Luxury

Brands at the Oscars 2011

Since the Academy Award, or the Oscar, was established in 1929, it has become a strong brand (see my previous article Events as brands: Paris Fashion Week). Its brand image is the one of glitz, glamour and red carpets.  That's why this event has been so much liked by luxury brands that are all about glamour and exclusivity.

This year, however, along with Gucci and Prada, it seems like the Oscars is becoming a bit more funky and relaxed.

First, it  will attract an unusual participant from the world of brands -- Omega 3 snack mixes Planter, a Kraft Foods brand.  With its Nutmobile specially made for this and other promotional events, Planter will make a statement about its support for the green and eco-friendly way of life.

The Nutmobile  by Planters

View image source here.

Second, many brands that are tapping into the huge advertising potential of the Oscars, will be exploring social media on a much larger scale that they've done so far. The Academy Award itself has been actively engaged in generating buzz about the event with a series of videos that feature young and hip hosts James Franco and Anne Hathaway.

Swarovski: enchanting the world

GINSENG_BangleToday SCHMOOZY FOX is happy to publish an interview with yet another Funky Brand -- Swarovski.

The origins of this Austrian company go back to 1895, when its founder Daniel Swarovski invented a machine for cutting and polishing crystal jewellery stones. Today, the Swarovski group, still family-owned and run by 4th and 5th generation family members, has a global reach with some 24,800 employees, a presence in over 120 countries and a turnover in 2009 of 2.25 billion Euros.

Swarovski comprises two major businesses: one produces and sells loose elements to the industry, whilst the other one manufactures and sells design-driven finished products. And it’s surely the latter that makes the Swarovski brand known to most of us. It’s particularly interesting to feature Swarovski on this blog, due to its positioning as a contemporary luxury brand -- after all, SCHMOOZY FOX’s area of particular expertise is what we call Affordable Luxury (join our Affordable Luxury group on LinkedIn).

NOBLY_Keyring Aqua

I am happy to talk to Nathalie Colin, Swarovski’s Creative Director of consumer goods, who’ll give us some insights into the company’s brand strategy.

SCHMOOZY FOX: Nathalie, Swarovski has a very long history of technological innovations and quality. How does a company with such a heritage manage to innovate and stay contemporary?

Nathalie Colin: On the one side, we have a heritage and values that we need to protect and maintain. On the other side, it is our responsibility to balance the heritage with the need for change, in a careful and respectful way.

We pay a lot of respect to the heritage of Swarovski, and to the initial visionary approach of Daniel Swarovski who founded the company. At that time, it required a visionary strategy and out of the box thinking to found this company in the middle of Tyrol. Daniel Swarovski knew early on that innovation was key, and that networking and collaborating with artists and designers (Christian Dior, Coco Chanel, Elsa Schiaparelli) was crucial to bring fresh ideas into the business.

From its very beginning back in 1895, Swarovski has been continuously exploring the extraordinary possibilities of crystal. And even now every step in our design process focuses on the same ambition: to push the boundaries of crystal.

Working with crystal is a given and I work with this in mind. I am particularly interested in various creative techniques with crystal: crystal mesh, pavé, stone set in stone, floating stone, exclusive faceted cut crystal stone, beading, embroideries, and Pointiage® -- a real craft couture technique where all stones are applied one by one by hand.

All these techniques open doors to endless creativity, especially when one can mix them together.

SCHMOOZY FOX: What about Swarovski’s co-operation with famous designers? I suppose this must be one of the important drivers that help create a contemporary brand image?

Nathalie Colin: It surely does! To give you an example, I am very pleased with our choice of inviting Harumi Klossowska de Rola as a guest designer the Spring-Summer 2011 season. One could say that Harumi is a Swarovski woman: modern, feminine, international, trendy, artistic, with an interesting personality.

She is also a muse, who has inspired photographers like Bruce Weber, Mario Testino, Althur Elgort. Elegance and mystery have become her signature.

Swarovski Nymphe zip coin purse, SS 2011

Harumi is the daughter of internationally renowned painter Balthus and Japanese countess Setsuko. She has an intimate connection with the world of painting, and she herself also paints. Our iconic motive of the season, the butterfly, is also one of her favorite animals (she has a butterfly-shaped tatoo). She was very enthusiastic to design a butterfly-inspired theme for Swarovski. The delicacy of the jewelry theme she has designed is really stunning.  On a personal level, I do appreciate the international spirit of Harumi, her sensitivity, her taste for cultural diversity… and her great sense of humor!

SCHMOOZY FOX: What does the brand of Swarovski stand for?

Nathalie Colin: Creation, perfection and innovation are Swarovski’s key values.

Our approach to design combines femininity and emotion with the rigour of innovation, and attention to details. Some of the technics we have developed (like the

Swarovski Nature brooch SS 2011

handmade Pointiage™ technic) have helped us create a distinctive signature style, and yet allow every accessory look unique.

In terms of brand positioning, we call Swarovski a contemporary luxury brand (SCHMOOZY FOX calls this “new luxury” or “affordable luxury” -- O.S.)

This positioning reflects our offering of desirable products which are accessible and have a broad appeal.

It also allows us to to combine our expertise in jewelry and crystal established since 1895 with creativity, quality and innovation to enchant our consumers.

This concept embraces the idea that luxury is no longer about acquiring for status. Instead, it has become a life enhancing experience that is linked to emotional enrichment and enchantment. Contemporary luxury is not elitist, it belongs to everybody. Swarovski is all about experiential value: enchanting the world, inspiring new perspectives, enhancing lives.

DOLLL_MPAContemporary luxury is provided by a brand that represents credibility, emotion, accessibility and is open to your heart. And this is why people come in our stores.

SCHMOOZY FOX: Could you tell me about the job of a Creative Director for Swarovski? Do you come up with all the new product ideas?

Nathalie Colin: I was appointed by Swarovski as Creative Director in 2006.  It is a great feeling to know that the work done by our creative studio will be known by large audiences.

Due to the scale of the company, I have a wonderful work environment as well as support with a large team of in-house experts one could dream of when it comes to product innovation, quality, plating, etc.

Finally, I very much relate personally to the brand’s ambition to enchant the world. This is such a positive vision! This concept embraces the idea that luxury is no longer a material acquisition for status but instead has become a life enhancing experience that is linked to emotional enrichment and enchantment. Swarovski is all about this experiential value: enchanting the world, inspiring new perspectives, enhancing lives.

And I really feel connected with what the brand stands for: credibility, emotion, accessibility and openness to your heart. And this is why I love being Swarovski’s Creative Director and why people come in our stores!

MILADY_BagSCHMOOZY FOX: Tell me a little bit about how you work, is there some pattern that you follow to launch new collections?

Nathalie Colin: Yes, there’s definitely a pattern that I follow. For example, I always start by researching the overall mood of the coming season: what is our state of mind ? Will there be a season of ornamentation? A season of exuberance? Are we going back to the roots? Is it more about vintage revival or rather a modernistic approach?

