Just the tonic

Fever Tree mixers have gone from being a little niche secret to a must have if you want to stock a credible bar either in your own home or when on the customer side of the bar when out. In many respects it almost is better to have a cheaper gin with Fever Tree than an expensive gin with an inferior tonic. Anyway the founders have just made a small fortune in selling part of the business, however it's the advertising I wanted to address. Firstly, they've been running the same creative since the end of 2009. Smart and efficient. Small spend and originally low awareness so no point in constantly changing style and message. Other brands take note.

Secondly, it's a perfect classic ad. It ticks all of the boxes and therefore delivers on the brief. I started deconstructing it on a recent flight (when I was drinking Gordon's and Schweppes - a double crime I'm afraid) and luckily the very next day discovered a neat little tool called Skitch from the Evernote family. It's great for annotation and I'm going to become a regular user I suspect.

Apple part II

Last weekend when I blogged about the latest Apple above-the-line campaign I was being a little disingenuous in that I was judging the new campaign on Apple's current positioning without looking forward to a direction of travel which I believe this brand is potentially (and must in my view) embarking upon - that of premiumisation even beyond their current premium level. So why do I say this ?    Well the harsh reality of satisfying an investor community which will always demand more growth.  That growth can obviously come from expanding the product offering (iWatch ?), expanding the base of their business (increased competition from the likes of Samsung is a threat here), increasing price points AND creating a more discernible range of price points.

Apple has always been a very "democratic" brand.   Look at the iPhone - it is available in two colours (black or white) and in three memory sizes.   It used to be an item, which in the hands of the owner communicated differentiation from the masses but now it is the preferred choice of the masses.   People aspire to the brand a little less but that does represent a huge opportunity for Apple to start to stretch the offering to recapture the imagination using say material differentiation, limited editions (with caution) to support a higher price point.

And I wonder if the hiring this week of Paul Deneve provides a little support for this view. An alumnus of Apple in the 1990's he has had a career in fashion and luxury culminating as the CEO of Yves Saint Laurent. His new title of "Special Projects"* suggests a pivotal role - certainly the Apple retail experience is now growing tired -   it is like walking into a school gymnasium, if you don't time your visit well it's a crush and an environment which has stopped communicating Apple's values - potentially a starting point for him linked closely to new products ? Time will tell.

It is merely an opinion but sometimes when you are cornered the only way is up !

*NB The use of the phrase "Special Projects" is masterful in the corporate world. Used in relation to a new hire it really does suggest this new blood is going to have a great influence. In relation to an existing employee it usually means they no longer have a productive role and the special project scope is...their exit.

It's not them, it's YOU !

It seems to be one of those immutable laws of brand marketing that the smaller the brand the greater the propensity to cycle through new advertising agencies.   It's as if the brand is seeking the magic bullet that will cure-all ills often in an effort to overcome a brand or product proposition which is just not viable.     Sadly it never works out. The pattern is well established;

3 months search and pitching, hiring and then 3 months of bedding-in of the new agency, 9 months of agency / client true love, 6 months of emerging strains, 3 months of client skulking behind the scenes being wooed by other agencies, termination and 3 months search and pitching.....(repeat)

Brands that cycle through new strategic agencies every 2 years need to seriously question if there is not something more fundamentally wrong with their approach and even the need to have a strategic / lead agency at all.

Of course often the break in the relationship comes about because a new senior marketer is hired and they feel the need to mark their arrival with a very visible action.   Both a regular reality and a cliché.   It's always tremendously disruptive to the activation cycle.   The marketing department turns inwards to refresh everything at the very moment when the stakeholders are clambering for support.  Momentuam is lost and brands NEED momentuam.

If you have a have a bad agency then fire them, without hesitation (NB also ask yourself why they were hired in the first place) but if you cannot put your finger on why you are cutting loose then question your motives.    It's costly and rarely results in the bump you expect AND the brand needs.

An Apple which has fallen far from the tree ?

