Luxury & Fashion Biz News: China’s Luxury Consumer, Drew Barrymore’s Beauty Venture, and Science + Fashion = Hagfish Slime

1.) A look at how mainstreamed luxury brands woo the young affluent Chinese consumer:


With wine and sparklies and pretty maids all in a row

The above video was filmed during an Affinity China event designed to bring young wealthy Chinese together in Shanghai to network while mingling with celebrities and ogling diamonds and cars.

From the China Luxury Network: “The gala event was described as an opportunity for those involved — including Mainland Chinese socialites, celebrities, and high level executives – to partake in a wine tasting, preview items by select luxury brands, and have an up close look at a Lamborghini parked inside the ballroom. The exclusive event was focused on the customer experience.”

Which is fairly textbook marketing for the new luxury environment. Ever since the financial meltdown of 2008, analysts and marketers have been flogging the “customer experience” aspect of luxury branding — that the way to keep customers coming through (or even just to) your doors is by providing them with an experience they can’t get anywhere else.

*NOTE: The kind of service that’s been so far lacking in many of China’s luxury boutiques (see: Pampered In Europe, Chinese Luxury Shoppers Slam Service At Home)

From the 2010 article, Luxury brands must regain focus on customer experience: “‘Luxury brands need to start focusing on what customer service means,’ said Milton Pedraza, CEO of the Luxury Institute, New York. ‘They need to start to out-behave — not just outperform — the competition . . . The customer experience at the store and Web site has to be extraordinary, and consistently so, in order for luxury consumers to develop long-term relationships.'”

A little pampering goes a long way.

*Speaking of China: Red Luxury’s article, Why Coach is Succeeding in China, is an informative look at how Coach has defined and subsequently dominated the “affordable luxury” market — “Coach positions itself as an accessible luxury brand, which means its prices are 50-75% lower than, and thus avoids direct competition with, the top luxury brands . . . furthermore, the accessible luxury strategy captures the large emerging Chinese middle class consumers and also provides a broader reach into the second and third-tier cities.”

*Somewhat Related: Small US-based footwear brand Allen Edmonds takes its Made in the USA show to China, where there’s growing demand for US products: “What demand from new markets like China translates to for the heritage footwear brand is, of course, increased production, for which Allen Edmonds has added 120 new employees over the past two years. Grangaard previously pointed out that ‘China is certainly an important part of [our growth]. And the development of the Chinese market will also create some jobs in the US.’”


Over 90% of the shoes purchased in the US are made somewhere offshore

The above-linked article states that Allen Edmonds has added 120 new employees to cope with demand from Asia, and that they’re hoping to open forty to fifty new stores in China over the next five years, if the consumer demand is there. But it’ll be tough competing against the already very well-established Italian, French and British shoe brands in the premium footwear market, and the Allen Edmonds name hasn’t exactly been associated with a history of glamour or flair.

The British, French and Italians, however, offer style for miles, and in ways that differentiate the wearer from the crowd. And among China’s billion plus consumers, personal differentiation is quickly becoming an important consideration.

*Something Else to Consider: A growth model in China is not the be-all and end-all for brands. You first have to keep in mind what rapid expansion does to your brand beyond simple employment and bottom-line numbers. As author and luxury journalist Dana Thomas stated in an interview with the Washington Times:

“I don’t believe luxury going populist, or democratic, as luxury titans like to say, is a problem. On the contrary, I think it’s wonderful that anyone with the desire and the money can walk into a luxury brand store today and purchase what they want without feeling anxiety regarding their station in society or receiving a snobby response from staff. That to me is true democracy. The problem is the listing of luxury brands on the stock market: with that, the raison d’être of these companies has switched from producing beautiful products to producing beautiful profits.”

If Allen Edmonds can ramp up production to supply fifty stores in China without sacrificing its “we’re a small company and we care about our products and our customers” ethos, then great. But that’s not usually how this type of story ends.

*Also Important to Remember: Just because the tag says Made in the USA, it doesn’t mean that workers are always treated well or paid in accordance with the law. See: Feds say L.A. ‘sweatshop’ sweep finds widespread violations“Federal and state labor authorities Thursday announced the discovery of “widespread” labor violations by downtown garment manufacturers that help supply retailers like Aldo, Urban Outfitters and Forever 21, among others . . . About $326,200 in back wages were recovered for 185 employees and each business was cited for failing to comply with wage laws.”

