Is a Net- a –Porter store the next big news in fashion?

There has been enough written on the impact of online retail models on traditional brick and mortar particularly in the fashion retail space. Consumers are after all more tech-savvy than ever and shopping would at some point have to respond to this behavior.

Online retail has had the advantages of low overheads, a global reach and real time communication to the end customer. Traditional retail threatened by online retail’s impact (the latter was supposed to be the former’s death knell) has been embracing technology at a very fast pace to compete with the online phenomenon and to also enhance customer experience.

What has been interesting is to see that successful online retail brands like
Net-A-Porter, Ebay are testing offline presences in the form of pop up shops and collaborations with traditional retail formats. What is also clear is that these players are not backtracking to a traditional model but are trying to bridge the gaps in the online customer experience, a journey which does not have the essential see, touch, feel and try and where the contact with the product is delayed till the purchase is delivered.

It also enables these online brands to strengthen brand salience and trust by bringing the designer in direct contact with the customer. The exclusive launch of Karl Lagerfield through Net a Porter is once such path breaking event and this strategy fosters a closer relationship with the design partners and customers.

This is also a great way to achieve greater success for new collection launches and follows the “limited edition launch strategy” pioneered by heritage luxury brands in the last decade. To summarize, these initiatives only create greater desirability and loyalty enriching the online experience.

The new approach is also helping online brands to build new alliances and broaden the net by acquiring new customer segments through partnerships with fashion magazines like Vogue, Private Member Clubs, Restaurants and other relevant channels. It will be interesting to see how successful online brands are in integrating off line channels and promotions in their business models in the years to come. Will On-line go Off-line? Are we seeing a role reversal? Will we see a new retail format between online and traditional brick and mortar. Only time can tell. But the lines are definitely blurring!

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The season of Oscars and the Style awards…

January is that time of the year when most social conversations revolve around celebrity looks on the Oscar red carpet or the series of
Indian film awards. Celebrity endorsement has always been a safe brand
sustenance strategy in emerging markets particularly for the beauty and fashion industry.

I am particularly intrigued by the choices made by celebrities in endorsing brands and the impact of their choices on their own positioning in the mind of the consumer in emerging markets. In recent times, closer to home one Bollywood star who has been fairly successful in creating a strong and carefully calibrated association with the fashion industry (also her passion) is Sonam Kapoor. Sonsm was recently felicitated by Salvatore Ferragamo yet again and was awarded custom made shoes designed by her on a recent visit to Florence. This has further cemented a relationship that started when the brand entered India in 2008 and with whom Sonam has had several associations starting with the Elle Ferragamo Breast Cancer event in Delhi.

Ms.Kapoor, advised by one of the more successful shops in the celebrity
endorsement space Bling promoted by friend Atul Kasbekar, has not only endorsed brands such as Ferragamo and Dior but also promoted fashion in one of her recent movies Aisha further strengthening her undisputed iconic status in the fashion space. In doing so she has not only favoured global luxury heritage brands but brought Indian fashion into the limelight endorsing new designers such as Masaba and Anamika Khanna. It
is noteworthy to see Sonam draped in a saree in a recent event receiving her
custom made shoes from Ferragamo and on the red carpet in Cannes
establishing that the Indian saree in its new avatar is here to stay! She has
taken the cause of fashion a step ahead by supporting breast cancer awareness
with Elle and recently turned Santa for an online portal www.perniaspopupshop.com by organizing a sale of more than 40 garments from her stylish wardrobe that she has worn in the past for public appearances, film events and red carpets all over the world. All proceeds were to be given to Smile Foundation that works for underprivileged children and youth across 25 Indian states. Now that is Fashion for a real cause in a season that encourages shopping and credit card spends across the world.

What I love about this committed focus on fashion is the integrity of brand “Sonam  Kapoor” as not only is the world of fashion true to her DNA and a natural extension of herself, the endorsements are natural. consistent and effortless. She embraces the fashion universe with no overt bias, classic heritage brands on one hand and fresh creativity a la Philip Lim. Alexander Wang,  equally depending on what the ocassion or event demands.

Recently another Bollywood star’s decision not to endorse a luxury car brand caught my attention. According to recent reports Amir Khan is known to have rejected a luxury car endorsement, apparently to concentrate on his image of a social crusader. When there is a race for one up-manship in endorsement deals and few marketers seem to give serious thought to their endorsement strategies and its relevance to the brand andtarget audience, it is heartening to see some celebrities staying off the beaten tracks to be true to the need to preserve their own “brand integrity”. I celebrate these moments as a brand custodian.

