1. Introduction

This article focuses on how new luxury brands can transform their business models in the Internet era in the face of rapid changes and fierce competition in the current market environment. The traditional offline physical store model is gradually being replaced by online digital operations, and emerging brands are gaining market share through innovative marketing strategies and consumer insights. In this context, we take the Alexander Wang brand as an example to analyze its performance in the modern luxury goods market and compare it with competing brands Balenciaga and Bottega Veneta.

Alexander Wang is a brand of the same name founded by the well-known Chinese-American designer who named the same as the brand Alexander Wang, known for its bold avant-garde design style and unique interpretation of street culture. Wang founded the Alexander Wang brand in 2005 and quickly gained widespread attention in the fashion industry [1]. The brand is popular with young consumers for its simple, cool design language and has created a style that is both fashionable and wearable in the luxury goods sector. Wang previously served as creative director of Balenciaga and successfully established the brand's position in the fashion industry with his unique design style [2]. The Alexander Wang brand not only focuses on the tailoring and details of the clothing but also actively collaborates with various artists and brands to maintain the freshness of the design and market competitiveness. Through the analysis of the Alexander Wang brand, we used research methods such as SWOT analysis, competitor analysis, questionnaires, and the construction of regression equations to comprehensively analyze the competitiveness of Alexander Wang in the market. Specifically, we explained through variables such as price, durability, and the number of patents and proposed relevant research hypotheses to assess the impact of these factors on consumer purchase decisions. In the SWOT analysis section, we listed Alexander Wang's strengths, weaknesses, opportunities and threats in detail to help better understand the brand's positioning in the market. Through the competitor analysis, we compared the differences between Alexander Wang and Balenciaga and Bottega Veneta, especially in terms of brand culture, pricing strategy and design style. The questionnaire provided real and effective consumer feedback for the study, and through the data of 1,000 valid samples, it revealed consumers' views on various aspects of the brand.

Finally, we constructed a univariate linear regression equation, with consumer purchase decisions as the dependent variable and price, durability, and patent number as the independent variables, to determine the extent to which these factors affect consumer choice of brand. The results show that although price increases will reduce sales to a certain extent, the impact is relatively limited for loyal customers of affordable luxury brands. An increase in durability and the number of patents significantly improves consumer willingness to purchase, especially in the luxury goods industry, where a brand's design innovation capabilities have become a key factor in attracting high-end consumers.

Through this research, we have provided specific strategic recommendations for Alexander's position in the luxury goods market, including how to better leverage its design advantages, optimize its pricing strategy, and enhance its brand awareness and satisfaction among consumers to cope with fierce market competition and achieve further brand development.

2. Literature review

2.1. Intro of Alexander Wang

Alexander Wang's journey as a young designer who became a major figure in fashion. Born in San Francisco to Taiwanese immigrants, Wang pursued his passion at Parsons and worked for big names like Marc Jacobs before starting his own brand in 2005. Known for blending urban chic, minimalism, and street style, his brand gained rapid popularity. Wang also served as Creative Director at Balenciaga from 2012 to 2015. His designs emphasize accessibility, convenience, and unique style [3]. In an interview, Marc Holgate talks about the series of sexual assault allegations that Alexander Wang has faced in recent years and says that the focus of their conversation was on the changes Wang's life has undergone after the allegations. The brand has a strong international presence with stores all over the world. Alexander Wang operates in Asia, mainly in Tokyo, Japan, and South Korea, mainly in Seoul, as well as in the United States and Europe. Starting out as an independent, the designer has achieved global sales of hundreds of millions of dollars and collaborated with several brands, from high-end fashion houses such as Balenciaga and Bulgari to mass market brands such as H&M, Uniqlo and adidas. Alexander Wang's consumers are mainly young people who want to show their independence and importance in society. Due to the high price of the collection, the target consumers are expected to have high purchasing power. According to Yotka, models Gigi Hadid and Binx Walton are the main inspiration for the brand, and “uptown and downtown” are important components that define the brand's target group psychologically; customers like the experience of discovering the combination of emerging habits and the old system of the fashion industry [4]. According to the article “Alexander Wang: Brands, Luxury Fashion, Designers and Handbags,” Wang's designs are mainly inspired by street style. He believes in the idea that “everyone can shine,” so his designs are simple, classic and tend to be neutral. He likes to use novel materials such as neoprene, latex and fur, and black is his signature color. From 2012 to 2015, he served as the chief designer of Balenciaga. After leaving, he successively collaborated with brands such as Adidas, H&M and Bulgari. Wang's designs are inspired by New York Street culture and art. By observing street artists and graffiti creators, he gradually blurs the boundaries between street fashion and the runway [5]. His brand is positioned for young professionals aged 20-35, targeting those who confidently navigate the urban jungle and pursue a casual sense of beauty. Alexander Wang has always remained true to the essence of his brand, conveying a unique insight into urban life through a relaxed, cool, and avant-garde design style. His brand is for those who live at their own pace, discover beauty in unexpected places, and redefine luxury – an attitude that is the very essence of Alexander Wang.

