Ralph Lauren is renowned for its ability to create a luxurious lifestyle brand experience that transcends the mere sale of clothing. This iconic American brand continues to see rising sales figures even as consumers become increasingly vocal about high prices. In a recent interview, CEO Patrice Louvet detailed how Ralph Lauren’s innovative pricing and merchandising strategies are setting the company up for success in unpredictable market conditions.

The luxury fashion market is undergoing significant transformations, with a growing number of consumers expressing fatigue over ever-increasing prices. This shift puts brands like Ralph Lauren in a unique position to either thrive or struggle. Yet, even as the average selling price of goods has surged by more than 70% since 2018, Ralph Lauren is not only maintaining customer interest, but is also experiencing increased foot traffic in its stores. This is further evidenced by the company’s stock price, which peaked at an all-time high in October 2024.

Analyzing the current consumer landscape, Louvet explained that Ralph Lauren’s brand elevation strategy is pivotal to its recent success. The concept of “brand elevation” involves enhancing storytelling, product quality, and the shopping experience to create a scenario where price increases are justifiable in the eyes of the consumer. Louvet stated, “Brand elevation means elevate the storytelling, elevate the product, elevate the shopping experience. The outcome is the ability to price.”

Ralph Lauren’s approach to delivering value resonates across various consumer demographics. The brand strives to appeal to both high-end customers, known as Very Important Consumers (VICs), who may spend considerable amounts, and aspirational buyers looking for more affordable options. As Louvet pointed out, “Everyone is buying into a piece of the Ralph Lauren world,” whether it is through luxury watches or a casual polo shirt. This savvy strategy ensures that customers feel a sense of investment regardless of their spending capacity.

A crucial aspect of Ralph Lauren’s business model lies in its storytelling capabilities. In 2024, Ralph Lauren significantly increased its marketing budget, allocating 7% of total revenue compared to only 3.3% a few years ago. This increase allows the company to maintain robust engagement through campaigns like the recent “Ralph’s New York,” which targets diverse consumer segments while still promoting brand prestige.

Another cornerstone of Louvet’s strategy is the focus on quality and timelessness. Investing in superior materials and designs not only enhances the products but encourages customers to perceive these items as long-term investments. According to Louvet, “We celebrate the product and make sure it’s superior quality. It’s got timeless style.”

However, it’s not just about the products themselves but also how consumers experience them. Louvet emphasized that every interaction with the brand, whether in stores, online, or through wholesale channels, must reflect this elevated standard. He noted, “For us, the elevation applies to every single touchpoint the consumer has with our brand.”

Exploring the shift in retail strategy, Louvet shared that Ralph Lauren has embraced innovative store designs and experiences. The recent renovation of a flagship store in Chicago now integrates a coffee shop, showing the brand’s commitment to blending lifestyle with retail. This kind of hospitality-driven approach has proven immensely successful, attracting more customers than originally anticipated.

As the conversation shifted to global markets, specifically China, Louvet revealed an optimistic outlook. Unlike some luxury brands struggling in this crucial market, Ralph Lauren views China as a significant opportunity for growth. He pointed out that while luxury brands often derive a larger portion of their sales from China, Ralph Lauren remains underdeveloped in the region. With an effective focus on major cities and a stable range of core products, the brand is set to capture more market share in the coming years.

Central to Ralph Lauren’s ongoing strategy is a deliberate shift towards timeless and iconic products. Historically, many luxury brands react swiftly to trends, but Ralph Lauren has shifted to prioritize core items, which account for about 70% of its business. This allows the brand to cultivate trust and recognition among its customer base, ensuring that staple items like classic polo shirts and cable knit sweaters consistently resonate with buyers.

In recent years, Ralph Lauren has focused on expanding specific categories, particularly women’s apparel and handbags. This category expansion aligns with Louvet’s philosophy of establishing leadership positions within each market segment. He remarked, “If we’re going to play in an area, it’s not to participate; it’s to win.” This competitive mindset represents Ralph Lauren’s commitment not just to growth, but to excellence across its diverse offerings.

Louvet’s insights into the current state of the luxury fashion industry provide a curated roadmap for navigating challenges while pursuing growth opportunities. He emphasizes that while economic uncertainties may create a challenging landscape, strong brand identities and relevant, timeless products will allow companies like Ralph Lauren to thrive.

As the luxury market continues to adapt, the strategies and values that Ralph Lauren embodies will likely be key drivers of its sustained success.