Hermès' Search for Growth

Around two years ago I visited the brand's New York office and flagship store through Columbia's Retail & Luxury Goods club, and met with the US CEO, Robert Chavez. Comments he made during that visit - control of brand growth, focus on current markets vs. new, strategic/targeted/slow and steady investments in Asian locations - are echoed in this piece with Axel Dumas. It shows Hermès' leadership is closely aligned on overall brand strategy, reinforcing the confident and strong position the brand holds in the luxury world.

Dumas also had some interesting insight on what digital means for the maison:

“Hermès is also making investments in its digital presence. Currently, the company’s brand website is divorced from its e-commerce platform. In mid-2016, the company will integrate the two. “E-commerce is important, but also it’s about communication, telling your value,” Dumas says. “That’s why we are really thinking hard on re-launching the new website in 2016. I view digital as a great opportunity and something that is going to become more and more important.” Indeed, according to Solca, digital is expected to drive, on average, 40 percent of projected luxury sales growth from 2013 to 2020. “[E-commerce] is one of very few ways luxury goods companies can now grow,” he says.

When Dumas was named co-chief executive three years ago, he spent a lot of time looking at the archives, and quickly drew a correlation between the international expansion that happened in the 1970s and the digital expansion that is happening today. “There was a discussion in the 1970s, should we go international or should we not? People were saying, you don’t need to go international because everyone is coming to Paris. Going international will be risky and costly. Fortunately for us, we took the step to go international. I think it’s the same subject about digital now.””

Business of Fashion: Giving Digital a Seat at the Table

The article out this morning on Business of Fashion, "Does Digital Finally Have a Seat at the Table?", points out both interesting data points and insightful analysis (often from the trusty resource Luca Solca from BNP Paribas, seemingly the only luxury expert in banking). As someone interested in luxury, but aware of the opportunities in digital, the numbers look good.

Article highlights:

  • Digital is where the consumers are, making up for slowing growth in China
  • eCommerce is expected to be 9 percent of the global personal luxury goods market by 2019, with a value of $27 billion. More pressing is the fact that online currently influences over 60 percent of luxury purchases
  • Chief Digital Officers need to merge the marketing and IT sides of digital in order to permeate the entire organization (hint hint, consulting firms)
  • Those who have outsourced eCommerce to companies like Yoox Net-a-Porter will have to reclaim customer data in order to glean any insights and find correct attribution
“[At] digitally mature companies, digital strategy is fully integrated into overall business strategy, negating the need for a specific chief of digital. “As in the case of Burberry, the alternative is to have the CDO and the CEO roles coincide,” says Luca Solca.

“In the 1920s businesses had chief electricity officers because it was such a new thing,” adds Ashley Friedlein. “This feels like that; a moment in time that will pass.””

​

Fashionable Conversations: WWD & Decoded Fashion

Today in New York the WWD Apparel and Retail CEO Summit wrapped up just as Decoded Fashion's annual NY Summit took off, making me wish I had been able to take time off from work to attend at least one. Last year while in school I did work with Decoded to plan and execute their summit, and it was fascinating to be able to listen to the different speakers talk about all things #fashiontech. This year, I was forced to follow the conversation on Twitter, but was still able to glean some interesting pieces from the conversations.

One quote in particular caught my eye, that of Tim Kendall, Pinterest's GM of Monetization. He said that 37% of mobile transactions are focused on fashion and luxury goods. That to me is very high, and I wonder if the quote was taken out of context - as brands are able to link a Pinterest post directly to an ecommerce link, allow purchase of items on a brand's Pinterest board. Either way, that is very encouraging for the fashion industry, and ties to McKinsey's prediction that luxury's share of online sales will double from 6 to 12 percent by 2020. After working on a mobile commerce/mobile app project with Yoox last summer, I find that area very interesting and clearly ripe for growth. I only wish I had been at the summit to hear in person the full discussion. Kudos to Decoded for driving such interesting conversations.

"But as luxury companies are increasingly forced to acknowledge e-commerce as a driver of sales — it is projected to grow 20 to 25 percent over the next five years, according to the Boston Consulting Group, while the industry as a whole is growing at only 3 to 4 percent a year — digital transformation, still relatively rare in fashion, is going to become more common."

- NY Times

Apple + Hermes: Surprising?

