David Jones Revisit Their Online Strategy - 8/11/10

On Thursday last, Australia's premium department store David Jones launched their online store which covers 1,500 products across several categories, including fashion, accessories, beauty, books and home wares.

David Jones were certainly early adopters of the online business when they launched their e-store almost eight years ago now (circa 2003) if our memory serves correctly. They really were pioneers at the time, the issue being it was too early a strategy, consumers had not entirely gotten their heads around online purchasing and it really was the early adopters who were actually purchasing. Unfortunately the numbers were not enough, a wider audience was needed to embrace this initiative. It would have been an expensive exercise as the logistics and input dollars for this project we believe must not have been achieving the forecast ROI as David Jones eventually decided to close the online store, after only a few seasons.

What a decade or so can do.... in our opinion it is the right move for the brand to do this now, Australian consumers are increasingly seeking out online retail opportunities locally and internationally, if David Jones was to sit on their respective hounds tooth hands any longer it may be harder to add a successful online offer. They can own this space if they do it well.

So what does it look like? Let's just say it's a relatively safe offer, we imagine stocked full of some best selling products, yet a good way to start. Easy to navigate, quick download times (and we know how important that is) and reasonable delivery windows. As we have said here at The MO Down before, luxury and premium brands owe several variables to their ongoing success yet one very fundamental point is 'control', by brands venturing into the online shopping space concerns were raised about the exposure and control of who and how the site is managed....well this is David Jones site and they can control it all the way through. The next big objective for them we'd like to imagine is getting more brands and some international fashion brands on board to really make their offer compelling, isn't it about that after all!

Image credit:davidjones.com

Follow MO Luxury's Facebook page for more luxury news...

AUTORE Launches New Website 03/11/10

While we are on the topic of fine jewellery, Australia’s South Sea pearl & jewellery design company, AUTORE, has recently launched its pearl jewellery online, with the release of their new website www.pearlautore.com The website has been designed to showcase their stunning jewellery, as well as provide information regarding purchasing, stockists, etc. The site also includes extensive ‘pearl education’ allowing you to ‘grade your own pearl’ by the ‘AUTORE Five S’s’ of Shape, Shade, Size and Surface. Definitely worth a peek!

Image credit: collinsjewellers.com.au

Follow MO Luxury's Facebook page for more luxury news...

Retail Openings Left Right and Centre… Let The Good Times Roll! 01/11/10

Last Thursday evening, October 28, was an exciting evening for retail, both luxury and commercial brands. With unveilings hotly anticipated by many, the MO Down followed happenings in Sydney and in Melbourne.

In Sydney, the Westfield Sydney project held its first stage opening. First to market brands opened their doors to a very excited crowd, in a very prestigious location– the centre spans an area between the Pitt St Mall, George St, Market St and Castlereagh St. Right under the landmark Centrepoint tower and directly between Sydney’s two major department stores (David Jones and Myer), it really couldn’t be in a better location if it tried.

This has been a huge project from the get-go, physically and financially, and first look in, we’re impressed! The mix of brands, the flow of the levels and the finishes to the floor and ceiling are impressive. And it’s only stage one. The centre should be complete by 2012. It is then expected to generate over $600 million a year in sales. Perhaps as a result of all the excitement, shares in Westfield Group rose 2.38 per cent on October 29.

Just goes to show Sydney’s voracious appetite for brands. Despite Sydney’s limited critical population mass, when compared to other key global bullet point cities, the demand is certainly being confidently anticipated by Westfield with this development.

In Melbourne, we also had a new larger footprint and new look Louis Vuitton boutique open in Crown Casino in Southbank. When Louis Vuitton opened in November last year in Chadstone, it took the number of Louis Vuitton retail spaces in Melbourne to three, which is significant. With the revamp of Crown it adds more square metres of selling space for a larger variety of product to be shown.

GFC anyone? Seems like a distant memory, long may this continue!

Image credit: blog.imff.com.au

Follow MO Luxury's Facebook page for more luxury news...

Coach, Louis Vuitton & Ralph Lauren have topped the Second Annual Digital IQ Index for Luxury… 14/10/10

We thought so. Recently, we’ve given a lot of thought to luxury brands and why they have been so slow to embrace the online revolution. For companies that base their business on innovation and cutting edge, luxury has been surprisingly sceptical. We’ve noticed that some brands are being left behind in the race to online, whilst others are surging ahead. This study has just provided hard evidence.