Once key trends have been identified, mood boards are designed to show possible sources of inspiration and key design concepts.  These boards stress the key colour mood and focus on the key colour palette. Important details such as the design of unique stone cuts focus on specific techniques. Decisions of whether to mix crystal with other materials are worked through in the next design steps.

The design of exclusive crystal stones takes place early on, inasmuch as the development of special colour coatings. This requires support from the innovation & product development team. Other teams that support our design process are product development, marketing, quality, production and supply chain.

To give you an idea of my collection planning schedule, in September 2010 I already started working on the Spring - Summer 2012 collection and began to inspire related teams throughout the company. The design phase started in October/November. And the samples will be fully approved and completed by June 2011.

SCHMOOZY FOX: I like Swarovski’s characters -- Erika and Eliot. Is there a story about them?

ELIOT URBAN BEAT_Keyring

Nathalie Colin: Yes, there’s a beautiful story about them! Eliot and Erika were born from a single crystal egg, and at birth the fairies gave them the power to bring instant joy and poetry wherever they go. Originally named Elvis, our young hero returns as a budding artist and graffiti tagger under the pseudonym Eliot. Easily recognizable and exemplifying Swarovski’s unique creativity and know-how, Eliot and Erika re-appear every six months with brand new looks and accessories. Originally launched in the form of pendants, today Eliot and Erika appear on a whole range of Swarovski leather goods such as coin purses, clutches and even handbag charms. Since their debut in Spring/Summer 2008, the pair has become a great success, eagerly awaited each season by fans across the globe. Many other adventures are already planned for Eliot and Erika in the coming seasons.

SCHMOOZY FOX: What are the main highlights of Swarovski’s brand strategy? How does it plan to stay a very innovative, exciting and funky brand in the future?

ERIKA URBAN BEAT_KeyringNathalie Colin: Our key brand strategy objectives are work on the architecture concept, celebrity marketing initiatives and work on new market segments.

We plan to expand a new retail concept to the new and already existing retail network. Today, Swarovski is an international player with strong retail business of 1800  branded boutiques and other points of sale in all major fashion capitals around the world.

It is in the luxurious and world famous Ginza district in Tokyo that Swarovski showcased the utmost creative expression of the ‘Crystal Forest’ concept with the opening of its first Flagship Store at the end of March 2008. And in December 2009 we opened a new boutique on 146, avenue des Champs-Elysées in Paris.

Speaking about the new retail concept, it has been designed by Tokujin Yoshioka as a multi-sensory experience, giving visitors the chance to immerse themselves in the seductive brilliance and infinite depths of crystal. We wanted the new retail architecture to surround the brand with a true crystal experience focused on pleasing the senses. We plan more than 150 openings this year and do have similar plans for the years to come.

Regarding celebrity marketing, since 1999, Swarovski has been deeply involved in the Cannes Film Festival, and since 2000 in the Academy Awards (the Oscars) and more recently as an official sponsor of the Toronto International Film Festival.

With a strong presence at major star-studded events such as the Grammy Awards, Golden Globes and Césars, internationally renowned celebrities such as Madonna, Sharon Stone, Marion Cotillard, Penelope Cruz, Aishwarya Rai, Zhang Ziyi and Jennifer Aniston select Swarovski for their red carpet appearances, and this of course helps enhance the brand of Swarovski even further.

All images in this article are courtesy of Swarovski.

3 psychological reasons why low-income consumers buy status goods

Image by shannonkringen on Flickr

Here’s a fascinating study that many nerdy (and funky) marketers will find useful.

The study was written by professors Niro Sivanathan from London Business School and Nathan C. Pettit from Johnson Graduate School of Management at Cornell and it’s called Protecting the self through consumption: status goods as affirmational commodities. Professor Sivanathan from LBS has kindly shared the study with me, and today I’m happy to give you a short overview of its main findings.

Let me start by asking you this simple question: WHO are luxury goods produced for? If you think that it’s only wealthy folks who wear expensive clothes and go vacationing in the world’s best hotels, you will be seriously mistaken.

The truth is, low-income individuals often pay for luxuries that they can theoretically not afford.

How can this be explained? The main reasons are, according to the study, psychological.  Sometimes, buying a luxury good, or indulging in a luxury service is the simplest way to repair our egos.

This can take several forms:

1) People seek status goods when they experience self-threat and need to heal psychological wounds. This is true for both high and low-income individuals.

For example, if you are a woman who has just gone through a divorce, you’d be likely to find yourself tempted to spend significant amounts of money on new clothes, beauty treatments, gym subscriptions and exotic vacations. Because this can make you feel good about yourself -- and this is worth paying a high price for.

Interestingly, the study showed that when individuals have another route to repair their self-integrity -- an alternative to acquiring status goods -- they tend to be less interested in seeking these goods.

2) Status goods serve the purpose of protecting an individual’s ego from future self-threats. They often serve as a buffer, or armor, against things that can go wrong in the future. In the study, those individuals who were asked to imagine that they had an expensive car, felt less threatened to face future self-threats than those without a car.

3) Some individuals’ lowered self-esteem drives their willingness to pay a premium on status goods. This explains economists’ observation that it is “often those earning the least that spend the greatest fraction of their income on conspicuous consumption”.  They acquire goods not for their functional properties, but to signal social status.

I remember witnessing my friends spending all their annual savings in one go (!) on a pair of shoes or jeans right after the Soviet Union collapsed. Status was everything and people were prepared to give all the cash they had to signal their associations with expensive and, importantly, famous, brands.

What might be the implications of this study for those who want to build Funky Brands™ ?

  • First of all, a status good is technically speaking not only simply a very expensive and good quality item. It is first and foremost a strong b r a n d. From the consumer’s perspective, there’s for sure no reason to spend any money, especially if her income is not that great, on something that is not known by others.
  • It’s often not just luxury, but affordable luxury goods producers, who are able to deliver on two important aspects. First, they can sell their products at prices which are not as high as pure luxury. And second, they are able to infuse these goods with an aura of style, luxury and status.

So, if you urgently need to repair your ego, you can do it perfectly well by getting yourself a Victoria’s Secret lingerie set, and skipping La Perla altogether.

Join the Affordable Luxury group on LinkedIn, and share the news and opinions about this exciting segment.

Ice Watch -- putting it all together

Jean-Pierre Lutgen CEO of Ice WatchThe sleek business card of Jean-Pierre Lutgen, CEO of Ice Watch, displays the addresses of his two offices: one located in Bastogne, a Belgian town near the border with Luxembourg, and another one in Hong Kong. From Europe to Asia, this funky brand has become true arm candy for millions of fans. Although the company was founded only 3 years ago, it’s difficult to refer to it as a startup, as the high brand recognition of Ice Watch internationally puts this company already in the league of well-established funky brands. Today, Jean-Pierre Lutgen, the creative and entrepreneurial founder and CEO of this funky brand, talks about his passion for Asia, plastic, marketing and putting pieces of the puzzle together.