I'm happy to declare that I am neither an Apple zealot nor an Apple hater.  They make great products which have, in so many respects, revolutionised the way we interact with the digital world and each other.   I've never given into the slavish worshiping of their design - both the iPhone 4 and 5 fail in my opinion on a number of fronts - not least their ability to scratch and break during normal use but, when it comes to my iPad it has become a constant companion. As a marketer I take an interest in how they talk about their products and their brand and usually it is the former which gets the focus in a very utilitarian, functional way which nonetheless works in communicating the Apple brand values.    So it has been very interesting to see them flipping this approach with their latest TV and print campaign. Although their products can be seen they are fleeting and the emphasis is overwhelmingly on their philosophy and vision.

[youtube=http://www.youtube.com/watch?v=Zr1s_B0zqX0]

It is a clever approach at a time when the brand needs to put some clear water between it and the competition, especially Samsung.     The marketplace has become cluttered with competitors who are now delivering some exceptional products and they need to defend and justify their price points, erase the memories of tax avoidance and continue to push Californian design as opposed to Chinese manufacturing.

It does all of this but at what cost ?      It probably plays well internally, what's not to love if you are an employee, this is a feel good message - your daily work is almost deified but what about the consumer ?     After a few viewings it feels self-indulgent - potentially objectifing products which are, after all, consumer tech which needs to be replaced on a regular basis if it is to remain relevant to the needs of the customer.

As a campaign it has luxurious cues but I'm not sure that's what Apple needs.  I want to love this campaign but my head keeps over ruling my heart.  We shall see.

S.W.A.L.K

Burberry continue to have the ability to surprise and delight us all.     Their latest campaign 'Burberry Kisses' brings the very human act of kissing to the digital world.   Delivering tactility and warmth to a medium that all too often is perceived as functional it takes you right back to the childhood ritual of sending a card Sealed With A Loving Kiss. [youtube=http://www.youtube.com/watch?feature=player_embedded&v=LRiZMVEIhas#action=share]

The campaign has been created by Burberry in conjunction with Google and, in the words of Burberry's chief creative officer, Christopher Bailey "Burberry Kisses began with the idea of giving technology a bit of heart and soul, and using it to unite the Burberry family across the world - by telling a story that makes the digital personal."

I read about the campaign on LinkedIn (a former colleague had 'liked' the story), I went to the site, I discretely kissed my own iPad screen and sent an email with a kiss to that person and then shared the entire experience on Facebook.    It was quite uplifting.   Now I am not sure I will repeat the experience but I suspect I am not the target and the target certainly will.    That's the beauty of campaigns from Burberry they have a customer base (Facebook likes 15,224,092 and counting) that wants to engage and broadcast their love of the brand.   So what if being caught kissing the screen of your iPad by a colleague feels a bit strange.  Soon everyone will be doing it.

PS  Kudos to Burberry for not spoiling this campaign by doing it on St Valentine's Day - a mistake lesser brands would have made.

Coffee time....again !

I can't recall the exact day I stopped using my Nespresso machine at home, I think it was around about November last year.   I can, however, remember the motivation that made me consign the machine to gather dust, or more accurately lack of motivation.   I simply gave up on making the effort to source the capsules.   I had long given up on having an aggressively pursued (by Nespresso) relationship with the Nespresso 'Club' to supply the capsules by mail and I never really bought into the whole idea of the Nespresso boutique.   It always felt faintly ridiculous and overwrought but I would slip in to buy some capsules when supplies ran low. Looking back I suppose my attitude was based on the belief that I see Nespresso as a necessary staple and not a luxury.  It's an at home coffee for goodness sake and it's really about convenience.   So the retail safari in the context of being time-poor was not a winner,  But I did persevere for a couple of years.

I reveal all of this to put recent news reports that Mondelez International are to start producing and selling an alternative to the Nespresso capsule into perspective.   Others have done this, winning court rulings with Nestle along the way but the Mondelez move is the biggest threat to Nespresso's dominance to date.

Or is it ?

Dominance has allowed Nespresso to deliver massive profits to parent company Nestle but that growth has been slowing.   I suspect I've not been alone in slowly falling out of love with my machine because I have been prevented from buying capsules at my usual grocery outlets.   Soon I will have an alternative and Nespresso will not sit idly by - they will have had a twin track strategy, fighting in the courts AND preparing for competition at the same time.   Their capsules will soon be sold alongside the new entrant - you can bet on it  !

