Introduction

In the 50 years since it was founded in 1967, Ralph Lauren has been credited with almost
creating the quintessential American lifestyle. The brand has used classic designs as the core
but has also evolved them in line with emerging trends. Revenues for the fiscal year 2017 stood
at USD 6.7 billion, which was a decline of 10% compared to like-to-like revenues achieved for
fiscal year 2016. At the end of fiscal year 2016, the company had 493 directly operated stores,
which included 144 Ralph Lauren stores, 77 Club Monaco stores and 272 Polo Factory stores.
The company has an estimated 23,000 employees across the world.

In May 2017, the Ralph Lauren Corporation appointed Patrice Louvet as its President and Chief
Executive Officer (CEO), replacing Stefan Larsson. Before joining Ralph Lauren, Patrice
Louvet served as Group President of global beauty at Procter & Gamble.

The Ralph Lauren brand story

Ralph Lauren started off on a humble note by working out of a drawer in the Empire State
Building in New York City and selling men’s ties under the tie manufacturer Beau Brummell.
With this support, Ralph Lauren quickly expanded to a whole line of menswear which Lauren
named “Polo”, paying tribute to his love of sports. In just 2 years, Ralph Lauren was awarded
his own in-store shop in the Manhattan department store Bloomingdale’s for the first time.
Riding on this early success, Ralph Lauren launched a full women’s collection and later opened
his first store on Rodeo Drive in classy Beverly Hills – the first freestanding store for an
American designer.

Today, the Ralph Lauren Group manages a total of 17 fashion brands and 4 lifestyle brands
across 493 directly operated stores in 30 countries. Ralph Lauren is most well-known for the
Polo shirt from the oldest brand in its portfolio – Polo Ralph Lauren. The product lines of Ralph
Lauren cover all areas of apparel fashion, including men wear, women wear, women’s watches
and jewellery, children’s wear and sportswear. The distinct identity of a preppy, aspirational
American look is so powerful that it is now defined as a key element of American fashion.
With a multitude of sub-brands under the umbrella brand of Ralph Lauren catering to the needs
of various market segments, Ralph Lauren has indeed become one of the strongest fashion
brands in the world.

Unlike the usual practices of branding that are normally seen in the consumer goods industry,
the branding philosophy in the fashion and luxury goods industry is quite different. Most
famous fashion houses like Christian Dior, Yves Saint-Laurent, Gucci, Versace, and Giorgio
Armani were built on the personality of the founders. As design is the most important
ingredient of fashion and luxury apparel, the individual style and personalities of these
designers became crucial to creating and sustaining the brand strategy of each of the houses.
The unique designs and patterns that reflect the personality of the creator gave the brand its
identity and helped it in attaining a differentiated image. A majority of the differences between
these fashion houses were also driven by the fact that the founders took up roles that influenced
the creative vision and direction of the whole house (something similar to what Ralph Lauren
is now doing).

In the case of Ralph Lauren, the influence of its founders’ personalities on its products is
evident in the emergence of the famous “Polo Bear”. The story goes that Jerry Lauren, Ralph
Lauren’s brother and head of the menswear division at Ralph Lauren, was an avid collector of
Steiff stuffed bears. In 1990, a tradition was started wherein colleagues presented a Steiff bear
version of both Jerry and Ralph Lauren to each of them as a birthday gift. The bear was dressed
preppy style, just like how Jerry Lauren dressed at the time. This preppy-dressed bear later
became a brand mascot and made its way into stores as both the actual teddy “Preppy Bear”,
and as a design icon that frequently started appearing on the brand’s products.

The Ralph Lauren story is indeed a fascinating tale of how the persona and lifestyle of a brand’s
founder has created and sustained a fashion brand for over 50 years and has made it a globally
recognized icon of American lifestyle.

Heritage Brands

As “heritage brand” is a fairly recent term, no established definition is available. However,

there are certain characteristics that help to develop an idea of what it means to be a heritage
brand. Heritage brands often define themselves based on their historic roots, fine quality and
value, a classic image, and a traditional American lifestyle (“American Classic,” 2013; “Ralph
Lauren,” 2013). Craig Higgins notes in his study on premium British menswear that “heritage”
“suggests something that is passed on or handed down from generation to generation, inherited,
a status that is acquired through birth, a birth right”. He also discusses the idea of heritage
brands having a “Heritage Quotient (HQ) that can be recognized by the presence of certain
characteristics (Elements of Brand Heritage)”. In his study, he cites a conceptual framework
for determining a brands HQ, which hold “brand stewardship” in the center, and five elements
of brand heritage (track record, longevity, core values, use of symbols, and history) surrounding
it. Higgins states that, “the more one observes these characteristics within a brand, the higher
its Heritage Quotient” . Figure 1: Heritage Quotient illustrates the framework for Heritage
Quotient.