2.2. Intro of Balenciaga

Balenciaga is known for creating avant-garde, technologically advanced structured pieces that push the boundaries of fashion and predict the future of women's ready-to-wear fashion. In March 2011, Balenciaga celebrated the opening of "Balenciaga and Spain" at the MH de Young Museum in San Francisco, USA, a fashion retrospective of 120 works from the career of Cristóbal Balenciaga. The exhibition included many designs from the museum's encyclopedic costume collection. Rodarte designer Laura Mulleavy said of the influence of Cristóbal Balenciaga, "You can't even measure it." In the post-war period, his lines became more linear and smoother, unlike the hourglass shape promoted by "Christian Dior's New Look." Other contributions from the post-war period include the spherical balloon jacket (1953), the high-waisted doll dress (1957), the cocoon coat (1957), the balloon skirt (1957), and the sack dress (1957). In 1959, his work reached its zenith in the Empire line, with high-waisted dresses and jackets cut like kimonos. His approach to the waistline is his most important contribution to the fashion world: he created a new silhouette for women [6]. Spanish brand Balenciaga was established in the Basque Country in Spain before relocating to France and opening a boutique store in Paris in 1937 because of the Spanish Civil War. Balenciaga used sleek and linear lines in the post-war era that deviated from Christian Dior's hourglass shape popularized at the time. He revolutionized women's fashion in the 1950s and, by the 1960s, had developed trademark styles such as the collar deviating from the collar bone and the "bracelet sleeves." Balenciaga was acquired by multinational French company Kering in 2001 – which owns Yves Saint Laurent, Gucci, and Alexander McQueen, among others – and was pegged as the company's fastest-growing brand in 2018 [7].

2.3. Intro of Bottega Veneta

Bottega Veneta was founded in Vicenza, Italy, in 1966 by Michele Taddei and Renzo Zengiaro. The brand's main product is leather goods, which are still Bottega's signature product category. From the very beginning, Bottega has adopted the slogan "When your initials are enough," which means that the brand does not use a logo but rather marks its products through the way they are made, focusing on quality, design, understated elegance, and craftsmanship, which helped the brand achieve success in the 1960s and 1970s. In 2001, Bottega Veneta was acquired by the Gucci Group (now Kering), led by Tom Ford and Domenico De Sole. According to WWD, "De Sole revealed at the time that Bottega Veneta had been at the top of his acquisition target list and that he and Ford had realized the enormous potential of the brand's long tradition based on high-quality leather accessories and shoes and Italian craftsmanship. He believed that the brand's revenue could grow exponentially, with revenue in 2000 of about 50 million U.S. dollars." [8]. Luxury brands like Bottega Veneta have traditionally used high-profile advertising campaigns and in-store experiences to showcase their brand values and demonstrate the exclusivity and high quality of their products and services. Although the luxury fashion industry is notoriously slow to join the digital age of brand interaction, it was gradually moving online in 2015 when Bottega Veneta began to stagnate. By 2020, when the global pandemic limited travel and social interaction, there was no doubt that online sales and digital brand communication were indispensable for even the most exclusive luxury brands. Like the entire fashion industry, luxury fashion companies accelerated their digital strategies. According to the Financial Times, the online share of luxury goods sales grew from 12% to 22% between 2020 and 2021, while Bain & Company says that by 2025, up to 30% of luxury goods sales will be online. According to Oberlo, brands' spending on digital advertising is growing rapidly and is expected to reach 571.16 billion US dollars by 2022, while the WARC report states that most advertising professionals are planning to increase spending on social media advertising, despite the effectiveness of social media in increasing actual sales for luxury brands being questioned and “feed fatigue” indicating a decrease in attention to online advertising [9].