Competition will tear down a very manufactured wall and Nespresso will behave more like the mass premium brand it is rather that the luxury brand it is not.

A ticking time bomb ?

Summer has finally arrived in London so I took the opportunity to have a more meandering Sunday stroll through Mayfair and along New Bond Street rather than the usual fast-paced, head down rush between meetings.

That gave me time to take in the sheer size of the, soon to be opened, flagship Breitling store on the corner of New Bond Street and Grosvenor Street.

I'm in two minds about this rapid "retailification' of the luxury watch industry - this is not borne out of a disregard for watches, I'm a fan of everything under £100 and everything over £10,000 !     It is, however a concern that a lot of watchmakers are, sooner or later, going to be caught out through an over expansion of the own retail space.   For many it has been an effective way of securing a share of the almighty Chinese Yuan and building awareness eschewing a reliance on multi-brand specialist and department stores.  As the spaces have become larger and larger with ever more costly leases it raises the question how profitable they will be when sales growth lessens, as it has done already for some brands.

On the plus side brands which attempt to build a cathedral to their product, creating environments which imbue their values, (a good example of this is the excellent IWC store on Madison Avenue) and that of their target customer, have less to worry about and this store should do that for Breitling.   To quote their news release  "The shop will carry Breitling's regular watch collections as well as limited-edition timepieces, and there will be a watchmaker installed in the store whose workshop will be visible to customers."

Installing a watch-maker, bringing the craftsman into the retail environment - up close and personal - is a savvy move.   It is a reason for the space and brings a new function and theater to the experience.    Luxury brands, especially those with long heritage, need to underpin their price points without overly justifying.   Bringing the atelier to the customer when you cannot bring the customer to the atelier is a winner.

Always be learning

Last summer, when I made the decision that my next career move would be working for myself, I outlined the three areas of focus which, in my mind, would occupy my time and efforts every day; - learning, immersion and thought leadership - identifying business opportunities and winning - delivering work and satisfying clients

Almost three months in and I'm pleased to say I'm remaining true to my objectives. As time goes on it's clear that the first objective becomes harder - it's inevitable that with more business there is a time pressure (the only thing we cannot expand is available time, without hiring) but I believe that not making time is a one-way road to failure.

Learning, immersion and thought leadership keeps the marketer fresh and relevant. It sharpens skills and sparks the imagination which ultimately help with the second and third objectives. So I'm now building in 6 of these a month.

This week King's College London Enterprise Connect ran a Marketing & Communications seminar emailed "How unique can you be ?" (It was free, in the evening and ended with networking and refreshments - so an efficient evening and I still managed to fit in a late dinner).

What made the seminar particularly valuable was the quality and range of speaker;

Dominic List - a very successful, serial entrepreneur who finds time to help others.

Tim Allen - an equally successful politico (Tony Blair in opposition and in early years in government) turned founder of his own communications consultancy.

Carl Phil - an energetic and unconventional entrepreneur.

Farzana Baduel - founder of Curzon PR.

All were good but for me List and Allen were the most valuable.

List for his absolute belief that marketing really does exist at the heart of the enterprise. He sees commercial and marketing tightly bound together and he's right. His commitment to the customer experience and the fact that marketing is about "understanding people, their preferences and therefore their purchases." is the critical thinking behind his deceleration that he spends "50%" of his focus on marketing. It obviously works.

Allen struck an absolute chord with me because of his political background. He believes, as I do, that political messaging and marketing campaigning are incredibly similar processes. Successful marketing campaigns (like politics) win hearts then minds. I share Allen's vision that starting from that absolute outward message and working backwards, backfilling the tactical plan is the way to success.

An investment of a couple of hours of my time but a weeks worth of stimulus and leanings. If you're not learning you are losing. Always be learning.

A lifestyle guide which delivers

Back in March a friend pointed me in the direction of Urbanologie a realtively new lifestyle guide which they describe as;

"Urbanologie (by invitation only) is the essential, curated lifestyle guide providing daily insightful news, knowledge and personalized information on the latest restaurant and venue openings, invitations to exclusive events and access to exceptional privileges and benefits, as well as essential updates and reviews on the latest lifestyle and fashion trends and recommended travel destinations."