SCHMOOZY FOX: What’s the concept behind the brand of Ice Watch?

Jean-Pierre Lutgen: Ice Watch is based on two main elements: people’s desire to seize and express change, and a strong identity. To address the former, we have put together 10 different watch collections. Collections change twice per year, just like in the world of fashion. Their affordable price (staring at Euro 59 per watch) allows people to buy several watches at a time, so that they could match their different outfits, and different moods. We know that many of our customers like to collect different models of Ice Watch. Because they like change! Even our brand slogan is, “Change. You Can.”

The strong identity is seen not only in the funky and refreshing design of the watch itself, but also in its packaging, which has become an inseparable part of the product, and of the brand as a whole.

ice_watch packaging

SCHMOOZY FOX: To prepare for this interview, I’ve watched several videos about Ice Watch in which you talk about the company. But you rarely talk about yourself. What is your background, and how did you make Ice Watch happen?

Jean-Pierre Lutgen: I studied at the university in Louvain-La-Neuve, and then I spent 10 years running a small corporate gifts company in Bastogne. I was quite different from my university friends, who all went on to work at established companies, and followed structured career tracks. My corporate gifts company had many ups and downs throughout the years, but I overall I enjoyed this highly entrepreneurial experience.

SCHMOOZY FOX: But besides studies and work, there must be other personal interests and skills that made Ice Watch possible?

Jean-Pierre Lutgen (smiling): You know, I think that success in life does not suddenly appear out of nowhere. Same with me, I can now see that a lot of my interests, passions and experience have developed over time. They were like pieces of the puzzle, lying around scattered on the floor. And finally, I put the puzzle together! For instance, as a small boy, I liked playing with pieces of plastic. I’ve always loved Asia. And I’ve appreciated the power of smart marketing. In addition to that, during my experience at the corporate gifts company, I made precious contacts in China, who later on became my very trustworthy manufacturers of Ice Watch. So, in the end, many of my passions, interests and skills fell into one place.

colorful ice watch

SCHMOOZY FOX: Often startups think that their brand will take care of itself. How did you approach the brand strategy of Ice Watch?

Jean-Pierre Lutgen: My impression is that most startups apply brand thinking in the best case only to the product. This is not a recipe for success. For me, a strong brand concept was the starting point of the whole business. The raw idea was mine, but I bounced it off many knowledgeable people, and invested the necessary time into refining the concept over and over again. Afterwards, I made sure that each element of my business strategy supported the brand concept.

I did think through the brand strategy early on, indeed. I also knew that expansion of the brand, and the growing demand for the watches had to match our ability to scale up production very quickly. And this is when I could rely on the already established network of reliable business contacts in Asia. A combination of brand thinking and dedicated production facilities was really powerful.

SCHMOOZY FOX: It’s hard to believe the amount of press coverage internationally that Ice Watch has received since its launch. Can you attribute this success to a single event or a series of activities?

Jean-Pierre Lutgen: I worked with PR firms in each of the countries where we were launching Ice Watch. But instead of fully outsourcing press relations, I myself was fully involved in organizing events and press conferences for journalists. I guess, as a complete outsider, I just thought out of the box all the time and spotted unexplored ways of connecting with journalists. For instance, instead of inviting them to the Ice Watch launch events by email, I insisted that we send them empty Ice Watch packaging boxes. When they received attractive boxes, of course they were curious to see what was inside. And when they opened them, they saw a custom-made invite which replaced the actual watch. They were intrigued, liked the packaging, and wanted to discover the product as well!

SCHMOOZY FOX: Who is the blond lady who features on almost all ads of Ice Watch? Is she a celebrity?

Melissa Ice Watch ad

Jean-Pierre Lutgen: She certainly has the looks of a celebrity! Her name is Melissa, and she is very far from the world of fashion and modeling. She works in her mother’s restaurant in the Netherlands. I had a very clear idea of what kind of woman could be our brand ambassador. I explained what I was looking for to a well-known fashion and art photographer from Antwerp, Marc Lagrange, and he found Melissa. The photos, as well as the rights to use them, cost me 10 000 Euros, which was a ton of money for a startup! But in reality, it’s very affordable compared to what I would have paid for a well-known celebrity!

SCHMOOZY FOX: What’s behind the name “Ice Watch”?

Jean-Pierre Lutgen: Brand naming was an important aspect of the overall strategy for us. Initially, we wanted to make transparent watches, and “Ice” was a good match. But even though we extended the concept to a variety of materials, not only transparent, Ice Watch was still our top choice. “Ice” represents purity. Nowadays, when humanity has to deal with the problems of rising temperatures and climate change, ice has become a luxury! In other words, Ice Watch is pure, democratic, transparent in the way it communicates and connects to people, and luxurious at the same time!

SCHMOOZY FOX: Where do you get so much energy to develop your funky brand?

Jean-Pierre Lutgen: From working with people! I travel all the time, and I don’t sleep very much, but once I start working with passionate people around me, I find the energy back.

SCHMOOZY FOX: And finally, why is Ice Watch a funky brand?

Olga Slavkina & Jean-Pierre LutgenJean-Pierre Lutgen: The watch industry is rather traditional and somewhat conservative even. Ice Watch has stormed this product category by a refreshing concept, and its democratic values. “Funky” also signals “affordable” to me, and Ice Watch has become a true affordable luxury, able to brighten up the mood of many people around the world.

Coach finally comes to Europe

Snapshot of the Coach web site

Coach and Affordable Luxury brand strategy

Coach -- a brand of hand bags from the US -- has frequently featured in class discussions during my marketing courses.  One could argue that its phenomenal brand success story can be attributed to a carefully orchestrated strategy of affordable luxury -- selling high quality bags at high prices, and at high volumes. In fact, its success has been so big that it has posted sales of $ 3.5 billion in the United States in the last financial year.

I knew about Coach not only from my nerdy MBA books.  I visited a Coach shop for the first time during my first visit to the US, back in 1994.  I went to a Coach shop again in 2000, when I was studying in Boston.

Both times, I was almost mesmerized by the almost magical effect that this brand seemed to have on those who visited its stores.  American women looked happy and proud to leave with a new status symbol in their hands.

But to the Europeans, spoiled by  a massive choice of high quality brands of hand bags, Coach has been literally unknown. With the competition so fierce, no wonder Coach waited for so long before entering Europe.

Coach in Europe -- lessons for other American brands

And finally, here it is. It chose to open its first European shop-in-shop in Paris -- a logical choice of the iconic capital of European fashion and style. The grand opening took place at Printemps on August 31st.

The distribution strategy that Coach will adopt will play an extremely important role for the degree of its brand success in Europe.  Provided it is able to compete with many European brands in the same product category, it will establish a good pathway for other American affordable luxury brands in Europe.

A specific US brand with a successful affordable luxury positioning is Victoria's Secret.  A sure winner on the US market, Victoria's Secret is likely to face a challenge of many established lingerie brands on the European market. It should closely watch Coach and learn lessons from its brand strategy in Europe.