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So Phillip Lim pops up in the neighborhood

 

 

I was recently walking through the IFC mall in Hong Kong with Jackie Astier from the Untitled magazine who is undertaking  a research project on the Asian market. She observed with justifiable excitement that she is  heartened to see the growing presence of new fashion brands in the city that had hitherto boasted only of big, bigger, biggest luxury houses like Louis Vuitton, PRADA, Salvatore Ferragamo and CHANEL in every shopping mall. Boring she commented. I prefer SOHO!

2012 has seen more new brand launches than HongKong has seen in recent memory. Alexander Wang, Tory Burch, J.Crew, Maje, Sandro (brands all less than a decade old) made their foray into the Asian market by opening shops in HongKong which is considered as the fashion capital in Asia and is often the litmus test to measure the potential of a brand and its acceptance by the most vied for Chinese customer.

The fashion scene in HongKong is also changing and how! Hong Kong shoppers seem to be experimenting with and embracing new designers in their wardrobes and one can see this change increasingly in street fashion. The fashion savvy are moving away from their safe black, brown and beige wardrobes and experimenting with new colors, prints and textures. Hong Kong’s favorite fashion retailer Lane Crawford which can be credited for bringing new fashion brands to this market and playing a critical role in educating the customers on new brands recently launched LAB, a new concept aimed at presenting fashion in a more accessible format, attracting a younger demographic and promoting contemporary fashion (read 200 USD up) brands that are looking at Hong Kong as an important window to the Asian market.

One wonders if this will be a growing trend and if brands would change their merchandising strategy in response to the changing trends in fashion in Asia.  Seasonal colors like “teal” are promoted in the brand catalogues but when my niece called  a favorite brand’s stores in Hong Kong she found out to her disappointment that not only did they not have most of the styles she loved, the color choices were restricted to just black and blue. Now, that is a merchandiser getting stuck in a time warp. As the world shrinks online and trends become global within minutes of a celebrity spotted in a new style (going viral through social media) it is important that brands present a consistent collection and do not underestimate  consumer preferences in the new emerging markets. In any case this is integral to brand building.

Fashion succeeds when it is dynamic and newness is an important formula to sustain the customer’s interest. More recently the success of brands like Tory Burch, J Crew could be attributed to the freshness of color palettes and the launch of 10-11 collections annually, keeping customers hooked and wanting more . Hope the merchandisers cotton on to this trend quickly and looking at their buys through the lens of a global fashion customer who is local but very quickly identifying with global trends. The other gap seems to be in the brands’  approach to channels like Lane Crawford vs their brand owned stores.  Brands would do well to effectively use these channels to build and attract a new customer segment with their off the ramp pieces and fashion forward palette to win the customer’s dollar.

2013 may well see new stand alone stores and new fashion  brands.  SCMP just announced the opening of a new Pop up store by Phillip Lim in Hong Kong. He already has a stand alone in Kowloon. Despite this my niece will have to just wait for the teal sequins sweater from her favorite brand to be shipped through Net a Porter. And I pray for that reality of 2012 to change in the coming year. Amen!

 

 

 

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How stars choose brands they represent? The case of Priyanka Chopra,Ferragamo and NDTV

Prasanna Bhaskar sends Priyanka chopra to Florence

Continue reading

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ZhangZiyi- China’s Aishwary Rai In Ferragamo

I remember taking a flight from Shanghai with Zhang Ziyi when she was a guest at Salvatore Ferragamo’s 80th Anniversary celebrations. http://www.verveonline.com/62/fashion/ferragamofull.shtml . We had an interesting discussion on how she picks the brands she represents. It is interesting how celebrities pick the brands they endorse. Today she is the Brand Ambassador for Omega. Celebrities are more discerning about the brands they choose to represent as it influences their own image and the brand values become an extension of their own personality.

Brands on the other hand have opted to choose faces depending on shifts in strategies and efforts to acquire new customer segments. The question is whether customers who target different brands in the luxury segment will receive a coherent message if the different brands endorsed by the same celebrity have no congruence. Maybe a good topic for Suzy Menkes to discuss in the next IHT conference.

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Cult or Culture!

Have been finally enjoying the journey of being inducted into a “culture” having worked for cult brands for many years. There is so much written about Apple and its genius founder Steve Job’s contribution in making it a CULT brand. So picking up a debate on “cult vs culture” is only natural. Have been ironing out the contradictions and how these very often confused yet discussed concepts impact the building of organisations and brands.

It is an interesting debate as clearly every great company has cult-like features in its organization culture. To understand this better, perhaps it may be useful to provide my understanding of the word Cult.

