Buyers, brand owners, and sales professionals spend a good amount of time on the road (and in the air). While most in-flight experiences are far from luxury, even in first class, we should all be working to make them a bit more bearable on ourselves.Read More
Moral licensing is a term commonly used in social psychology and marketing, referring to the unconscious way in which we are less conscious of immoral behavior, after acting in a moral way. For example in one study where customers viewed a 40-second video praising their actions, 33.3 percent of those customers bought eco-friendly batteries. Those who saw a similar video, this time praising the company's efforts, purchased the eco-friendly batteries 69.6 percent of the time.
Moral licensing has growing significance in the retail industry today, as more brands focus on sustainable and corporate social responsibility marketing. Maryam Kouchaki and Ata Jami reported for Harvard Business Review that corporate philanthropy reached $18.5 billion in 2015, and cause-related marketing increased to about $2 billion in 2016. In the short-term, if brands and retailers want to effect altruistic consumer behavior, we will use messaging that asks for a commitment to a cause, rather than praising customers for their dedication.
Want to learn more about moral licensing?
That's a wrap for this year's #MustHave16 Design Competition, hosted by Art of Fashion.
The competition is demanding of the emerging fashion designers who participate. They are required to submit a sketch and a sample. In addition, they must go through the 5 phases of starting a brand: including building a social following and marketing strategy, working with retailers to ensure their design meet customer's needs, and selling their design in-store.
"It is a challenging competition, but it is a challenging market for emerging designers", says Jennifer Pilkington, Managing Director of Retail Assembly, who is a competition sponsor. "The hard work pays off, as the designers have a real world toolbox at the end of the competition."
This year the competition offered mentorship and feedback from a variety of industry experts including Laura-Jean Bernhardson, CEO of multi-store retailer Fresh Collective, Elle Bulger of Pinch Social, Jennifer Powell of Hart and Galla, and Donna Bishop, founder of Green Beauty and FGI Board Member.
Browse the video playlist below and congratulate our winner Bulgun Puteeva of Bulia.
Uber's head of Economic Research and former economist at Yale, Keith Chen sat with NPR's Shankar Vedantam to talk about dynamic pricing and behavioral economics. This is a must listen for every merchant, buyer and product / brand manager who touches or thinks about pricing.
Addressing how they are supporting Bangladesh development, H&M produced a fairly well-rounded video. With all of the coverage on the much needed improvements to working conditions, the economic and developmental impact is often left untouched. It is this development and international investment in the country which is why organizations should continue to push for improvement in the lives of their workers.
It is a one-sided perspective, but it includes a variety of initiatives:
- Wage growth
- Skills training and upgrades
- Improved employee - management relations
What is missing, but perhaps not within the context of this video, is the environmental working conditions - exposure to toxic materials, chronic pain and ergonomic initiatives, etc. But overall, it was nice to see an organization addressing specific measures in a fuller way - not simply speaking about the cheque they cut in light of the tragedies.
The globe's favorite (American) public broadcaster, NPR, launched a Kickstarter campaign and made 25,000 t-shirts to follow it's journey. An increasingly popular notion (see H&M's efforts, and Patagonia's transparency about their supply chain), NPR's report paints a very clear, visual picture. Videos, charts and graphs, and even photos of how different threads are spun are interesting to browse.
Whether or not you have an interest in apparel product management or product development - it's is an interesting series of videos and supporting podcasts. Visit npr.org/shirts
A week from today, Bloomingdale’s will open a three level ‘re-imagined’ store in the Stanford Shopping Center in Palo Alto. At 125,000 square feet, not only will it be smaller than the unit it is replacing (220,000) but it will also be the retailer’s smallest full-line store.
The customer demanded the same experience and assortment as their well-traveled clientele know and love from their flagship locations. The retailer, taking advantage of the rare opportunity to make a second impression, is rolling out 100 brands and 68 designer shops that were not showcased at the previous location.
Sharper editing, shop ‘tightening’, and efficient floor plans enable the retailer to offer a strong assortment of women’s, men’s, children’s, and home products. “The new building in Stanford feels bigger though it’s smaller,” added Jack Hruska, EVP of creative services. About a quarter of the exterior is designed in glass, allowing for significant amounts of natural light.
