury brands to compromise on their age-old values of exclusivity and tradition. It does, however, require them to merge those values with their opposites: accessibility and evolution.
On the potential costs/benefits for luxury labels in sports, Rolling Stone’s Anastasia Nisenbaum had a few words:
…sports fans do care about relatable luxury but only if it is done right and feels authentic. Customers can spot a disingenuous campaign a mile away. But like sporting events, luxury brands will continue to challenge themselves to balance two juxtaposing ideas: exclusivity and accessibility. This is incredibly difficult and it will be interesting to continue to watch brands grapple with this complex concept on a global stage.
As luxury brands continue to adapt and innovate, it's likely we'll witness an increasing number of such collaborations, extending their influence into previously uncharted territories. The allure of tradition combined with accessibility has the potential to reshape the luxury industry's landscape; it's a strategic move that reflects the changing dynamics of the luxury market and its consumers. So long as sound strategy is followed by detailed execution, brands who (carefully) incorporate this emerging strategy will reap the benefits.
