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  • Posted by: Dominik Prinz & Eric Morrison on Monday, October 15 2012 10:25 AM | Comments (0)

    Piggy BankOver the past two years, a curious trend has emerged amongst luxury brands.

    Across Italy, numerous high-end fashion brands have championed efforts to restore cultural landmarks. In January 2011, Tod’s CEO Diego Della Valle pioneered the trend when he announced a $34 million donation to restore the Colosseum in exchange for advertising rights. More recently, Gucci and Prada have continued the trend by broadcasting their investments in historic landmarks across Venice in return for commercial retail rights.

    Just as Italy’s consumer protection agency, Codacons, publicly challenged Tod’s role, many have responded to the brands’ initiatives with skepticism - questioning if the brands’ real intentions are purely “good” or rather calculated. Also, many wonder if this is a case of “good intentions gone bad” – especially if restoring cultural sites results in them being turned into high-end commercial stores that drive away local vendors.

    Such attacks indicate multiple tensions; one amongst them is the inherent challenge that luxury brands face in undertaking corporate citizenship. How can brands predicated on premiums and status for the select few amongst us credibly give back to society at large? And does the exchange of funding for promotional rights undermine this effort after all?

    Yet, the branded initiatives offer insight into how the luxury category can align corporate citizenship with the strategic objectives they have defined for their brands and business – as long as they take into account some critical considerations:

    First, the brands need to be strategic in aligning themselves with such momentous real estate. By linking themselves to iconic cultural sites, brands like Tod’s, Gucci and Prada can emphasize relevant associations such as tradition, sophistication or exclusivity. But they also need to be cautious in pinning down their messaging. Once consumers get the impression that these efforts are merely driven by commercial self-interest, advocacy can quickly turn into skepticism and distrust.

    Second, in working to preserve Italian heritage, brands have a chance to demonstrate “authenticity.” It is easy to identify the cultural and aesthetic synergies between such brands and their renovated sites. As Interbrand’s recent publication Meta-luxury: Brands and the Culture of Excellence argues, "Brands that have created value across generations are a valuable part of our culture." Yet, even on a tactical level, such brands recognize their own stakes in maintaining their nation’s architectural and cultural distinction, as “Made in Italy” claims and Italian roots in turn substantiate the brands’ premiums.

    Ultimately, luxury brands can step up to take on parts of the responsibility that public institutions can’t always live up to in an age of public deficit and funding cuts.

    If done right, luxury brands can demonstrate good Corporate Citizenship and close the gap between perception and performance. And they can venture beyond restoring important cultural heritage; they can restore consumers’ trust in a brand’s positive impact on society.

    Eric Morrison is an Associate Strategy Consultant and Dominik Prinz is as an Associate Director of Strategy for Interbrand.

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  • Posted by: Lizzy Stallard on Monday, September 12 2011 12:49 PM | Comments (0)

    While this certainly isn’t new practice, there’s been a flurry of recent activity between fashion brands and wheels. Let me explain. First, we have luxury exercise bike manufacturer, Ciclotte, which is working with with Roberto Cavalli to produce a new collection of colorful (and of course, animal print-infused) bikes. At first glance it seems rather bizarre, but then digging deeper, it appears that this collaboration comes ahead of the designer’s upcoming gym wear collection. Ah, there’s the link. I was struggling there for a minute.

    Next on the list comes the Gucci and Fiat 500 lock up. One could argue that the Fiat 500 / Gucci link seems to work as the 500 is steeped in Italian history and exudes a sense of Italian style, aspects that are mirrored in Gucci’s roots. What is critical though is the execution of the partnership. To what extent is a Gucci-clad interior plastered in the recognizable print possibly eroding the brand? If you ever wondered what it might be like to drive around in a Gucci handbag, now you can find out. Perhaps more discreet detailing could be more in keeping with maintaining quality and exclusivity, but then again if you are buying a Gucci branded car, your motivations are possibly not to keep it a secret.

    Then we move on to Victoria Beckham and Range Rover – this is an interesting one. Of course Beckham has earned her stripes in the fashion world, but she has a certain marmite-ness about her. People love her or hate her. To what extent is it a risky strategy for such an established heritage brand to lock in with someone who creates divided opinion? That said this collaboration feels fresher than perhaps the Gucci/ 500 partnership, because as “creative director” the customer will start to discover infusions of her style through the partnership, as opposed to just wrapping the car in a brand à la Gucci style.

    Collaborations and partnership strategies certainly require a great deal thought, careful execution, and ongoing management. Ultimately the underlining motivation for the tie up in the first place must be focused on increasing the value of the brands in question, as opposed to the lure of the short term sale. Approach is any other way, and it’s guaranteed to backfire.

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  • Posted by: Bertrand Chovet on Wednesday, May 4 2011 12:53 PM | Comments (0)

    On May 2, 2011, Volcom agreed to join the French luxury group PPR, owner of world-famous, iconic brands such as Gucci, Yves Saint Laurent, Balenciaga, Alexander McQueen, Bottega Veneta, and the lifestyle brand PUMA.

    The appearance of the “Youth Against Establishment,” boards sports and apparel brand in a portfolio of brands targeted at more mature customers may seem surprising. However, it already promises a huge potential of synergies betwee PPR, PUMA, and Volcom, from footwear to fashion. And in many ways it bears similarities to Nike’s acquisition of Hurley in 2002.

    But the most interesting piece of the acquisition is surely the youth content and what it should deliver in terms of influence and presence. Though Volcom's 2010 revenue was less than a tenth of PUMA's revenue, it outpaces PUMA's presence in other ways – for example, with approximately 1.3 million fans on Facebook, it has the lead on PUMA (with 4.7 million fans) by 27 percent.