TECHNOLOGY AND SERVICE
The Palo Alto store will also serve to showcase and test the company’s latest technology-enabled service philosophy.
- Smart fitting rooms have charging stations and mirrors with touch-screen lighting options.
- Wall-mounted iPads in fitting rooms allowing customers to look up product information, message associates, and forward pictures.
- Same day delivery guarantee within 15 miles.
- Order online, pick-up in-store, which has been boosting traffic, sales and lowering return rates. Hopefully it is also allowing for customer – associate relationship maintenance.
- Touchscreen tablets allowing for product previews and information sharing with associates and friends.
- Handhelds for mobile transactions, and digital customer service (emails and texts to customers without leaving the sales floor).
BLOOMINGDALE’S QUICK FACTS
- 34-unit department store chain
- $3.2 billion in sales annually
- California’s 10 stores drive about 25 percent of the company’s total sales
- The 59th Street flagship in Manhattan also generates about a quarter of the company’s sales
The mobile payments market has had big news in the last month – the release of Apple Pay, and PayPal’s announced split from eBay. Yesterday Boku announced that customers are able to pay for real world goods by adding the payment to their mobile phone bill. Internet access required, NFC (near field communication) technology not.
This method of payment is called carrier billing. Previously carrier billing has been limited to digital wallpapers and ringtones, but with new deals with Vodafone, O2, and EE, Boku is expanding its role of e-Money issuer in the UK and EU.
Boku will negotiate limits with individual phone carriers (and merchants). They are operating using industry standard limits for now. £30/transaction £200/month will not facilitate an auto purchase, but does allow for magazine and convenience purchases, including movie tickets, parking, takeout, and public transportation.
“It may not yet revolutionize mainstream retail payments, but it could well see people using mobile to pay for cans of pop, newspapers and magazines and making other ‘micropayments’ in small retailers and the like, while the mainstream high street stores are still grappling with finding budget for beacons and other tech” commented Paul Skeldon at internetretailing.net.
Who would have thought that it would be corner shops and kiosks that got the first taste of mobile payments in retail?
Merchants will need to sign on, thereby allowing customers to use this method of payment. Consumers will not need to register. In most instances it will take only confirmation via text to process the transaction. No credit card information exchange, in fact, no credit card required.
The global m commerce market is set to grow from $116 billion in 2014 to $467 billion in 2019. The focus in North America has been on wallets and beacons, but carrier billing is likely to have a larger global impact in the end – serving regions where merchants and consumers have cell-phones but not NFC technology. “Suddenly, mobile payment has become simple to implement” summarized Skeldon.
ADDITIONAL | Has mobile payment hit its tipping point?
ADDITIONAL | VIDEO The 5 big benefits of ‘charge to bill’
Google is in constant evolution, and it remains the number one search engine. It is important for retailers to follow the company’s updates, difficult to decipher as they may be.
In a move to keep users on their search page for longer, Google launched search within a site. The clumsy name simply indicates that below the header for a particular retailer, is another Google search box. Instead of immediately clicking on the retailer’s website, the user may enter a secondary search on the same Google page.
Search within a site searches are treated like other search result pages. Which means, relevant advertising is also returned. The organic results are from the specific retailer. The ads are from any company that has purchased advertising – including the direct competition. We searched ‘marc jacobs’ at Revolve Clothing (above), and Shopbop – another ecommerce retailer was the top return (below). The rest of the results were all from Revolve Clothing.
As Mark Ballard, director of research at Rimm Kaufman Group LLC articulates, “You’d end up generating ads for your competition on a search that otherwise would have taken place on your site”.
Google argues that the search feature on many commerce sites are plainly not very good, and the company is looking to fill that second query result on its own search pages.
There is a solution for retailers wanting to control the returned results, and eliminate any advertising. Google has allowed for the retailer’s own search results page, as long as it’s formatted correctly and submitted to Google. Amazon and Walmart have already opted-in.
