Luxury brands play the sports card hard. Can it reverse the decline?

At the Paris Olympics, the infiltration of luxury brands in the sports field is everywhere. From sponsoring events to choosing star athletes as endorsers to collaborating with sports brands, luxury brands are vigorously playing the "sports card".

In terms of increasing exposure through the Olympics, fashion brands have realized that sports events can become a new stage for fashion shows because Italian tennis players broke the all-white uniform tradition at Wimbledon. Taking LVMH, a sponsor of the Paris Olympics, as an example, many of its brands are fully displayed during the grand event. With an investment of 150 million euros, it has greatly increased brand exposure. The mass appeal of sports events enables luxury brands to reach untapped audiences. For example, Prada's sponsorship of the Chinese women's football team has received high viewership on social media.

From the perspective of brand cooperation methods, Jiang Han, a senior researcher at Pangoal Institution, pointed out that it includes sponsoring sports events, co-branding cooperation, and inviting athletes to endorse. In recent years, luxury brands have frequently collaborated with sports brands on a wider range and launched products suitable for sports scenes. In addition, luxury brands also achieve market expansion through cooperation with sports celebrities. Sports celebrities have great market influence and are less involved in scandals.

However, the luxury goods industry is currently facing a downturn. Sales of groups such as Kering and LVMH are declining, and Burberry is at risk of being kicked out of the FTSE 100 index. The American Affluent Consumer Research Company found that the number of affluent consumers who plan to spend more money on luxury goods has decreased.

Against the background of the overall slowdown in luxury consumption, sponsoring sports events may give a boost to brands, but it is doubtful whether the "sports card" can reverse the decline. Jiang Han believes that playing the "sports card" can enhance brand image and popularity, but the decline of luxury brands is the result of multiple factors working together. Relying solely on this strategy is not enough. Brands need to comprehensively consider multiple factors and formulate comprehensive market strategies and product strategies to achieve sustainable development.