A new season of Formula One is upon us and as the adrenaline rushes through our veins while we cheer for our favourite teams, it’s difficult to ignore how these automobile companies are not just competing for victory in the championship race. They are also among those seeking a piece of the premium fashion pie as they strive to become more celebrated lifestyle brands. As most luxury brands discover that being on the consumer radar for one specific product – whether it’s cars or fashion – is no longer sufficient to be a leading player in the industry, it’s interesting to observe how these automobile companies are managing to grow without compromising their core brand equity. The luxury automobile industry is nearly twice as large as the luxury personal goods industry. Their combined market is estimated to be between 380 and 390 million consumers worldwide (Rysman, 2021). Collaboration between the two should be a win-win situation, expanding brand universes in both categories.
Leveraging Brand Identity
Mercedes-Benz’s involvement in fashion reinforces the company’s luxury positioning. It has successfully tapped the winning mantra – customers want to invest in a vehicle that is not just a product, but a piece of design that reflects a luxury lifestyle. This is especially reflected in the company’s representation in F1, a sport that uniquely taps into the values of performance and innovation. Mercedes-Benz, which now considers itself a luxury lifestyle brand, has been involved in the fashion industry for 27 years through brand collaborations and sponsorship of fashion weeks like the New York Fashion Week and prizes. It has chosen this route over developing its own high fashion line. Having said that, it has dabbled in fashion. It has successfully proven that one can create distinctive brand experiences by collaborating with cultural pioneers. In this way the automobile company has become a credible and authentic part of the consumers’ lives, establishing an emotional bond, and eliciting enthusiasm for the Mercedes-Benz brand.
On the other hand, Ferrari, one of the most well-known Formula 1 brands, has advanced far beyond the rest of the F1 pack in its development as a luxury fashion brand. Its fashion line contributes to a broader brand diversification strategy aimed at establishing Ferrari as a lifestyle brand. “Ferrari is more than just a car company,” says Rocco Iannone, who was appointed creative director of brand diversification in 2019 (The Brand Hopper, 2021). Ferrari’s fashion customers are typically younger than those who purchase the company’s luxury vehicles. There are also more women in the former group. In China, where the luxury consumer profile is younger, the demographics overlap more (The Brand Hopper, 2021).
Ferrari and Mercedes-Benz have yet to connect their F1 teams directly with their fashion products. Analysts predict a more integrated approach in the coming years. As car brands evolve into lifestyle megabrands, more will venture into high fashion. Many car companies have a very strong brand, and we live in an era where brand storytelling is more powerful than just having an archive of lines and shapes coming from an atelier, and car manufacturers are looking to fashion to enlarge the vision of their brand because the present trend is witnessing a shift from product-driven to brand-driven identity building.
There are still many obstacles to overcome as consumers expect exceptional quality from the brand, while fashion critics expect Ferrari to experiment. For Ferrari, the priority areas include refining the brand’s identity, expanding into new categories like leather goods and shoes, and increasing retail distribution.
Authentic Collaboration
Should automakers take the Ferrari route? The answer to this is ambiguous as another collaboration may cause the consumer to become bored. Numerous fashion industry insiders believe that fashion collaborations risk oversaturation and consumer apathy. However, there is always room for genuine and new ideas. Another testimony for the success of this route is AlphaTauri, a premium fashion brand launched by Red Bull, a non-fashion brand, in 2016. AlphaTauri is now working with Formula 1, signing a multi-year contract to become Scuderia AlphaTauri’s premium fashion apparel supplier, dressing senior staff and presenters.
Because of its involvement in Red Bull’s Scuderia AlphaTauri F1 racing team from 2020, AlphaTauri is already in the pit lane. Although it’s an outsider in the fashion industry, it aims to be one of the leading brands in premium fashion. Red Bull has appointed Bernd Hake, former Hugo Boss chief sales officer, as CEO of its global consumer products division, which includes AlphaTauri, beginning in May (Rysman, 2021). The hiring of a well-known fashion industry veteran demonstrates Red Bull’s dedication to this new product category.
Most people believe that a partnership with F1 fits AlphaTauri’s DNA perfectly. While most brands only sponsor one racing team, AlphaTauri is the racing team’s namesake. To date, AlphaTauri is best known for its patented material innovations: According to the company, Taurex boosts stamina by reflecting energy radiating from the body back to the wearer and another patented invention Taurobran allows to trap heat in the fabric. The brand’s material innovations make a motorsports partnership a good fit: racing teams benefit from the innovative clothing, and the brand gains exposure.
The brand is always looking for new innovations to achieve its goal of fusing fashion and for this Formula One, the premier class of motorsports, acts as the ideal playground. Through the material innovations offered by the sport, their goals are well executed.
Conclusion
The kind of synergies driven by brand building and material innovation may well propel the future of cross-category brand development. There was less willingness to jump from one industry to another thirty years ago but globalization, industry integration, and oversaturation in the fashion and automobile industries reflect that people are now open to something new. Luxury brands are interested in sports like F1 because their association with them adds to the status that the brands are supposed to represent, and it gives them a place to advertise in a non-invasive way, irrespective of the audience’s financial situation. Luxury brands rely on such advertising to increase consumer desire for their products or services, and using a high-speed, expensive, and alluring sport to promote their products or services not only translates into lucrative sales but also helps them in creating an ideal image or niche for themselves.
Mansi Agarwal is a second-year student of Economics at Indraprastha College for Women.
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