GOOGLE TO HANDLE MORE QUERIES
The search within a site feature is one of the newest the company is using to keep retailers on the Google search page longer. Structured and Rich Snippets pull key product and site details (like a camera’s dimensions, resolution, etc.) from brand and retailer websites, displaying them on the search results page. Thus, delaying the click to a retailer / brand’s webpage.
At this point, search within a site doesn’t seem to be altering consumer behavior in a significant way, but Google is actively expanding both the Snippits and Site Search features.
ADDITIONAL | Google’s Top holiday tips for retailers.
Product drives most into fashion and retail – it inspires and serves a need. What supports that product, from production to sales, is retail math. Dive into our LA Retail Math sessions for a deeper understanding of the fundamentals.
Advance session attendees understanding of how retail math affects both the commerce and customer-facing side of the business. Develop skills to impact key metrics by planning for and manipulating the various factors impacting profit and sales.
One-day session facilitated by RETAIL ASSEMBLY in either Foundational or Advanced Retail Math skills. Includes participant materials and online access to covered materials until Saturday October 25.
FOUNDATIONAL RETAIL MATH SESSION
- Costing and mark-up
- Sales reporting metrics, reading and uncovering risks and opportunities
- Foundational profit, and markdown basics
ADVANCED RETAIL MATH SKILLS SESSION
- Inventory and the basics of merchandise planning metrics
- Driving profit and productivity
TWO - DAY SESSION
- Day 1 Foundational
- Day 2 Advanced Skills
A week ago we had the pleasure of attending an event hosted by the Art of Fashion and Fresh Collective – aptly titled “The Retailer’s Point of View”. Laura Bernhardson, CEO and founder of Fresh Collective gave an inspiring and passion-packed presentation that armed designers with great information about the business of retail, and the importance of building strong relationships.
Fresh Collective has an interesting model that has been fine-tuned over the years. Truly built in the spirit of growth and collaboration, the retailer has expanded to multiple locations, and all with a consignment model. Typically ‘consignment’ does not elicit a positive reaction from either retailers or suppliers, but Fresh Collection makes it work.
WHY CONSIGNMENT WORKS FOR THE RETAILER
“The bottom line is it allows us to work with emerging designers.”
Fresh Collective has a customer who appreciates and wants to support unique, local artists and designers. But any retailer (and designer) will tell you that an emerging designer business is never easy. Despite high-levels of design training, it can take years for a designer to perfect the fit, fabric selection, assortments, marketing, and even sourcing. Most retailers will wait until a brand is more established before jumping into business together – for all of the reasons above and more.
Through a consignment partnership, Fresh Collective is able to protect its profit, and provide their customers with the new, saleable, local designs they desire. The designers walk away with customer and retailer feedback and guidance, continuous cash flow, and the opportunity to develop their business.
CUSTOMER APPROPRIATE PRODUCT
Maintaining assortment integrity and merchandising can be difficult for a retailer with a consignment supplier. Often the supplier considers the space in-store to be ‘rented’ instead of part of the retailer’s own. Many large retailers, like Hudson’s Bay prefer this type of agreement. However, in a smaller store, the retailer will still want to maintain control over their environment and product selection.
Ms Bernhardson does this extremely well – not a single product reaches the hanger or shelves in-store without first being chosen. Fresh Collective’s mission really guides each product choice, “to inspire joyful living and self-expression, one relationship at a time”. Colour and print with the practical aspects required (the customer must be able to ride her bike in each day piece, and it must cover her bra straps) are all evident on the sales floor.
Working closely with designers by providing feedback on the design, and clearly articulating what her customer is looking for ensures success for both Ms Bernhardson and the designer.
PARTNERSHIP IS A LEARNING TOOL
Consignment has the effect of putting a higher level of ownership back on the designer to ensure sales plan are met. After all, they will only be paid for what they sell. The feedback from the buying team early on in the development process is the first way in which the retailer is able to ensure a high quality product which meets the customers’ wants.
Even more important is the direct interaction with the customer Fresh Collective affords its designers. Events, and even in-store communication is invaluable and often something designers receive primarily post-season, after the next collection is already designed and produced.