I've given it a couple of months and I have to say I'm impressed.  Recommendations and insights are always relevant (to me) and current.   The communications themselves are crisp and well written and come at a frequency which is complimentary to everything else in my in-box rather than rehashed spam which is often the case.

I've included yesterday's offering below;

 Hugo Campbell-Davys has done a good job at delivering exactly on his vision.  

Tick. Tock.

On Friday I made my third visit to Baselworld the annual Watch and Jewellery Show.  This year was a little different as I was representing myself rather than a brand so I approached the whole experience in a very different mindset.

Trade shows are, by their very nature, different beasts.   There is something both collegiate and competitive about them and in-between order writing there is the undercurrent of insider gossip and recruitment. 

The watch category is one where the nuances between competing brands are very finely drawn so it is refreshing to see newer entrants flex their brand muscle.   For me Burberry, debuting with a double height stand stole the show.   Replicating a store experience and using traditional and digital to create a tactile and engaging space.     Remember Baselworld is very much a B2B enterprise and selling the brand dream is critical if orders are to follow.

It's about the experience and not about the words (every brand picks from the same dictionary) - or, put it another way - show me, don't tell me.    

PS Notable mention to Rolex who used 10 x floor to ceiling screens to create a window on their world which lived up to the concept.    

Retail matters

My reading this morning has been dominated by retail. First up, an article on Forbes.com by Kenneth Rapoza in which he quotes an article in China Daily reporting that Bernard Arnault plans to "adjust" the Chinese expansion plans of LVMH. The article suggests that the rapid expansion into second and third tier Chinese cities may cease because people prefer travelling to the larger cities to shop. I think this is 50% accurate. I suspect another driving reason is the need to reduce risk of economic turndown and brand rejection through saturation. Just as many other luxury brands follow where LVMH stores go (arguing over mall adjacencies) they would be wise to follow LVMH where they so not go !

Just as the Chinese government continues to manage a gentle landing and a more sustainable growth pattern Luxury brands need to do the same. For some, it will be too late.

But focusing back on the concept of "destination flagship stores", pulling consumers into large cities to have a differentiated retail experience - this is as true now as it was for the last 100 years. That once or twice yearly pilgrimage to "the capital city" to seek goods not available elsewhere. eCommerce naturally allows a brand to hedge it's bets, comprehensive availability of purchase with the perfect retail experience focused on a lesser number of stores.

Which takes me neatly to the second article. An excellent summary in today's FT by Barney Jopson on the whole Ron Johnson / JC Penney debacle. It's worth spending some time reading this and other reports (all this week) about the hubristic like qualities of Mr Johnson who was the very successful head of retail at Apple before heading over to JC Penney as CEO to 'repeat the magic' (my words).

Except the magic was perhaps not so much to do with Mr Johnson and more to do with Apple's products or, as the article quotes Ken Favaro (an analyst at Booz & Co) "What made the difference for Apple Stores was the power of products. It wasn't retailing expertise."

And that's what JC Penny and Mr Johnson found out. On one hand an innovative tech / lifestyle brand and the other a 112 year old department store chain.

What's so surprising is why anyone is surprised !

So as I drink my third espresso what are the conclusions and the killer question ?

- a brand is only as strong as the product

- don't overextend the retail footprint just to grow sales - make existing stores work harder

- people come to buy products not have a retail experience (that's still important but fundamentally it HAS to have a great product at the centre)

- when you are hiring are you hiring a person or the successful brand they last worked on ?

Beauty is in the composition.....INDEED

They say a fool and his money are easily parted and so it must be with marketers responsible for smaller, niche brands. Today's advertising crime (perhaps this will become a regular feature) is a full page advertisement for Hasselblad in the FT's 'How to spend it'. Hasselblad is one of those brands where time has sadly passed it by. It's seen Leica ride the wave of rising prosperity and it has failed to keep up.

It's a fantastic product with a very proud heritage. I also suspect it has small marketing budgets.

All the more reason for questioning why it's running magazine advertising. Usually this comes down to confidence or, more accurately, lack of confidence in those who are running the brand. They want the reassurance of seeing their wares in the same company as bigger players even if they are on page 27 and Chanel is page 2 & 3, Zegna page 4 & 5 and Vuitton page 6 - you get my point.

