successful distribution strategy

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.

Zumba sells branded merchandise

I first wrote about Zumba, a funky Latin workout, almost a year ago.  In that post, I talked about the challenges that any services organization can encounter in its attempt to build a funky brand. The main challenge for Zumba, I said, was to ensure that its main customer touch points (places and ways in which people experience the brand) remain consistent. Which seems like a big task given millions of Zumba-like, or Zumba-inspired, courses currently offered around the world by external fitness instructors. Since then, I've taken several Zumba classes myself -- and not only out of my desire to do non-stop funky brand research! :)  I also wanted to ditch the workout, and join the party. ((Zumba's brand slogan)). My personal observation is that many of these classes had very little Latin about them, featuring non-Latin music, and non-Latin dance moves.

In other words, my own Zumba experiences have been patchy, and differed from one place and instructor to another.

Perhaps Zumba management (to learn more about the company, see an article about Zumba's founder Alberto Perlman published by Sprouter)  decided that keeping the brand consistent throughout its customer touch points was a difficult task to carry out.  Perhaps they thought that it would be a good idea to build the brand by selling Zumba merchandise not only online, but also in real life.

IMAG0462In any case, I am not familiar with Zumba's selected strategy, but here are a couple of observations.

I came across Zumba-branded merchandise on the shelves of Di a couple of days ago.  Di is a Belgian chain of shops that sell inexpensive cosmetics and home cleaning products. Di has also been expanding its health and wellness section by adding vitamins, food supplements, and slimming shape-wear.  This section is where I spotted sizable Zumba-branded boxes, sold at retail price of Euro 69.95 per piece (pictured above). They were placed on a shelf underneath a TV screen that featured a demonstration of a Zumba workout, with the message "as seen on TEK TV " ((a Belgian TV store)) running across the screen.

Each box contained 4 Zumba workout DVDs, as well as a set of small weights.  The packaging displayed a TEK TV logo.

What are the implications of this on Zumba's brand?

First of all, the importance of selecting appropriate distribution channels is crucial for building a strong brand.  Even though the idea of selling Zumba-branded merchandise seems  attractive  ((at least on the local market, it could be a way of tapping into existing awareness about the brand name that has been created through workout courses, whether "real" or not))  per se, where it is sold, is of even major importance!

What strikes me as quite inconsistent with what could be a very funky brand, is the association of Zumba with a TV shop.  I don't personally know very many funky brands that have been built through this not-so-funky distribution channel (but if you know, please submit a comment!)

I would question whether TV shops can reach the kinds of customers Zumba needs to be reaching.   I saw lots of professional women "ditching the workout, and joining the party" after office hours. Which means that they probably don't have the time to watch TV shop sales sessions during the day.  I suspect that an additional endorsement of a product by a TV shop means little to them.

Selling Zumba merchandise at a rather unexciting Di (think of it as an equivalent of the UK Boots, but with a somewhat duller product selection) would not be my top choice either.

To conclude, Zumba would be much better off building a funky brand through better selected and more exciting distribution channels.

NOTES

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.

Zumba fitness

Zumba Image source: http://www.zumba.com

I've recently caught a glimpse of Zumba on TV, and the funky Latin workout caught my attention. And not only because I myself like to move to the steamy Latin tunes. I've heard about Zumba from some friends here and there, so I was curious to dig a bit more into the concept, and analyze the brand.

So, what's Zumba really?  Is it something you do to get fit, lose weight, or just have fun? To get a better idea what it looks like, have a look at this video I found on YouTube:

It's a bit of a mix of various Latin dance styles – there's some salsa, merengue, samba and something else I can't quite determine. It also looks like fun. But is Zumba just a kind of fitness program you can follow at your local gym, or is it also a profitable business? Importantly, does its business model support the brand and its values? Here are some branding clues SCHMOOZY FOX is happy to share with you.

What exactly is the product?

The core “product” of Zumba is its fitness workout. It is actually a “service” rather than something tangible you buy at a shop. You go to your local gym, move around, dance and sweat for an hour to funky Latin tunes. What you get as a customer is an experience, fun and positive emotions. Most probably, you'll burn some calories along the way. In terms of tangible products, there is some Zumba-branded merchandise available on the site, such as DVDs, music, umbrellas, T-shirts etc. Not too exciting, but not too bad either.