"It looks first like a luxury watch, and second like a gadget" - Quartz

With the announcement of the new Hermes collaboration with Apple, even hours later there are scant articles about the new device from fashion, style, or luxury news outlets. In one respect, this is because tech blogs and news sites abound, so they will cover an Apple event with more gusto. Yet, given that such a rarefied maison has taken on the tech scene, one would have assumed more articles would be out there talking about it (waiting for The New York Time's Vanessa Friedman to weigh in, post-"break up" with its previous version). 

It is no surprise that Apple is interested in moving its design upscale, with the recent-ish hires of Angela Ahrendts of Burberry, Paul Deneve of YSL, and Patrick Pruniaux of Tag Heuer. These are impressive hires, brand-wise, but it's hard to say what can be more upscale in the world of accessories than Hermes - and for this, I think the saying "if you can't beat them join them" goes both ways. I am certainly not as attuned to these worlds as others, but it still seems a surprise that Hermes, or any traditional luxury house, was persuaded to partner for the techy watch. With the prices more affordable than I would have expected, it is my assumption this will help Apple sell more watches, and move past earlier knocks on the watch design. For Hermes, it could be a surprising entry item for aspirational buyers, retailing for essentially the cost of two traditional enamel bracelets, and even arriving in the signature orange Hermes box. It would have been interesting to hear the discussions surrounding that "final mile" decision. 

 

Instagram leads the "natural" charge

The popularity of Instagram and its influence on the wider spread use of photograph filters is well-known. Today AdWeek noted that "design teams are beginning to see the benefit of moving away from over-lit, over-staged and generally over-edited photography for their campaigns" in favor of photos that look and feel more organic - to use both on and off the mobile platform. These types of images often resonate more with customers, and indeed I remember when analyzing Pinterest metrics at Moda Operandi one of the most pinned posts was that of an Instagram photo. 

Yet another, smaller, point made in the article caught my attention. One art director said that the huge network of designers and photographers on Instagram, and their portfolio-like profiles, means that trends catch on much more quickly and it is a race to adapt to new styles before they become worn out. "Now Instagram especially is responsible for speeding up the rate that we try to push aesthetics and try new things," said Alex Nassour of McKinney. This is likely both a threat and opportunity, pushing creatives to stay ahead of the game and constantly experimenting with novel ideas. It will be interesting to see if there is a future backlash to a faster-paced environment in the already competitive advertising industry. 

Adweek: How Instagram Is Changing the Way Brands Look at Photography, Online and Beyond

 

XRC Labs: bringing innovation to retail

As a strategy consultant with time spent in luxury retail and startups, I find the launch of XRC Labs a particularly interesting and exciting new entrant into the (crowded?) accelerator space. Based in New York, XRC Labs is "an innovation accelerator for the next generation disruptors in the retail and consumer goods sectors" that aims to create an ecosystem of entrepreneurs and investors to identify the next big opportunity in the industry. The lab is a joint venture between Kurt Salmon and Parsons School of Design, with additional support from the Harvard University Innovation Lab. 

There are two interesting things here. One,  members will focus on combining technology and data with design to help move the shopping experience beyond its current form, which hasn't changed much over the past several decades (Rebecca Minkoff is one example of a brand that has done an excellent job of experimenting with new tech to update and upgrade in-store customer experience). Note the technology exists, but designing it well, for a (personalized?) customer experience is the trick.

Two, the alliance of a large, traditional management consulting company with a design school and university - for the purpose of entrepreneurship in retail - is unexpected but very welcome. Each brings something unique to the table, and it provides a spin on the growing trend in corporate venture arms. I'm looking forward to seeing what the first class brings to the table, hopefully the first of many to come!

Bem Vindo a Portugal: Beautiful, Delicious, Kind

I recently returned from a two week European roadtrip through Spain, Portugal and France, that was an escape from the city as well as a last ditch effort to enjoy my free time before starting work again. Graduating from undergrad is a much sweeter, more exciting experience because you don't know what you're getting into, and future opportunities to take time off (i.e., grad school) still await. Now, many of my classmates are on long journeys in far flung locations, grasping onto what little time we have left to gallivant about before rejoining the real world.

Portugal was a new country for me, therefore I spent a decent amount of time reading various articles in the Times and Vice, as well as finding various blog posts and Anthony Bourdain episodes. Our itinerary included driving along the coasts of the Algarve (southern) and Alentejo (western), then cutting in for the Alentejo countryside before heading to Lisbon and Porto.

