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Moncler's iconic down jacket. Source: Farfetch.

The popular outerwear brands Moncler and Canada Goose have a lot in common. Both companies were founded in the 1950s (Moncler - in 1952, Canada Goose - in 1957), and expanded in the 2000s through direct investment. They subsequently held IPOs (initial public offerings) 4 years apart: Moncler in 2013 and Canada Goose in 2017.

However, the value of one brand exceeds the value of the other by more than 10 times.

Source: Canada Goose, Moncler

While Canada Goose focused on the technical characteristics of its products (innovative materials, protection from extremely low temperatures), Moncler CEO Remo Ruffini decided to turn Moncler into a luxury brand, and a down jacket into a trendy closet item on par with a Cartier bracelet or an Hermès handbag.

Which brand strategy is more effective

First, "luxury" allows you to set much higher prices. No one will ask whether the technical characteristics of a Chanel handbag justify the price of 5 thousand dollars. It costs so much because it is Chanel.

Secondly, luxury brands can easily sell goods of different categories by simply adding their logo to them. For example, Moncler gloves and perfume are bought by people who want access to the brand but aren't ready to shell out more than $2,500 for a jacket. In the case of Canada Goose everything is different - the brand is more focused on functionality, so each released accessory should impress potential buyers with its technical characteristics.

Finally, luxury brands are more likely to be re-purchased. Do you need two high-tech Canada Goose ski jackets that can withstand the Arctic cold ❄ ? Probably not. But do you need a few luxury items? You don't want to be seen wearing the same Moncler down jacket on two ski weekends.....

Luxury brands can sell more products at higher prices than brands focused only on functional benefits. Source: Michelle Wiles

To be fair, Canada Goose is a successful brand in its niche. But in this article, I want to focus on Moncler and what other companies who also want to use "luxury" as their brand strategy can adopt.

How Remo Ruffini turned a down jacket into a luxury item

Let's start with the story of Ruffini himself. The CEO of Moncler grew up in Italy. He got into the world of fashion from childhood. His parents owned clothing companies, so Remo began to understand the business at an early age.

But in addition to understanding the fashion business, Ruffini had an amazing ability to sense trends and adapt them to the market. His parents sent him to Boston to attend college. However, there Remo became acquainted with local fashion and decided to go into business instead of studying:

"When I came to Boston, I discovered the preppy style. There was a culture there that I could bring to the Italian consumer. Such strong emotions. It helped me make a life-changing decision: I would not go to college - instead, I would start working." Remo Ruffini, W Magazine

Ruffini returned to Italy and, under the guidance of his mother, launched New England, a brand that combined Boston preppy style with Italian quality. In 2000, Ruffini sold his stake in New England and set himself the ambitious task of revitalizing one of the brands with a rich history.

And he got that opportunity in Moncler. Like Canada Goose, Moncler had great potential to become a leading high-tech brand. The company's founders were granted patents to create frost-resistant outerwear using thermal down. In addition, the brand boasted a rich history - it had long produced clothing for explorers and French Olympic skiers.

However, in 2003, the company was on the verge of bankruptcy. Ruffini had worked there since 1999 as creative director. According to the Wall Street Journal, Ruffini and his partners acquired the brand "for next to nothing," and he took over as CEO in 2003.

From there, Moncler's transformation from a maker of Olympic ski jackets to a luxury fashion brand began. You can see Ruffini's strategy in the graphic below. It is simple and consists of just two steps (three if you are starting from scratch). This strategy allows you to focus on the bottom line and be flexible.

A model for turning a product into a luxury item. Source: Michelle Wiles

Step 1: Make the brand more desirable

Moncler it was not enough to offer the audience functional benefits - luxury brands must also give people emotions. As a rule, emotional benefits are expressed in the fact that customers convey a certain message to others through the very fact of owning a brand: I am trendy, rich, attractive or belong to a group to which others want to belong. Ferrari and Aman hotels, for example, evoke similar associations. In order for Moncler to join this category, Ruffini applied 3 tactics:

A down jacket is not a very seductive product. Yes, that was the case before Moncler. Ruffini updated the styles, made the jackets lighter, and in 2005 turned to renowned designers Junya Watanabe and Nicolas Ghesquière to help give clear contours to the previously shapeless garments. Today, many argue that it was Moncler that turned down jackets into a luxury item:

"It used to be that handbags were particularly popular with fashionistas .... Now it's outerwear."
Experts point to Moncler as the brand that initiated this shift.