Developed by NYU Stern Professor Scott Galloway, a team of experts and industry partner iCrossing, the study measured and ranked a brand’s digital footprint across four dimensions: effectiveness of a brand’s site, digital marketing, social media and mobile.

Fashion icons including Prada, Christian Dior, Cartier and Rolex dropped significantly from last year, showing ignorance to the significance of the digital age. Industry leaders included Coach, Louis Vuitton & Ralph Lauren (tied), Gucci and Hugo Boss. We predict this study will start to accurately forecast sales figures, and look forward to seeing how these findings correlate. For a deeper understanding of these results, check out this link.

Image credit: topnews.in

Follow MO Luxury's Facebook page for more luxury news...

Despite up and downs, we still trust David Jones… 11/10/10

It says a lot about brand legacy, especially in light of recent controversy. A recent survey has shown that Australia’s premium department store is ‘the most trusted department store.’ Myer, Target, Big W and Kmart followed.

David Jones have been consistent marketeers since they established their brand in 1838. They say it takes one hundred years to build a reputation and five minutes to destroy it. They have certainly had their fair share of scandal- this year alone. Are consumers more forgiving than we thought, or have they just been lucky and avoided the wrong kind of mishap?

Despite cutting costs, poor share performance and sexual harassment allegations, the David Jones name remains relatively untarnished in the eyes of their consumers. Why? David Jones is a strong and consistent brand that have been clear about their target market and strategy alignment. They give back to their customers (loyalty programs)- they have won the hearts and minds. The flower show in spring each year, the Christmas window treats. The music, the overall in-store animation, their willingness to exchange and not knowingly be under sold. So simple, yet so effective.

The survey asked participants to give their ‘gut feel’ on the brands they instinctively trust the most. As to why they have survived recent scandal, we turn to Ken Roberts, CEO Worldwide, Saatchi & Saatchi. ‘What builds brand loyalty beyond reason?’ The answer is love.

Love is the most powerful marketing strategy on the planet. And they have us. We can't help but wonder if we would be so forgiving of a company we had not forged an emotional attachment to? Something tells us that we would not. Love is blind and Australians love David Jones. At least for now, the houndstooth is here to stay.

Image credit: ourbrisbane.com

Follow MO Luxury's Facebook page for more luxury news...

Luxury And Brand Behaviour: Proactive Or Reactive? 7/10/10

We recently commented on the relative reluctance of luxury brands to embrace the Internet. Online shopping and online marketing have been embraced with open arms by many other industries. Luxury has been sceptical. In a sense, this is incongruent with their usual position at the forefront of innovation. They are masters of reinvention and rejuvenation.

Underlying every marketing strategy employed by luxury brands is the maintenance of their legacy- the purity of their message and their communication with a specific audience. It may seem harsh, but luxury isn’t a commodity. It’s not for everyone. This said, everyone has their own interpretation of luxury, and this is beyond the control of marketers.

Some luxury brands are being left behind in the race to reinvent and remain relevant, whilst others have forged ahead. It is interesting to note that brands such as Chanel under Karl Lagerfeld, who have embraced technology and changes in social interaction (think online coverage of runway shows), seem to be managing their raison d’etre seamlessly. They say in fashion that everyone ‘has their moment’ but some have faded faster than others.

It is essential to survival that brands appreciate how their audiences change. It is important to consider future markets, and generations to come. Brands that remain static will be buried.

Image credit: glasshousedc.com

Follow MO Luxury's Facebook page for more luxury news...

Brand Confusion in China 28/9/10

Great news for international luxury brands. A recent study has shown that Chinese consumers prefer imported brands to domestic brands. We’ve discussed in detail the increasing importance of the Chinese market to the luxury industry- they are fast becoming the world’s number one consumer of luxury goods. So much do the Chinese prefer international labels, that many Chinese brands are presenting themselves ambiguously, of non-specific origins, faux-foreign, if you will. Will they succeed in crowding out the international competition? We aren’t convinced….