Figure 1: Heritage Quotient

Ralph Lauren has a very different history, but ironically has some Brooks Brothers roots. Ralph
Lifshitz, who later changed his last name to Lauren, is the son of a Russian Jewish immigrant,
and grew up in the Bronx, New York. In the late 1950s, after college, Ralph Lauren worked as
a salesman at Brooks Brothers. In 1967 Ralph Lauren came out with his first original line of
ties, which were wider than the ties that were popular at the time, and also more expensive. He
gave his line a sporty name, Polo, and in 1969 extended the line to menswear. In fact, Ralph
Lauren had to buy the right to use the “Polo” trademark from Brooks Brothers. Polo, the team
sport played on horseback, and sometimes called “the Sport of Kings,” was formalized and
popularized by the British. So why would a young man with roots in the Bronx name his
company Polo? According to Joseph Hancock, “by using the word Polo to define his total
strategic brand concept, Ralph Lauren associated his brand to status”.

Ralph Lauren, which started with a tie collection, has grown to an internationally renowned
lifestyle brand. The Ralph Lauren brand consists of numerous divisions, which for menswear
includes Polo Ralph Lauren, Purple Label, Black Label, Rugby, Club Monaco, Chaps, RLX,
RRL, RL Golf, and Denim & Supply. Ralph Lauren’s focus has always been on lifestyle
marketing and association— putting practical garments in a luxury setting, which enables
consumers to associate the brand with high-end status. Ralph Lauren describes itself as a brand
that stands for “providing quality products, creating worlds and inviting people to take part in
our dream” (“Ralph Lauren,” 2013).

The company also has a major online presence, where sales at ralphlauren.com were up 24%
in 2010. By building a lifestyle brand, and through his attention to classic design, quality and
the retail environment, Ralph Lauren has made himself a powerhouse in American menswear.

The Ralph Lauren brand strategy

Ralph Lauren is famous for his controversial opinions on fashion, which are epitomized in his
quotes – “I am not a fashion person. I am anti-fashion. I am interested in longevity,
timelessness, style”.

Walking into any Ralph Lauren store, one will immediately notice that the majority of the
apparel designs veer towards the classics – think clean-cut oxford shirts and basic polo shirts
with the embroidered pony. The unwavering focus on classic designs, together with the Ralph
Lauren brand name, the elegance of the stores and the luxury of the materials, have managed
to capture precisely what consumers’ desire from a luxury brand.

The Ralph Lauren brand, since its launch, has crafted and operationalized a strategy that
directly taps into a blue ocean opportunity in the fashion industry – the balance between haute
couture (sophistication) and classical lines (design and heritage). By successfully mixing a new
age identity with classical designs, Ralph Lauren has maintained its appeal with a wide range
of consumers. This has also allowed it to attract consumers from different age groups, and has
allowed it to hold on to them as they have progressively aged.

The balance of class and simplicity allows consumers to express their personalities by wearing
Ralph Lauren. The design of its apparels starts on a blank canvas, allowing the consumer the
flexibility to interpret and bring out his or her individual style in the final product. This
effortless and clever design strategy has not only enhanced the Ralph Lauren brand identity,
but has also allowed it to strengthen its equity in different market and product segments.

Maintaining this balance between the classics and latest trends is not a one-off tactic for Ralph
Lauren. It is built into the brand’s core. In September 2017, it announced that it would revive
one of its coolest and most successful collections from the 1990s – the Polo Stadium Collection
launched during the 1992 Barcelona Olympics (which was in turn inspired by the uniforms
worn by American athletes in the 1920s and 1930s).

Ralph Lauren’s brand & marketing communications

The Ralph Lauren brand is created for a consumer that values quality, exclusivity, style, fine
living and prestige. He or she appreciates the quintessential American look and timeless
classics, and aspires to be respected and recognized for his or her wealth and sophistication.
All these psychographic and behavioral characteristics are aptly captured in Ralph Lauren’s
brand and marketing communications and across all consumer touch points.