Typical features of a Cult are

a)     strong leadership and the followers/group members not only buy into the group’s philosophy but we often see a personal allegiance to the leader; this is one reason why the cult conjures a slightly negative perception as it is difficult to sustain this level of allegiance beyond that leader’s tenure;

b)     clear distinction between in-group and out-group, the sense of belonging is clearly established both as entry criteria and for membership continuance criteria, and any violation of the key criteria invites sanctions immediately including ostracism and expulsion. In fact, interestingly, the word Ostracism comes from the Greek practice of voting out a member as a way of punishment. So, a strong sense of belonging is essential and is cultivated, nurtured and enforced. Maybe cults are perceived to be “excluding” rather than ” including”

Some experts point out that Cults are extremely rigid, whereas Cultures are flexible and adapt better to changing circumstances. Globalization and Technology are two great forces that are at once a threat and an opportunity at the same time – Cults may be easier to manage in defined geographies/communities, and it becomes an awesome challenge as the boundaries expand and its imperative to include diverse geographies and communities. Some experts have added language to this mix, not to mention the “perceived sense of isolation” of a cult with the mainstream. This is one reason we find that cultures survive longer in global companies rather than cults.

Cultures are all encompassing, inclusive and celebrate shared sense of beliefs, values, customs, practices – typically placing the group’s interests before self interest. The Amish group in Pennsylvania is a good example that has thrived over 300 years.

In my view, perhaps we need a bit of both. Cult-like features in a global company reinforce a particular way of serving customers, and achieves a level of QUICK integration otherwise difficult in such a global sprawl. This is why we find companies like Apple, HP, IBM, Disney, etc spend plenty of time on achieving some common elements like language (choice of words – for eg, customers are called Guests at Disney), common practices, etc.  Similarly, the Financial Services industry has its own set of rules and norms, and conformance is critical to both entry and continuance. Newcomers are indoctrinated and the emphasis is on achieving a tight fit between organizational norms and the members’ behaviours.

A cult per se has a limited time span as it does not adapt to the changing circumstances. Globalization has also brought various nationalities, cultures and habits together, and also brought in a healthy mix of interracial marriages. This growing trend towards greater tolerance of others’ beliefs/habits is only likely to strengthen in the future. A culture defines the tone, the intent but accepts a different language.

What does all this mean for organizations?

Managers need to develop a global mindset and assist staff to integrate with the company’s norms whilst ensuring that employee does not lose her individuality.  The answers are no longer at the end of the spectrum, rather they are converging towards the middle – hence we need to strike the right balance as opposed to choosing one or the other (unless of course we are talking about illegal behaviours and actions where there is a black-and-white rule to follow).

The younger set of managers may be more adept at achieving this, as they themselves are the product of forces such as globalization/technology – it is not unusual in many global companies to find managers who have studied in 2 countries, lived in 3 countries or speak multiple languages. Labour mobility is quite common these days, so the people transport their ideas, cultures and behaviours. As the next generation of employees takes advantage of similar trends and opportunities unleashed by these global forces, they will be far more demanding of their managers – anyone paying lip service to such notions and trying to impose a cult at the expense of culture, may not last the run.

In short, what I see is that a Cult mentality is required at a startup stage, and the as the business evolves into a global organization, we need more culture-like features such as integration. However, it is true that some cult-like features will always be present in any organization culture as without such a tight-knit fabric, thousands of employees in different parts of the world will not have any way to understand the mission of the company, and about their work helps the company achieve its mission.

So where are brands described as cult brands headed? It will be interesting to re-visit history and conclude that groups that differentiate themselves through their culture will be around to tell us their success stories. Only time will tell…just noticed a friend who has a cropped look, wears jeams and leather jackets to fit into a CULT.. Am I glad I can keep my face, my 10 year old wardrobe and keep doing what I enjoy. Celebrating a culture!

 

 

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The China formula for new entrants in the luxury sector.

So we hear that China will contribute to 20% of worldwide sales for luxury brands. A lot of reports have been published on the evolution of the luxury customer but none of them really spell out the challenges ahead.

Here are a couple of observations based on the successes of Louis Vuitton, Ferragamo and most recently the one year old Chinese luxury brand Shang xia from the House of Hermes

1. The Chinese customer is getting sophisticated: New brands looking at the market are required to create a context for the brand. For example how does an Amrican sportwear brand fit into a country whose fashion aesthetic is “Dress up for the show” vs “fashion that is comfortable and effortless”. The key is education and therefore investing in a team that understands fashion and speaks the language of the brand. Also when increasingly brands are manufacturing in China it is important to focus on design and designer vs craftsmanship and knowhow.