Small brands should exploit other, more efficient, channels.

Then there is the ad itself. The camera drowns in a see of dark leathers (not forgetting a ubiquitous Louboutin shoe - because that communicates luxury right ?). The 'strapline' works well but everything else fails. It's as if they spent all their time and energy on the strategic thought and then limped over the creative finish line.

If I have time I will look online and see if they bring the campaign alive digitally. I hope so but I fear the worst. Shame. Great brand, superb products, fantastic heritage.

The price is right

Today the Wall Street Journal prompted me to think about price twice today - both indirectly and directly.    Indirectly first in an article titled "Learning How to Set the Right Price."    As the opening paragraph tied it up  "One of the key elements in building a successful business is setting the right price for a product or service. Materials, labor cost and overhead should go into the equation, but it's also necessary to think about whether to undercut rivals. If the price is set too low, incoming revenue might not suffice and the venture might struggle to stay afloat.  The Wall Street Journal blog The Accelerators asked a group of startup mentors to provide their insights." The insights focused on naissant businesses but pricing goes to the very heart of business decision-making and yet, all too often, not sufficient energy is spent on getting this right.    For a luxury marketer, and that's what I'll focus on today, price is one of the most effective differentiators you have.     It establishes two things the relative value of the good or service compared with competing items AND the absolute value of the item based on price suggesting how much has gone into the creation of the item.

Dealing with the second point first it's vital that there is sufficient equity built into the product through a back story which suggests exactly how much effort has gone into creation and, if at all possible, a credible argument to suggest scarcity.   It's scarcity that can drive true price differentiation.   This gives you, the manager, a fundamental price point where you can then benchmark off the competitive set, the first point.

And here the guide is simple.  You always, always, ALWAYS (if you can substantiate it) practice premium pricing.  You always want to be the most expensive player in the category.  Always.   There could well be a role for your brand to be the second most expensive player but that is a vulnerable place to be.    It's leadership that counts.

In the USA I played a role in taking a 3rd player brand in terms of volume which had been, for years, historically priced below the No 1 and No 2 players to the price leadership position.  The result, growth exploded.    The bigger the price differential the faster the brand flew off the shelves.    And, at the same time, it became easier and easier to market the brand.  Price matters !

And yet why do some brands fail to see this ?   For some it's a desperate attempt to gain a short term advantage and sale but ultimately it reduces equity.    A few weeks ago I walked through the Burlington Arcade in London (a collection of bijou, luxury boutiques).  One brand stood out.  Every item in the window had a handwritten card with either 33% or 50% off.   All in stark contrast to their stated positioning.    If I had previously bought something I would have been appalled (almost cheated) and, if I was considering a purchase, I would have strolled right past.

Price confidently.   Be brave.   If the product can justify it, the customer will buy it.

And the direct price provocation ?   Well after 15 years of always working for an organisation where my advertising clout resulted in me receiving a complimentary WSJ subscription I now faced the hard realities of self-employment and a newly lapsed subscription.   However, paying (I've gone for digital and print) actually makes me feel even better about my relationship with the WSJ, a newspaper I consider essential reading for the global marketer, proving the maxim that you value most what you pay for and often that's FULL PRICE !

Made in England / Made wherever

Over the last couple of weeks I've been in the company of makers of luxury goods who, despite being based in the UK, see many of their products produced elsewhere.   Every time they have been questioned on this, along the lines of, "do they wish that all of their products were made in the UK" they have had a similar answer.   "Yes it would be nice" and "For bespoke products, where the customer did not mind paying a premium , this was still an option.", "It's a conversation about quality and style not where is it made." However, at no time were their answers defensive - their manufacturing choices (although often they are sourcing materials from the UK) were based on cost and ensuring the desired quality was achieved.      Indeed they were sanguine about the situation and referenced the fact that the target consumer (who in many cases is very global) is not driven by a "Made in...." label.

It's about design, it's about quality control, it's about the values and ethics inherent in the product.  It's about the equity which has been built up in the brand but what it's not about (with the exception of a food or drink based appellation) is where the product is actually made.   Apple with their "Designed by Apple in California.  Assembled in China" have typified this approach.

