Why is Apple hiring luxury fashion execs? It wants to be a lifestyle brand

Apple’s hire of Angela Ahrendts, CEO of British fashion label Burberry, has both tech and fashion audiences talking. Ahrendts, who’s set to leave Burberry in mid-2014 to take over Apple’s retail and online stores, led the company’s turnaround from a staid, old-fashioned trench coat brand to a respected global luxury brand known for digital innovation.

Ahrendts is the second luxury-industry chief to join Apple (s AAPL) this year. Previously, Paul Deneve left his gig as CEO of Yves Saint Laurent to become Apple’s VP of special projects. He’s reportedly working on wearable devices like the rumored iWatch. Both of Apple’s hires represent a wake-up call to technologists who underestimate the importance of experience in fashion retail and branding to create an iconic brand (Note: Hear more about this at Gigaom’s Roadmap conference).

The high-end lifestyle market has always been a fascinating space. In fact, fashion brand marketing has been one of the most profitable industries. So, in order to understand what makes Apple’s hiring news so remarkable, we need to understand the distinction between consumer technology and high-end fashion markets.

In the last decade, Apple has been positioned itself as a consumer technology company. Ahrendts’ predecessor at Apple,  John Browett, came from Dixons, a British electronic goods chain similar to Best Buy. Before Browett was Ron Johnson, a former Target exec who led the roll-out of Apple’s original retail stores and its now famous Genius Bar concept. Johnson and Browett both had backgrounds that were more mass-market than high fashion.

Ahrendts’s background is different. She’s been CEO of Burberry since 2006, and before that held leadership positions at Liz Claiborne, Henri Bendel and Donna Karan International. While Browett and Johnson had consumer sensibilities, Ahrendts understands the importance of values and cultures at the core of a brand.

Consumer technology brands are less about “soul searching” than fashion is. Tech brands try to differentiate themselves from competitors through price (accessibility), brand recognition and new technological features. High-end fashion products, on the other hand, differentiate themselves from competitors based on price (exclusivity), brand identity and design. Fashion operates as a form of class differentiation in a relatively open and egalitarian society.

Due to its incessant change, fashion deliberately creates differences between one social class and another. Elites initiate a fashion trend and, once the crowd imitates it, they abandon it for something new. In other words, fashion is a way for consumers to signal their membership in a specific social community. This membership, or sense of belonging, is constantly under scrutiny because fashion is a dynamic system that changes according to what’s in style today, rather than changing due to advances in technology.

Under Ahrendts, Burberry was able to relaunch itself as a culturally symbolic brand. An underlying consequence of the Burberry brand being a cultural symbol is its ability to be perceived as a source of differentiation, in which belonging is continuously renegotiated, season after season. Under Ahrendts, Burberry migrated from being perceived as a British brand to a global icon of fashion, becoming a force of direction and change in the fashion industry. Its products have become symbols of the cultures and countries with which they’re associated, and the expectation is that Burberry will be rewarded with a stronger market leadership position and higher levels of brand equity.

At Apple, Ahrendts and Paul Deneve will be expected to do the same: sustaining Apple long transition from consumer technology company to high-end lifestyle brand, renegotiating belonging not in terms of technology proximity but style adoption. They may face some of the same problems that Burberry has had. As long as Apple focuses on the fashion mentality lifestyle, it will continue to wow its customers.

Enrico Beltramini is the founder and managing partner at FT Accelerator, a global infrastructure for fashion tech start-ups with offices in Silicon Valley, Milan and Seoul.

RoadMap 2013