new luxury

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.

Co-branding: Martini and D&G

Today I want to talk about an interesting example of a product launch video that I've spotted through the Facebook feed of Jean-Gabriel from FreshUp.TV. For branding addicts, its main attraction lies in the fact that it has included several impressively powerful branding techniques in one go: co-branding (or brand partnership), celebrity endorsement and even country branding.

Brand partnership

The product in question is Martini Gold by Dolce & Gabbana that has been co-branded by two iconic Italian brands. Here's an ad that accompanied the product launch:

As I've already written in my article Brand partnerships,

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.

In the case of Martini and Dolce & Gabbana, the co-operation between the two brands has been long-lasting and included such initiative as opening Martini bars within Dolce & Gabbana boutiques in Milan and Shanghai, and even a line of suits by D&G called Martini. The launch of Martini Gold is yet another step that strengthens both brands co-operation even further.

Celebrity endorsement

Italian actress Monica Belucci has starred in the Martini Gold ad acting as a brand ambassador.  In addition to that, the ad has been directed by a famous film and music video director Jonas Åkerlund who himself has a celebrity status.

Country branding

One of the main aims of this video is to evoke the origins, culture and lifestyle of Italy.  Italy is also highlighted by the La Dolce Vita style of the ad, and a mix of Italian style and fashion icons. Monica Belucci embodies Italian cinema, and both Martini and D&G represent refined Italian style. The scenes of Rome highlight the Italian cultural background of the product even further.

For many brands, especially those with a lot of heritage and strong cultural roots, associations with their home countries can enhance the overall brand image and give it a special zing.  Look at how Dolce and Gabbana stress the importance of Martini Gold being a truly Italian brand:

How Funky Brands can be creative: 7 insights from the Creativity Forum in Antwerp

A cake by Taarten Van Abel, a creative company mentioned during the conference. I thought it would be a good symbol for female creativity

A cake by Taarten Van Abel

On Thursday, I attended an event dedicated to creativity. The conference took place in Antwerp and was organized by an organization called Flanders District of Creativity. This year, Flanders DC gave the stage to creative and inspirational women.

Creativity fuels Funky Brands — innovative, edgy, contemporary products and services that stand out from the crowd. Funky Brands are worth experiencing over and over again, and importantly, bring positive functional and emotional benefits to those who use them.

For examples of Funky Brands, visit the Funky Brand Interviews section.

Here is my summary of 7 insights from the event that can be applied to Funky Brands:

Image by pumpkincat210 on Flickr

1) MAKE SURE TO INCLUDE CREATIVE, PASSIONATE AND KNOWLEDGEABLE WOMEN IN YOUR BUSINESS TEAM

Women’s signature style of doing business can be referred to as lifestyle entrepreneurship. This means that often, women’s main motivation behind starting a business is not just cash, but first and foremost, creating value for their customers.

If you are a team of men, invite at least one talented woman who will surely bring a different perspective to your business.

2) BE AUTHENTIC IN YOUR BRAND PROMOTIONS

Randi Zuckerberg, who’s in charge of the Creative Marketing department of Facebook, gave examples of authentic ways in which Facebook has communicated with its members.

In a short case study, Randi demonstrated a difference in reaction from Facebook fans to two photos of celebrity Eva Longoria. One photo of Eva was pure glam, whereas in another shot she looked more like someone you’d meet on the street rather than red carpet. Interestingly, the simple photo raised a massive wave of “likes” on Facebook. This taught Facebook itself to use friendly, amateur-like images of its employees in the company’s communications campaigns.

Don’t exclude glamorous and stylish visual expressions of your brand, but it’s worth exploring more authentic ways of connecting to real people, at least once in a while.

Here’s an image that captures the main points of Randi’s presentation:

Image courtesy of Visual Harvesting

Image courtesy of Visual Harvesting

3) IF YOU WANT ENGAGED CUSTOMERS, MAKE THEM PLAY A GAME WITH YOUR BRAND

Jane McGonigal, a game designer from the Institute for the Future, spoke about solving world problems by encouraging people to play more games. Jane defined games as “unnecessary obstacles that we volunteer to overcome.

If we take the example of golf, what’s the fascination behind trying to hit the ball with a stick and make it fall into the hole, instead of just picking it up by hand and placing it there? But even if the final purpose is to make that ball fall into the hole, nobody would ever be interested in having no obstacle to overcome, and no thrill to experience.

Image by Levy Fulop on Flickr

Image by Levy Fulop on Flickr

The truth is, people like the excitementenergy and thrill of playing a game. In similar terms, nobody wants a dull and unmemorable experience of learning about your product, buying it in an unexciting environment, and experiencing its dull features.

Engage your customers in a thrilling game, and enhance the funky brand experience!

4) DEFINE YOUR BRAND NOT IN LINE WITH PRODUCT FUNCTIONALITY, BUT WITH WHAT YOUR CUSTOMERS REALLY WANT

Diane Nijs, a professor of imagineering1 , gave an example of the Dutch bakery Taarten Van Abel.