POLL: Vote for the funkiest startup brand

The summer is over, and our summer funky startup contest has come to an end. SCHMOOZY FOX has selected, and interviewed three exciting startups:

1) Crashpadder, an online community that helps find cheap short-term accommodation 2) The Smart Hanger, eco-friendly paper hangers from Toronto 3) Zigfreda, a colorful luxury wear brand

We think that all of them are on the path of building funky brands.

Which one do YOU think should benefit from our free brand coaching?

Click on the links above, read the interviews and M A K E  Y O U R  C H O I C E for the FUNKIEST STARTUP BRAND! Select your choice form the list below, and hit the VOTE button. The voting will be closed on Tuesday, September 14, 2010 at 10 pm Brussels time (GMT +1). And please keep this in mind: there will be only ONE vote allowed per IP address.

The voting is closed, and results will be announced shortly.

Zigfreda -- pressing the Refresh button

Zigfreda-Teaser-Katia&Hans

Zigfreda is a colorful luxury wear brand that was started by a Brazilian designer Katia Wille together with a Dutch businessman Hans Blankenburgh back in 2004. This makes Zigfreda and its sub-brand for kids, BabyZig, far from being a startup, one might say. However, Zigfreda had to re-invent all of its key business elements almost entirely, when the founders decided to relocate the company from Rio de Janeiro to Amsterdam two years ago. This is why I can refer to it as a “re-startup”, and I am happy to host it as the third, and final, runner up in our funky startup contest.

SCHMOOZY FOX: What’s the story behind the brand name Zigfreda?

Hans: We came up with this name while sitting at a cozy cafe in Amsterdam several years ago. Back then, we knew that we wanted to create an exclusive brand for women, so we wanted the name to sound feminine. We don't talk about Zigfreda as belonging to a specific country, Brazil, The Netherlands, Italy, you name it. We believe that neither design nor the name have to be linked to any particular geography!

Zigfreda-Teaser-SS11B-1

SCHMOOZY FOX: Tell me about Zigfreda’s beginnings in Brazil. Was it a smooth start?

Katia: After Hans and I met, we spent several years in Europe, and then decided to move to Rio and start our new brand there.

I come from a family of couturiers, both of my grandmothers were making bridal clothes, and I was drawing from a very early age. After studies at a design school I worked for Nike, Tommy Hilfiger and O’Neill. While I was on holiday in Rio, I met my old aunt and she showed me her vintage collection from the fifties, sixties and seventies. She wasn't using any of these clothes anymore, and she gave them to me, simply because I liked these pieces so much. When I saw them, I suddenly had a creative urge to do something different with this collection!

DSC07273_1A friend of mine, who was an owner of a popular fashion boutique in Rio, encouraged me to alter the vintage pieces, and then organize a vernissage at her shop. I transformed the entire collection by mixing prints, making skirts out of dresses, and so on. As a result, I created 30 unique pieces out of the original clothes. The vernissage had a phenomenal success in the press, and all of the collection was sold out. I sold it under the name of Zigfreda, and our brand story was born.

In 2002 I also received a job offer to work for one of the prominent fashion houses in Rio, so Zigfreda did not materialize right away.

In 2004 we started to sell in luxury boutiques and department stores in Brazil. This led to an invitation for Fashion Rio (The Fashion Week of Rio de Janeiro) followed by Sao Paulo Fashion Week. We grew organically, and in 2008 Zigreda clothes were sold in Brazil, Japan, South Africa, Hong-Kong and Singapore, to name a few.

SCHMOOZY FOX: With a business running smoothly, why did you decide to put everything on hold and make a totally new start in Europe?

Hans: Though Brazil is a great country with major opportunities in luxury market space, often better profit margins can be reached from more international strategies that allow higher quality and lower cost of fabrics, machinery and production. We decided to change our strategy to Europe & Asia to allow more scale for sales, PR and production.

Img2538

There were many advantages for us to make Zigfreda a truly international brand by operating out of Europe.

This decision coincided with the market downturn, and we had to reinvent our business almost from scratch. True, we had developed a lot of knowhow and expertise in many areas during our time in Brazil, but such important elements as team, production process, and sales channels, had to be launched from zero!

SCHMOOZY FOX: Did you have to put your collections on hold during this business re-start?

IMG_0144---Version-2Katia: Yes, we skipped three collections. With our Spring-Summer 2011 collection we want to bring a new beginning to Zigfreda, now located in Europe with production facility in Italy, Portugal and Asia.

BabyZig, a new brand for kids from 3 months to 8 years of age, is a very new brand, for instance. We did test it in Brazil, but the real launch took place this past summer in Milan during the Pitti-Bimbo trade fair. The Zigfreda Spring-Summer 2011 sales season will be launched in Milan (White fair) 24th -26th September and our showroom in Paris (TENT Showroom, Rue Charlot 33, 1st – 5th October).

SCHMOOZY FOX: How could you summarize the brand essence of Zigfreda?

Hans: Zigfreda as well as BabyZig are international brands that don’t know any geographic boundaries. Although both are certainly upmarket brands (the average price of Zigfreda is Euro 350 and BabyZig Euro 160), they are also very democratic.  This is especially true as regards the way I myself talk about them.

We are very open about sharing knowledge. I share my business life through social media, help and coach other business owners and also receive a lot back from them. The outdated notion that sharing might be counterproductive is simply not valid, in my view. You share, you learn, and you grow. We also want to find and create an environment in which people could find ways to explore their connections with Zigreda.

IMG_0089---Version-2Katia: Zigfreda is almost like a favorite painting -- it can be a matter of personal taste, and perhaps not for everyone. But once chosen, it lightens up your day, every day! I want my clothes to trigger the emotions of empowerment, femininity and happiness in women. Femininity is really key to Zigfreda. I’ve heard many people refer to Zigfreda as a “Southern” brand, probably due to the exuberance of colors, but my color palette is beyond North or South, it’s just my vision of true happiness that I translate into fabric prints and designs. I think it’s this happy emotional outburst that people like so much.

SCHMOOZY FOX: What are your plans for the future?

Hans: Our main objective is to establish brand awareness in Europe, select the right sales channels, and also introduce a line for teenagers (bridging the gap between BabyZig and Zigfreda) -- of course all in due course!

Katia: the main plan for me is to remain in the mindset of a startup! I believe that it’s never a good idea for a brand to become comfortable with the status quo. I want to be able to have enough challenges to overcome so that the brand grows ever stronger! I want to press the Refresh button over and over again!

ZigfredaLogo

Invitation to join two new LinkedIn groups

funky  brands by SFToday I want to draw your attention to the two new groups on LinkedIn recently created by SCHMOOZY FOX. First, there's a group called FUNKY BRANDS.

Here is a direct link to this new LinkedIn group and I invite you to join it!