Ralph Lauren’s brand communications have always been best-in-class in painting an

aspirational picture of American life. Starting in 1974 when it dressed every character in the
hit movie “The Great Gatsby”, and continuing into its spreads in high fashion magazines and
media campaigns today, Ralph Lauren always pays exquisite attention to the way in which its
brand is being portrayed in the aspirational luxury segment.

Ralph Lauren’s primary advertising mediums are print and events. Its movie-stills style of
advertisements appear regularly in lifestyle and fashion magazines like Vanity Fair, Vogue,
Cosmopolitan and Gentlemen’s Quarterly to name a few. It also participates frequently in
prestigious fashion shows like the New York Fashion Show and Milan Fashion Week.
Sponsorships are also an essential tool in Ralph Lauren’s communication strategy. It is
currently the official outfitter for all on-court officials at both the Wimbledon and US Open
tennis tournament, and the official parade outfitter for the US Olympic and Paralympic Teams.

The Ralph Lauren brand has not been a laggard in the creation and implementation of digital
and mobile marketing strategies. As digital and social media marketing increasingly became
critical platforms to engage with consumers in the fashion and luxury space, most of its
marketing efforts today are focused on digital and social media. These efforts have seen
considerable success by being innovative and highly customer-centric. For example, Ralph
Lauren publishes its own editorial content in its RL Magazine – a clever way to advertise by
providing useful fashion content to consumers.

In 2009, Ralph Lauren launched the Make Your Own Rugby iPhone mobile application,
allowing customers to select a blank shirt, polo, sweater or jacket and customize it with
distinguished crests, football-themed patches and letters. As children’s wear forms quite a
substantial proportion of Ralph Lauren products, the brand has also invested in a children’s
virtual storybook through a series of online videos titled “The RL Gang”, where clothes
featured in the videos can be ordered in real-time.
Despite the drastic and disruptive changes in advertising mediums over the years, the themes
in Ralph Lauren’s advertising have been consistent throughout. They are largely focused on
family, romance, and elegant living with a huge representation of the polo player, symbolizing
refinement, affluence, esteem and style. This consistency in brand communication has paid
handsome dividends for the brand in terms of positive consumer perception on the brand’s
reliability. Ralph Lauren follows one of the fundamental principles of brand building to the
core, which is about having consistency in brand messages and positioning over a long term.

In February 2017, Ralph Lauren hired its first Chief Marketing Officer (CMO), Jonathan
Bottomley – showing its commitment at CXO/ Board level towards the creation of a more
cohesive brand communication strategy and stronger focus towards the measurement of its
communication effectiveness. With a CMO in place, Ralph Lauren hopes to achieve greater
alignment between marketing efforts and corporate strategy, and a stronger customer focus in
both strategic and tactical initiatives.

The Ralph Lauren brand architecture

Ralph Lauren always had a long-term vision in shaping its product portfolio. It has always been
important for the brand to link its different apparel and accessories lines under a single cohesive
identity. The brand is currently going through a difficult time with decline in revenues and the
need for optimisation of its operations. It has now become even more important for the brand
to ensure that its product portfolio works together and portrays a consistent and credible image
for the brand. It is also exploring opportunities to broaden its product lines and also venture
beyond fashion. Regardless of the outcome of these initiatives, it is important for Ralph Lauren
to ensure that the expanded product portfolio still has a strong link with the iconic parent brand.

Ralph Lauren has always enjoyed success due to positive consumer perceptions of its classic
designs, high quality and premium image. It has followed an expansion strategy using the same
core credentials into other fashion segments. The Ralph Lauren brand architecture has always
been a topic for branding discussions as the architecture is constantly optimized to maximise
the Ralph Lauren brand equity. Because of this executives do not hesitate to kill sub-brands
that do not perform well – some examples of sub-brands that have left the portfolio are Ralph
Lauren Black Label, Ralph Lauren Blue Label and Ralph Lauren Rugby. As of February 2017,
the Ralph Lauren brand portfolio comprises of 17 fashion brands, each differentiated by a
different line of apparel with specific targeting towards different marketing and consumer
segments.