2.4. Review of the literature

Alexander Wang is a young designer who has quickly risen to fame in the fashion industry. He is known for his urban minimalist style and served as creative director of Balenciaga from 2012 to 2015. His brand emphasizes simplicity and individuality and has enriched its product line through collaborations with brands such as Adidas, and H&M. Balenciaga is known for its avant-garde designs. Since opening its doors in Paris in 1937, it has influenced women's fashion through groundbreaking structural designs and becoming one of the fastest-growing brands. Bottega Veneta is known for its exquisite leather craftsmanship and understated luxury. Adhering to the philosophy of "when the name is enough," its pursuit of quality has made the brand stand out in the luxury goods market and continue to grow under the support of Kering Group.

3. Design oof research

3.1. Data source

To obtain more realistic and effective data, we distributed a total of 1,000 questionnaires and received 1,000 valid questionnaires. The participants in the questionnaire survey were young and middle-aged people aged 20-40 who are potential consumers of the Alexander the Great brand. In the questionnaire setting, we selected two competing products and three dimensions. Balenciaga and Bottega were used as references for the survey as Alexander Wang's main competitors. At the same time, we evaluated the brand using three dimensions: price, durability, and the number of patents owned by the brand.

3.2. Variable interpretation

The three control variables in this experiment are price, durability, and the number of patents to analyze the competitiveness of Alexander Wang.

In the experiment, the price range of Alexander Wang was set between 3,000 yuan and 6,000 yuan, while the prices of the two competing products were set at 8,000 yuan and 5,500 yuan respectively. The prices were selected with reference to the ready-to-wear prices on the brand's official website. By changing the price levels and combinations of product attributes, we can arrive at a more reasonable positioning of the product in the market.

In the experiment, the durability of King Alexander was set to four levels: 2 years, four years, six years, and eight years. The so-called durability refers to the maximum service life of the product, excluding subjective damage or disposal of the product by the consumer. This indicator is only used to measure the objective quality of the product, and in this experiment, the quality of the product is expressed in terms of the expected service life. By continuously changing the durability index, we can determine the extent to which product quality affects whether consumers choose to purchase.

In the experiment, the number of patents of King Alexander was set at four different levels: 35, 40, 45, and 50. The so-called number of patents refers to the number of patents that the brand has applied for or is in the process of applying for, including technology and design patents. This indicator is used to measure the design level of the brand. The more patents there are, the more proof that the brand has excellent design and innovation capabilities. By adding this indicator, we can measure the impact of the core ability of a fashion brand, that is, its design ability, on consumer decision-making.

3.3. Research hypothesis

According to the general laws of economics, other things being equal, an increase in price will lead to a decrease in sales. In this study, it is assumed that the increase in price will lead to a decrease in sales, but the rate of decrease will be relatively low because fashion brands have strong customer loyalty, and customers often continue to buy because they like the brand's design style.

Durability represents the quality of a product. Other things being equal, an increase in quality will make consumers more willing to buy the product. In the experiment, it was considered that the brand under investigation is a luxury brand, and users who buy luxury goods care more about fashion and trends than durability. Therefore, we predict that an increase in durability will lead to an increase in sales, but this increase is limited.