Another LinkedIn group recently created by SCHMOOZY FOX  is called Affordable Luxury.  It is also very relevant to all those who are in the business of building innovative, striking (aka "funky") brands. Here is the direct link to this LinkedIn Group.

In one of my previous articles called How Funky Brands Can Be Profitable, I discussed how a consumer product or service could succeed if positioned in the affordable luxury segment.  This segment can also referred to as mass luxury or new luxury.

From SCHMOOZY FOX's perspective, there's a close link between two groups.

In fact:

The Affordable Luxury group falls nicely with the concept of funky brands.

There are several ways of looking at it.

In fact, most of SCHMOOZY FOX's clients are consumer goods or services seeking to craft a brand strategy that will aim at their positioning as affordable luxury brands. And in our experience, most funky brands are exactly affordable luxury products or services!

Just have a look at our Funky Brand Interviews with all those brilliant businesses that have been built based around such elements as creativity, design, affordable luxury and fun!

SCHMOOZY FOX invites you to become members of one of both groups on LinkedIn!

Schmoozing and fun are guaranteed! :)

Funky Brand Interviews are one year old!

Photo by Theresa Thompson on Flickr Today, SCHMOOZY FOX's  Funky Brand Interviews are turning one!

Since last June, we've interviewed founders and top managers of some of the funkiest brands out there. In each of these interviews SCHMOOZY FOX has tried to uncover personalities and interests of real people behind brands, as well as learn insights into these innovative companies from a personal perspective of people who work there.

From the Dutch lingerie queen, to a talented photographer who helps people build funky personal brands, to a funky T-shirt brand and a top luxury fashion designer -- all of our interviewees could identify with SCHMOOZY FOX's concept of funky brands. And this is definitely something to celebrate!

Below is the list of all SCHMOOZY FOX's Funky Brand Interviews to date, and there will be more funky ones coming soon!

And don't forget, we'll continue to celebrate throughout the summer! If you are a funky (or funky-to-be) startup, you can learn how you can benefit from some top-notch brand strategy coaching that we've arranged for you FREE of charge! Learn more here.

OUR FUNKY BRAND INTERVIEWS TO DATE

Interview with Rowan Gormley, CEO of Naked Wines

Interview with Marlies Dekkers, the Dutch "lingerie queen"

Interview with artist Thaneeya McArdle

Interview with Kyan Foroughi, CEO of Boticca,com, an online jewellery market place

Interview with James Payne from Baileys Irish Cream

Interview with Tekin Tatar from BeFunky.com

Interview with Wim Somers from Theo

Interview with founders of Lotty Dotty

Interview with Michael Chia, a photographer who helps build funky personal brands

Interview with Martin Bachmann, CEO of Maurice Lacroix watches

Interview with Anders Wall, CEO of Biomega bikes

Interview with fashion designer Tim Van Steenbergen

Celebrating one year of Funky Brand Interviews

Photo collage

Today I have some important news for you!

At the end of June, SCHMOOZY FOX will be celebrating one year of its Funky Brand Interviews.  And in this respect, we have some great gifts to offer to those who want to build a funky brand!

Last June, an interview with Rowan Gormley, CEO of Naked Wines, a UK-based online wine retailer, marked the start of the new category on our blog, Funky Brand Interviews. Since then, SCHMOOZY FOX has published interviews with founders and top managers from such famous brands as Marlies Dekkers, Baileys, Tim Van Steenbergen, Theo , Biomega and others.
Today, we’re announcing a call for up-and-coming funky brands!

If you know talented and passionate entrepreneurs setting up an innovative brand, please spread the news to them!

Rules of the game

Very simple! All that we require is:

That you are a start-up, either just launched, or seeking market entry That you want to build a very successful brand to fall in love with

That your main industry is Consumer Goods or Services, particularly in the "affordable luxury" segment

Our prize

SCHMOOZY FOX will identify three semi-finalists, all of whom will be interviewed for our blog. Out of the three interviewees, we will select 1 finalist, who will also receive a:

FULL DAY OF BRAND AND MARKETING COACHING by SCHMOOZY FOX

It’s a great way to start building your brand awareness online through SCHMOOZY FOX's social media channels.  It's also a fantastic opportunity for ideas-rich and cash-poor start-ups to get smart advice on how to get on the right brand & marketing track right from the start!

How to apply?

Please write an email to olga (at) schmoozyfox (dot) com with the subject “Funky Brands”, or publish a post on our Facebook page, and tell us why your company is, or has the potential to become, a funky brand. For funky brand criteria, visit our blog.

Timeline

Submissions will be accepted until July 17th, and winners will be announced in August.

Please note that SCHMOOZY FOX’s past and present clients, as well as interviewees, are not eligible for participation! :)

Please spread the news, and happy schmoozing!

True luxury: inclusivity vs exclusivity

I've just come across a series of thought-provoking posts on springwise. Their common theme is brands trying to build loyalty with online tools. Whereas some of them do it in a democratic and "inclusive" way, others opt for "exclusivity". Let's see how this might result in their brand positioning. One article describes a hotel in NYC which has set up an online forum for its guests. The Pod Hotel offers budget accommodation for young travelers, and the forum is a brilliant solution to help them connect to each other in real life, and have fun together in NYC. It clearly addresses the pain particularly of those who travel alone and don't know anybody in New York City.

Snapshot of Pod's online forum for registered guests

This is a brilliant idea, and The Pod Hotel is surely on the good track of creating some valuable loyalty with this simple online solution.  My advice is that it should definitely do a bit more to make this feature known on its website. As it stands now, the site fails to communicate it. I don't know if it's a planned move or not. If yes, I suppose that the reason might be that the hotel works at capacity most of the time, in which case the forum is only there to trigger repeat visits rather than recruit first-time customers.

Another idea featured on the same site is an online social network launched by the airline KLM. The online network is not targeted at all KLM's customers, but only frequent flyers.

For the moment, KLM has set up two online communities -- one for China, and another one for Africa. Essentially, the main target is entrepreneurs who all share the same challenges working in emerging markets.  They can discuss issues of common interest and network online, which triggers encounters offline.

KLM even organizes offline networking events for the online community members both in China and throughout Africa.  KLM says that its online social community is "exclusive" and by invitation only.  My guess is that this exclusivity is tied to KLM's reward program which actually makes sense.

Think of it: the more you fly, the more chances you get to meet like-minded entrepreneurs. And the better you should get rewarded by an airline company for your loyalty.  So, this kind of "exclusivity" achieves both goals -- it rewards frequent flyers whilst giving them a possibility to socialize.

A snapshot of KLM's online community for frequent flyers

I also want to address another kind of "exclusivity" which rarely does anything good if a brand seeks positioning in the luxury or affordable luxury segments.

I've come across many brands, especially various online shops, which try to create an aura of exclusivity out of .... well, pretty much nothing.  I find it amusing when some freshly launched site writes  me to become their member "by invitation only"and start shopping there.