So an off-the-peg suit can be made from British wool, designed by a designer based in London, tailored into reality in a workshop in England but actually manufactured elsewhere.    That protects margins and achieves a price point which is competitive.

Manufacturing will ebb and flow depending on the realities of the cost of labour.   It's the other parts of the process that countries and regions need to hang onto tightly.

Free coffee at Starbucks

This week Starbucks in the UK has shown it's skillful marketing muscle in two ways (NB In the interests of full disclosure I have to confess to NOT being a SBUX hater, sure I will support and drink from independent coffee shops wherever they present themselves but I support SBUX in their vision to create a coffee culture and the bathrooms and wifi are not unhelpful).

The first free coffee, or should I say about 8 free lattes, comes courtesy of their launch of a new espresso bean option, Guatemala Antigua.  Check the SBUX website every morning, grab the 'code word' and you can pick up your free latte between 0930 and 1130 !   I'm not sure if you were meant to do this only once - but there seems to be no registration so for a week I'm not putting quite so much money back into their coffers.   But on a serious note it's a good way of driving trial and sustaining their credentials as more than just a fast coffee place.

The other free coffee is their just announced program based on the concept of "banking or suspending a coffee".   The concept of paying for two coffees, drinking one and leaving the cash for another hot drink for someone who is deserving of a free drink has been talked about for some time and last week started to appear in my own Facebook newstream. Now Starbucks have announced that they will be adopting the policy in the UK.   

They have diluted the proposition a little, and rather than the coffee being given to the needy from the location you banked it the money will go to Oasis, the community charity who will distribute.   I think this breaks the tangible link between 'leaving money' behind the counter of your local SBUX knowing that potentially the homeless person you walk past two minutes later could pick up that coffee.   However, the doubling up of the donation (SBUX double the value of your contribution) makes up for this.  Ian Cranna deserves praise for both speedily adopting the principle and making it work.   I'm sure others will follow.

 

Things I carry ....a Moleskine

Today Moleskine, the company which made the act of taking notes and capturing thoughts a joy, debuted on the Italian stock market in what appears to have been a successful IPO.Early adopters of Moleskine when it came back on the scene in the late '90's (I'm glad to say I was one) probably regret a little at how ubiquitous the Moleskine has become but that's to be expected when niche moves to relative mass - especially with financial targets to hit. Almost exactly four years I blogged about my love of Moleskine (and Sharpies) and I'm pleased to say that love affair continues - fueled by a massive expansion in the range - there is indeed a Moleskine for all occasions - every size, every colour.

It is a "luxury" proposition that works on two levels.   Firstly, it's price point, quality and communication & retail strategy deliver against the lux-checklist but secondly, the emotions that using the product elicits provide that essential layer of inner luxury gratification.   It's a clever mix and achievement.  Converting the everyday to the luxurious essential.  (They just need to keep away from some of the desperate supporting products they have been pumping out - their NPD team need a shake-up for sure).

Moleskine takes me neatly to a product which has moved rapidly from "useful to have and browse every couple of days" to "essential that this site is up an running on my desk top or to hand in an app"....LinkedIn.         I mention it in this blog because in an effort to become even more sticky in the life of those of us on the move it has become a great vehicle for content sharing - it's longer just an online Rolodex !    This week they have been running a great feature called "Things I Carry".      A fun insight into what many of our business mentors and heroes carry as they go about their business.   It's good to see a smattering of Moleskines in there.

It's a reminder, for all of us, that tech is merely the enabler, like pencil and paper.   The true talent is what lies in your mind, the luxury of time to think and the ability to communicate it to the appropriate audience.

China whispers

It is hard to imagine what life would be like for many luxury brands if it was not for China. Put bluntly many of them would have ceased to exist if the financially empowered Chinese consumer had not developed an increasing appetite for luxury goods at the very moment the rest of the world was going into economic shock.    The baton of demand was passed and, other than the Lehman Brother's collapse "dip", most Luxury brands did not skip a beat. Indeed the last 4 years have been good ones for all brands with high sticker prices, all have floated upwards on a rising tide but to take the oft used analogy further - it's only when the tide recedes do you find out who has not been wearing swimming trunks.