"Moncler has developed more modern and feminine silhouettes for traditional down jackets and has also started to successfully collaborate with fashion designers." Racked

Brilliance, silhouette and design make Moncler down jackets more attractive. Source: Moncler

1b. Distribution

One of Ruffini's first orders of business was to remove Moncler from sports stores (which evoked associations with technological, functional products). Instead, he began partnering with premium retailers and opening his own Moncler stores, allowing the company to control their own locations and consumer experience. Ruffini's first stores opened on the slopes of high-end ski resorts.

In 2008, Ruffini opened a flagship store in Paris on the most luxurious rue Saint-Honoré, reinforcing Moncler's image as a member of the fashion elite:

"The store in Paris was a strong statement that influenced customer perception of the brand. From that moment on, we became what we are today." Remo Ruffini, High Snobiety

Today, Moncler stores are more like museums. In every corner of the boutique in Manhattan's Soho neighborhood, jackets of different styles and related accessories are on display. A few unusual models are displayed behind glass, and the lack of windows and ornate interior transports guests to an alternative Moncler universe.

You can find inspiration and fresh looks in every corner of Moncler Soho

Canada Goose, on the other hand, simply sells jackets. Their store in Soho (just one block away from Moncler) resembles the sterile arctic expanse for which their clothes are designed to travel.

Canada Goose Soho store sells functional clothing to protect you from cold temperatures

1c. Fantasy Events

Ruffini wanted Moncler to be associated with haute couture, and one of the main components of haute couture is the catwalk. But the catwalk and down jackets are not very compatible. That was the case before Moncler came along. To attract the attention of fashion editors, Ruffini began staging large-scale shows, such as a 363-person flash mob at Grand Central Station in 2011, an ice show at the Wollman Rink in Central Park in 2015, and a march in down jackets in Lincoln Center Square in 2016.

Along with the designers came the fashion shows, but a regular walk down the runway back and forth clearly wouldn't be enough. WSJ

Moncler shows at Grand Central Station and Lincoln Center. Source: WSJ

These events not only gave Moncler fame, but also brought a sense of "fabulousness" to the brand's image. The brand was no longer selling a coat, but a dream:

I don't need a regular fashion show, I need a different vision, a different way of showing. I'm not selling a collection, I'm selling an attitude. Remo Ruffini, WSJ

The combination of updated style, a smart distribution strategy and extravagant events organized by Ruffini allowed Moncler to become a luxury brand. But positioning is only half the battle. It's also important to grab (and hold) the attention of your audience. Which brings us to step 2....

Step 2: Enhancing cultural relevance

Leading brands remain in the spotlight as long as they set the cultural context. It's no coincidence that Louis Vuitton hires musicians and artists as creative directors to help the 170-year-old brand stay relevant. Another prime example is Loewe, which dressed Rihanna for her Super Bowl performance and Beyoncé for this year's Renaissance Tour.

How does Moncler ensure cultural engagement?

• A recognizable brand identity
• Collaborations within the special Genius project

2a: Brand Identity

Collaborations are a great way to freshen up your product as each designer adds something different to it. But good collaborations start with developing an identity that can be built upon in the future. Think of the luxury suitcase brand Rimowa. Its calling card is the fluted aluminum case. This is a kind of canvas on which other designers can "paint" without losing the essence of Rimowa:

Rimowa's collaborations with Supreme, Off White, Tiffany, Anti Social Social Club, Fendi... and Moncler

The distinctive feature of Moncler down jackets - their "layered" surface - allows designers not only to reinterpret the brand, but also to keep it recognizable.

Moncler x Valentino, Pierpaolo Piccioli. Source: Harper's Bazaar

Moncler x British designer Craig Green. Source: End

Moncler x Richard Quinn couture brand. Source: Wonderland Magazine

Canada Goose also collaborates with designers and brands, but the lack of a recognizable identity reduces the effectiveness of these collaborations. Nothing ties them together. For example, Canada Goose's collaborations with Drake's OVO (October's Very Own) look disjointed and lazy, while Feng Cheng Wang's more creative Canada Goose collection lacks a visual connection to the brand.

Canada Goose x OVO. Source: Canada Goose

Canada Goose x Feng Chen Wang. Source: Canada Goose

Further evidence of Moncler's cultural status is the fact that Drake chose a shiny red Moncler Maya jacket to star in the 2016 Hotline Bling music video (alongside iconic brands Timberland and Air Jordan), despite OVO's ongoing collaboration with Canada Goose.

Hotline Bling can only mean one thing - a surge in Moncler sales. Source: Vanity Fair

2b. Moncler Genius Special Project

After realizing that collaborations are an effective way to get into the media and increase brand awareness, Ruffini decided to launch a special project dedicated to collaborations with other designers.