Smaller runs and in-season repeats are a lean and effective way to learn what resonates with customers – without huge financial mistakes in inventory buying. And the direct sales feedback means the designer can make quick changes, swapping out merchandise that isn’t selling and correcting any mistakes. This fast action keeps the retailer’s sales floor fresh, and gives the opportunity for the designer to increase his/her sales.
POWER OF AN EARLY OPPORTUNITY
Whereas a retailer like Holt Renfrew will require a cohesive, high quality line with perfected fit and capacity to create monthly collections, an emerging designer with Fresh Collective has a bit of time to work with the retailer to perfect all aspects of their brand. Because their customer is looking for novel ideas, the designer can test and try new things.
The experience, with a growing customer and sales base is ideal for a new designer. And a stable yet unique brand matrix is perfect for Fresh Collective. It’s a model that works for the retailer, their collection, and supplier base – an ideal retailing scenario.
Streetwear and its codes have become so integrated into the fashion vocabulary, it is no longer considered to be a separate category by many of the globe’s top designers. Consider the long-standing collaborations between Stella McCartney, Yohjo Yamamoto, and adidas, Erin Wassen x RVCA.
What shouldn’t be happening right now is a decline in the surf brand industry. The big 3 brands are no longer part of a subculture. Surf and board sport style have never been more important to the boarder fashion and consumer market.
Many have pointed to the supply chain inefficiencies – and Quiksilver and Billabong are certainly making some positive moves here. But what I don’t see happening is a conversation about where these brands fit within the larger apparel market. They still consider themselves to be subculture, perhaps it’s a crisis of identity.
Customers are looking for surf, more specifically they are looking for surf fashion.
“There’s definitely a bigger dialogue happening right now beyond the pieces themselves. I think fashion today is a way for people to create a community. It’s a conversation. That’s where the individuality of people takes it to another level. It takes it back to a point in time when clothing meant something. It’s important to speak back to that time. “ – Humberto Leon in conversation with Carole Lim and Shayne Oliver of Hood by Air at Selfridges
Authenticity is a significant part of any fashion experience. If the big 3 surf brands were offering the right style, it would be the ideal purchasing decision, and a better alternative to buying the fashion from retailers who are not grounded in the sport of it.
The Board Room at Selfridges
Last month luxury department store Selfridges introduced The Board room, featuring street sport classic brands Stussy and Eastpak, alongside Hood by Air, Y-3, Oak NY. Reinforcing the blurring lines between ‘street’ and fashion, the retailer also sought out it’s designers to create decks, including Jil Sander, Dries van Noten, and Rick Owens.
Slam City Skates have opened a pop-up to help with the technical aspects (i.e. hardware) of skating. It’s a nice introduction into the sport for the fashion-set. The retailer has a skate park & is offering 1-hour lessons to ensure that new Christian Louboutin boards doesn’t remain as wall art.
Taking a closer look at the influence skate and surf has had on the fashion landscape, Dazed & Confused produced a special issue of the magazine for Selfridges. What is so great about The Board Room is it pays proper homage to both street and fashion, and encourages the growth of both.
The big 3 surf brands should take a look. The market is increasing, the demand for their product should be at least keeping pace.
“A lot of what we do speaks back to this feeling: to really want to be part of something, and relating to brands.” – Humberto Leon in conversation with Carole Lim and Shayne Oliver of Hood by Air at Selfridges
The Canadian government has enacted new legislation with hefty fines for individuals and companies sending electronic communication to its citizens. The rules, effective July 1, 2014, are outlined under CASL (The Canadian Anti-Spam Legislation) – and clearly indicate the need for consumer and recipient consent prior to sending any communication.
There are three types of consent outlined:
- Express consent
- Implied consent for business relationship
- Implied consent for non-business relationship
A FEW WORDS ON CONSENT
· Requests for consent must include a statement indicating unsubscribing from the list is always an option.
· Unsubscribing must always be an option with every communication.
· Consent must require an action, such as checking a box. The box cannot already be checked (that would require no action).
CASL also covers notes on misleading or false subject lines, the unsubscribe process (within 10 days), communication requirements (physical mailing address and additional contact channel), and referral guidelines. For additional details, please refer to the website.
