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

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Feud Between Hermes and LVMH? 05/11/10

We’ve been closely following the happening surrounding LVMH’s acquisition of Hermes shares here at the MO Down, and there has been an interesting development.

Monsieur Arnault, Europe’s wealthiest man (incroyable!) and CEO of the mighty LVMH group, has a history of getting his way. Let’s face it– he is an incredibly astute businessman, regardless of whether or not you like his modus operandi. Monsieur Arnault has his well-trained luxury eye firmly on one prize in particular. We’ll give you a hint: it’s something iconic and orange in colour. The primarily family-owned Hermes is firm in its stance that the business remain theirs at 73 per cent, and it looks like it could become a fight to the death for one of France’s most iconic brands.

It was a surprise revelation when LVMH revealed its acquisition of 17 per cent last week. Despite Msr. Arnault’s adamant denial that the move signifies future plans for a takeover, Hermes isn’t convinced. ‘If you want to be friendly Arnault, you should withdraw’ said Hermes representatives, questioning LVMH’s motivation. Hermes isn’t interested in becoming part of the luxury conglomerate. Msr. Puech (fifth generation heir of Emile Hermes, founder) told French paper, Le Figaro, ‘we are artisans; our goal is to make the best products in the world. We aren’t in the business of luxury, we’re in quality.

It’s rare to see such hostility between such big names and we can’t help but be fascinated to see how this plays out. We will continue to update as we hear…

Image credit: fashionphile.com

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Dior to Open Flagship Sydney Store? 04/11/10

We adore Dior, doesn’t everyone? With such a rich history and such artisanal qualities, the appetite for Dior is reaching pandemic proportions. Perfect timing for the opening of a flagship store in Sydney, wouldn’t you say? The store is rumoured to be opening within the next 18 months, and we’re actually quite surprised it hasn’t happened sooner. Especially since they have been talking about it for ten years. Dior really is one of the pure and original luxury brands, sitting comfortably alongside Chanel, Hermes, Louis Vuitton, Valentino and Yves Saint Laurent, to name a few.

Dior accessories are currently available in Sydney and Melbourne David Jones stores, as well as several DFS locations. However, the appetite certainly exists for the full range, whether that be ready-to-wear, handbags, shoes, costume or fine jewellery. Australian consumers are certainly ready, and we predict a mad rush when doors open. Exciting times!

Image credit: blogs.forbes.com/hannahelliott

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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

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Tiffany & Co. to Establish Presence in China 03/11/10

Yesterday we talked about the price of diamonds rising with increased demand, and that this is largely attributed to the growing market for luxury goods in China. Chinese brides are developing quite the appetite for diamonds, it would seem.

Tiffany & Co. are firmly entrenched in the engagement market, so it makes sense to see its strong and confident expansion into China. According to company representatives, Tiffany is planning to open a number of new stores in China in the near future, driven by robust sales growth in the market. Apparently, within the next three years, there will be between 25 and 30 Tiffany & Co. stores in China– including, 14 this financial year. There are currently 12 Chinese Tiffany & Co. stores, but with a 27 per cent increase in the fourth quarter compared to the same time last year, there is certainly an appetite for more.

It is also of particular interest to us that the 2011 jewels and diamonds collections were unveiled in Beijing on October 22. This is the first time Tiffany & Co. have ever launched a new range outside of the US, but we won’t be surprised if it’s not the last.
We’ve said it before, China is rapidly becoming the world’s largest market for luxury brands. We expect to see many more brands paying much closer attention to this market, in an attempt to attract the attention of as many customers as possible.

Image credit: latimesblogs.latimes.com

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Economics 101: Increased Demand Means Prices Will Rise... 02/11/10

We’ve recently spent a lot of time talking about China as an emerging luxury market. We haven’t been able to say enough, really. The increased consumption of luxury goods in China is having a real and important impact across many products and services in the luxury industry. Demand has suddenly spiked, and we are wondering if this increase will mean what economics guarantees it will mean: prices will rise.

Demand by Chinese and Indian brides for diamonds has helped to lift the global price of diamonds by 44 per cent. Wasn’t it Sade’s song… It’s A Diamond Life? We think this is very apt. The increase in diamond prices in addition to the increase in gold prices globally is really upping the total retail price if you want some chic ‘bling’ in your life, regardless of where in the world you’re purchasing. While we are still excited that global luxury brands are spreading their wings and doing very well, we had not thought this all the way through. We recently speculated that a new level of super-elite luxury might start to emerge as the luxury market increases in size… could diamonds and gold soon fall into this category? Time will tell…

Image credit: aclutx70th.com

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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

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