Luxury 360 - The fun of Beauty Part 2

In my last post: LUXURY 360 - THE FUN OF BEAUTY PART 1, I showcased the "fun-ness" of Chanel's Color Creativity video and the reasons luxury brands are instilling more creativity into beauty from a branding and sales perspective.  

Today I want to share a really interesting except from the L2 Think Tank Digital IQ Index supplement, "Beauty in China" to further illustrate the reason beauty is a key focus and growth area for luxury brands:

• Young women in China currently spend 10-15% of annual income on beauty products
• Trading up; the prestige beauty segment is outpacing the mass category in terms of growth
• China is the largest online beauty market in the world with 17% of beauty bought online (compared to 4-6% in 'mature' markets) 

What trends are you seeing in the luxury beauty market?

Luxury 360 - The fun of Beauty Part 1

I swear the beauty industry keeps getting more interesting.  Take these still shots above from the Color Creativity video featured on Chanel's beauty webpage here.  The reinterpretation of the iconic design of Chanel beauty products is...well, fun!  

It makes sense that Chanel and other luxury brands are similarly increasing their point-of-view (and often investment) in beauty to entice consumers in new and innovative ways:

• Beauty can be a huge revenue generator to brands (as it is for Chanel and Dior) and has higher margins than fashion. 
• Beauty as entry-level priced products allows everyone to become part of a luxury brand's often aspirational world.
• Once a consumer has been introduced to a luxury brand through beauty, a brand can then cross and up-sell to higher price point items.  
• Apart from fragrance, which is a highly fragmented market with low brand loyalty, make up and skincare are high on brand loyalty.  Think about it.  Once you find a concealer, blush or even a mascara that works for you, you repeat buy.       

So much more to say on this topic but I thought I would split it into two posts.  More beauty insights to come in the next post, LUXURY 360 - THE FUN OF BEAUTY PART 2.

Digital Marketing

I took a great class on Digital Marketing a few months back and took the below quiz as an introduction.   Don’t peek at the answers below too quickly!

Questions:

1.     Who spends more time online on average? Men or women?

2.     What are the top three product categories that people buy via smart phone apps?

3.     What percentage of companies are now using Twitter?

4.     By late 2011, how many tweets were there per day on Twitter?

5.     What simple addition to a web page can help double conversion rates?

Answers:

1.     Women. Spending an average 8% more time at 25 hours per week.

2.     Groceries (76 GBP a month), travel tickets (56 GBP a month) and clothing (47 GBP a month).

3.     83% of companies are using Twitter as part of their social media strategy.

4.     250 million tweets per day or 3,000 per second.

5.     Adding photos of people to a web page can often improve conversion rates.  

PPhoto credit: Burberry

Everlane: New concept of luxury e-tailing

By cutting out the middleman, the budding luxury clothing design and manufacturing company offers high-quality products at unconventional prices.  The company started by producing a luxurious version of the classic t-shirt for just $15.  It has now evolved its product offerings to silk blouses, wool scarves and backpacks.  How does Everlane achieve such prices?  See the value chain below:

Photo credit: Everlane.com

Luxury 360

Luxury 360 is a new and recurring post where I will examine the current luxury goods market trends and recap the main highlights.  I personally like to know the big picture of the industry and sometimes find it difficult to get this information in one place.

• 2012 has proven a good year with sales for a third year in row showing double-digit growth. Globally, luxury goods sales are estimated to reach 212 billion euros in 2012, a 10% increase from 2011.  Sales for 2011 were 192 billion euros up 11% from 2010.
• Accessories (leather goods and shoes combined) are the champion category of 2012 with sales up 14%.  For the first time accessories are the largest piece of the market overtaking apparel.  
• At 27 billion euros Greater China (Mainland, Hong Kong, Macau) is now the second largest luxury goods market behind the United States, bypassing Japan.  However Greater China, which accounts for half of luxury spending in all Asian markets, is slowing with projected growth of 20% in 2012 versus 30% in 2011.
• Men are gaining share in luxury spending accounting for 41% of all sales.  In 1995, men accounted for 35% of luxury purchases.  

Hope you found this interesting!  If you want a more in depth look into these highlights, see the Bain & Co. luxury goods market report here.


Photo credit: Runway Passport

The Curator, Tastemaker, Style Influencer ...

The curator, tastemaker, style influencer, fashion ambassador and celebrity; They are changing the scene of online shopping.  I see one consistent trend being the use of curators in recommending products. Marketing research has shown that we as consumers like recommendations from people we know and/or admire and are more inclined to shop these suggestions.  So is the curator the new online marketing strategy of today as was the flash-sale of previous years?  Below are four unique online websites that have adopted the curator-based business model.

AHAlife is an online discovery and shopping platform that offers unique handpicked products by the likes of Donna Karan, Daniel Boulud, Tina Brown and Tim Gunn.  

The Coveteur offers a look into the closets of tastemakers, celebrities and fashion elite with the ability to actually shop pieces from their closets.

Vaunte recently launched and is also offering up fashionable closets by redesigning the world of online luxury consignment shopping.

The Cools is a social network and an e-commerce site.  Its tastemakers include Erin Fetherston, Vladimir Restoin Roitfeld, and Agyness Deyn.