The good news? Brands and retailers have until June 30, 2017 before the Implied Consent deadlines are enforced.
Speaking of communication - we have two excellent newsletters which provide well-edited content: fashion and retail stories which caught our eye, spark ideas, improve performance and enhance professional skills. Sign-up today.
Last week it was announced that Kelly Slater’s relationship with Quiksilver would be coming to an end after over 23 years. The athlete had a 100% sponsorship deal with the brand initiated April 1,1990. Slater is partnering up with Luxury group Kering, which is one of the more interesting moves we’ve seen from the action sports world in some time.
Launching his own apparel brand, Slater will be supported by Kering along the way in development and execution. Kering is expected to be a great partner with Slater operationally, helping with sourcing, logistics and e-commerce.
Kelly has once again chosen a fantastic strategic partner who can help him see his vision through. His long relationship with Quiksilver allowed him to develop fully in his sport. Slater was competitive throughout, surfing the best waves around the globe, filming documentaries and films, and travelling to remote places. With Kering, Slater is moving on to his next long-term partnership.
“For years I’ve dreamt of developing a brand that combines my love of clean living, responsibility and style.” – Kelly Slater
A MUTUALLY BENEFICIAL PARTNERSHIP
While Kering will be an incredible partner for Slater, Slater is also expected to be a strong partner for Kering. The surfer, who actively advocates on behalf of marine conservation, will serve as an ambassador. Sustainability (economic, social and environmental) is a key value at the company, which also includes Stella McCartney, Gucci, and Puma.
“Because quality is the quintessence of our brands, the challenge of sustainability stimulates us to create products that are more imaginative, longer lasting.”
Kering is pioneering a Group Environmental Profit & Loss Measure that will be considered for each brand. The EP&L measures the environmental impact across the organization’s operations and supply chain, attaching a monetary valuation to each. Many companies are speaking about responsibility, but Kering is perhaps the first to attach a profit figure to it. This will almost certainly drive different and better sustainability-related decisions.
Slater is joining a nice portfolio that will compliment his brand nicely. Kering has a proven track record of nurturing and building new talent – Alexander McQueen, Stella McCartney are great examples of this. The company already has their feet wet in the action sports world with the purchase and current turnaround of Volcom. The commitment to responsible design and production is already touted throughout the groups portfolio of brands, but perhaps most recognizable with Stella McCartney who consciously uses alternative materials to leather/fur.
SPORT & LIFESTYLE AT KERING
The Sport and Lifestyle component of Kering’s business is still small at 33 percent of the group’s total, and is dominated by PUMA, the globes number three sports brand, Wholesale represents 79 percent of the sales in S&L, but the group’s retail sales are outpacing the channel (comp retail sales grew 6 percent in 2013). Expanding into new markets and product categories (Volcom launched its first footwear collection in 2013), and knowledge sharing between the brands are expected to be the keys to Kering’s success in sport.
Volcom has been suffering the same way the other brands in the action sports world have. While Kering has yet to prove success with the brand, they are committed to the business. Fueled by solid demographic and social trends, Kering will continue to grow its Sports and Lifestyle portfolio. Kelly Slater’s brand could be a nice way forward: brand and design strength (& growth!) like Stella McCartney / Alexander McQueen, with the global appeal of sports and lifestyle apparel.
It seems the wearables market is finally generating the fashionable momentum it needs to succeed. We now live in a world where design in every aspect of our lives matters, but nowhere in tech does a design-first approach need to be taken more seriously than in the wearable category.
Luxottica’s recently announced partnership with Google Glass – particularly for the Ray Ban and Oakley brands, and the fitness category (of course, done by Nike) are making good strides in both style and function. However, it is the smartwatch category that is believed to have the largest market cap.
“Many look at the smartwatch as the next tablet, a device that will define its own category and alter the pace of the entire mobile industry,” BI Intelligence analyst Tony Danova wrote in a report published last fall, also predicting a $9.2 billion market in four years.
Although the smartwatch story is set to explode this year, there is no clear market leader. In addition, the traditional watchmaking industry has seemingly written off the possibility of wading into connected waters.
