How to build a luxury brand: the Moncler case, from tarnished label to €1.7 billion

From Grenoble to the paninari of Milan

This chapter of Luxury Masterclass, in the module on how to build a luxury brand, looks at the Moncler case. Moncler was founded in 1952 in Grenoble, France, making sleeping bags and down jackets for professional climbers. In the 1980s the range expanded into more urban products, which, like it or not, triggered a show-off and bandwagon effect: the famous paninari of Milan.

In 2003, at a time when the brand had lost its shine, the Italian entrepreneur Remo Ruffini acquired Moncler. The next milestones were 2006 and 2009, when two fashion collections for men and women were launched alongside the high-mountain products, followed by the listing on the Milan Stock Exchange in 2013. From then on revenue grew exponentially, to today's turnover of more than €1.7 billion.

The three eras of the relaunch

The summary table of the company's development from 2003 to today is the most important slide in this case study. It splits the story into three periods and reads each one through four levers: product, distribution, customers and communication.

2003-2007: five years of rethinking

The product is the iconic outdoor one. Distribution is wholesale, meaning it relies entirely on retailers and distributors. The customers are new high-end customers. Communication relies entirely on traditional media.

2008-2017: ten years of strong expansion

New products, new ranges and new categories are added to the core product. Alongside wholesale distribution, the retail channel is developed, meaning single-brand showrooms: in Milan on Via della Spiga and Via Montenapoleone, at Fiumicino airport, all built on the same format, the same look, the same interiors, the same scents, the same CRM. A network of company showrooms working alongside the existing distribution. The customers are of new nationalities, as the brand expands into new markets. And alongside traditional media comes tailored communication, based on the data the customer leaves in the CRM: when you buy a Moncler product, the sales assistant enters you into the CRM, which sets off a series of follow-ups, digital by email and on paper, with catalogues and thank-you letters.

From 2018: the digital era

The product goes through Moncler Genius, a very advanced creative direction for exploring new kinds of product. Distribution becomes omnichannel: every channel is covered, offline and online. Alongside the classic distribution through retailers and single-brand showrooms comes online selling, with its own e-commerce and online retailers. The customers are no longer just high-end and of new nationalities: they have new buying behaviours, starting with buying online. And alongside traditional media and CRM-based communication comes digital communication.

It is a roadmap to use as an example for your own companies, as well as a case study. The exercise is to plan your growth with a framework built on product, distribution, customers and communication: where I am today with the product and where I want to get to; where I am with distribution and where I want to get to; what kind of customer I have and what kind of customer I want in the near future; what kind of communication I use and which I want built into the company in a year, six months, three months.

The high-end brand matrix

Moncler's success rests on brand, product, distribution and communication. Applying the high-end brand matrix, buying a Moncler is driven 45% by social status, 40% by the refinement of the product, since it is still a technical product, and 15% by the bandwagon effect, meaning belonging to a group.

Moncler's mission is to develop a global brand able to keep innovating while preserving the uniqueness of its positioning. The positioning is the luxury product, broadly the winter outerwear piece, offered across several collections, from the most technical to the most urban, under Moncler Genius, the in-house creative direction launched in 2018.

What Moncler Genius is

Moncler Genius is a creative direction that entrusts the development of new products to different artists and designers. It is a response to the times we are living in and, at the same time, a collective of creative minds, a place of inspiration. Each Genius, each artist or designer, works individually, and all of them take part in interpreting Moncler's identity: different spaces host different creative visions, which together shape the brand's global message. The Moncler Genius Building is their home, a physical place.

The product always stays fully true to its heritage. The outerwear collections in today's catalogue show that you can create products that respect the brand's tradition while looking to the future, and even set trends with new designs and new materials. It is the challenge every luxury brand faces. For the most technical products a dedicated brand was created, Moncler Grenoble: two product categories, the urban one and the technical one for climbers and ski slopes.

Distribution: the single-brand store rules

Another interesting distinction is between directly operated single-brand stores, wholesale single-brand stores in department stores such as La Rinascente, and e-commerce. Directly operated single-brand stores dominate, supported by wholesale single-brand stores, while e-commerce is growing but still accounts for a very small share of the brand's sales. City retail rules.

Revenue is spread widely across three continents: EMEA, meaning Europe and the Middle East, Asia and the Americas. You can see the explosion of the Asian market, which for these brands, as for leather goods and watches, becomes an important market, if not the first. And the Italian market is growing and holding up, coming in just below the American one. Luxury customers exist in Italy: you need to reach them with the strategies studied in this module.

Communication: 65% of investment is digital

Moncler's communication from 2018 to today has an absolute focus on digital, with the customer at the centre of the strategy, an omnichannel strategy covering every sales channel, and performance measurement of digital investment. Moncler's Chief Operating Officer explains that they embraced online advertising and multichannel buying through an advanced data integration system: both marketing and sales have to rest on a process of collecting, managing and analysing data. With this integration they adopted a data-driven programmatic advertising strategy and in 18 months transformed the way they plan, measure and optimise media investment, thanks to platforms such as DoubleClick and Google Analytics.

The important thing to grasp is that in a structured, multi-billion company like Moncler, digital accounts for 65% of investment, against 35% for traditional media. Five years earlier the figure would probably have been 90 to 10 in favour of traditional media. For us small and medium-sized businesses, it shows that the future of buying advertising space, and the present too, is digital. All this led to an analysis by Fortune, the world's number one business magazine together with Forbes, naming Moncler on 10 April 2020, at the height of the pandemic, as the luxury brand best equipped to get through the crisis.

What we can learn

The most important slide in this case history is the one with product, distribution, customers and communication laid out across different eras. The exercise is to take it and adapt it to your own company. The files mentioned in the course can be downloaded from the module's download area, together with the Excel file with the questions to fill in and the exercises to complete.

What we covered in this module: why people buy high-end products, meaning the three effects, bandwagon, social status and refinement; the market, which divides into mass market, premium and luxury, with premium and luxury together forming the high end, and the need to communicate to all seven social classes even if you sell to only four or five; the difference between premium and luxury; how to build a brand in the high end, which can be ascending, from premium towards luxury, or descending; and the Moncler case, with the takeaway you will find again in the exercises. The next module is devoted to strategic marketing and product development.