Ralph Lauren: Selling a Dream at Every Price

Opens in new window

Plenty of brands talk about world building, but few are as committed to the concept as Ralph Lauren, which recently recreated its Polo Bar restaurant at a Hamptons estate to wine and dine guests attending its latest fashion show.

It was one of the showier bits of “Ralph’s world,” the all-encompassing concept that has served as the linchpin of a strategy to elevate the brand’s image, allowing it to expand into high-margin categories such as outerwear and handbags while still selling plenty of polo shirts. The goal is to make sure that, however customers come into Ralph’s world, they feel like they’re getting good value for their investment.

Consumers appear to be on board: Ralph Lauren’s stores are busy, even as the average price of the goods sold in them has risen over 70 percent since 2018. So are investors — the company’s stock hit an all-time high in October 2024.

But the elevation project now faces its greatest test yet, as shoppers around the world demonstrate fatigue with spiralling prices and China’s sluggish economy clouds the outlook for a once-promising market. As it navigates the turbulence, Ralph Lauren is doubling down on its storytelling and leaning into the core products that have given the brand its longevity.

BoF: So many brands have been raising prices and elevating their image. There’s a sense in the market that there’s perhaps a bit of fatigue with that among consumers. I’m curious if that’s been your experience.

Patrice Louvet: We’ve been on a multi-year journey regarding our brand elevation. Brand elevation means elevate the storytelling, elevate the product, elevate the shopping experience. The outcome is the ability to price.

We often get compared to a lot of the other companies in that we’re [raising like-for-like prices]. I don’t view us as taking pricing. I view us as driving elevation, making sure that the consumer value is there. Because for the pricing to stick, you need the consumer to feel like this is a good investment.

I think every consumer cares about value. Whether you’re a billionaire or whether you’re scraping by on $12 an hour, every consumer cares about value and making sure they’re putting money into something that reflects what they care about.

BoF: When you talk about the value proposition, what does that look like for your top customers and for the customers who are more aspirational?

PL: First, everyone is buying into a piece of the Ralph Lauren world. Whether you want to be a banker on Wall Street, whether you want to be a horseback rider in the Hamptons, whether you want to be a cowboy in Colorado, we create these movie sets. The products are the props. The consumers [are] the actors. That’s true whether you’re a VIC who spends $1 million with us in one pop to refurnish your entire house or whether you’re going to one of our outlets and you’re looking for a polo shirt.

Then we leverage the breadth of the portfolio that we have. What’s pretty special is we sell $100,000 watches and you can have a pack of T-shirts. This range of product enables us to connect with all types of consumers. We’ll appeal to the uber-rich and we’ll appeal to people who will buy a piece of the dream, but they may not buy the $100,000 watch.

BoF: I think people intuitively understand how the $100,000 watch connects to [Ralph’s] world. Tell me how that looks for the pack of T-shirts or the polo shirt.

PL: As a consumer, I’m connecting with three things. I’m connecting with the storytelling. That touches everybody now. We have dramatically increased our marketing investment. It’s now about 7 percent of total company revenue. It was 3.3 percent a few years back [in fiscal 2017]. We’re using broad storytelling, like the timeless campaign we just did [titled “Ralph’s New York”], and then we have more targeted marketing activities that go after different consumer groups.

The second is all the work that we do on the product and celebrating the product and making sure it’s superior quality, making sure it’s got timeless style, making sure it’s something that you can wear in five years, or you can wear in 10 years.

Then the third area is the shopping experience. Often, people focus exclusively on stores. For us, the elevation applies to every single touchpoint the consumer has with our brand. So, whether that’s our website, whether that’s our outlets, whether that’s the work we do with our wholesale partners, to make sure that they’re getting this unique experience.

I think the combination of the three is what enables us to appeal to someone who just wants a polo shirt or someone who wants to refurnish their entire house.

This range of product enables us to connect with all types of consumers. We’ll appeal to the uber-rich and we’ll appeal to people who will buy a piece of the dream.

BoF: Let’s talk about the last show, the one in the Hamptons. How were you using that to reach your VICs, and then, also, for that larger world building?

PL: We actually don’t do fashion shows. Yes, we have models on the runway [but] we do brand-cultural moments, and we invite you into a movie. The movie in [September] was set in the Hamptons.

The shows I like the most are the ones that showcase the entire portfolio. So you have our luxury business collection, Purple Label, Polo, men’s, women’s and children’s. Then, the way we activate the show is again through every single touchpoint. If you’re a VIC, we’ll give you the option to come and join us at the show. We might have in our stores a viewing of the show. We will leverage it on our social media platforms pretty actively.

The idea is to have a surround-sound marketing programme and to appeal to a broad group of both our current consumers and future consumers. What we’re finding with these cultural moments is they appeal very broadly and they’re an incredible way to recruit new consumers, which is the lifeblood of this company.

BoF: How have stores evolved over the course of this elevation project compared to say, five or six years ago?