2. Maintaining the luxury quotient: Brands survived the recession by introducing new lines at competitive (read lower) price points. The challenge is to ensure that the luxury quotient is retained even at affordable price points. In China “lower price points” can be considered “cheap”. It is imperative to build brand integrity on core values rather than talking price which could spell doom in the long run.

3. Think out of the box to get share of voice Below the line initiatives and reaching out to clients through superlative service will differentiate brands as the customer is  increasingly exposed to service standards in other parts of the world. Brands need to ask if they should organise trunk shows and pop-up stores in Tier 2 markets which will clearly define the future of the sector. A consistent digital strategy is required to be embraced to reach out to the 400 million consumers on line.

The Formula is to be committed to the DNA of the brand, have a non compromising long term approach and embrace the need to be granular as brands expand beyond the key cities.

 

 

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Facebook and a multibillion dollar business beyond brands!

FacebookSo this is what I think. Facebook is making a big contribution to the Beauty and fashion industry and soon will use high profile facebook users to endorse their brands vs celebrities.

When my friends decide to capture every moment of their being in a camera and plaster it on Facebook at 2 am every morning they are living their dream of achieving Stardom. Here are some things that Facebook has changed for businesses

Impact on Fashion and Beauty business: Get dressed 3 hours before leaving home. Every picture has to be perfect and some even have make up artists advising them.

Impact on the Travel business: It is now imperative to be in different countries in the globe just to be part of an event where they can have a picture with the rich and famous

Impact on the event management business: Birthdays are now no longer cozy dinners with good friends- they are mega events which have to be big, unique and newsworthy

Impact on real estate, employers, relationships: they change apartments, jobs, friends, boyfriends and husbands at least every 2 years to be ” Newsworthy”. how else are they going to get the likes, unlikes and comments every day is an event, a big moment as 1000 facebook contacts are waiting for the next big thing that has to be announced.

And the list can go on. Facebook has given humanity an opportunity to present themselves to the world in the way stars do. This has accelerated the pace of change across the board and we will soon have image managers managing facebook profiles for the common Joe and Jane. Of course this also promises to create a new genre of therapists who will counsel individuals having a nervous breakdown in a environment where you are defined by what you are on Facebook!

 

 

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Milan Station HongKong to Milan Station China…


It is IPO Season. And my favorite among all the fashion houses that are IPOing Prada, Moncler, Ferragamo is Milan Station.

Milan Station, a familiar name amongst HongKong fashionistas and a prominent 2nd hand reseller of used luxury handbags in Hong Kong, recently listed its stock on the Hong Kong stock exchange. The company raised about USD35million overall, and the issue was oversubscribed by 2100 times (yes, two thousand one hundred times!!). The company has been in existence for just over a decade, and buys used luxury handbags at nearly 70% of the market price, and sells it at slightly less than the market price – pocketing the difference as net profit. This simple business model yielded a revenue of nearly USD100million in 2009, and a net profit of USD8million. When we consider that all their stores in Hong Kong are rented, and that rents increased nearly 40% last year in Hong Kong, this is an amazing performance. Read more in Reuters.

As fashions and seasons change, consumers want to possess different bags in different bags in various colours and sizes. Mr. Yiu, the entrepreneur, seized upon this idea to launch his unique business in Hong Kong. In HongKong there are two clear segments that Milan Station targets. The Tai Tai Peak fashionista who needs a bag a day and want to be caught repeating her bags . This segment are sellers of bags to Milan Station as they only wear the newest in season. The second segment are the aspirants of luxury who will save up or even skip meals to have Louis Vuitton bag and regularly exchange to upgrade their fashion quotient.

Why did investors queue up to buy this stock? After all, Hong Kong is a mature market and has a stable population of only 7million. The secret is to the north of Hong Kong! The company wants to open several new stores in the Mainland China market, and will use the IPO proceeds to establish its operations. Whilst the wealthy Chinese buy luxury products in Paris, Milan and Hong Kong, the next 3-4 tiers of consumers need to be enticed into the luxury world through a model that affords cheaper prices. However here the Chinese prefer to buy newer models Chanel, Prada, Hermes are preferred to older models of Gucci or Louis Vuitton. Moreover, these consumers can also sell back their goods to the same stores and recover a good chunk of their investment. Calculated on a usage per day basis, the math turns out to be a win-win situation for both the store and the buyer. What may be interesting is how Milan Station keeps up with the supply of NEW BAGS. The Chinese are traditionally not second hand goods buyers and this will be key to the success of Milan Station’s operations in China. The stores are always keen in products labeled Made in Italy/France, but for the buyers it is Made in Heaven!!