What's the business model?

Well, that's a good question. I did some googling around to find out more, but all I can do is simply assume that Zumba sells licences to designated fitness instructors around the world. Or maybe, cash flows come simply from the fees instructors pay to Zumba for the obligatory qualification courses. Whatever the current business model, SCHMOOZY FOX could come up with at least several more ways of how to create and capture more value for Zumba!

As far as instructor training, it's not clear from the site if an instructor has to follow all of the offered 8 levels or only one. For instance, in Belgium, there are several basic level workshops available for the price of 325$ per two days, and no previous Zumba experience is needed. I wonder if you actually have to be a dance or fitness teacher to start with, or can I also take that 2-day course and start teaching Zumba next week? I suggest that Zumba.com sheds some more light on this point, in order to make things more clear for potential instructors.

Who are Zumba's customers?

There are two main kinds of customers in this case: those who will take classes, and those who'll teach them. As regards course participants, I wouldn't be dwelling only on such criteria commonly used in marketing as age and gender, and where they live. SCHMOOZY FOX would also focus on the deep emotions that trigger potential customers' decision to sign up for a Zum'ba course. Is it a desire to lose some weight? Become more sexy? Meet a potential date? Have fun? Build self-confidence? These are some of the questions Zumba should keep in mind to get a better idea about its customers. For now, its targeting seems a bit more fuzzy rather than funky.

In order to reach instructors, Zumba should be doing a different kind of analysis. After all, instructors' reasons for teaching Zumba are totally different. Here, emotions play a certain role, but incentives and rewards are equally important. Zumba should build a community around the instructors, and preferably give them access to some perks: use your imagination here, there are plenty of great opportunities available!

Importantly, customer touch points (I explained what they are in my article about Abercrombie and Fitch) should be thought through in relation to both groups of customers. The funky web site alone (actually, it's only the home pages that looks good, whereas national sites are pretty weak) will not do the job of maintaining the brand, and the biggest challenge for Zumba is to ensure that the quality of courses, instructors and spaces where courses are held, is consistent.

Orchestrating so many elements around the world (Zumba courses are offered on a global level) certainly requires a lot of dedication and consistency, but if this huge effort pays off, a true funky brand is born! Consistency of services is by the way one of the biggest challenges for any service brands, and only few get it right, on very rare occasions!

How is Zumba being promoted?

The most obvious channels that drive the buzz around the Zumba brand are its  web site, and coverage in the world's leading health, beauty and fitness magazines. I would imagine that a lot of the marketing is also word-of-mouth driven.  In addition to these channels, Zumba has partnered with The Kellogg Company to participate in a joint health and fitness initiative targeted to the US Hispanic market at some point, but this was an initiative undertaken only in the US. The name of this initiative was Zumbando con Kellogg's.

Something that Zumba could consider to build a brand would be celebrity endorsement by a Latin star – a dancer, fitness instructor, actress – plenty of opportunities here. Remember how strongly aerobics is associated with Jane Fonda? That's definitely something to consider in the Zumba case.

Apart from that, just like any respectable service brand (I am being a bit sarcastic here, as there aren't that many of those around!), Zumba should keep in mind that “point of sale promotions” (the actual fitness rooms where classes take place) as well as  instructors themselves shouldlive the brand, breathe the brand, and promote it. Just look at a very large selection of amateur Zumba videos on YouTube: each of them has a totally different look and feel with the only common factor being Latin music! More consistency is required!

From would-be-funky to truly funky

Building brands for services companies is surely one of the most challenging activities to engage in, as this requires so many elements to be in harmony at all times.  But if you manage to get it right, you can reach unbelievably good results. If Zumba wants to move from being would-be-funky to a truly funky brand, there are so many things it should still work on! In addition to the suggestions above, it should also know its competitors, position itself very differently from them, and get those brand core values sorted out in a more of a … Zumba way.

To learn about further developments of the brand, please read Zumba sells branded merchandise.