    Why? Because Volcom speaks to skateboarders, snowboarders, and surfers in a unique tone and voice. The brand mixes rock, trash, and punk content with extreme sports and board sports. For years, the brand has been admired for its consistency and its ability to embrace skate, surf, and snowboard under one brand – a very specific lifestyle that speaks directly to younger audiences.

    While today, the Volcom brand doesn’t achieve the same level of business as PUMA, it seems clear that the owners are aiming to preserve its authenticity, protect and enhance its brand relevance, and also improve its operational efficiency. PPR’s acquisition definitely represents a turning point for the board sports industry – and for Volcom.

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  • Posted by: Interbrand on Wednesday, June 9 2010 02:15 PM | Comments (0)

    Interview with Jean-Baptiste Danet, CEO Interbrand Europe
    Published in La Tribune, May 31 2010

    (Lire en français ici.)

    Over the past few years, the luxury category has been influenced by a phenomenon called “accessible luxury.” How has this affected the luxury world?

    “Accessible luxury” is an oxymoron enabling those brands with a weaker heritage and less anchorage in the tradition of luxury to proclaim themselves as icon brands.

    This phenomenon has shrouded the luxury sector in a cloud of contradictions, made even denser by the economic crisis. It has shown how it is possible to either focus on dreams or on reality—but never simultaneously on both.

    How have the luxury brands reacted to this?
    Some luxury brands, like Ferrari, have chosen to control their growth and even limit production in order to maintain their legendary status. Others, like Armani, have deliberately adopted a volume strategy and endeavored to enlarge their customer base, thereby relinquishing the traditional notion of luxury. These two contrasting strategies have both paid off. It is important to highlight that the way in which consumers have reacted to the crisis proves that luxury is not a category a company can decide to enter. Rather, luxury is born of product excellence. Myths are based on reality, not the contrary. Today, it would seem that “genuine” has become “the exception.”

    Is this why some brands have returned to their origins over the past few months? 
    Genuine is the key factor of demand and therefore the factor that generates value. Those brands that have surfed on the “luxury for all” trend are no longer considered to be luxury brands per se. Well-established, historical brands have had to focus on their prestige/past glory—on what has made them legendary. Louis Vuitton has strengthened its “traditional” luxury status, notably with a well-inspired and successful advertising campaign highlighting its savoir-faire.

    For other brands, demand for perfection and excellence has enabled them to reconstitute a coherent positioning. This is, for example, the case with Hermès (see video below), which has always clearly expressed its positioning based on craftsmanship and the pursuit of the highest quality for its perfectly structured product catalogue.

    This endeavor to be genuine has also had an impact on distribution modes. All top brands—Gucci, Prada, Burberry, as well as Vuitton—have invested in expanding and/or realigning their distribution network. When it comes to preserving or communicating a brand image, sales outlets are just as crucial as the products themselves.

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  • Posted by: Manfredi Ricca on Friday, March 19 2010 10:10 AM | Comments (0)

    By Dara Kennedy and Manfredi Ricca

    As Emma and Rachel wrote in their last post about the celebrity apocalypse, the tragic suicide of Lee Alexander McQueen first shook a saddened fashion world and then left it speculating on the future of the brand. While it is no easy task to contemplate the next steps without the visionary at the helm, the brand must now consider its options.

    The challenge with Alexander McQueen is that he had become a uniquely strong personality in the fashion world (standing out in a sea of strong personalities). As WWD stated, he evolved “from traditional tailor to fashion iconoclast and consummate showman.” This makes managing the next steps particularly tough, as the person behind McQueen was driving the desire and demand of the brand as much as the style. And yet, while McQueen’s big personality may have helped to drive the brand, many believe that his unique production also stands on its own. If this is indeed the case, this uniqueness can be picked up, cultivated and revived by a new thinker and creator—and will eventually ensure the brand’s survival.

    However, before those managing the brand go ahead and begin pulling McQueen the individual apart from McQueen the brand, they need to let some period of time pass. To transition McQueen to another designer very quickly (whether the designer in question is an established bad-boy like John Galliano or a similarly iconoclastic young upstart) would be a mistake. The brand would struggle with retaining its authenticity. Even Karl Lagerfeld didn’t take the helm at Chanel until more than 10 years after Coco’s death.

    In the meantime, the best path forward may be to follow the lead of successful high-end beauty brands Bumble and bumble and MAC. These two brands have successfully created a buffer of sorts between the brand and the end consumer by cultivating a passionate group of professional devotees – makeup artists and hairstylists who truly believe in the brands, but appreciate the opportunity they have to interpret the products these brands offer through their own creative skills.

    PPR’s Gucci Group, Alexander McQueen’s parent, can work with McQueen’s team to select a group of young designers who greatly admire Lee Alexander’s work and are committed to carrying his legacy forward by preserving the integrity of his philosophy, but who can interpret it in a fresh way. Perhaps that group of young designers changes and evolves relatively quickly, allowing many young designers to have their time in the group spotlight. The Alexander McQueen brand is then still about Lee Alexander; however, it’s now about Lee Alexander leaving behind not only his inspired designs and razor-sharp tailoring, but also an opportunity for young designers, like him, to follow in his footsteps.

    Regardless of which direction it chooses, the McQueen brand will have to proceed with caution, making sure to preserve McQueen’s vision at every step. Luxury is, in the end, about DNA - a unique code at the basis of the brands’ existence and prosperity from one generation to the other. Luxury brands survive their namesakes when the latter has managed to pass their DNA on to their creations. When that doesn't happen, then that unique, inimitable DNA disappears forever with the namesake – and what remains is simply a soulless body.

     

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