In this respect, the example mentioned on springwise is Claseo, a recently launched "luxury" label. Unfortunately, it's not possible to have any idea about how luxurious its designs are because you can't enter their site. The reason is that the site is "exclusive" and by invitation only.

Snapshot of the invitation-only site of Claseo

I think it's counterproductive to seek positioning as a luxury brand through such self-limiting "exclusivity".  Whereas this might be feasible in instances when brand equity is already at its peak, this move is rarely a good solution for a start-up.  This is particularly true for web start-ups.  Building a user base is of ultimate importance for them, and certainly a key to creating a strong brand.  I have written and spoken about this on several occasions.

Looking at three examples above, the "inclusivity" of the budget hotel in New York in fact makes it truly exclusive. By solving the real need of its customers -- a simple human desire to socialize -- the hotel succeeds in occupying a very lucrative segment of affordable luxury.  The same refers to KLM's online social network for frequent flyers, which helps entrepreneurs connect and socialize in real life.

Funky brands are smart because they understand what true luxury is, and although it may sound counter-intuitive, in many cases being inclusive and democratic, rather than "exclusive", is what really helps build a great brand!

Anders Wall, CEO of Biomega, talks about city biking as a new luxury

The MN bike by Biomega

Having talked about square wheels in the previous interview featuring a Swiss watch brand Maurice Lacroix, today our focus is on round wheels -- a Danish brand of bikes called Biomega. Launched in 1998 by an industrial designer Jens Martin Skibsted, Biomega is a company that has been building its brand through a rigorous strategy of brand partnerships. Through co-operation with PUMA and such world-famous designers as Marc Newson, Ross Lovegrove and Karim Rachid, as well with its bikes featuring in permanent collections of art museums, the brand of Biomega has occupied a very interesting niche on the bike market: a stylish, funky and functional luxury item for use in the city. Today I am happy to host Anders Wall, CEO of Biomega who shares his views on city bikes and funky brands.

Anders Wall

SCHMOOZY FOX: Anders, the name Biomega sounds a bit like it could be a brand of healthy food or vitamins. Could you tell me the story behind the brand name?

Anders Wall: Indeed, some people also think that there is something “bio” about it. But in reality, the name was conceived as “bi omega” which visually would look like this ΩΩ. Two letters "omega" put together do look like a bike.  Later on the name took a life of its own, and there’s no such association in customers’ minds.

SCHMOOZY FOX: Did Biomega follow a strategy of brand partnerships and co-operation with famous designers right from the beginning?

Anders Wall: Jens Martin Skibsted, the founder of Biomega, has designed most of the bike models. But indeed, Biomega was set to build its brand through partnerships with such famous designers as Marc Newson early on.

SCHMOOZY FOX: What’s the brand philosophy of Biomega? How are you reinventing the wheel?

The Boston bike

Anders Wall: We think that a bicycle is often portrayed as a product consisting of many spare parts, rather than a complete whole. The “spare part” brand discourse is very typical to most bike brands, and it’s very rare that they address the values and needs of consumers other than technical performance. For Biomega, a bike is based on the concepts of integration, drivability, durability and visibility. By integration, we mean that a bike is one whole that can bring a lot of aesthetic value to the owner. By drivability, we mean that a bike should be easy to drive, fast in acceleration and quick in braking. Durability refers to the fact that our bikes will last. All of these qualities are important to keep in mind when a new model of Biomega bike is conceived and designed. And finally, visibility means that our bikes must make both the product and the user noticeable. Our products stand out in the crowd, and so does the person who's using the bike!

SCHMOOZY FOX: Why do you refer to Biomega bikes as New Luxury?

Anders Wall: Bikes and biking as a process in general is hardly ever associated with luxury. Biomega does add luxury to bikes, primarily through superior design. What’s important is that Biomega bikes are meant to be used only in the city. Through their ease of use and funky design they in fact compete with cars! In this sense, owning an astonishing bike with luxurious design as opposed to having to sit in traffic jams becomes a true luxury.

SCHMOOZY FOX: How much does it cost to own such an object of new luxury?

Anders Wall: The majority of our bikes cost around 1.200-1.500 Euro. Our special models like the MN is more expensive (prices start at around 3.500 Euro). Our most exclusive bike, a carbon version of the MN with special components, is sold at the price at 6.500 Euro. Our bikes are distributed through design stores,  as well as selected bicycle stores.

SCHMOOZY FOX: Besides co-operation with famous designers, Biomega also went into brand partnerships. Could you speak about Biomega’s partnership with Puma?

Anders Wall: We have worked on a brand partnership with Puma for five years now. The brand partnership was based on the Biomega model Boston, which was created in special versions for the Puma brand stores around the world. These Puma versions carried both the Puma and the Biomega logo, and were unique in colors. Last year, our partnership was taken further and we are now a licensee of Puma. In the coming months we will introduce a new range of Puma bicycles – 5 models in total – which have been designed and produced by Biomega. Where the previous bikes were only sold in Puma brand stores, the new range will be sold through bike stores all over the world and online. This is a very exiting new business for both Puma and Biomega.

SCHMOOZY FOX: To what extent do you think Biomega can be called a Funky Brand?

Anders Wall, CEO of Biomega

Anders Wall (smiling): I think that SCHMOOZY FOX’s definition of funky brands is very much in line with Biomega’s philosophy. We are small (there are only 6 employees at Biomega!) but a very agile company. We think we have created a great company culture and built the business through a very rigorous brand strategy right from the start. The funky aspects are certainly seen by the final customer, but only few people realize that behind this there’s a lot of very meticulous business and brand strategy work done within the company! We’re also outward rather than inward-looking, and through our brand partnerships we have achieved a global reach.

SCHMOOZY FOX: Do you bike to the office?

Anders Wall: I live outside of Copenhagen, and actually take a train every day. But once I am in the city, I of course bike! I own several models of Biomega, including the MN model. After all, apart from being a CEO, I am also Biomega’s brand ambassador, and I very much enjoy it!

SCHMOOZY FOX: Thank you, Anders!

Diffusion brands vs parent brands

A significant advantage that successful luxury brands have, is that they have a good chance to launch diffision brands. Diffusion brands are a form of a line extension, discussed before.  They are “step-down line extensions of existing  luxury brands, normally less expensive than the  main-line merchandise.” ((How Young Adult Consumers Evaluate Diffusion Brands: Effects of Brand Loyalty and Status Consumption, Ian Phau Edith Cheong , Journal of International Consumer Marketing, 21:109–123, 2009))  They are often called second lines, subbrands and endorsed brands. Think of them as “children” of their more established “parent brands”.

Armani dot com screenshot

Examples of diffusion brands abound in the fashion world, for instance. Armani launched  Armani Exchange, Calvin Klein introduced CK, and Prada started a diffusion brand with a whole new name: Miu Miu. In all of these cases, the important condition for introducing diffusion brands was very high brand loyalty and brand recognition of parent brands. In other words, unless the brand equity of your parent brand is high, it might not be even a good idea to start considering diffusion brand launches.