The Chinese demand for luxury goods is not going to end - why would it - but there are some dynamic forces at play which will determine which brands will prosper and which will fail.

Assessing the state of the Chinese economy is beyond me, and I won't even try.   But last week there were a couple of indicators that I do understand.   The first were announcements by Pernod Ricard and then Remy Cointreau that a drop in demand for their high-end whiskies and cognac in China was impacting their performance.    The reason for a decline in performance is, to quote the Financial Times Louise Lucas "..distillers’ pricey spirits are falling foul of Beijing’s frugality campaign, as officials obey orders from the top to reduce conspicuous consumption – a move already denting sales at high-end restaurants and luxury goods makers. The new government’s anti corruption drive is also hurting gifting".  

The second was a report in the WSJ that the Chinese Air Carriers were experiencing a fall in profits, currency and fuel prices aside, due to a falling of in international demand which neatly links (are you still with me ?) to an illuminating article in today's Independent newspaper by Laura Chesters advancing the theory that Chinese HNWI are changing their buying habits and seeking not only less overt expressions of luxury but would rather purchase these closer to home.  She quotes HSBC’s luxury expert Erwan Rambourg as saying “Chinese shoppers have become more sophisticated and discriminating, which means some established brands may lose market share - we call this a ‘first-mover disadvantage.”

So what do I make of all this;

(1) With a new, more austere, government, overt luxury will be played down - that's apparent in the short-term but time will tell if it becomes a sustained change in behaviour - brands need to develop products and rituals which are less flamboyant.

(2) Take the Chinese luxury consumer for granted at your peril.   What sold yesterday, will not sell today.    (1) is obviously linked to this but so is an emerging sense of esthetic.   That's changing desires quickly.  Heritage brands have an advantage here and need to draw on their reserves of craft based legitimacy.

(3) Luxury brands, no matter where headquartered, should have marketing personnel from China working alongside the global team.   A quarterly "state visit" to Hong Kong and Shanghai no longer cuts it.  The same goes for new product development teams.

(4) Luxury brands who have grown overly dependent on Chinese tourists shopping at their flagship stores need to diversify their audience.  Reconnect with their European base.  Fast.

Can you Hack(ett)

On Tuesday I had the opportunity to enjoy dinner in a small group with the founder of Hackett, Jeremy Hackett.     I anticipated that it would be an unmissable opportunity to listen to a founder (1983) who had remained with his creation and I was not disappointed.

Firstly (and this is something I did not know) he began CURATING rather than CREATING.   Selling second hand clothes picked up in markets all over including London and Paris.   Of course he was creating - carefully editing an aesthetic which would then become the brand we all know today.    

It's interesting that Mr Hackett stresses that at this time he had "no notion of brand". Sometimes when someone says that it is modesty, other times its true.  When it is the latter such a statement is the result of a genuine passion and vision which is so powerful that it does actually will a brand into being without all the attendant back room strategy.  Of course the strategy then has to follow but it's interesting to dwell on the relationship  between product and brand - considering the question what would you rather lead with - a strong product or a strong brand.

Despite my passion for branding I believe that it is the product which is fundamental for success and longevity.   There is nothing more deflating for a consumer than to "fall for" a brand only to be disappointed by the product   You can only fool people for so long.

Secondly, I think everyone round the table was impressed by his sheer commitment to the enterprise despite the fact that, over time, ownership has changed.   That's refreshing.   He built something and thirty years on he's still nourishing it.   Doing things for the long term rather than the short term is admirable.   Contrast that with a lot of people who only seek to create something they can inflate, flip. cash out and walk away from.

Finally, all of this was delivered with great humility, modest insight and utter dedication to his brand products !     Altogether an enjoyable evening chaired / facilitated by a very able Colin Cameron.

A thousand points of light

Towards the end of this week a very revealing image started to circulate.  In actual fact two.  The juxtaposition of two images, eight years apart, of the crowd outside The Vatican was another piece of evidence  that the mobile device has become a permanent addition to our every move.