Content is Key - Part 2 of 2

In Content is Key - Part 1 of 2, I discussed the importance of content marketing strategies to attract, acquire and engage consumers by producing good content continuously.  I gave Net-A-Porter as an example of an online fashion retailer doing it really well with a frequently updated and beautifully presented online magazine highlighting product offerings, seasonal trends and exclusive insider interviews.

But good content marketing strategies are not only reserved for online-based businesses.  We are now frequently seeing brick-and-mortar companies conquering this space by using social media platforms or blogs to reach out to consumers.  The blog DKNY PR Girl run by Aliza Licht, Senior VP of Global Communications for Donna Karan, has captivated readers with her smart and witty take on highlighting the brand.  Mixing insights on style and life in NYC with current product offerings, you almost forget she is a Senior VP for Donna Karan!  And it works with over 400,000 followers on Twitter.  

I hope more fashion companies (both on and offline) adopt Ms. Licht's approach to content marketing. It is always amusing for consumers such as myself to read fun and insightful content by people-in-the-know in addition to DKNY PR GIRL proving to be a more than successful communications strategy.


Photo credit: DKNY PR Girl

DVF and Evian Team Up

Another fashion industry collaboration with a beverage!  I previously posted on Diet Coke and Jean Paul Gaultier and Starbucks and Rodarte.  This time it's Evian and Diane von Furstenberg (DVF).  Evian's brand image is luxury bottled water.  DVF is best known for the use of colorful graphic prints and the creation of the iconic wrap dress.

DVF has designed Evian's 2013 limited-edition bottle with the words "water is life is love is life is love is life is water” and with the designer's signature heart logo in red.  This is Evian's first time to link up with an American designer however the company has partnered previously with Paul Smith, Issey Miyake, Jean Paul Gaultier and Christian Lacroix.  The DVF limited-edition bottles willl be available in stores this month.


Photo credit: WWD

What's next for Tamara Mellon?

The woman behind the Jimmy Choo label and now multinational company recently told The New York Times “As soon as my resignation came out from Jimmy Choo, I had lots of people e-mail me saying, ‘I would love to invest in your new project.’ ”  One year ago Tamara Mellon left Jimmy Choo.  So what exactly is she up to now?  Apart from moving to NYC from London, Ms. Mellon is writing a book.  “It’s not strictly a business book and it’s not strictly a memoir,” she said. “It’s a hybrid.”  Even more interesting, there is talk in creating her own lifestyle brand.  “I’d rather take the risk and have a new challenge,” she said.  Well, we are all excited to see what's next from this ultra-successful businesswoman and personal favorite I look up to.   

See full New York Times article here. 

Content is Key - Part 1 of 2

Digital marketing. Consumer engagement. Content marketing strategy.  These terms are fast becoming viewed as Marketing as a whole and not just a subset.  Almost all major brands nowadays have a social media presence in order to attract, acquire and engage consumers.  But the key for brands is not only how many people "like" them on Facebook or "follow" them on Twitter, it is producing good content continuously.

Content marketing strategies can range from social media, to online (and offline) magazines to blogs, etc.  Editorial departments once reserved for magazines and newspapers are increasingly becoming in-house divisions.  Take Net-A-Porter for example.  One major component of its business is editorial which takes current product offerings and creates continuous content in the form of an online magazine identifying trends, most wanted pieces and interviews with trendsetters where people can then click and buy directly from the site.  This is an example of content marketing at its best (to remember attract, acquire and engage) and ultimately drives sales.

Photo credit: Net-A-Porter

Rodarte collection for Starbucks

"Medieval and fantasy role-playing games": the inspiration for Rodarte's Spring/Summer 2013 collection

The collaboration between fashion forward Rodarte (known for creating the striking ballerina costumes for Natalie Portman in Black Swan) and the coffee chain is definitely a surprise.  This is Starbucks first foray into the fashion industry. I personally love the idea as I am the target customer for this partnership.  But I wonder if the majority of Starbucks customers will respond to products by a designer brand.  Thoughts???


Photo credit: style.com

Brad and Chanel

The most important branding takeaway I learned from working in the luxury goods industry is the importance of showcasing one's heritage but innovating to stay current with the times.

Recently naming Brad Pitt as the first ever male face to the iconic Chanel No. 5 perfume is innovative.  The ad campaign not only appeals to women by having the stamp of approval from Brad, but also appeals to men as a gift for their significant others. See full ad campaign on Chanel's website. 

Chanel No. 5 is the iconic perfume of the fashion house and embodies it's rich history being the first perfume released in 1921.   And let's be honest here, if Brad likes it I like it! 

Photo credit: guardian.co.uk

Diet Coke & Jean Paul Gaultier Collaboration

Last night while reading fashion magazines on my iPad, I came across Diet Coke's newest print ad: "Styles evolve, but good taste never changes."  What a great statement I thought.  I had to incorporate it into my blog.

The collaboration between Jean Paul Gaultier and Diet Coke is a great example of two different industries collaborating in order to gain new audiences, increase brand awareness and/or enhance brand image.  Good taste is the key takeaway to Diet Coke's ad campaign.  What a great way to bridge the beverage products and fashion industries by merging good taste with style, a well-known match.

It is no wonder Coca-Cola retained its #1 spot on Interbrand's 100 Best Brands report which came out last week, winning over Apple and IBM.  See article here.