Why is Hermès considered as the most adulated and exclusive among all luxury fashion houses? Thierry Hermès founded the brand as a harness workshop in Paris in 1837 with “patience” as an integral part and element in its strategy. Hermès has always been a significant proponent and user of the “limited edition” strategy and also limits distribution of its products in its stores, demonstrating its commitment to showcasing only the most authentic products. They wanted to put in all the effort and time to manufacture products with a 2-year mandatory training for all its craftsmen who put together the leather products on the Hermès portfolio. Even to purchase an Hermès product, one has to place an order and wait for a few months before it is ready. Instead of rationing high demand by price, Hermès rations by queue creating surplus demand which overflows into other Hermès “consolation” products like wallets and belts. An extremely rare Himalayan Nilo crocodile Birkin bag was sold for 185,000 making it the second most expensive bag to be sold at an auction. Hermès keep their franchise stores to a minimum, and focus on operating more centrally controlled stores. They assert their independence in their shareholding structure and family ownership so they are able to retain most of its production within France and serve their vision. Hermès stay away from celebrity endorsements as a brand-building tactic. Instead, only the A-list celebrities and the ultra-wealthy can afford to get associated with the brand. Hermès makes its store managers responsible for their own collections and offers them the freedom of purchase to meet specific needs of their customers. Semi-annually, 1,000 store representatives are given the opportunity to attend their event “Podium” in Paris. Each flagship is instructed to pick at least one item from exclusive product categories to push every flagship store to showcase and sell complementary products. This adds to the allure of the Hermès brand as not all products are available in each store and the online store only offers a selection of the company’s products. How do you position your brand as limited edition?