The brand architecture falls somewhere in-between a ‘branded house’ and ‘house of brands’.
In reality both Ralph Lauren and Polo have masterbrand status and are used to endorse specific
sub-brands. The Ralph Lauren masterbrand has a broader equity compared to that of Polo,
which is more used for endorsement of Polo-specific apparel lines. Brands that are part of the
portfolio from acquisitions are allowed to operate without any form of endorsement. The
current portfolio stands as below and ensures that the Ralph Lauren masterbrand has its
influence throughout the portfolio:
Polo Ralph Lauren: This is Ralph Lauren’s first complete line of men’s Polo shirts,
sportswear and tailored clothing. Launched in 1968, it is the oldest brand in the portfolio and
continues to be top-of-mind in the men’s luxury casual and sportswear markets. It now offers
accessories including eye wear, handbags, hats, scarves, gloves, belts and small leather goods
as well.

Ralph Lauren Collection: The Ralph Lauren Collection is Ralph Lauren’s highest end brand
launched in 1971. Timeless and sophisticated, it is a line of women’s clothing that ranges from
handmade evening gowns and tailored blazers to luxury sportswear. With its high price point,
it targets the fashion-conscious and refined lady.

Polo Golf: Launched in 1987, Polo Golf combines Ralph Lauren’s love for sport and a luxury
lifestyle. It offers state-of-the-art golf apparel including custom-fit mesh polo shirts, stretch
shorts and that aims to enhance a golfer’s swing.

Polo Sport: Launched in 1992, this is Ralph Lauren’s line of high-performance active wear,
targeted at athletes and fitness junkies. This brand showcases Ralph Lauren’s dedication to
innovation. In 2014, it ventured into smart wearables and showed the world its first PoloTech™
shirt – a men’s shirt with cutting-edge silver fibers woven directly into the shirt and a small
sensor-filled black box attached near the ribcage to collect real-time biometric stats like steps
taken and heart rate.

Double RL (RRL): This brand was named after Ralph Lauren and his wife Ricky’s ranch in
Colorado (hence the “double R”). It was launched in 1993 and offers rustic-styled apparel
inspired by the independent, hardworking spirit of the West – including denim, military-grade
chinos, sweaters, flannels, vintage accessories and leather goods.

Ralph Lauren Purple Label: This is the upscale couture line of Ralph Lauren that was
launched in 1994. It offers refined and custom-made tailoring for men’s tuxedos, suits, and
sportswear, including Polo shirts made from luxury two-ply long-staple cotton.

Lauren by Ralph Lauren: This was Ralph Lauren’s line of women’s clothing priced at a more
accessible point, aimed at the modern, everyday lady. It was launched in 1996 and offers a
large range of apparel, bags and accessories, from sophisticated work dresses to swimwear to
sleepwear.
Ralph Lauren Golf, RLX and RLX Golf: These collections were launched in 1998 and offers
ultra-modern, graphic, performance-driven golf apparel, including progressive fits to
sophisticated styles to technologically advanced fabrics. It is targeted at younger golfers who
want to look trendy. Ralph Lauren Golf offers golf apparel for ladies while RLX Golf offers
golf apparel for men. RLX offers clothing and outerwear built for general outdoor sports such
as tennis, golf, skiing, sailing and hiking.

Club Monaco: This Canadian-based specialty retailer which sells designer lookalike casual
apparel for both men and women was acquired by Ralph Lauren in 1999. This was a growth
strategy that aimed to provide a venue of choice for youth aged 15 – 25 who aspired towards
well-fitted, fine clothing with modern, urban sophistication.

Pink Pony: Established in 2000, the Pink Pony campaign is a global initiative that was set up
to show support towards cancer victims. A proportion of Pink Pony product sales goes towards
the Pink Pony Fund and other large cancer charities across the world. The Pink Pony brand
comprises of women’s sportswear and shoes crafted in luxurious fabrics, all of which feature
the pink Polo player logo, demonstrating the company’s commitment towards the battle against
cancer.

Polo Ralph Lauren Children: This collection is designed to reflect the timeless heritage and
modern spirit of Ralph Lauren’s men and women collections. It is subdivided into Boys (sizes
2-7 and 8-20), Girls (2-6X and 7-16), Big Kid, Little Kid and Baby (Boy and Girl). It offers a
variety of clothing from t-shirts and dresses to overalls and loafers.

American Living: Launched in 2008, American Living was bought over by Ralph Lauren.
The brand is available at department stores Macy’s, Belk and JCPenney and offers classic, all-
American collections including men’s, women’s and children’s apparel, and home goods. The
brand’s pricing is aspirational yet accessible.