2.) QUICK HITS:

A.) L’Wren Scott, niche fashion designer and wife of Mick Jagger, is launching her first perfume in collaboration with uber-upscale department store Barneys New York. The NYTimes journalist assigned to interview Ms. Scott about the perfume project (as well as tag along on a NYC perfume sniffing excursion) confessed that, despite all the fancy notes and exotic talk of Paris meets Mumbai inspiration, “it smelled of Sprite, leaving a residue of Dr Pepper.”

I think that’s called “damning with faint praise”.

A look at L’Wren Scott’s fashion design below:


L’Wren Scott Fall 2012 — 10 minutes of tall and skinny

*Related Celebrity-Beauty News: Drew Barrymore has created a premium colour cosmetics collection for Wal-Mart, giving the big box retailer some celebrity-name ammunition to compete with Walgreens, Target and Sephora for a slice of the coveted mainstream consumer pie.

What makes the launch newsworthy is that Barrymore and Wal-Mart are promising that the makeup and nail polish will be custom blended and contain the same ingredients as luxury brand cosmetics, yet sell for a fraction of the price. Writes Fashionista: “So how are they going to get away with selling it at Wal-Mart prices? No expensive ad campaigns and no huge sales force. Because it’s an exclusive deal with Wal-Mart, Flower will use Drew Barrymore’s popularity … social media, and Wal-Mart’s ‘reach’ to market it. So the budget that would have gone into advertising instead went into the formula.”

I’m curious to see how public reception and sales numbers turn out, especially as WWD recently reported that, “The [beauty products] doing the best and the fastest growing [are] categories of high colour, with the lowest price point,” especially nail and lip colours, with lip colour sales (of $548 million) increasing by 11% over last year, and nail polish sales (of $33 million) soaring by almost 50% over 2011.

B.) In the “Super Gross But Way Cool!” department, science meets fashion in the most unexpected ways: Hagfish slime could slink to the height of fashion“Clothes made from hagfish slime could one day be the height of sustainable fashion. Synthetic fabrics such as nylon and polyester are made from petroleum. A green, natural alternative would be a protein-based cloth made from spider silk — or the thick slime made by the hagfish (Myxine glutinosa) to help it escape predators. The slime contains myriad protein threads 100 times thinner than a human hair.”

And there’s a slimy video illustration to go along with it!

You’re welcome.

C.) New Dior head designer Raf Simons says that Dior needs to become more like Chanel to succeed: “Raf Simons says he’s working on turning Dior into a brand that everyone in the world will recognise as soon as they see it — sort of like Chanel. ‘The Chanel woman? I don’t even need to see, I smell her from round the corner, but I don’t recognise the Dior woman,’ Simons said in an interview for the January issue of Vogue UK. ‘I want to work on that fast. Chanel has the deux-pièces with the pockets, or the bouclé, but what is it for Dior nowadays? I can’t say.'”

Which is a huge criticism that devoted fans of fashion design have been yelling from the rooftops for the past two decades — that once exclusive and distinctly individual luxury brands sacrificed their identities in the chase for global dollars; that they ignored their internal codes and threw anything and everything at the customer just to see what sold.

*NOTE: Dior was particularly hard hit by this phenomenon under the flamboyant and increasingly erratic guidance of John Galliano, until no one knew what Dior stood for anymore, except for maybe the not so flattering “Russian Prostitute” dig from the Sunday Times — and that’s not the sort of image you want your global luxury brand to project.

Comments

  • FiveoaksBouquet

    I’m glad the luxury market is catching on to the importance of the shopping experience. Mr. Freeman, the owner of our local five-and-ten when I was growing up had that down pat: make the little kids feel welcome and they will come back every week with their allowance to buy water pistols and paper dolls!

    Raf Simons has a point there. Can’t wait to see what the Dior woman will be like. The image of “the new look” from 1947 is the only Dior signature look that comes to mind. It’s been a while.

    • http://www.nathanbranch.com/ Nathan Branch

      Water pistols and paper dolls . . . and bubble gum.

      I remember one of the local shoe shops had a treasure box that each kid could pick whatever he/she wanted out of it when their parents bought them a pair of shoes. So you can bet we bugged our parents to buy us shoes!

      It was such a wonderful reward to open the treasure box and find something wonderful inside worth taking home (though usually we grabbed a candy item and ate it during the car ride home).

      I think Chanel is the only luxury brand that has a consistent image anymore. This is why YSL went back to its “codes” this past season (even though it was such a dull retread) because they need to re-establish the idea of the YSL woman. And now Raf Simons is talking about the same thing for Dior while Frida Giannini is attempting to steer Gucci back to the sleek Italian glamour it once embodied.

      It’d be a whole lot easier for all of them if they hadn’t so completely demolished their brand identities themselves over the past thirty years.