The number of patents represents the core product strength of a brand. Other things being equal, an increase in product design will lead to an increase in sales, especially in the luxury goods industry. Most potential luxury goods buyers attach great importance to the fashion value of the brand and pursue trends. Therefore, we predict that an increase in the number of patents will lead to a relatively large increase in sales.

3.4. Construct linear regression model with a single regressor

A linear regression model is used to establish a link between one variable  $$ X$$  and another variable  $$ Y$$ . The model assumes a linear relationship between  $$ X$$  and  $$ Y$$ , and the slope of the model represents the effect of a one-unit change in  $$ X$$  on  $$ Y$$ . Just as the mean value of Y is an unknown characteristic parameter of the overall distribution of Y, the slope of the line connecting  $$ X$$  and  $$ Y$$  is also an unknown characteristic parameter of the joint distribution of  $$ X$$  and  $$ Y$$ . Econometrics tells us exactly how to use sample data from these two variables to estimate this slope, that is, to estimate the effect of a one-unit change in  $$ X$$  on  $$ Y$$ . Here is the equation for the linear regression model with a single regressor:

$$$ Y_i={\beta }_0+{\beta }_1{X}_i+{\mu }_i$$$

Based on the above experimental hypothesis and control variables, a univariate linear regression equation is constructed, with consumer purchase decisions as the dependent variable and price, durability, and patent number as the independent variables. By using the software Eview, this formula becomes:

$CHOISE=C(1)\ast DURABILITY+C(2)\ast PATENT+C(3)\ast PRICE+C(4)$

And get the result:

$$$ CHOICE=0.108773656054\mathrm{*}\mathrm{D}\mathrm{U}\mathrm{R}\mathrm{A}\mathrm{B}\mathrm{I}\mathrm{L}\mathrm{I}\mathrm{T}\mathrm{Y}\mathrm{ }+\mathrm{ }0.0178175475141\mathrm{*}\mathrm{P}\mathrm{A}\mathrm{T}\mathrm{E}\mathrm{N}\mathrm{T}\mathrm{ }-\mathrm{ }0.000188760216774\mathrm{*}\mathrm{P}\mathrm{R}\mathrm{I}\mathrm{C}\mathrm{E}\mathrm{ }+\mathrm{ }0.113252858085$$$

3.5. Interpretation of regression results

According to the results of the regression analysis, the  $$ p$$ -value of all variables is less than 0.05, and the hypothesis test of the significance level is passed. This means that at a 95% confidence level, we can say that these variables have a significant impact on consumer purchasing behavior. In addition, the model's goodness of fit  $$ R^2$$  is approximately 0.176, indicating that the equation can explain 17.6% of consumer purchasing variation. This reflects the reasonableness of the model in explaining the relationship between the independent and dependent variables, but also suggests that 82.4% of the variation may be influenced by other factors not included in the model.

Other things being equal, when the price rises by one unit, consumers' purchase quantity will, on average, decrease by 0.000189 units. This is consistent with the economic theory that price increases will suppress demand. This result shows that consumers are sensitive to price changes, and even small price changes will have a negative impact on purchase quantity.

Again, other conditions remain constant; when the durability of a product increases by one unit, consumers' purchase volume will increase by 0.108744 units. This is consistent with expectations and shows that consumers are more inclined to buy products with higher durability because higher durability means better product quality and user experience, which in turn increases willingness to buy.

For every additional patent a product has, consumer purchases increase by 0.017818 units. This result shows that products with more patents are more attractive in the market because patents usually indicate strong innovation capabilities and unique functions, which enhance consumer trust and purchase intention.

Overall, this regression model shows that price, durability and the number of patents all have a significant impact on consumer purchasing behavior, with an increase in price inhibiting purchases and an increase in durability and the number of patents promoting purchases. Although the goodness of fit of the model is 0.176, indicating that there are still a considerable number of factors not included in the analysis, the included variables are representative and logical in explaining consumer purchasing decisions.

4. Marketing analysis

4.1. SWOT analysis

Based on the above sample screening of the 1000 shares, the SWOT analysis of Alexander Wang can be clearly found and understood in the process of customers choosing Alexander Wang, Balenciaga, and Bottega Veneta.