Ralph Lauren Watches and Fine Jewelry: Launched in 2009, the Ralph Lauren Watch &
Jewelry Co. introduced a premium collection of timepieces that are inspired by the image of
prestige and sophistication that the Ralph Lauren brand has evolved to represent. This sub-
brand has now expanded to include collections inspired by luxury lifestyles – including the
Stirrup Collection inspired by the equestrian lifestyle, and the Automotive Collection inspired
by Ralph Lauren’s passion for classic car designs.

Denim & Supply Ralph Lauren: As its name suggests, this sub-brand that was launched in
2011 offers mainly denim-based and casual apparel, including loose sweaters and plaid. It was
born in Brooklyn, New York, and is inspired by the style of artists, painters, musicians and
poets who inhabited there. With its lower price point and accessibility, it targets the younger
crowd who is less interested in luxury and refinement.

Chaps: This brand is similar to the Lauren by Ralph Lauren brand, and offers casual
sportswear and dresses at a slightly lower price point. It draws on authentic inspirations, from
nautical styles to American vogue, and offers apparel for men, women and children as well as
home accessories.

The Ralph Lauren brand portfolio: Extending outside fashion

The above sub-brands allow Ralph Lauren to operate in many segments of the fashion apparel
market and capture value in ways that do not cannibalize the other brands in the portfolio.
Leveraging its strong brand equity in the fashion apparel market, Ralph Lauren has also
extended the brand to watches and fine jewellery, categories that are natural extensions of
fashion and luxury. However, it hasn’t stopped there. The brand has also extended into other
product categories such as:

Ralph Lauren Home: This home furnishing and accessories brand reflects the style and
craftsmanship aligned with Ralph Lauren’s brand image. It offers furniture, bed and bath
linens, china, crystal, silver, decorative accessories, gifts, lighting, fabric, wall and
floorcovering, and photography artwork.

Ralph Lauren Pet: Extending Ralph Lauren’s style into pet collectibles, this brand offers dog
vests, sweaters, hoodies, parkas, coats and leashes, all with the signature embroidered Pony
logo, for discerning pet owners.

Ralph Lauren Fragrance: The Ralph Lauren Corporation launched its first fragrances in 1978
– Lauren for women and Polo for men. Today, it has expanded into a variety of 10 fragrances
for men, 9 fragrances for women and 3 unisex fragrances.

Ralph Lauren Restaurants: To date, Ralph Lauren owns three restaurants and a café – the
RL Restaurant, Ralph’s, Ralph’s Coffee and The Polo Bar. The RL Restaurant was opened in
1999 just across from the world’s largest Polo store, the Chicago Flagship on Michigan
Avenue, and represents the setting of foot by Ralph Lauren into the restaurant industry. Just
like how its fashion brands are strongly inspired by Americana, the food is inspired by
American classics and modern city-club cuisine – think seafood, steaks, chops, sandwiches and
salads. First-time diners can also expect to be treated as a member in its unique club
atmosphere, reflecting the brand’s impeccable attention to service. In 2010, it opened Ralph’s
in Paris, offering all-American experience to lovers of American food in Paris. The menu even
offers beef from Ralph Lauren’s Double RL ranch in Colorado. In 2014, it opened its first
coffee shop on the second floor of the Polo Ralph Lauren flagship store in Manhattan. In 2015,
it opened The Polo Bar in the heart of New York, offering a more casual yet refined setting for
food and drink. Food is inspired by Ralph Lauren’s personal favourites, and waiters are decked
in custom Ralph Lauren grey flannel trousers, leather wingtips and silk repp ties. The RL
Restaurants are indeed a great way to present another channel for consumers to experience the
Ralph Lauren brand, rather than just its fashion and home products.

Through extending into multiple product categories, Ralph Lauren has been able to leverage
its brand equity to have a presence in these lucrative sectors. It is truly a success story of classic
brand management – appealing to a broad category of discerning, fashion conscious consumers
through holistic brand equity encompassing multiple categories combined with a high-quality
product experience.

Ralph Lauren’s future business challenges

Brand architecture management: Strong brands provide companies with a very powerful
tool to enter newer markets with limited investment, by leveraging their strong brand equity. It
provides companies with opportunities to create multiple revenue streams. Therefore it is not
a surprise that most strong brands have leveraged their equity and extended into newer product
categories, newer markets, and newer market segments. However this strategy has its own
pitfalls. One of them is the risk of dilution of brand equity by over-stretching the brand into too
many product and market segments.