The buzziest new devices are activity trackers and watches that wirelessly connect with smartphones. Samsung’s Galaxy Gear is the most readily available device on the market. At this point, it is still speculation that Apple could launch its eagerly awaited smartwatch, preemptively dubbed iWatch, this year.
The other entrants are making slow progress, some notable names include:
- ConnecteDevice of Hong Kong (Cogito brand)
- MyKronoz from Geneva
- Pebble Technology
- I’m Watch
MyKronoz in particular is an interesting competitor to what will look to be the big two: Samsung and Apple. The company is Geneva based, which is a city whose soul is in watchmaking. Perhaps the most compelling feature is its entry price point of $69, which is comparable with Swatch’s (the leader in watches). The results at My Kronoz are good. The company aims to ship 500,000 units this year, up from 100,000 the previous year.
“We felt that the Swiss watch industry was clearly not venturing into connected watches” –Boris Brault, ceo MyKronoz
Of course, the traditional watch industry would agree: “The watch communicates, whereas the smartwatch informs. It’s totally different.” Jean-Claude Biver, president of the watches division at LVMH Moët Hennessy Louis Vuitton recently mused to WWD.
The wearable category is shifting from the world of tech to the world of fashion, and it’s time we in the fashion and retail industries educated ourselves. Wearables is not sitting on the innovation sidelines any longer – they will quickly becoming truly relevant for the early adopter.
 Diderich, Joelle. 2014 March 27. Smartwatches Gain Steam. WWD via http://www.wwd.com/accessories-news/watches/smartwatches-gain-steam-7617758/
As Baselworld welcomes over 1500 watch and jewelry brands to its show this week, both traditional and technological timepieces are poised for growth. Although, there will be little overlap between the two categories in the foreseeable future.
GROWTH IN THE LUXURY TIMEPIECE MARKET
Overall growth of Swiss exports was 1.9 percent in 2013 (a year earlier, exports achieved an impressive 11 percent increase). Most of the key players in watches experienced modest results in-line, with only a few notable exceptions.
Swatch gained market share, reporting better results in the industry with an +8.3 percent increase. On the other hand, LVMH’s profit and the number of stores rose while the company’s sales revenue for watches and jewelry declined slightly for the year.
How does an industry continue to grow, while its functionality continues to diminish? “Watches are unnecessary because anyone can see the time on their cellphone or TV,” Enrico De Paoli, watch collector, recently admitted to the NY Times. And as many savvy consumers know, a $20 watch tells times as effectively as a $20,000 watch.
Buying a particular watch is about image, it expresses a set of values and your personal style. As each luxury brand at its core speaks to a different customer, each watch brand and watch feature does the same.
Isetan reported that is annual watch sales rose more than 60 percent last year, driven by sales in “complications” and womens’ watches. For those ‘outside looking in’, complications are features like perpetual calendars (taking into account leap years), chronographs, and moonphases. This is consistent with feedback provided by many executives – it is purely emotion driving purchases and growth, no longer under the guise of functionality.
Is there room for “SMART” in horlogerie?
“I do not believe it can compete with mechanical watches in our haute horlogerie segment in terms of emotional value, the shared passion we have making our watches and the passion that our clients have, the aesthetic value and longevity of the object and its long-term value”
-Theirry Stern, ceo of Patek Philippe
Smart watches do not even seem to be a point of discussion among luxury watch executives. With continued, albeit slowing growth, overall, brands remain true to their heritage.
Swatch is one of the few traditional watch brands to toy with a smart watch, launching a connected watch with the Paparazzi back in 2004. It has since been discontinued. Nick Hayek, chief executive of Swatch Group is still not impressed enough with available technology to wade back into that business. Battery life, a lack of functional difference from a smartphone, and information security concerns are a few areas that need to be addressed before the Group considers entering the business again.
Tissot is currently developing a wi-fi watch, and is a brand already known for their touchscreen T-Touch watch. But it is moving forward cautiously, “we don’t want to go in the same direction as what is currently on the market, and especially not watches that provide personal information like your heart rate or anything like that, because when you enter the health arena, there are risks attached,” Francois Thiebaud, Tissot’s president told WWD.
