The Paris Olympics has attracted luxury brands such as Louis Vuitton, Dior and Armani, hoping to capitalize on the city’s cultural importance and the return of large crowds. The move comes at a time when economic troubles have put pressure on the luxury market.
Paris is bringing an air of luxury to the Olympics.
From the custom Louis Vuitton cases that will house the Olympic medals and torches to the Armani outfits worn by the Italian team, luxury and beauty brands will be plentiful at the Paris Games. Italy’s glamorous backdrop has attracted sponsors, including beauty and luxury fashion companies, making this the most extravagantly-endowed Olympic Games ever.
LVMH is one of the Paris Olympics’ biggest brand partners, with the conglomerate spending about $160 million, Bloomberg reported. Brands like Dior, Louis Vuitton, Armani and Prada are spending big money to sponsor athletes and teams, along with more affordable luxury brands like Skims, Glossier and Lululemon. They’re hoping to use the brand value of the Olympics, growing interest in women’s sports and the city of Paris to appeal to crowds over the weeks-long event.
“Paris is a city with great cultural importance,” Harry Poole, vice president of marketing solutions at Excel Sports Management, told Business Insider. “In that respect, there’s no question that this market makes a lot of sense.”
The Paris Games are back in full swing, with spectators returning for the first time since the pandemic began. This has helped attract advertisers from around the world looking to reach a wider audience. According to a Sponsors United study, 64% of sponsors at the Paris Games were not local, compared to just 14% at the Tokyo Games.
“The attendance will be much larger than the previous few games, so it’s a fantastic opportunity for any brand to gain global exposure and be noticed on a global stage,” Ellie Thorpe, director of Kantar Brand Z, told BI.
In a fragmented media environment, where people are more likely to receive personalized advertising on social media than commercials on the nightly news, the Olympics offer a rare opportunity to appeal to a large, diverse and guaranteed audience all at once.
“A lot of people around the world will be watching the Olympics,” Fleur Roberts, global head of luxury at Euromonitor International, told the business magazine. Her group estimates at least a billion people will watch. “The spotlight is on the athletes, so naturally people are going to be looking at what they’re wearing.”
Focus on women’s sports
The lack of opportunities for mass endorsement, combined with growing interest in women’s sports, creates a golden opportunity for fashion and beauty brands.
For the first time in history, the Olympics will have equal numbers of male and female athletes, and Deloitte predicts that global annual revenue from elite women’s sports will surpass $1 billion this year, a new record.
“Attendance, viewership and fan engagement are on the rise, and sponsoring female athletes and teams is seen as an easy route into the market for brands,” Marguerite Le Rolland, head of apparel and footwear at Euromonitor International, wrote in a recent report.
Among beauty brands, P&G’s Olay is partnering with the event for the first time, sponsoring Team USA and using several female athletes to promote a new product that will be the team’s “official face wash.”
“This is a testament to women’s sport being recognised on the world stage,” Octagon’s Poole said of the new Olympic sponsored beauty brand.
Glossier is also the first beauty brand to sponsor the 2024 US Women’s National Basketball Team, a partnership that speaks to the evolution of women’s sports and the representation of female athletes on the global stage, while Dior has assembled 15 international female athletes to form its own “Dream Team.”
“There’s a shift in women’s sports toward showing the full humanity,” Nancy Atufunwa, senior vice president of marketing and client services at sports agency Octagon, told the business magazine. “They might be into beauty, they might be into fashion. It’s a big part of how they express themselves.”
International fashion brands are also involved in the Olympics: Haitian-Italian designer Stella Jean is dressing this year’s team for Haiti, while Actively Black, a small black-owned fashion brand, is dressing the Nigerian team.
“From a fashion and beauty perspective in general, we will see these brands continue to invest in the sector,” Atufunwa said. “Luxury is definitely a big time for Paris and for France.”
Resisting the Wave of Luxury
The Olympics come at a precarious time for the luxury goods industry, which is under pressure from inflation and slowing sales growth in the wake of the pandemic. Industry bellwether LVMH saw its shares fall after second-quarter profits fell short of expectations amid sluggish sales.
“But our analysis shows that people are willing to spend money on brands they perceive as valuable,” Thorpe said. “Brands that connect with consumers and build strong consumer relationships will have an edge in consumer choice.”
The Olympics are also a great opportunity to prove that luxury goods are “worth it” after the recent backlash against soaring prices.
Earlier this month, LVMH-owned Dior faced a backlash after it was found to have produced a bag that retailed for $2,780 for $57. Both Armani and Dior have been embroiled in accusations of hiring contractors with unfair labor practices.
In a profile of LVMH Chairman Bernard Arnault published last month, Bloomberg reported that one of the reasons the company is sponsoring this year’s Olympics is to generate positive public opinion and avoid a blow to the luxury goods industry.
“When you think of the Olympic values, there’s the pursuit of excellence, discipline and expertise and those are really positive and aspirational attributes that align with a lot of our brands,” Thorpe said.