Some examples of brand equity dilution due to overstretch are those of Calvin Klein and Pierre
Cardin. One of the many reasons that these brands diluted their equity was the use of the brand
name on a very wide range of products. By franchising their brand names to almost every
conceivable product category, the brands significantly diluted their equity. This was because
of a simple reason – a brand cannot have transferable equity in different product categories.
The further the category is from the brand’s home, the weaker would be the perceptions and
higher would be the negative impact on equity.

In the last 50 years, the Ralph Lauren brand has expanded to create a diverse portfolio of sub-
brands, of which 17 are fashion brands and 4 lifestyle brands. With such a burgeoning portfolio,
Ralph Lauren has to be more focused and careful about managing and maintaining the equity
of the master brand. It also becomes more complex to maintain a consistent brand personality
across all marketing and communication efforts, especially when the sub-brands do need to
talk to different consumer segments (who in turn have different and discerning needs). Over
the long term, the performance of acquired brands also needs to be analyzed in isolation and
also in relation to the wider portfolio.

In continuation of its strategy of expanding into categories that have synergies with high-end
fashion, Ralph Lauren may keep on exploring opportunities. With the master brand already
quite stretched, it would need to take these decisions more carefully. Whatever category the
expansion is into, and regardless of whether it is via an acquisition or through the launch of a
new sub-brand, Ralph Lauren would need to ensure that the spirit of the brand lives through in
a holistic manner. Additionally, the integration of new sub-brands or acquired brands into the
architecture of the portfolio will always remain challenging.

Store profitability and inventory management: Another challenge that Ralph Lauren faces
is store profitability and inventory management. This has had an effect on its bottom-line.
Revenue for Q2 FY2017 has dipped 8% compared to the same period in the previous year. As
such, new management has expressed that it has plans to close about 50 high end stores to
improve store profitability and reduce inventory as most of the inventory was subject to heavy
discounting.

Given that customer insights are the holy grail of modern business, the more companies know
about their customers, the better they can innovate and compete. One very good example of a
company that has successfully leveraged its customer research capabilities to improve
inventory management is Zara. One of the secrets of Zara’s success is that the brand trains and
empowers its store employees and managers to be particularly sensitive to customer needs and
wants, and how customers enact them on shop floors. This has allowed them to accurately
supply fashion that resonates with customers in almost perfect quantities, resulting in the
discounting of a very small proportion of its products, approximately half compared to its
competitors – a very impressive feat.

Similarly, Ralph Lauren needs to also do the same and consider how it is using its customer
intelligence capabilities to anticipate demand more accurately and respond with optimum levels
of supply.

Leadership and management structure: The founders’ dilemma is a classic phenomenon for
any company, which is originally built by a strong and charismatic founder and leader. As the
main competitive advantage for the company is the founder himself, life after the founder is a
hard topic for both the founder and company to discuss. Moreover, when a company’s success
and survival depends tremendously on the existence of a single person, it is vital for the
company to take proper action from an early stage so that proper leaders can be nurtured within
the organization. Ralph Lauren himself has a net worth of USD 5.3 billion as on February 2017,
compared with the corporation’s net worth at USD 7.4 billion.

With regard to corporate governance, as the brand continues into a new chapter, the search for
a new CEO has ended. Stefan Larsson was appointed CEO of the company in September 2015,
succeeding Ralph Lauren himself who is now the Chief Creative Officer. However, due to
differences in opinion over direction, Stefan Larsson departed from the company in May 2017.
Patrice Louvet was appointed as President and Chief Executive Office immediately after the
departure of Stefan Larsson.

The brand’s charter into its next 50 years will depend on the capability and experience of the
current CEO and his relationship with Ralph Lauren (who still wields considerable influence
over the operations of the organisation and its long-term strategy). Apart from this, David
Lauren, the founder’s second son, stepped up in 2016 as Chief Innovation Officer and Vice
Chairman of the Board. David Lauren joined Ralph Lauren Corporation in 2000 as Chief
Creative & Marketing Officer and has been credited for several of the brand’s digital
campaigns and online innovations, including Ralph Lauren Magazine, Ralph Lauren TV and
ralphlauren.com, one of the first e-commerce websites within the luxury space. It seems like
leadership has indeed put in place a solid leadership transition plan to ensure the brand and
company’s business continuity.

In a bid to make Ralph Lauren a leaner company, the company has recently eliminated layers
of management through restructuring. For instance, the office of the chairman has been
eliminated and the duties have been absorbed. It is expected that this will help improve
efficiency within the organization, hence leading to greater profitability.