It is interesting that whilst domestic brands want to seem international in China, international brands are working hard to localise- See Hermes and the recent launch of its new Shang Xia label. Much attention is being given to the discussion over which brands will survive as the fittest in the increasingly overcrowded, but extremely lucrative, Chinese market. We think the real issue is going to shift from domestic vs imported, to whether brands can fight themselves apart from the blurry mass of competition.

It is important for brands to remember that identity is everything, but identity does not exist in a vacuum. Clever marketing involves adapting with your market. If the Chinese market demands an international, world-renowned, elegant but youthful, sophisticated but accessible, showy but modest, traditional but edgy brand in line with domestic taste and demonstrating good CSR…. Then that, it seems, is what they shall have. Too confusing? Hermes has it all sorted. Launching an international brand off the back of a global fashion powerhouse, all the while intertwining it with Chinese history and culture? Pure genius. We can’t wait to watch Shang Xia blossom.

Image credit:edition.cnn.com

Follow MO Luxury's Facebook page for more luxury news...

Getting Down To Business: How To Enter The World Of Luxury 21/9/10

Luxury is magnetic. Intelligent luxury brands understand that their success relies heavily on those who work for them. After all, a business is nothing if not its people. Recruitment strategies are fundamental to total business strategy.
Names such as Gucci, YSL, Hermes, Prada, Chanel, represent legacies- years of excellence and stability. The people behind them keep the wheel turning, and reinforce the power and standing of these iconic luxury brands. But how does one get over the counter, so to speak?

In Australia, one can work within the luxury industry a lot more readily than in other countries. In France, positions in head office are highly coveted by retail staff, who themselves are often well-to-do, society people to begin with. In Korea, you almost need to be royalty- at least from a recognised political or wealthy family. The same can be said for a lot of senior positions in Hong Kong and China. Luxury brands are at the top of the consumer/retail pyramid. Entry into these rarefied environments is highly desired, and highly limited, by very nature of the niche markets themselves. When dealing with people’s ‘dream’ brands on a day-to-day basis, it never ceases to amaze us how difficult potential candidates find it to articulate why.

In order to secure the ‘dream’ job, there is one tactic that almost never fails: research. Passionate people only apply please. Introduce yourself to the brand. Let it become a part of you, consume you even. If you can’t do this, then the brand is not for you. This is a career choice, a lifestyle choice even, not a job. Know the difference. The success of luxury brands is not only driven by innovation, quality and exclusivity, but also by the lifetime loyalty of clients. Working for luxury is an extension of one’s passion. It cannot be feigned.

Image credit: luxuryinsider.com

Follow MO Luxury's Facebook page for more luxury news...

Valentino Announces 'Capsule' Collection With Gap 13/9/10

Valentino is teaming up with Gap to create an affordable women’s wear range, the ‘capsule’ collection. Designed by creative directors, Maria Grazia Chiui and Pier Paolo Piccioli, the announcement follows Lanvin’s collaboration with H&M, last week. Here at the MO Down, we understand the mission behind this project: to bring the iconic world of Valentino into touch with Gap’s everyday fashion essentials. It makes luxury accessible to a wider market, by combining luxury with basics.

Our concern is that this sort of collaboration may be becoming a little too common, so to speak. When we buy luxury, we pay top dollar because we know that Valentino, for instance, we get what we pay for. The quality and rich history the Valentino name has come to represent, guarantees us the best and finest of design and materials. The Valentino name speaks loudly for the calibre of the product. We wonder if the collaboration of luxury with mass-market brands will have a long-term effect on brand value for the luxury partner?

Surely, these sorts of collaborations will do wonders for the everyday woman’s wardrobe. And for the seasoned fashionista, Gap will never know the true Valentino. But will aspirational markets start to question the sense in paying big bucks, when they can get something designed by Valentino For Gap, for a fraction of the price? We are afraid that these ‘spin-off’ labels, will do more damage than good. Time will tell.

Image credit: glamourwave.com

Follow MO Luxury's Facebook page for more luxury news...