One of the few retailers who has opened the conversation around how the two different worlds may interact is Paris Left Bank’s Le Bon Marche. Their new watch department opened in the summer featuring the regular luxury players alongside alternative brands like Slyde and MF&B in their Galerie Imaginaire Horlogere.
True to the gallery’s name, the brands encompassed embrace the traditional elements of timekeeping and beautiful watchmaking, but are re-imagining it in a new way. Not exactly “connected”, but expressing an innovative set of values.
“The smartwatch is an information device that tells you that you’ve got mail or a message, whereas a high-quality Swiss mechanical watch is a communication device that communicates to others who you are,” Jean-Claude Biver, president of the watches division at LVMH said.
It is important not to discount the results achieved by Swiss watchmakers. The luxury business has never been built on a fleeting new thing, and often sells and appeals to consumers through its heritage. It is the premium end of the market that is driving much of the growth in watches, exports above 3,000 francs ($3,390 US at today’s exchange) grew 2.8 percent, while watches below 200 francs ($226 US) declined by 8.5 percent.
Perhaps smart watches and traditional timepieces really are playing in different fields. They are certainly appealing to very different customer needs for the time being.
Victoria Gomelsky wrote an excellent piece on some of the most interesting luxury watch products on the market. Click below to have a peek through.
 Henselder, Axel. 2014 March 27. “Looking Good: Swiss watch industry ticking along at record pace”. Baselworld Daily News.
HOW TO BE IN BUSINESS
This was one of our favorite videos in 2013. The designers of Proenza Schouler, Jack McCollough and Lazro Hernandes, celebrated 10 years with Barney's New York with a capsule collection, went with the CFDA to show at the Ming Dynasty Wall, and opened their first flagship in Soho.
What will your business accomplish in 2014?
When it takes one year to prepare to make a tie, how do you grow this business to be ten percent of sales (425 million euros in 2012) for a luxury maison?
After only bags and scarves, le cravat is the most important business for the French luxury company Hermes. What is remarkable about the category’s significant size is that it takes over a year to develop a single tie. The design process alone is 2,000 hours, or six to eight months. Drawn in the Paris studio, the design is then sent to the engraver where colours are separated.
The quality of the Hermes tie is a direct result of its production. Rolls of silk are spread across tables, colours mixed in and then the silk twill thread is woven. This process is another six months, with the discerning eye of the artisans, finishers, and quality control.
“The solidarity of the twill is exceptional”, two distinct pieces to assemble (the blade and tail) versus the industry standard of three, and a single lining (when the industry, again, has usually two lining types), ensure excellent durability and dry-cleaning results.
Photos by Nathan Pask for WWD.
With a development investment as high as each tie is, we are referring here to the 2,000 hours of design plus another few months of engraving, how has Hermes grown the business in its almost 50 years? In 2012 silk and textiles saw increases of 16 percent over the previous year.
“Our designs evolve perpetually – we never engage in a big revolution, but we change in each collection the size of the designs, the rhythm, and color combinations,” Christophe Goineau, creative director of Hermes men’s silk department, told WWD. The Hermes 59 EA vintage silk tie has had 100 different colors applied to it over the years.
Tie size, options of light- and heavy- twill fabrics, and an eight- centimeter width versus a 9.1 centimeter provide additional options which do not significantly affect the production process – and very little of the design and engraving process.
Classical designs offer a longer shelf life, and lend themselves more easily to different color combinations. The whimsical designs offer more play and creativity in scale, and rhythm. This is how the company maximizes each design’s life – and their sales.
Read more strategic business insights:
Hermes is a company known for its high quality, meticulous, creative and talented artists and craftspeople. They are also one of the most successful and profitable luxury companies on the globe today, out-indexing the players with double digit increases year-over-year. It is something they have achieved this without sacrificing their values and core.
With multiple ways to achieve the same end, our online retail courses present a variety of solutions through content, videos, and case studies. Great retailers pull great new ideas to their enhance their business - without sacrificing their own vision and strategy, from the content. Dive in to a topic today!