For the strengths part, compared with competitors Balenciaga and Bottega Veneta, Alexander Wang's prices are more affordable, attracting a wider range of young consumers. Especially fashion lovers aged 20-40. The brand has strong capabilities in design and innovation, with 35-50 patents, which proves its advantages in technology and fashion design, which creates a certain competitiveness in the luxury goods market. Alexander Wang's products are durable (2-8 years), combining trends and practicality, which further enhances consumers' trust and loyalty to the brand. The brand's street style and minimalist design are highly in line with young consumers' fashion needs, creating a differentiated market position.

For the weaknesses, compared to the high-end avant-garde of Balenciaga and the low-key luxury of Bottega Veneta, Alexander Wang's brand positioning is relatively mid-to-low-end, which may limit the brand's expansion in the high-end luxury market. Due to its lower price positioning, the brand's ability to command a premium is weak, which may affect its profit margin and brand recognition in the high-end market. The product style is biased towards street fashion, which may face market risks brought about by changes in trends and consumer aesthetic fatigue.

For the opportunities of Alexander Wang, With the demand for street fashion and affordable luxury brands increasing among the younger generation, Alexander Wang could further expand its brand influence in the international market. And through collaborations with precedent brands such as Adidas and H&M, Alexander Wang can launch more joint ventures to further enhance brand awareness and attract consumers from all walks of life. With the popularity of e-commerce and social media, Alexander Wang can leverage digital platforms to enhance brand exposure and interact with young consumers.

There still have threats that will lead to Alexander Wang's marketing value getting decrease, the luxury goods market is highly competitive, and brands such as Balenciaga and Bottega Veneta have advantages in terms of innovation and brand value that may put pressure on Alexander Wang. In the face of global economic volatility, consumer demand for luxury goods may decrease, and purchasing decisions, especially for affordable luxury brands, are more likely to be affected. The brand mainly relies on its street fashion positioning. If trends change or consumer preferences change, Alexander Wang may face the risk of sales decline. The past sexual scandal allegations may have a negative impact on the brand image, and the brand needs to respond proactively and enhance public trust.

4.2. Competitor analysis

The results of the regression analysis show how Alexander Wang differentiates itself from competitors Balenciaga and Bottega Veneta in terms of price, durability, and patented innovation, factors that directly influence consumer choice. Alexander Wang's prices range from 3,000 to 6,000 yuan, compared to Balenciaga's prices of 8,000 yuan and above and Bottega Veneta's prices of around 5,500 yuan. Alexander Wang attracts young consumers with limited budgets through its lower prices. These consumers want to get a sense of fashionable design while also paying attention to the cost performance of the product.

The balance between the durability and practicality of the product is also a consideration. In the analysis of the above data, for every unit of increased durability, consumer purchases increase by 0.108774 units, indicating that durability is an important factor affecting consumer choice. Alexander Wang balances fashion and practicality within a durability range of 2-8 years; while Bottega Veneta has higher durability, its design is biased towards tradition. Alexander Wang's products can consider both fashion and a certain degree of practicality, which appeals to consumers who not only pursue fashion but also want to get some value for their money.

The main reasons consumers choose Alexander Wang over Balenciaga and Bottega Veneta are the affordability of the price, the balance between durability and design, and the outstanding innovation. Compared with Balenciaga's high-end avant-garde and Bottega Veneta's classic craftsmanship, Alexander Wang is positioned as a fashionable, practical, innovative, and affordable brand, especially for young, trend-conscious consumers with a limited budget.

4.3. Strategic analysis

For Alexander Wang, the key is to create a seamless omni-channel presence - a multi-sensory experience where every touchpoint amplifies the brand's story. First and foremost, Wang's brick-and-mortar stores are more than just retail spaces; they are immersive experiences [10]. Sleek simplicity is paired with innovative displays that blur the line between shopping and performing arts. These flagship stores offer exclusive collections and personalized service to ensure that every customer enjoys a VIP experience. The visually stunning e-commerce platform showcases the collections through high-quality photography and engaging storylines, while interactive features such as 3D product views and curated playlists further enhance the discovery experience. In addition, targeted social media campaigns keep the conversation going, provide a behind-the-scenes look, and foster a sense of community. Online purchases can be easily picked up in-store, while on-site sales consultants can offer virtual styling consultations. Social media campaigns direct users to curated product pages, and exclusive online merchandise keeps the digital buzz going. This interconnectivity allows customers to shop on their own terms, whether it's physically browsing, virtually exploring, or interacting through social platforms.