There are several observations that I want to make in relations to diffusion brands:

  1. By launching a diffusion brand, a parent luxury brand de facto enters a whole new world of new luxury (also referred to as mass luxury and affordable luxury). I wrote on this subject before. New luxury is where many funky or funky-to-be brands develop.  If done properly, the new luxury positioning can bring enormous benefits to both: a child brand and the parent.
  2. Diffusion brands are a good way to target consumers who are usually much younger than the main target market of parent brands. They can tap well into the trend of status consumption, “The motivational process by which individuals strive to improve their status through the conspicuous consumption of consumer products that confer and symbolize status both for the individual and surrounding significant others.” ((Status consumption in consumer behavior: scale development and validation, Eastman, J. K., Goldsmith, R. E., and Flynn, L. R.  Journal of Marketing Theory and Practice. Summer 1999, 41–52.))
  3. Empirical research demonstrates ((Phau, Cheung, Journal of International Consumer Marketing, 21:109–123, 2009)) that diffusion brands have the same quality and status perception among younger target market as parent brands. This is a great way to appeal to a younger audience, and chances are that it will later on develop preferences for the parent brand as well.
  4. Importantly, the success of diffusion brands is often determined by a brand naming strategy. To put it simply, if a child brand bears the name of the parent (like Armani Exchange has a name of the parent brand, Armani), the benefits reaped from the existing status of a parent brand are almost immediate. If, however, a child brand is given a totally new name (Miu Miu vs Prada), such benefits are much less apparent. ((ibid.))

Armani Exchange screenshot

Diffusion brands are not a phenomenon characteristic exclusively for luxury products and services. On the contrary, they frequently occur in a very vast and complex area of brand architecture.

Brand partnerships

Photo by Nelson Cheen on Flickr

Funky brands evolve, they are not static.  In spite of being able to stay true to its authentic values and brand vision, a funky brand is nevertheless able to keep its finger on the pulse of consumers, experiment and surprise them.

BRAND RE-VITALISATION TECHNIQUES

I have already discussed several techniques that brands use in order to stay contemporary and fun.

Line extensions occur when a company “introduces additional items in a given product category under the same brand name, such as new flavours, forms, colours, ingredients or package sizes.” 1.

Example is Starbucks introducing a line of instant coffee, Starbucks Via.

Brand extensions are more radical ways of either capitalizing on the success of your already popular brand, or bringing some fresh air into the otherwise old and tired brand image. A brand extension is “using a successful brand name to launch a new or modified product in a new category.”2

Example: a brand of bananas Chiquita and its new line of fruit juice bars.

BRAND PARTNERSHIPS, OR CO-BRANDING

True to its "schmoozy spirit" (schmoozing is the term I discussed before), SCHMOOZY FOX is fond of brand partnerships.

They can be particularly interesting for you if your brand does not yet plan to launch a whole new product line, or extend into a totally unexplored area.  Then perhaps a brand partnership is something to keep in mind while you are searching for a strategic direction. Brand partnerships are also referred to as co-branding.

A brand partnership is usually a short or medium-term collaboration between two or more brands in order to enhance each other's positioning vis-a-vis the target market.

FASHION AND HOME ACCESSORIES

A recent trend that I've been noticing in the mass luxury (also called new luxury) market is this: fashion brands partner with artists and designers to create home accessories.

Here is a recent example of this trend that I came across in a Dutch magazine (forgot its name :( )

Diesel lamp

This is a lamp that is a result of a brand partnership between Diesel, Foscarini and Moroso.

Another example is a recent partnership between Levis and fashion designer Veronique Branquinho. The suprising result of this partnership is not actually related to fashion at all.   It's .... wall paint that is sold under a slogan Fashion for Walls.

levis_ambiance_1

Watch this space for more examples of brand partnerships.

1) Principles of Marketing, P. Kotler, 2002, p. 478

2) Kotler, Principles of Marketing, 2002, p. 479

A new kind of brand ambassadors: famous entrepreneurs

Jimmy Wales WikipediaHere is a photo of a magazine back page that I took this morning. It made me think of a new trend that is emerging in the area of celebrity endorsements: business celebrities as brand ambassadors. Even if you are not familiar with the term, you've most probably come across brand celebrity endorsements on many occasions.  These are short or long-term partnerships between a brand and a real person, usually a celebrity from the world of music, sports or movies. If you've seen ads with Hollywood stars next to cars, perfume or other products, then you've seen a celebrity endorsement in action.

In such brand partnerships, celebrities serve as the so called meta-brands: overarching, superior concepts that add  positive associations to other brands wanting to relate to them. For celebrities, it's also important to choose the right brands to work with, because at the end of the day, they have to pinpoint these people's personal brands.

My observation that I want to share with you today is this: most brands, especially luxury products, like to work with celebrities from the world of entertainment and sports.

However, it seems like there's a whole new trend emerging out there: celebrities from the non-entertainment world. They are not as widely known as entertainment stars, but they nevertheless have a lot of qualities that brands can tap into and benefit from. This trend is not yet very well explored by brands, it seems.

A concrete example that I want to share with you today is the recent brand campaign by a Swiss watch brand Maurice Lacroix. In particular, its brand partnership with Jimmy Wales, an American Internet entrepreneur and co -founder of Wikipedia.

The two other brand ambassadors that Maurice Lacroix chose -- Bob Geldoff and Justin Rose -- come from the worlds of music and sports, respectively. But Jimmy Wales is a businessman whose name is known to a lesser extent.

What's known much better is his non-profit foundation: Wikipedia.

What did Maurice Lacroix want to communicate by selecting Bob Geldoff, Justin Rose and Jimmy Wales as its brand ambassadors? I guess, the most important qualities that seems to unite them all are continuity, staying on course, and staying true to themselves. And of course, achieving results.

As brands look for authenticity and natural, not-too-commercial, ways of connecting with their consumers, we're likely to see more entrepreneurs, journalists, and other people outside of the entertainment world with strong personal brands, endorse products and services.

Events as brands: Paris Fashion Week

I just came back from Paris, where I attended the show of a talented Belgian designer Tim Van Steenbergen and discovered some up-and-coming funky fashion brands.

While experiencing the Paris Fashion Week first-hand, I thought of the importance of such an event which has a very distinctive brand. It is in fact what one could call a meta-brand. In other words, it' s an overarching, superior concept that adds usually positive associations to other brands that want to relate to it.

Think of the Oscars. Taking part in the Oscar ceremony, being nominated for the main prize, and of course, winning the Oscar gives huge credibility to those movie industry participants who are lucky to be part of this event. The Oscars nomination ceremony is a meta brand for all those that can and want to benefit from it.

In a similar way, Paris Fashion Week is another such meta brand that helps participating brands propel to the fame and greater brand awareness. Paris Fashion Week is the fourth in a series of other major semiannual fashion weeks. The "big four" take place in New York, London, Milan and Paris.  Fashion collections are shown several seasons in advance so that fashion buyers have a chance to prepare their stock in a timely manner. For instance, right now in Paris designers are already presenting their Autumn-Winter collection for 2011.