The bakery owner built a funky brand by redefining his product from simply a cake, to the expression of festive spirit. As Diane pointed out, people rarely buy cakes to eat them. They buy them as symbols of celebrationfeast, and enjoyment. Taarten Van Abel has grasped this and began to create cakes that are works of art. The brand of Taarten Van Abel has become so well-received by people that the company has decided to launch a TV channel for kids, in which its symbolic cakes have given ground to stories and fairy tales.

5) UNLOCK THE MEMETIC POTENTIAL OF YOUR IDEA

Memetics is a theory of mental content based on an analogy with Darwinian evolution, which was originated by Richard Dawkins in the 1976 book The Selfish Gene.   Meme is a unit of human cultural transmission analogous to the gene, and psychologist Susan Blackmore talked about ways of how this sort of replication happens in culture.

Memetics would be worth checking especially for those who are fans of viral marketing. Why do some ideas fly and replicate themselves, and others just sit on the shelf unnoticed? Maybe memetics is a field that you should look into in order to understand why some brands just fly and become funky, and others never get noticed.

6) IN ORDER TO STAY CREATIVE, BE WHO YOU REALLY ARE

According to Baroness Susan Greenfield, a UK neuroscientist, the essence of creativity is daring to be who you are, your individuality.

eccentric dude

Some of you might know that it’s not always easy to stand out from the crowd and be different. Sometimes, the simplest thing to do is to conform and have an easy life. That’s why there are so many dull and unexciting brands out there!

But sticking to who you really are, daring to be, can also come across as magnetically charismatic if you manage to find creative ways of getting your value across. Your Funky Brand might not be liked by everyone, but those who’ll notice you, might fall in love, and isn’t it a huge reward?

7) BRING STRUCTURE TO CREATIVE PROCESS

Christie Hefner, Playboy’s former CEO, talked about structured creativity. Creativity is often associated with wild out-of-the box thinking, and structure is probably the last word that comes to mind in this respect. And yet a rigorous approach to the creative process is always beneficial to building a successful brand.

This is a very valid point in relation to Funky Brands.

When you build a Funky Brand, combine teams of creative people with experts in brand strategy. This can be especially powerful when you want to build a strong brand through online channels. A lot of brands nowadays want to splash out all the creativity they have, and expose it through social media, without having a rigorous brand strategy in place. Don’t fall into the trap of unstructured creativity, be funky and be smart!

Image by wilgengebroed on Flickr

Image by wilgengebroed on Flickr

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.

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! :)

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

Funky benefits of Benefit Cosmetics

LaughterLately, I've been busy interviewing founders of funky brands, sharing tips with you on various subjects of brand and marketing strategy, and hey, doing work for my clients. So,  I haven't as a result written a plain vanilla funky brand review in a while. Time to correct this bad gal's behavior!

Although, wait a minute, the brand in question is actually a perfect fit for any bad gal'. They even have a product called Bad Gal Mascara.

The brand in question is called Benefit Cosmetics, and its place of birth is San Francisco, which happens to be one of my favorite cities.

I guess it was the mention of San Francisco (written somewhere on the product display in a shopping mall) that caught my attention right from the start. To give this phenomenon a proper name, let's say that San Francisco was my first brand entry point for the Benefit brand.

In other words, it generated enough curiosity in order for me to continue exploring Benefit products.

And what did I find out?

Well, first of all, very funky product design. It was a true eye-catcher. A bit of a retro look combined with vibrant colors looked candy-like.  The shape of packaging also somehow felt right. I picked up a small bottle of perfume and just enjoyed holding it in my hands.

Second of all, there're funky product names. Check it out: "smokin' eyes", "some kind-a gorgeous", "my place or yours".

BadGalBenefitMascaraProduct quality? It seemed fine, although I can't be an authority on this subject -- I was in a hurry and thought I'd experience first instead of buying right away. So, I simply don't have an opinion on how long-lasting these products are, if their texture and scent are pleasant, etc. But I have a feeling that this stuff is nice.

Benefit Cosmetics was founded by twin sisters, Jean and Jane Ford, formerly models in NYC. After earning enough cash during their modeling career, Jean and Jane decided to invest it into something they knew very well -- make-up. And so Benefit was born.

Right now both sisters own a minority stake in Benefit, having sold the controlling stake to LVMH back in 1999.

As you can imagine, the business of cosmetics and make-up is extremely competitive. Dominated by huge powerhouses such as L'Oréal and the like (and this is just one market segment!), cosmetics brands have to struggle very hard in order to break through a huge level of competition. Therefore, it's important to stand out from the crowd.

Benefit for sure did it quite well through its packaging, product names (and the brand name itself which is pretty successful!) and its ability to tap into the city brand of San Francisco.

And, importantly, it is highly profitable, one of the important characteristics of all funky brands.

Does this mean that there's no need for any brand strategy and positioning work any more for Benefit to do?

Not at all. Benefit's consumers and their interests are evolving. New creative and funky-to-be competitors are coming to the market. There are indeed a lot of things to take care of if one's funky brand is to stay funky!

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!