He may be known for his iconic white hair, black sunglasses and pursed lips, but Karl Lagerfeld also succeeded in doing what many of his luxury brand contemporaries could not: he got with the times.

In his 2013 book, Lagerfeld admitted that Coco Chanel would hate "what I do".

"I do what she never did. I had to go from what Chanel was to what it should be, could be, from what it had been to something else."

With his couture credentials firmly in place from stints as head designer at Fendi and Chloe, Lagerfeld entered the world of Chanel in 1983 and slowly began to reinvent it.

Coco Chanel was the queen of minimalism — "Before you leave the house, look in the mirror and take one thing off", she famously said. But Lagerfeld banked on a riskier strategy: he went all out, with Paris Fashion Week shows featuring icebergs and towering cruise ships.

Last year in Paris, Lagerfeld outdid even himself by recreating a beach on the runway, including real sand, an ocean with gentle waves, a blue sky and seagull sounds to signal the beginning of the show.

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A keen sense for spectacle combined with the desire to evolve is seemingly satisfying both sides of Chanel's clientele — on the one hand, the conservatives, on the other, increasingly edgy millennials.

Luxury in the age of fast fashion

It's a remarkable achievement given the visionary designer cut his teeth in a vastly different era: before the internet and the rise of mass consumption, fast fashion and, crucially, social media.

All have threatened to disrupt the old guard of luxury brands.

"Millennials want things instantaneously," say professors Valérie Moatti and Céline Abecassis-Moedas, which is anathema to high-end brands prioritising quality over quantity.

And fast fashion aside, there's never been more competition for the old guard, with Shopify and Instagram giving every wannabe designer a foot into the door of the once-exclusive fashion industry.

Luxury brands are feeling the bite, and Chanel is one of only two houses (the other being Michael Korrs) still ticking over as independent operations.

Dior, Celine, Fendi, Marc Jacobs, and DKNY have all been bought by Louis Vuitton-Moet Hennessey, while rival group Kering owns Bottega Veneta, Gucci, and Saint Laurent.

Chanel's cruise ship at the Grand Palais in Paris for the finale of the 2018/19 fashion show. ( Instagram: Chanel )

'Accessible luxury'

So, it's no surprise that luxury brands have turned to everyday consumers, selling "accessible luxury" (makeup, handbags, perfume and accessories) and using social media to reach them.

For many luxury brands, couture lines are artistic endeavours that bleed money rather than making it. But while most runway pieces are never mass-produced, they're marketing for the smaller goods that turn over the cash registers.

Proving ahead of his time, Lagerfeld took a risk and in 2004, became the first designer to collaborate with Swedish high-street behemoth H&M, paving the way for future partnerships between mass market and luxury.

"Accessible luxury", not haute couture, is what's keeping high-end brands in business.

Handbags are proving so lucrative that big fashion houses like Louis Vuitton and Hermes are buying Australian crocodile farms to ensure supply of handmade crocodile skin bags, some of which sell for upwards of $50,000.

Perfumes are also paying dividends, with the global luxury perfume market projected to grow 6.8 per cent by 2023.

Karl Lagerfeld was inspired by Egyptian civilisation and the spirit of New York for the 2018-19 CHANELMetiersdArt collection. ( Instagram: Chanel )

Taking fans behind the curtain

With millennials not afraid to splurge on the occasional "investment" piece, the luxury market must toe the line between accessibility and exclusivity, a balance that Chanel has managed to find.

Before social media, a fashion show was an event for a select few, a club based on who it left out, rather than let in.

Now, with Instagram Stories and Instagram TV, anyone is transported to Paris, Milan and New York to witness the newest collection as it is revealed, thousands of kilometres away.

Lagerfeld, unlike many of his contemporaries, knew where things were heading and decided to embrace Instagram and its ultimate spawn, The Influencer, a cross between a model and the girl next door (who manages to appeal to both).

Despite being one of the last luxury houses to trade online, Chanel was named by Insightpool as the most influential luxury brand on social media (based on overall engagement).

Other luxury brands, however, have not had as much success as Chanel in the Instagram era.

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Balenciaga's experiment with "quirky" Instagram posts, for example, confounded some of its 8.8 million followers.

"This is someone who tried to be cool and edge without any talent left", wrote one follower of a bizarre post featuring a bare leg with knee-high socks and spiked stilettos, partially obscured by a pillow.

In the age of "personal branding", where cultivating an "authentic" and effortlessly cool identity is the ultimate goal, being branded "inauthentic" can be a death knell.

And with brick-and-mortar stores failing, especially department stores, once the spiritual home of luxury fashion, brands cannot afford to alienate social media.

Shift from the West

While some brands may resent it, emerging markets like the Middle East and China are keeping legacy brands afloat as they're embraced by the new waves of millionaires.

This presents the same challenge in retaining their exclusivity while meeting demand — paradoxically, Asia's love of Louis Vuitton has resulted in it becoming overexposed and thus less exclusive.

Lagerfeld was one of the first designers to truly understand the potential of China in the luxury fashion space. In autumn 2008, he staged a fashion show for Fendi on the Great Wall of China, and in 2017, he plucked Chinese model Ming Xi from relative obscurity and made her the co-star of his campaign alongside Kendall Jenner.

Australia's proximity to Asia — a major luxury market — means legacy fashion labels are heading Down Under and opening new stories in peak tourist areas and international airports.

"Our close proximity to Asia and, in particular China, has seen significant growth in purchases from high-spending tourists visiting and shopping in Australia," says Deloitte National Retail Leader, David White.

Before Instagram, Chanel constructed a giant iceberg in in Paris for its Fall-Winter 2010-2011 show. ( Supplied: Chanel )

What's next for Chanel?

With Lagerfeld gone, it will be interesting to see if the creative genius's right-hand woman and director of Chanel's Fashion Creation Studio, Virginie Viard, will carry on his legacy of constant reinvention.

Having worked with Lagerfeld since 1987 (when she started as an intern), the media-shy Viard told Elle that she visualised the show, "got things ready for him, decided on the materials, coordinated teams and liaised with suppliers".

And while it sounds like Chanel has been left in good hands, it will be hard to follow the man who epitomised the evolution of fashion, and who believed that "fashion is a language that creates itself in clothes to interpret reality".

Caroline Zielinski is a freelance writer.