3 Analysis and Evaluation

3.1 SWOT analysis

Strengths Weaknesses
Brand and history Past strategies
Quality of products and services New materiel choices
Multiple distribution channels Online Presence
Positioning Low margins
Lower innovation rate

Opportunities Threats
Non-evolving current competition The new Premium competition
New buying behavior New buying behavior
New markets Difficulties to attract new customers

3.1.1 Strengths

Brand and history

Lancel is a strong and well-established brand in luxury leather goods. They have a lot of
customers that are regulars who own several bags from the brand and frequently come back. As a deep-
rooted marque in the French luxury landscape, Lancel pass in priority in front of other brands to get
corners in multi-brands shops such as the Galeries Lafayette, Printemps or Harrods. Lancel is a well-
appreciated brand by French, Russian and Eastern Asian customers. Historically Lancel is a brand that
created a lot of bag designs and carrying techniques (over 100 patents)8 they have a certain authority in
the industry. Many leather goods industry companies inspired themselves from the Lancel’s creations
(Cartier, Prada, Chloe and others).

Quality of products and services

All the Lancel’s products are of great quality and are easily recognized by the public. The made in
France and made in Italy of the products is a good guarantee in the mind of customers. Also, the services

8 Book « Lancel – Maison parisienne depuis 1876 » (in French)

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proposed by Lancel in their shops, customer services, after sales or advice are set to be outstanding by
the direction. Lancel invests a lot of money in customer services. Moreover, in the mind of the new
direction keeping the quality high is more than crucial. Because even if they want to replace the
company as a premium brand, they want to keep the quality and services standards of luxury brands.

Multiple sales channels

Lancel sells through different distribution channels and touches a huge number of customers
from different markets. The retail department is the strong branch of the company now. They are
present in more than 60 locations in France alone. They represent more than half of the benefits of the
brand. The Galeries Lafayette and Printemps are working with Lancel placing the corners of the brand in
some of their best spots. Also, the wholesale part of the firm is very strong and continually growing.
Finally, the business other distribution channel is the e-commerce on the Lancel’s website and on their
partner’s webpage.

Positioning

Nowadays the positioning of the brand, even though quite ambiguous, is a strong point for
Lancel. They are in between luxury and premium even if the new strategy is now shifting toward the
premium.

3.1.2 Weaknesses

Past strategies

The past strategies of the brand brought Lancel from a top-earning brand to almost bankrupt. In
the 1990’s Lancel was one of the most selling brands in the leather goods industry. In 1997 the company
got purchased by the Richemont Group who decided to organize a reorientation of the brand strategy. It
was a bad decision that still affects the brand nowadays who, since then, had to close over 100 stores
and lost a big part of its market.

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New materials choice

Another weakness is the choice of material that was changed in order to cut the cost. Lancel had
until a few months ago some of the same suppliers as brands like Chanel! But with the new strategy, the
production costs became too high. Therefore, it was decided to change suppliers and go for less
expensive ones. However, it backlashed with clients complaining about the quality and the price/quality
ratio. It becomes problematic as the regular clients are moving away from the brand.

Online Presence

The social media presence of Lancel is weak consequently they encounter difficulties reaching to
new customers especially the youngest ones. The customers of Lancel are the ones who already know
the brand, many are going to other brands because they do not receive extra or fresh information from
the brand. Therefore, they have difficulties attracting new clients. Something needs to be changed
especially that the new strategy is really aiming for younger people. An age range that is constantly
using social media will not be reached using traditional advertisement.

Low margins

Even though the costs are cut the margins are quite low as the prices were incessantly
decreased in order to attract a higher number of customers. Moreover, many products are sold through
partners who are getting really high commissions.

Lower innovation rate

Lancel used to be an extremely innovative brand setting the trend of the industry around the
world truly representing the French savoir-faire. Nevertheless, nowadays the brand is more following
the trend just going for products that prove themselves on the market.

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 3.1.3 Opportunities

Non-evolving current competition

The current competition of Lancel is composed of older brands that have failed, for most of
them, to adapt to the new customers and to the digital era. They are well-established brands, so they
still function but only thanks to their fame. However, their sales are quickly declining, and
restructuration is happening. Moreover, a great number of companies that are the future competition
of Lancel are also going downhill. So Lancel has the opportunity to arrive on the premium market for the
luxury one offer different products on that market.

New buying behavior

Even if Lancel is currently quite absent on an online point of view they are rapidly evolving
especially the e-commerce department. Which is interesting because more and more people all around
the globe are buying online or at least consulting the website before going to the shop or going to the
boutique after finding it online. Consequently, having a rapidly developing online department is
primordial.

New markets

There are new markets and new categories appearing in the luxury and premium goods
universe. Especially on the leather goods industry, with the current social trends people are looking for
the alternative to leathery products. Products in textile or bark are being developed. Besides, it is not
only about the materials used it is as well about the type of products. Different kinds of products can be
developed by a brand like Lancel. The demand is already present. Accessories like gloves, hat, or
watches can be developed as Lancel used to do in the past. Or even products for the pet, in the early
2000’s one of Lancel best seller was a dog bag.

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 3.1.4 Threats

The new premium competition

By deciding to shift from the luxury to the premium market, Lancel is entering a universe they
are not familiar with and that was never linked to the brand. It is a new step that could make regular
customers move away from the brand. The new opponents in this market shares are well known by the
premium clients. Therefore, these brands are a threat for Lancel. Brands as Coach, and Michael Kors are
now on same level as Lancel, they have tendency to monopolize all the advertising space so it might be
hard for a newcomer to exist.

New buying behavior

As it is an opportunity, it is also a threat, the customers’ new buying behavior can become a
nightmare for Lancel if they do not continue in developing their e-commerce and social medias. The
Customer Relationship Management department (CRM) needs to improve if they do not want to miss
out.

Difficulty to attract new customers

Lancel has become less innovative during the last decade, and the younger generations are
increasingly attracted by innovative products. Moreover, uniqueness and unlikeliness of products have a
predisposition on appealing to younger customers. People are less and less interested by the
mainstream as everyone wants to be distinctive from the crowd.

3.1.5 Conclusions

Lancel is well anchored in the French luxury landscape and is known for the quality of its
products. But by going to the premium market, they expose themselves to companies that can produce
much larger number of bags and at cheaper costs. And even if they will sell at a lower price people will
still expect very high-quality products as it is Lancel branded. The online presence of the brand and the

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choice of the new material can be compensated by an evolution of the brand on the social media and
the quality of the products by their new competitors.

The conclusion of this SWOT analysis would be that Lancel finds itself at an intersection in their
path to a successful future. There are several roads to their aim, however, the other ways are leading
towards a certain failure. The brand is getting stronger on the last couple of years, but they are not
protected from breaking down as it happened in the past to them or to many other brands. The most
difficult part now is to make sure that they seize the opportunities that are there, especially the buying
behavior of their new target group and their new competitors. Nevertheless, they should make sure that
they do not go too fast and just for this additional new target group because their current customer
could feel left aside and go for another brand. Consequently, Lancel should be careful about how they
reach to their new clients as well as how they will evolve on social media.

Ninon de Lancel – Medium, color black

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