Wang's team utilizes data like skilled conductors. They utilize insights to measure the impact of their social media efforts, determining which posts and collaborations resonate best with their audience. This data-driven approach ensures that their online presence delivers targeted messages that maximize engagement and ROI. But it's not so much about algorithms as it is about personalities. Wang utilizes social media to share his brand's unique DNA. The platform serves as a canvas for his bold aesthetic, showcasing behind-the-scenes footage, runway presentations, and even fun collaborations such as a Pepsi video. This transparency fosters trust and a sense of community among his fans.

Therefore, through social media, Alexander Wang wants to differentiate Balenciaga from Bottega Veneta and thus gain a higher market share and options to expand the market by emphasizing the brand concept and future development positioning. Therefore, selecting the right KOLs and KOCs is one of Alexander Wang's main goals. Collaborating with fashion bloggers, models, and artists active on platforms such as Instagram, TikTok, X (Twitter), and REDnote to reach users in different circles. KOLs (Key Opinion Leaders) Select fashion bloggers and celebrities with high traffic to increase brand exposure. KOCs (Key Opinion Consumers) Select lifestyle bloggers to share real outfits and increase users' trust in the products. Initiate online challenges or topics, such as dressing challenges and other activities, to encourage users to upload pictures or videos of them wearing Alexander Wang products. And add an online user reward mechanism, such as offering small gifts, shopping discounts, or event tickets as rewards, to increase user engagement. In addition, by using the analytical tools of social media platforms and incorporating customer data from Web 3, the interaction rate, conversion rate, and user feedback of content can be monitored using Google Analytics, etc., so that marketing strategies can be adjusted in a timely manner.

5. Conclusion

This study provides a comprehensive analysis of how Alexander Wang navigates the challenges of the luxury fashion industry, leveraging affordable luxury positioning, design innovation, and streetwear aesthetics. With its transition from physical stores to digital channels, Alexander Wang demonstrates agility in responding to market shifts, enhancing consumer engagement through social media and online platforms. The comparison with competitors Balenciaga and Bottega Veneta highlights how Alexander Wang sets itself apart by balancing affordability, durability, and innovation, attracting younger consumers with a focus on both practicality and fashion.

The findings from the regression analysis confirm that price, durability, and the number of patents significantly influence consumer purchasing decisions. While higher prices slightly reduce sales, the effect is minimal due to brand loyalty. On the other hand, increased durability and innovation through patents foster greater consumer interest, reflecting the importance of product quality and trend-setting designs in the luxury sector. The SWOT analysis further reveals the brand's strengths in affordability and innovation but also acknowledges challenges like evolving consumer trends and competition from high-end brands.

To maintain competitiveness, Alexander Wang must continue refining its omnichannel presence, utilizing immersive in-store experiences, seamless e-commerce platforms, and targeted social media campaigns. Collaborations with influencers and KOLs across platforms like Instagram, TikTok, and RED enhance brand visibility and foster community engagement. The strategic use of data-driven insights ensures marketing efforts are optimized to resonate with target consumers.

In conclusion, Alexander Wang's ability to balance affordability, innovation, and digital strategy positions it well to capture market share in an increasingly competitive environment. However, the brand must remain agile, anticipating consumer preferences and market trends to ensure sustainable growth. By continuing to invest in design innovation, strengthen its brand image, and enhance online engagement, Alexander Wang can solidify its position as a leader in the emerging luxury space.

Acknowledgement

Weichenyang Zhou and Yongze Yu contributed equally to this work and should be considered co-first authors.