"The customer wants to see something new every day..... He won't wait six months. That means I need a new story at least every month to retain an audience. So I said, why don't we make this approach the foundation of our business?" Remo Ruffini, WSJ

In 2018, he launched the Moncler Genius project: every 1-2 months, contemporary designers reimagine Moncler down jackets and present their unique vision of the brand. The project has its own building in Milan - the space is divided into 8 cells, each responsible for 1 of the 8 annual collections.

Adidas is a current Genius partner. Source: Moncler

With its special project, Moncler makes the ingenious transition from a simple collaboration to a full-fledged platform for co-creation. Genius is now an independent brand that many designers want to join.

Fashion collaborations? They're over. At least at Moncler, whose successful five-year Genius project "has evolved from a series of fashion collaborations into a platform for co-creation across industries." Vogue, February 2023

Moncler Genius 2023 participant list. Source: Vogue

I firmly believe in the Moncler Genius model and its constant evolution... From now on Moncler Genius is also about art, music, movies, sports and much more. Remo Ruffini, Vogue

For example, Moncler and Mercedes Benz presented a joint concept at a weightlessness-themed show during London Fashion Week 2023.

Moncler x Mercedes. Source: Mercedes

The move from collaboration to co-creation reinforces Moncler's position as an artist rather than a brand. What could be more inspiring than art? This is a direct testament to Ruffini's ability to push the boundaries of marketing and find new and original ways to promote.

The new model of luxury brands

Remo Ruffini transformed Moncler into a luxury brand by changing two things: first, he made it more desirable through high quality products, a smart distribution strategy and interesting events, and second, he allowed Moncler to position itself as a cultural leader through the Genius platform.

These changes have not been easy. However, they have enabled Moncler to charge higher prices, sell more products and reduce marketing costs in the long term. Ruffini's strategy has paid off.

Moncler's path fits into the luxury brand's strategy. Source: Michelle Wiles

Perhaps the key element of Ruffini's success is the fact that he is both creative director and CEO of the brand. He is happy to invest money in creative solutions (e.g. expensive events) that only pay off after a while. If it's not about money, what has been Ruffini's goal all along?

Perception.

As he stated in an interview with Luxury Society, investing in public perception of a brand guarantees excellent financial results in the future:

"The future of a company, in my opinion, is linked to knowledge and brand perception. It may happen that turnover grows, but it is much more important that knowledge "grows". People knew Moncler as a down jacket for years until they came to realize that the real value is the brand, which is a mark of quality. It is this kind of investment that provides a solid foundation for tangible growth." Remo Ruffini, Luxury Society

One of the most common questions I get from my clients is how to measure brand marketing return on investment (ROI). Yes, tactics like digital advertising and discounts can show an immediate increase in sales. But, as Ruffini points out, financial performance is a lagging indicator of brand success. Improvement should be measured primarily by perception.

Moncler and the flywheel model

So how do brands link marketing, price and product to the core operations of the company? For example, flat packs, out-of-town locations and delegating the assembly of goods to customers allow IKEA to cut costs and offer good design at low prices.

Source: Michelle Wiles

How is Moncler doing? The Moncler model is self-sustaining (a good sign) and not surprising given its efficiency.

Source: Michelle Wiles

Price <> Positioning. Moncler's pricing policy (over $2000 for a jacket, $645 for a hat) reflects the company's positioning as a luxury goods manufacturer.

Positioning <> Product. High-end design, thoughtful silhouettes and collaborations with designers reinforce the company's positioning as a luxury apparel manufacturer. Just like the high level of service in the stores, which is not inferior to the most prestigious fashion houses.

Brand, Product, Price <> Company Operations. Moncler's operating model fully supports the brand strategy. Ruffini focuses on the long term rather than short-term results. Owned stores allow Moncler to independently create the desired experience, and the Genius model enables creative brand innovation. The product portfolio (the totality of all products) maintains exclusivity through quality outerwear and attracts customers through high-margin complementary products such as scarves and perfumes.

The future of Moncler

What's next for Moncler? Staying relevant is a challenge for all luxury brands. Even the Genius program will lose its effectiveness over time if Moncler can't breathe new life into it. In a 2022 interview, Ruffini called experience the next frontier for Moncler's cultural leadership:

"You have to be partly a prophet to say what will happen in 2025 or 2028," he reflects. He admits it's not easy, as technology is changing too quickly. But he feels one way forward will be to create immersive experiences in stores, online and elsewhere, like the grand show in Piazza del Duomo. "I think the luxury world has moved from possessions to experiences." Remo Ruffini, WSJ

Moncler's history of fantastic events and collaborations sets the creative bar high. One of the advantages of running a tech brand like Canada Goose is that you don't have to organize cultural events to increase sales. Offering people high quality is enough. On the other hand, as a brand that is a cultural leader, you can draw attention to whatever you decide to do next. If, of course, you are brave enough to lead others.

Source: Medium

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