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Lululemon was founded in Vancouver 15 years ago, but it has a freshness issue on it's home turf. The city is a living example of an active population, but the customer no longer perceives Lululemon's offering to be unique. To reinvigorate the city's love affair with the brand, in 2009 The Lululemon Lab opened its doors in a beautiful warehouse space, complete with 3 designers, 30 production staff, and 10 in customer sales.
THE LAB SPACE
The space would attract those customers who are, or were previously, brand loyal. And because they are shopping at a lab, they would also be looking for something fresh and new, making them innovators or early adopters. In theory this should be the customer, and the advantage of opening such a location.
With a design and production team present, The Lab could be putting inventive apparel and accessories on-floor weekly, testing new colour palettes, patterns, silhouettes, and fabrics with early adopters. Identifying what these customers are interested in allows retailers to maintain market dominance, brand awareness, and grow their sales and profit through each product life cycle.
IT's REALLY JUST A NEIGHBOURHOOD SPACE
But, walking into The Lululemon Lab store, you can't help but feel like they've missed the opportunity. The colours are neutral - blacks, greys, muted burgundy. The fabrics are often for day-use and uninteresting: linens, cottons, etc. The staff is focused on lifestyle events held in the space, most are unrelated to an active lifestyle, such as gin tasting, candle-making, and onesie painting.
While The Lululemon Lab is doing a great job at becoming a neighbourhood destination, they are doing little to help this global retailer's future product development and sales. "Once a month, ideas born in the Lab are presented to Lululemon's main design team". If The Lab's designers have any relevance to future sales, shouldn't this be a constant dialogue? Has the company considered putting its best, most intuitive designer in The Lab? Located in the Pacific Northwest he/she would have unlimited access to their core customer, and the perfect venue to test their best and newest ideas.
Lululemon does continue to do some fantastically innovative things, most recently the founders partnered with a local college to ensure Vancouver becomes a technical design and production education leader. It is too bad The Lab isn't tapping into the bigger product opportunity.
We are big proponents of retailers testing product and allocating small portions of their assortment for innovative product. To learn more about product management, assortment planning, and the business behind this strategy, subscribe to our online courses and workshops.
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November was a significant month for the Olsen's. Ashley was named to the CFDA Board, and both Mary-Kate and Ashley launched a pair of fragrances at Sephora.
Attention to detail and perfectionism run through the various veins of Dualstar, the multi-million dollar company Mary-Kate and Ashley founded. The sisters spent close to two years developing the scents, Nirvana Black and Nirvana White. They worked with fragrance veterans Robin Burns and Michael McGeever, moving through 50 versions before landing on their first, Nirvana Black.
What the two have built together is impressive, and we particularly appreciate their hard working ethic, and strategy when choosing partners. Mary-Kate articulates it as follows: "We all have skin in this game. It's a team effort. That's a fresh way to do things."
ON BRAND EVOLUTION
MK&A's evolution has been steady, built experience by experience. From the time they were baby-actresses on Full House, the two have been exposed to business and been involved, or spear-headed various clothing, entertainment, beauty, and manufacturing projects. Michael McGeever, SVP of Sephora said it beautifully, "In the first part of their careers, they built a brand that was centered around them. When they created the second act of their career, it was really more about the celebration of quality and craftsmanship".
WWD's article, "The Olsen's on Scents, Fashion and Branding" chronicles the details.
What I really love about MK&A approach to a new product category is how they immerse themselves in the market. They study it first to determine what they could offer that is different. Regarding the Nirvana project, "We looked at how people are speaking to this consumer and how we could speak differently," Ashley told WWD.
That kind of knowledge is incredibly powerful when you're entering a saturated marketplace. The ability to scan the complete fragrance landscape and reflect on what is already working and what isn't working is both prudent and smart. It allows you to start, not from scratch, but with some of the learnings of the industry's giants. An excellent tool for those working in sales & brand management, buying, and product development.
While it is rare to have the experiences and business exposure throughout life that MK&A have experienced, passion and a willingness to learn can go a long way to building a career and retail business. To learn more about the industry, pick up new skills, knowledge and some fresh inspiration, subscribe to our courses and workshops. Our Weekly Newsletter is available to keep on top of industry news stories we're following.