After catwalks are over, designers and their teams quickly prepare show rooms that are visited by fashion buyers from the world's leading boutiques and luxury department stores. Some successful fashion brands manage to ensure their annual turnover just in a matter of a few days, with all of their stock being ordered by a handful of leading fashion boutiques.

In this sense, there are many immediate and tangible benefits from taking part in fashion weeks, as they are a great way to ensure sales for participating brands.

It's only the world's leading fashion houses that present their collections during Paris Fashion Week. But curiously, the spill-over effects of this meta brand can also be beneficial for some much smaller brands and fashion start-ups. It seems that many rent small show rooms and promote this fact within the framework of Paris Fashion Week, even without being able to afford higher level participation in catwalk shows. In this sense,  even without a guarantee of large-scale sales, such small brands can benefit from intangible spill-over effects on their brand awareness from the Paris Fashion Week meta brand.

Also see my funky brand interview with co-founder of a funky-to-be T-shirt brand Lotty Dotty that I discovered during Paris Fashion Week.

Luxury brands are embracing social media, finally

Chanel has a Facebook fan page In December 2008 I published a post called Right moment, right message, right place: how to build luxury brands using social media. It seems that only a year ago most luxury brands were so hesitant to embrace the power of social media and the Internet in general!

Back then, I personally had a bit of a challenge to spot the funkiest first-movers in social media among luxury brands. There was a good debate on some LinkedIn groups related to my search for such pioneers, but the overall opinion of those I asked to share their examples was this, "Luxury brands won't embrace social media because they fear to lose their exclusivity appeal."

And look what's happening in December 2009!

Stefano Gabbana, a co-creator of the Dolce&Gabbana brand, is on Twitter (@stefanogabbana).

Chanel and Alexander McQueen have Facebook fan pages.

It looks like luxury houses have taken note of the fact that even people with the biggest purchasing power -- their potential customers -- hang out on various social media platforms.

"(The web) is very important by the sheer fact people are spending more time online, on Facebook, Twittering," said Emanuel Ungaro's chief executive, Mounir Moufarrige, quoted on brandchannel.com.

As I mentioned in that article a year ago, even if resistant, luxury brands would eventually explore social media, because their customers would digitalize their brands for them. It looks like SCHMOOZY FOX's predictions are coming true to life! ;)

Is this democratization of luxury? Let's watch this trend and see what shape it takes next December.

How funky brands can be profitable

D&Gperfume In one of my previous entries, called Funky Brands Defined, I published a list of attributes shared by most Funky Brands™.

An important one is the fact that they are not driven by innovative and creative ideas alone, but are or have the potential to be profitable. This, of course, requires a good deal of  business development and brand building work done.

In today's post, I want to talk about how your brand can benefit and become profitable from mass luxury brand positioning.

Mass luxury (often referred to as affordable luxury or new luxury) brand management essentially combines characteristics of building brands that have the luxury and exclusivity appeal, with techniques that can lead to relatively high sales volumes.

My marketing professor at ESSEC (a Paris-based business school famous for its luxury marketing program) was a former Armani guy. He certainly knew a lot about sustaining those "old luxury" brands like Chanel and Gucci (and Armani, of course). But he was nevertheless fascinated how some innovative companies managed to combine classical Kotler marketing with  the know-how of luxury brand management by building extremely funky brands in the mass luxury segment.

Some of these brands were created completely from scratch (for example, Coach and Victoria's Secret in the US, Agent Provocateur in the UK, and a Dutch brand Marlies Dekkers whose founder spoke in an interview on this blog), and others were born under the umbrella of already existing "true luxury" brands (for instance, Armani Exchange as a modest brother of the brand Giorgio Armani).  Over the past decade or so, many brands were launched to satisfy a desire for a better lifestyle expressed by wealthier middle class eager to splash out on previously unaccessible items.

So, what can you learn from mass luxury brands in order to make your brand profitable? You'll be surprised how many potentially funky start-ups fail just because they are disconnected from their potential customers. So, the most important rule of thumb is that you gotta get to know your consumers, their lifestyles and their desires as much as you can.

Stop for a moment doing this tedious market segmentation based on geographical location, age and gender. This stuff tells you nothing about your consumer's deep emotional needs and desires. Unless you've understood what emotional connections they can make with the products you sell, you'll be wasting your time.

Besides that, keep in mind the following factors which, in my view, may trigger consumers' interest in purchasing your funky mass luxury goods or services:

  • The lifestyle factor: Whereas splashing out on a single Gucci outfit is an extremely rare occasion for most people, and buying a Lamborghini is simply out of the question, a sizable market out there still wants to have a luxurious lifestyle. "Luxurious" can mean different things for different customers, and the trick is to find your loyal segment for whom your product will be a luxury. The right combination of such items as furniture, consumer electronics, food and drink, beauty products and fashion can do wonders and make our lifestyles luxurious and enjoyable. Not every item in your customer's home has to be of super funky design and great quality, but make sure your brand can end up on your customers shelves!
  • The self-worth factor: people appreciate goods and services that can contribute to their enjoyment of life (e.g. high quality perfumed candles, a meal at a gastronomic restaurant, or a visit to a spa) and feeling of self-worth. Do you know what contributes to the feeling of self-worth within your customer segment? If not, the first step towards making profits is to find that out fast and act on it.
  • The funky factor: people like standing out from the crowd, and making a statement about who they are. They often express themselves through the clothes they wear, or items they use (computers, phones, cars).  If your customers have created emotional connections with the products you sell, and even made them part of their personal brand, you've for sure kept the funky factor in mind successfully! Again, if you know how the attributes of your brand can enhance the funky factor of your customers, you've certainly moved forward towards a beefed up bottom line.

Mass luxury is the most profitable segment of many markets because attractive margins can be combined with sales volume. But the challenge is, mass luxury brands do not sell themselves . They are driven by hard-to-define factors like fashion, word-of-mouth, and constantly evolving preferences of your customers. If you've managed to apply a rigorous framework to identify these factors, and closely monitor them, you'll certainly be on the path towards making sizable profits and building funky brands.

Finally, a good article on the subject that I can recommend is "Luxury for the Masses" by Michael J. Silverstein and Neil Fiske, published in Harvard Business Review in April 2003. Have fun learning the tricks of the funky brand trade!

Marlies Dekkers talks about her lingerie revolution

Second in the SCHMOOZY FOX funky brand interview series, this article reveals the personality of the Dutch fashion designer and entrepreneur Marlies Dekkers, creator of the successful lingerie brand marlies|dekkers. In this interview, Marlies Dekkers shares her enthusiasm, drive and passion for the fashion empire she has created from scratch and turned it into a successful business and lingerie brand of choice among many celebrities. It's an inspirational story for all women entrepreneurs who dare to be.