Department Stores Cut Costs As They Get Ready To Talk Numbers 7/9/10

It seems that cost cutting is the new black for Australian department stores. David Jones and Myer have both reigned in their spending– they have to reveal their full-year results later this month, and simply aren’t getting away with the excesses of the past. According to Deutsche’s retail analysts, David Jones is forecast to deliver a full-year net profit after tax of $171m, up 10 per cent, with earnings before interest and tax to rise 11 per cent to $251m. Myer is expected to report underlying net profit after tax of $165m, up 52 per cent with EBIT up 14 per cent to $269m. Gross margins are expected to be resilient in spite of industry discounting that reflects the benefits from supplier negotiations at DJs and the high-margin private label program at Myer. Retail trading conditions are still tough in the wake of the GFC, but things are looking up. Retailers are expecting a better Christmas this year than they have had in a while.

Image credit: theage.com.au

Follow MO Luxury's Facebook page for more luxury news...

The Gloss Goes Off Australia's Luxury Department Store - 3/8/10

Australia's luxury and oldest department store David Jones, with a seemingly unblemished history spanning 172 years, well known for their 'pied de coq' (hounds tooth) logo and the international luxury fashion they brought to Sydney post-war with Parisienne themed parades in 1947 introducing Pierre Balmain and a year later with the collection of Christian Dior's famous 'New Look', the first time Dior had ever shown outside Paris.

David Jones pride themselves on representing and nurturing local premium and contemporary fashion, accessory and beauty brands. Receiving enviable amounts of positive publicity on their celebrity dotted and beautifully orchestrated launches and the strategic 'designer exclusives' they are able to negotiate. But today, they find themselves in the news for all the wrong reasons.

Following on from the abrupt resignation on 18 June this year of Mark McInnes, David Jones' former CEO who was at the helm for a seven year period, clearly a resignation was simply not enough. In what is a landmark claim that was lodged yesterday in the Federal Court, Ms Fraser-Kirk, a 25 year old junior publicist said McInnes made unwelcome sexual advances toward her and she seeks punitive damages of 5 percent of the company’s profit and McInnes salary and benefits for the seven years he was at the helm, i.e. between 2003 and 2010. The amount comes to at least A$37 million. Any punitive damages awarded through the lawsuit would be donated to a charity helping those affected by sexual misconduct in workplaces, Fraser-Kirk said during today’s press conference.

The new CEO Mr Paul Zahra clearly affirmed the company profit forecast and the company’s strategy of targeting affluent female customers with designer fashions in cities and high-income suburbs. David Jones advised they will “defend the claims vigorously” and won’t comment while the matter is before the courts, the company said in a statement yesterday .

David Jones shares fell on this news yesterday and on the eve of their bi-annual spring/summer 2011 launch today at the flagship Elizabeth Street store, it is going to be difficult for David Jones to dodge this bullet. Affirmative action will need to be seen to be actioned by David Jones, a department store with a very strong and loyal customer base, a large portion of those being female.

Image credit: davidjones.com.au

Follow MO Luxury's Facebook page for more luxury news...

China’s Consumers Prefer Established Brands – 14/5/10

‘Hold Off Being Bullish On China’s Luxury Market’ says an article in The Wall Street Journal, which is based on a report just released by KPMG on the Chinese wealthy consumer.

A key point of the article was that Hugh Devlin, a luxury branding consultant, said that China's luxury market will catch up with the West very fast, but is "still relatively immature." He also suggested that “Western brands that look to China as a dumping ground for last season's products will likely not be successful.”

Another interesting finding from the KPMG survey was that “three-quarters of respondents said the financial downturn had little impact on them, while almost half said they expect their spending on luxury goods to be unchanged or to go up." Great news, breath out... particularly as most of the recently released luxury first-quarter revenue and profit figures have maintained continuing positive growth in China.

However, we suppose the luxury brands should not put all their pave wontons into the wok at once… The successful brands are the recognised brands, generally with a heritage or those that have invested years ago in China. New brand entrants have a harder act to follow and need to be informed as to the consumer tastes and how they like to be talked to.

Image credit: luxuo.com

Follow MO Luxury's Facebook page for more luxury news....

Client Relationship Management Is A Necessary Investment – 11/5/10

A recent Forbes article – Pitch Your Luxury Offering As An 'Investment Brand' – is an excellent example of the benefits of investing in the client for the long-term.