Ralph Lauren future brand challenges: Appealing to a new generation of global

consumers

Another growing challenge that Ralph Lauren may face is to be able to appeal to a new
generation of consumers. To sustain the brand appeal to consumers who are now more digital
savvy and have higher expectations in the 21st century, there are a few important issues that
Ralph Lauren needs to tackle in the next 3-5 years.

Product appeal: In the luxury fashion industry, high quality design and its consequent appeal
are the primary influencers over consumers’ purchase decision. Ralph Lauren needs to stay
close to its customers’ evolving needs and tastes around fashion and also ensure that its product
lines and stores address these needs. The need for product line optimization has already been
recognised. As part of the most recent restructuring exercise, a decision has been taken to
reduce the number of lines the brand produces. The focus will shift back to Ralph Lauren’s
core product lineup, which includes Polo shirts, blazers, military jackets, and motorcycle
jackets.

Ralph Lauren has plans to venture into the accessories space, which includes handbags and
small leather goods to leverage its brand equity and also hedge the brand against the strong
headwinds running through the global fashion industry. A great example of a luxury fashion
brand that has leveraged its strong brand equity and ventured into multiple product categories
is Giorgio Armani. By leveraging its expert knowledge of the fashion and luxury industry,
Armani has been able to come up with winning concepts in other product lines that include
cosmetics, watches, jewellery and eye wear. Instead of blindly experimenting with product
categories, Ralph Lauren should conduct an expertise and capability check, which will help it
identify the categories where it can extend the brand (and showcase expertise and deliver using
existing operational capabilities).

Innovation: As Peter Drucker said, innovation and marketing are the only two functions of
any organization. Irrespective of how committed employees are or how competent top
management is, unless the company connects with the customer, success will always be
elusive. Top management needs to constantly evaluate their strategic decisions in the context
of customer feedback and how the customers can help the company in co-creating value.
Innovation is therefore a key factor that will strongly influence the future of the Ralph Lauren
brand. David Lauren seems to be doing the right things, with the brand witnessing some
groundbreaking innovations under his leadership, in the areas of product development,
customer experience and stakeholder engagement.

On the product front, Ralph Lauren has introduced the Ricky Bag with Light, which features a
discreet rechargeable battery that powers an internal LED light in the bag to help locate
personal items. A USB port in the bag also helps to charge mobile devices. Under David
Lauren’s leadership, it has also launched the PoloTech shirt.

In terms of customer experience, Ralph Lauren has launched interactive fitting rooms with full-
sized touchscreen mirrors at the Polo Flagship store in New York, creating a seamless digital
in-store experience and enhancing the overall customer experience. Customers can now adjust
the lighting and language, and select clothes, colour options and sizes just by tapping on the
mirror. They can also view suggested pieces, ask for a sales associate, or pay on the spot.

On the stakeholder engagement front, Ralph Lauren has launched RL Insiders, a mobile
application that allows a select group of people to become the company’s trusted advisors,
contributing to the development of Ralph Lauren’s products, marketing ideas, services and the
brand. David Lauren has also been credited for the innovative launch of “The RL Gang”.

Moving forward, Ralph Lauren needs to also recognize that each innovation has as relatively
short lifespan. Once other competitors adopt an innovation strategy, it is no longer considered
“innovative”. Therefore, Ralph Lauren needs to constantly invest heavily in R&D, innovation
and technology as an integrated part of the business strategy, to meet and exceed customer
expectations.

Mobile commerce: Being the first luxury brand to set foot into e-commerce, it seems strange
that the brand has not offered a mobile shopping platform yet. Currently, it operates two e-
commerce sites in the US and eight sites internationally. Different forms of market analysis
strongly point towards a scenario wherein spends on mobile commerce will overtake desktop
based ecommerce in the next 3 years. On an average, most brands get about 15-20% of their
website traffic via mobile devices and this is growing rapidly. With the deluge of investments
that fashion companies have planned in the mobile commerce space, Ralph Lauren needs to
quickly make mobile shopping not only an effortless experience but also a delightful one.