PL: First, you will now have the ability to walk into many more stores. That’s been an important part of our elevation as we put more emphasis on direct-to-consumer.

There’s been a lot of innovation in terms of the types of stores based on the city that we’re in. We focus on [our] top-30 cities. Earlier this week, we opened a new store in Shenzhen. It’s a really modern take on the Ralph Lauren experience, which fits nicely in Shenzhen. I don’t know that we could do that on Madison Avenue.

We haven’t renovated our flagships for many, many years. We believe in vintage, but there’s a point where consumer experience shouldn’t necessarily be vintage, so we just renovated our Chicago store. We added the coffee shop. Coffee has just been an incredible success, well beyond our wildest dreams. We’re leveraging hospitality.

We are putting more emphasis on clienteling. In London, we just renovated an entire floor in our new Bond Street store, which now looks and feels like a Ralph Lauren apartment. That’s where our VICs can come. They can spend the day there with their families.

We’re weaving technology in. You will have seen these endless-aisle screens where you can have access in our store to now the entire range. We want people to be able to tap into our full lifestyle. We don’t just sell denim. We don’t just sell handbags. You want to buy a sofa? We have a sofa. You want to buy a polo shirt? We have that too.

BoF: China’s been a bit of a troubled market, especially for higher-end Western brands. Ralph Lauren has been more optimistic. What are you seeing there that others aren’t?

PL: China is a big opportunity for us short, mid, and long term, and we’ve got very good momentum there. We have a very focused strategy on the top-six cities, which I think is a differentiator versus some of the other players. Arguably, we are underdeveloped relative to other luxury brands, because China is about 8 percent of our [sales]. It used to be about 3 percent before Covid, so we’re growing nicely, but others are 20 percent, 30 percent, 40 percent of their business, which also indicates the size of the opportunity for us.

On the product side, our most elevated products are what we’re selling actually in China. We were talking value earlier. The consumer’s clearly seeing the value in those more elevated products, so think beautiful linen suits, think wonderful cashmere turtlenecks. We’re going to continue to lean into that.

This is a time where consumers, given the uncertainty and the anxiety — and there’s a lot of that in China — are leaning into brands they know, products they trust, product categories they’re familiar with. So many of our items are classics and what we call ‘core.’ Like 70 percent of our business is core, which you can get season on season, as opposed to fashion, where everything really changes from season to season. We’re known for these icons [like the] cable knit sweater, polo shirt, Oxford shirt, tweed jacket, leather outerwear, and that’s really resonating nicely with the consumer right now.

BoF: Is that [70 percent core, 30 percent fashion] a stable ratio?

PL: We’ve actually made a significant change to lean much more into core. Some of our businesses used to be 20 percent core, 80 percent fashion. We’ve concluded that that’s not our game. Our game is iconic products that consumers recognise, love [and] trust, year on year, generation on generation. We’ve leaned much more into that, including in the women’s business, which is historically known to be much more fashion-driven.

Rather than look to change everything every season, there’s so much to build on. There’s so much of our core that consumers trust, that a number of consumers actually don’t know yet.

BoF: Category expansion is a big tentpole of this strategy. How are you evaluating which categories to invest in next?

PL: Because Ralph Lauren’s such a broad lifestyle brand, it’s actually challenging because there are so many things we could actually do. The filter we look at is how does it fit with the overall brand equity, the categories, and then it’s size of prize, difficulty of the dive. We’re close to a $7 billion company, on our way to 10, so we’re looking for big building blocks.

Then, what are the capabilities or expertise required to be able to be credible because our mindset is if we’re going to play in an area, it’s not to participate; it’s to win. We’re not interested in being number 55 in a category. We want to be in a leadership position. That’s been Ralph’s philosophy from the get-go.

If you double-click on that, where you land is what we’re driving now, which is women’s apparel, outerwear, handbags. I think those are pretty evergreen given the size of the businesses. Right? If you ask me, ‘’

‘When do you think you’ve fully tapped into the potential of these three categories? Two years? Three years?’ I’d tell you it’s probably 10 plus. There are so many other things that come into this office in terms of, ‘Could we do this? Could we do that?’ and the answer is, ‘Yes, later.’

BoF: Any final thoughts you wanted to add here?

PL: I think there’s a lot of negativity right now around the luxury space. Yes, some big [brands] are struggling, but there are companies winning, and if you look at what’s driving that, it’s the strength of the brand and the relevancy of the brand. It’s the focus on core, recognisable, authentic, timeless products, and then it’s a real attention to the shopping experience and really walking in the consumer’s shoes in terms of what they’re looking for. I’m optimistic about where this business is and where it can go. It’s going to have ebbs and flows, but I think the negativism is probably overblown.

This interview has been edited and condensed.

This article first appeared in The State of Fashion 2025, an in-depth report on the global fashion industry, co-published by BoF and McKinsey & Company.