Recently, MO Luxury has conducted another round of online and in-field research to gauge what is important to the high net worth and existing luxury client, and the aspirational consumer. And the conclusion is, as other research has advised before and many more will advise again, every client wants to be treated with respect, acknowledged sincerely and warmly, provided with the correct product knowledge to ensure their experience (whether this be in-store, web/email or telephone) is professional and both efficient and effective.

Clients want to be treated as a person and not a number, lifetime customer values of fully satisfied clients are worth hundreds of thousands of additional dollars each year to your brand. Why risk not satisfying your clients at all, or only just satisfying your clients, when positive and consistent attitudes from staff, great training and clear and appropriate communication are the keys to creating loyalty.

So that’s why we were interested in this Forbes article, which serves to reinforce the long term relationship. Brands should 'invest' in each client by providing them with time and relevant information, there is an incredibly high probability that reciprocity will be seen, i.e. the client will invest with the brand(s) that show them the most loyalty. Quite apart from the additional future investment positive word of mouth will bring you.

We thought this was an important quote from the article: "That is, they should not be trying to get consumers to make a purchase but, rather, to make an investment. And, to succeed at this, they must treat their clientele (dare I say customers?) precisely like they are making an investment."

Image credit: coxnewsweb.com

Louis Vuitton Wins Big In The Brand Value Survey – 30/4/10

Q: What is the world’s most valuable luxury brand?

A: Louis Vuitton - according to a survey by market research firm Millward Brown Optimor (as discussed in The Luxist).

LV was followed by: Hermes, Gucci, Chanel and Hennessy.

We thought this was a particularly interesting article. Brand values are often debated amongst marketing and financial management as to whether an intangible asset, such as a brand, should go on the financial statements. At the MO Down, we know the power some of the brands hold, but it was still eye-opening to see Louis Vuitton with a brand value of nearly $19.8 billion. Now that is a serious asset...

For more discussion on ‘brand as an asset’, see our earlier article: Luxury Branding 101.

Image courtesy of the Luxist.

Confucius Say... Chinese Market Is Now Second Largest Luxury Market in the World - 26/4/10

Several articles in the MO Down have been dedicated to the Chinese market's voracious and growing appetite for luxury goods. According to a great article in The Huffington Post, Tom Doctoroff, North Asia Area Director of JWT advertising firm answers a range of excellent questions about what Chinese consumers really want. And the layered understanding that needs to be grasped by luxury brands in this lucrative market.

With China now the second largest luxury market in the world, that is (1) an incredible achievement in a relatively small amount of time; and (2) the growth seems destined to continue given the rate of success being experienced by this country with entrepreneurship and a vast and increasing range of business ventures operating internally and being exported.

Luxury brands must be focused on where in the life cycle the luxury consumer is, "the guy on the top of the mountain and he's never secure of his position, so he wants to stay on top - [reaching him] is about mastery and connoisseurship. ...Then you have new luxury - men moving forwards, in the middle of their journey. Then you have independent women and then you have youth." The integrity and professionalism of the product needs to speak specifically to these people.

"According to TNS, 64% of Chinese think luxury brands denote success, and only 1% think they denote superficiality." This is significant and therefore points to strong aspiration to actually acquire luxury goods, whether that be an entry point pair of sunglasses or a belt, it is the connoisseurship of the brand and the message it sends to each of these consumer groups. This is how they will make their purchasing decision.

The same thread with any market - clearly understand and 'talk' specifically to your consumer. So simple to say, not so easy to do. As real estate agents say, location, location, we say, relationship, relationship....

Luxury Branding 101 – 12/4/10

“Great brands make great investments.” This interesting headline caught our attention recently in an article in Forbes.

A great article, it focuses on the 'brand as an asset' and the growing acceptance of this by investors. It reveals that research by Credit Suisse has determined that “brand value gives companies a genuine competitive advantage.”

The brands highlighted in this article include Apple, Ralph Lauren and Tiffany & Co. Tiffany & Co. were praised for following the rules of branding by “continuing to design and produce unique pieces that appeal to a growing global audience of ‘Tiffany blue-box’ aficionados.”

We believe ‘brand as an asset’ is also about the company one keeps, or who their new 'bestie' is... Think Louis Vuitton opening a mega flagship store on the corner of King and George Street in Sydney's CBD, just opposite the Apple store… share the love.

Image courtesy of imageshack. It shows a Tiffany & Co. advertisement.