A sustainable approach to business: In recent years, sustainability in business has become a

hot topic. Although social and environmental efforts may not be a key factor for consumers to
choose a particular brand, not having societal considerations while doing business could be a
reason for consumers to avoid the brand. Ralph Lauren understands this, evident from its
numerous corporate social responsibility efforts. The Pink Pony sub-brand was a global
campaign to show support for breast cancer victims. The opening of a Ralph Lauren Centre for
Breast Cancer Research at the Royal Marsden is another contribution towards the battle against
cancer. In terms of environmental efforts, Polo Factory Stores in the US sell green pony tote
bags with 100% of profits from the sale donated to the global clean water non-profit
Waterkeeper Alliance. In order to be at the leading edge of its industry, it is essential that Ralph
Lauren continues its corporate social responsibility work.

Reacting to consumer sentiment and trends: With the internet and social media, consumers
have never had greater power in influencing brands than before. Today, consumer sentiment
plays a greater role in advertising and brand communication than ever before. Consumers are
able to and are forthcoming in expressing their views on issues in the fashion industry,
including body image and feminism. It is common for brands in the fashion industry to use
slim models and retouch fashion images which often leads to unrealistic depictions of the
female body. This has sparked a global outcry, with consumers questioning the impact these
images have on impressionable youth, causing them to experience issues with body image and
self-esteem. Brands who engage in such unethical practices are punished with consumer
boycott and law enforcers.

As Warren Buffett’s famous quote goes: “It takes 20 years to build a reputation and five
minutes to ruin it”. Being in this industry, Ralph Lauren needs to be careful with its brand
communication and advertising practices, and be aware of what their customers like or do not
like.

Conclusion: Ralph Lauren as the symbol of the American lifestyle

The Ralph Lauren brand was set up from the start to be all about the American lifestyle. From
the designs of its apparels and accessories, to the dining experience offered in its restaurants,
the Ralph Lauren brand stands as a symbol of America – an amazing feat for a brand that has
only been around for 50 years.

One of the secrets behind Ralph Lauren’s success is its ability to offer a consistent brand
experience all over the world – from products to stores and even to post-purchase. By delighting
customers in a consistent manner across all touch points in every Ralph Lauren store they step
into, the brand has created an environment in which it continually exceeds its customers’
expectations.

Building and sustaining a personality that is relevant and one that resonates with the customer
base is one of the most difficult aspects of building a strong brand. Ralph Lauren, with its
presence in diverse markets, a very wide brand portfolio, and interactions with diverse set of
customers, manages to hold up well to this challenge of building a relevant and resonant brand
personality.

The future looks steady but not smooth sailing. Although the brand equity is strong, customer
attitudes towards fashion (and especially apparel) have changed significantly. The definition
of luxury has changed. The high-end fashion industry is going through a turbulent phase, which
is characterized by cyclical demand and supply patterns, rapidly shifting consumer attitudes
towards luxury and the gradual loss of “exclusivity” as a positioning platform. Ralph Lauren
will not be immune to these structural changes.

Ralph Lauren himself has been an iconic leader and flag bearer of the brand right from its
inception. Not brash, but as the founder he has strong opinions and viewpoints about the
brand’s strategy and future growth path. This has led to frictions with his top management,
which is exemplified in the departure of the last CEO. Although it is important to have a strong
influence as a founder on the brand’s positioning, crafting and building an effective senior
management team is also critical to ensure longevity of a brand of such status. The appointment
of the company’s first CMO in early 2017 is a positive step in this direction, but stability and
cohesiveness in the C-suite will be watch-out areas over the next few years.

Succession planning is not something that seems to be top of the agenda for Ralph Lauren. In
the way he has run the company from the time he founded it, outsiders have grown through the
ranks of the company to eventually take up senior leadership positions. Out of his three sons,
one holds a senior position in the company, while the other two work in different industries
(with one an aspiring entrepreneur through Dylan’s Candy Shop). To ensure a smooth
succession planning, there is a need for the Ralph Lauren business to assimilate family
members deeper. At one point a critical choice needs to be made about who would be at the
helm of the company – a Lauren family member or an outsider. Both options could work, but
then it depends on whether Ralph Lauren himself, fiercely proud of his name from the time the
first tie he made, is willing to let go of his child (the brand) to be nurtured by someone from
the outside.

Brands that successfully withstand seismic storms stay true to their core. Although Ralph
Lauren’s innovation pipeline has produced some strong products, it needs to continuously
invest in its core product portfolio, so that it stays relevant and appealing in current times. If
Ralph Lauren can maintain its credentials of being able to balance classics with new trends, it
will have a future full of opportunities to look towards. If the core gets diluted, then it will find
it difficult to withstand the competitive pressures and changing category dynamics.