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Aman Fayun: Temple of the Soul’s retreat

Aman Fayun Village

As I wait to take the train back to Shanghai the words inscribed on the tablet penned by Emperor Kangxi of the Qing Dynasty (1644 – 1911) resound in my head as I navigate the crowded waiting room of Hangzhou Station.

On the door of the Hall of the Heavenly Kings in Lingyin Temple is a couplet that says ‘Let us sit and wait upon the threshold, where we shall see another peak flying from afar. Let us welcome spring with a smile as the snow melts and the brook starts to flow once more.’

The memory of the great hall of the Heavenly Kings, with its double eaves, some sixty feet in height makes this return to the real world a little unsettling. Everything I have seen in China so far has been about size and grandeur but this has been a unique experience of splendor and serenity that rightly gives LingYin Temple its reputation of being the temple of “the soul’s retreat”.

Ling Yin Temple at sunrise

Ling Yin Temple at sunrise

I discovered the temple during my short but “soulful retreat” to the tranquil Amanfayun, the new Aman built in the spirit of a traditional village with the same stone pathways, shaded courtyards, lush groves of bamboo and tea fields which form such an essential part of my childhood memories at my grandfather’s village in Kerala. The astounding similarities and the discovery of Lingyin Temple “China’s own Tirumalai” made the stay at Aman Fayun’s village a sweet pilgrimage down memory lane.

For those who haven’t heard Lingyin Temple is a Buddhist temple of the Chan sect located north-west of Hangzhou, Zhejiang Province, People’s Republic of China. The temple’s name is commonly literally translated as Temple of the Soul’s Retreat. The monastery is the largest of several temples in the Wulin Mountains, which also features a large number of grottos and religious rock carvings, the most famous of which is the Feilai Feng (“the peak that flew hither”).

The monastery was founded in 326 AD during the Eastern Jin Dynasty by the Buddhist monk Hui Li, who came from India. He found that the peak resembled part of the Gradhrakuta Mountain in India. The temple is without doubt a premier showpiece in the West Lake environs and is notable also as one of the ten most famous Buddhist temples of China. At its peak under the Kingdom of Wuyue (907-978), the temple boasted nine multi-storey buildings, 18 pavilions, 75 halls, more than 1300 dormitory rooms, inhabited by more than 3000 monks.

The hall of the Heavenly Kings at the Temple (where I found this statue of Dritarashtra) is larger than the main hall at many temples I have seen, reflecting its status as the centre of Buddhism in south-eastern China. To the left of the courtyard stands the Hall of the Five Hundred Arhats.

Hall of 500 Arhats

The Grand Hall of the Great Sage is triple eaved and stands 33.6 metres tall. It houses, as is traditional, a statue of Shakyamuni, the historical Buddha. The present statue was carved in 1956 from camphor wood in Tang Dynasty style and coated with 60 taels of gold. It is the largest wooden Buddhist statue in China. At the back of the main statue is a statue of Guanyin, backed by a large screen that features the carved images of some 500 Buddhist pilgrims and arhats. The building has a complex floor plan, shaped like a Buddhist swastika. Along the arms of the swastika are arranged the five hundred arhats as slightly larger-than-life bronze statues. At the centre, where the arms of the swastika join, stands a bronze canopy housing statues of four bodhisattvas representing the four cardinal directions. This is currently the tallest solid bronze structure in the world. The interior of the hall reaches about 30 metres, with a gold-painted ceiling featuring base relief images of traditional Buddhist symbols. Size and grandeur can leave you completely dumbfounded – a feeling I have had everytime I have stood before the idol of Lord Venkateshwara at Tirumalai.

As I related to friends over a bowl of congee that evening how the strong Indian connect I had discovered in Lingyin this weekend made this pilgrimage so sacred, a friend at Amanfayun narrated, that Feilai Feng, or “the flying Peak”, is so-named because legend holds that the peak was originally from India (with some versions suggesting that it is Vulture Peak), but flew to Hangzhou overnight as a demonstration of the omnipotence of Buddhist law. A large number of carvings dot the surface of the peak. More are located in various caves and grottoes throughout the peak.

In contrast to the temple experience of overwhelming size, splendor and grandeur is the simple charm and comfortable familiarity of Aman Fayun village situated on 14 hectares of natural surrounds and fresh village air. A spirit which transforms your soul and takes you on the rest of the journey of the “Soul’s retreat”. Or like for me – it’s very much like going home!

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