Inside Hermès Giant Empire

ROBIN BOY on BUSINESS

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Producing exclusive and sumptuous products only with high demand is certainly what Hermès is more than good at. It turns out that smart strategy is the ultimate key behind the company’s success.


As one of the leading luxury fashion brands in the world, Hermès has successfully built and consistently maintained its empire throughout the years. For the last ten years, the revenue development of the French company has been nothing but stellar as it never drops. If anything, it keeps rising to €2,853 million this year. According to global brand validation firm Interbrand, it came in 32nd amongst the Best Global Brands in 2017 with brand valuation of €20,2 billion.

Of course, the spectacular opulence comes with great tactics. Having leather goods and saddler as its biggest contributor, Hermès’ marketing plans never cease to help the company in ensuring the exclusivity of the products.

One of it includes a three-day in-house training session called “Inside the Orange Box” for all new employees and artisans. Through this training, the want everyone to feel close and involved in the company’s culture and values. There’s also two years of mandatory training for the craftsmen before taking part in the making of leather goods. It is considered an important part as passionate workers will be able to work their best in producing high-quality products.

A little bit different from other companies, Hermès doesn’t rely on celebrity endorsements as their brand-building tactic. Instead, they are actively staying away from that marketing practice. The fact that only the A-listers and crazy wealthy ones can afford its most premium and exclusive products is already considered an endorsement.

To be able to obtain the lavish products, customers also have to wait and be patience. Those who want to carry around Hermès bags have to place an order and wait for a few months before it is ready. It is often said that the queue for the bags creates surplus demand, which will overflow into other consolation products like wallets and belts.

The long queue itself is also caused by the exclusivity of Hermès’ products. The company has always been the advocate of “limited edition” strategy, where only a selected few will have the chance to obtain the rare goods. Another thing to note about the deluxe products is that they never offer discounts; which gives a sense of pride to the holders.

PHOTOS Courtesy of Probutterfly, Hollywood Reporter, Starstyle, Harpersbazaar, NYTimes