The majority of us in western markets use a "smart-phone" from the first wake up alarm of the day to the final check of email / scores / the weather forecast at night and every conceivable step in-between.    They have made citizen journalists of us all and allow us to transact wherever, whenever.   I've now started to leave my SBUX payment cards at home and use the phone screen instead.   It's a logical step to start investing more and more of our lives to a device which can, if used correctly, help us get the most our of the day, and night.

I believe that brands do not have to fully engage the mobile platform but they do need to know what parts of it they will exploit and have strong reasons as to why they can ignore other aspects.  First rule - you need a customer base that wants desires to engage with your product on the move.

Turning back to that image again there is also a challenge to the manufacturers.   Witness the travails of new owners of the iPhone 5, arguably the most delicate smart-phone ever made.  Seemingly designed to be admired but not to join battle in the pockets, handbags and on the hard pavements of everyday life !

Is luxury history ?

On Thursday I was privileged to be invited by Imagination in London to attend their seminar "Is Luxury History ?" - once I got over the potentially alarming implications of this being answered in the affirmative - it is, after all, my chosen sector - I prepared myself for an enjoyable few hours above the rooftops of London listening to what promised to be an exceptional line-up.   I was not disappointed. Three speakers stood out for me.   Two I'm familiar with - James Lawson from Ledbury Research and Professor Jean-Noel Kapferer from HEC Paris and the Pernod Ricard Chair on Prestige & Luxury Management.  The other was a surprise and a thought-provoking one at that, Ross Klein the Head of Strategy for Imagination, The Americas.

The afternoon moved from the rigour of data and trend served up with aplomb and diligence by Lawson and onto the strategic framework of luxury management itself delivered in the usual captivating style of Jean-Noel before we were treated to the indulgence of luxury retail in all formats by Klein.    It was an engaging narrative arc and one which required much mulling over afterwards which I did in the reassuring old-school luxury environment (ties mandatory and the use of mobile devices forbidden) of Mark's Club in Mayfair thereafter.

So here are the items which stuck in my mind;

• "Premium is comparative.   Fashion is imitation.  Luxury is superlative."   In nine words Jean-Noel provides the guidance that every luxury marketer should recite as a mantra every single day.   This is all anchored in his view (that I certainly share) that "luxury is  a religious belief system".  When a marketer starts to invite comparison of performance or, even worse, the customer does it is a slippery slope for the brand in question.

• "Advertising does not sell, it builds the dream."   Another Jean-Noel pearl.   I would go a step further and say that whenever a luxury brand places the product front and centre it has wasted every media dollar spent.   If it has such insecurity about the need to show a product in this way it probably should not be advertising.  Think brand not product.

• "Increase the average price of your range and don't chase volume."    This one is etched on my heart.   All too often marketers forget that the most formidable weapon they have in their armoury is price.   In a cluttered category it is the escape mechanism (as long as you have lots of brand equity).   I recently re-read a strategy paper I had written whilst managing The Macallan Single Malt Whisky in the USA "Managing for Value & Volume".   Eight years on I would not change a word of that strategy.

• "The rise of FMCG Managers and the end of familism".   This is the last Jean-Noel observation I had noted down (there were dozens more) and it concerns the entry into luxury companies of the more technocratic FMCG manager.  An important addition in key areas as the luxury business expands but he introduced the essential activity of "unlearning".   In other words that incoming manager had to adapt quickly to the luxury context.  Fascinating and worth a more detailed blog in the future.

Ross Klein's presentation was one of those where 'you had to be there'.   It was a tour de force as he raced us around the globe from bijou boutique to super mall.  From Downtown Dallas to Skyscraper Dubai, he focused strongly on the rituals around retail and this chimed  perfectly with Jean-Noel's religious parallels.

Klein held a mirror up to us as he stressed the fine-line between volume and awareness driving activities and the need to preserve exclusivity.   He cited a perfect example of the superficially very clever cross-marketing project between Target and Neiman Marcus with holiday time pop-ups in each other's stores.    It does not take a genius to work out that one benefited more than the other !   The Neiman Marcus team obvious forgot the unwritten rule - only ever pool your brand's equity with an equal or greater brand !

So what was the conclusion ?  Well luxury is very much alive but brands require careful nourishment - it's never a foregone conclusion that every brand will survive.

As for Imagination they did a good job presenting their own brand in a luxurious way.