Does the Red Carpet Really Help Sales of Designer Clothes?

 

Red carpet fashion is an indispensable part of awards show season. Networks devote hours of coverage to celebrity style, often extending the pre-show posturing for more hours than the ceremony itself.

Stars want to appear on best-dressed lists and avoid nasty backlash from critics. In the 2000s and beyond, celebrities have aimed for flattering style instead of outlandish outfits designed to invoke a visceral response.

From Shock Value to Elegance

This wasn't always the case. In 2005, The New York Sun lamented the sameness of awards show dresses, as actors aimed for grace instead of shock value. For comparison, style-watchers need only review some of Cher's most notorious midriff-baring costumes to remember what the red carpet once looked like before stylists worked behind-the-scenes with fashion brands.

The shift came in 2000, at the Golden Globes, when nominee Halle Berry wore a stunning Valentino gown. It elevated her image to that of a serious artist and did not hurt the Valentino brand, either. According to one Valentino associate, the iconic designer longed for Old Hollywood glamour at what, up until that point, had been a very casual awards show event.

Here was born an extraordinary marketing opportunity: fashion brands whose self-promotion had been largely limited to print magazines, runway shows and occasional television advertising could promote their clothes by partnering with a notable celebrity. This benefits both parties: stars who break with their on-screen image and fashion houses who get priceless publicity.

Analyzing the Inconsistent Sales Numbers

But does award show and premiere exposure translate into an increase in sales? There is inconsistent evidence that fashion brands receive a substantial return on investment. Lesser-known designers may get a temporary spike in interest, while established brands may flatline or, in rare cases, see a sustained increase in revenue. Some brands may do well regardless of how often, or how many, stars they dressed for the red carpet.Jennifer Lawrence Oscar Lunch Pantsuit 2016

Last year, Racked analyzed the designers worn by female attendees at five major award shows -- Oscars, Grammys, SAG Awards, People's Choice and Golden Globes -- over three seasons from 2013 to 2015. Comparing the frequency of a designer's presence -- multiple stars wore Armani, Valentino and Versace, for example -- to publicly available revenue numbers, Racked found little correlation between the red carpet and the sales.

Specifically, Armani, the most-worn designer, had a glut of celebrities wearing pieces from its collection: 21 over the three-year span. But the brand's revenue grew 16 percent in 2014 and only 5.7 percent in 2015. In comparison, Valentino, worn by 18 celebrities over the three years, attracted customers regardless of star endorsement. Valentino dressed 11 stars in 2013, five in 2014 and two in 2015. The brand's revenues doubled in 2013, but continued to increase the following two years, up 36 percent in 2015 alone.

Meanwhile, Donna Karan and Gucci were among the brands represented on the red carpet, but Gucci nonetheless experienced financial problems and Donna Karan was shut down in order to devote revenues to the more lucrative DKNY.

Then there are smaller designers, who may expect to be the fanciful winners of the red carpet with the right star endorsement. Beyonce gave this boost to Osman Yousefzada and Michael Costello, but they did not become breakout successes. Smaller design houses may also have limited distribution channels, making it tough for consumers to find pieces even if the red carpet inspired a potential purchase.

Adding Up the Costs of Promotion

Dressing stars for the red carpet isn't cheap, and an A-list celebrity may opt to go for a different design house at the last minute, meaning representation on show night isn't guaranteed. The $50,000 to $100,000 cost to style a celebrity holds up to other forms of publicity, however, that may run from $10,000 to $25,000 for a print magazine ad or minimum $100,000 for a television commercial. 

This cost doesn't necessarily include the fee some actors receive to wear the gowns, which E! Online reported ranged from $20,000 for Oscar attendees to $100,000 for presenters and up to $500,000 for nominees. Celebrity stylists and their agencies may also receive a substantial fee, as well as travel expenses. 

Accessories Are Where It's At

For couture brands who want to attach their name to a tony fantasy, there is perhaps no better entry point than dressing a celebrity for the red carpet. But if direct sales are the objective, the strategy may be best left to shoe and jewelry designers, whose red carpet initiatives drive sales growth.

Bloomberg reported in 2014 that award shows were a lucrative venue for shoe designers who, such as Weitzman's Nudist sandal, which was worn by Jennifer Lawrence, saw sales quadruple after the publicity. Snaps of shoes are shareable on social media and, crucially, much more affordable than couture gowns.

Although some stars have lucrative contracts to wear jewelry at specific events -- Anne Hathaway reportedly received $750,000 to wear Tiffany & Co. during her 2011 Oscars hosting gig -- companies are not necessarily looking for a corresponding increase in sales. Anna Haber of Gemfields told Business of Fashion that their 2013 partnership with Mila Kunis was about increasing awareness of the category of colored gemstones at the consumer level as well as informing jewelers about the brand.

Given the saturation of social media with celebrity style, it seems unlikely that red carpet partnerships will disappear any time soon. With declining consumer audiences in traditional advertising, such as print magazines and television, fashion houses may in fact increase celebrity relationships in order to drive awareness. This may be true during the few weeks of award show season and year-round as celebrities promote their own personal brands

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