Cabo da Roca, western most point of Europe

Cabo da Roca, western most point of Europe

In short, Portugal is a beautiful country full of wonderfully nice and inviting people. My friend and I were often staring in silence, taking in the scenery that was delightfully free of hoards of tourists. Portugal is a country of only 10 million, therefore there were stretches of road that we would drive for an hour and see only one other car, and as we were there in early June, summer holiday crowds hadn't yet poured in. The food was cheap, but great, and we struggled to find a bottle of wine that cost more than 10 euros.

In just over a week we were able to drive almost the entire coastline, and I would highly recommend our route to anyone else looking to escape to a quiet, cultured, and well-fed destination.

  • Day 1: Sevilla - Olhão: stop in Tavira, Santa Luzia, eat at Tasquinha O Galo in Olhão
  • Day 2: Olhão - Vila Nova de Milfontes: stop in Praia da Marinha, Sagres, eat at A Sagres and Patio Alentejano in VN de M
  • Day 3: Vila Nova de Milfontes - Herdade do Vau: stop in Cabo Sardão, Zamujeira do Mar, eat and sleep at Herdade do Vau
  • Day 4: Herdade do Vau - Évora: stop and eat at Herdade do Esporão
  • Day 5: Évora - Lisbon: drink at The Insolito, eat at Ramiro's, Buenos Aires Cafe, and Casa Pasteis de Belem
  • Day 7: Lisbon - Coimbra: stop by Cabo da Roca, Sintra, Obidos, see Coimbra University
  • Day 8: Coimbra - Porto: eat at Cafe Santiago for the francesina, sunset byob in Jardim de João Chagas, drink at Gaia's port houses, stop in Duoro Valley

What's Your Gutsy Move?

It's been almost two weeks since I graduated from Columbia Business School, and while it felt surreal, exciting and yet anticlimactic, a definite highlight of the ceremony was Sallie Krawcheck's commencement speech. A graduate of CBS herself, Sallie has had a pretty diverse career path and overcame obstacles that probably would have couched others. 

Below is a link to the transcript, very worthy of a read.

salliekrawcheckcbs2015


" I have a friend, Vernice Armour, who asks a question that I always love: “What's your gutsy move?”

I would add to that, on this day of graduation and new beginnings: “What's your impact going to be? What's your meaning and purpose? What’s your point of difference? What’s your gutsy move?” "

Transcript, Ellevate Network            

Aiding the Travel Planning Experience

Last night I gave my final presentation in a class entitled “Launching New Ventures,” expanding on a travel idea that consolidates travel itineraries into an online database. The idea driving Ripe Travel is that many of my friends in graduate school create vacation planning documents, often in Excel, that contain extensive details on everything from flights to hotels and transportation options. These documents too often end up sitting on their computer, or sometimes mailed around to others who are planning to travel to the same destination. It is easy for all of that leg work to go be lost in the depths of computer folders, and for future travelers to go it alone in their own planning.

 

Knowing that this is not something that happens only at Columbia, I want to create an online database for all of these travel documents. A place where itinerary creators can go to share their experiences, and others to benefit from the knowledge of real and proven plans. While it’s still in the pre-beta stages, I’m excited to see what Ripe Travel can become.

amazon-destinations.png


In talking to potential future customers (a la Lean Startup, a class I took with Steve Blank last year), many said they often used TripAdvisor because they are seeking user reviews, but that it still was not an easy site to use; one ends up sifting through too many pages, the top recommendations are not relevant, or the reviewer profiles are too dissimilar to their own. In perhaps a bid to overtake TripAdvisor, this morning Amazon Local launched their revamped travel site, Amazon Destinations. While it is too early to tell if Amazon Destinations can compete with the over 200 million reviews on TripAdvisor, Amazon’s existing review system, and the data and algorithms behind it, is probably causing some concern within the veteran site. And though there are other hotel booking and review sites - Hotels.com, Trivago, Expedia, etc. - Amazon Destinations is a focused customer proposition. Very localized, the site targets destinations within driving distance from major metropolitan areas, for overnight or long weekend stays. Amazon is taking an iteration on a previous business model, and avoiding offering everything at once. Yet I’m sure it will only be a matter of time before a much greater expansion of the product is announced. I only recently signed up for Amazon Prime (I know, very late to the game), but as my free time to travel dwindles when I rejoin the real world post-graduation, this new Amazon offering will be greatly appealing. I’ll become the loyal Amazon customer their data is likely already predicting.

The Columbia Experience

Recently I was lucky enough to be interviewed by Accepted.com on my experience at Columbia Business School. The interview is now live on the site! Over the past two years I have counseled several former colleagues through the application process, and this was another great opportunity to share my thoughts on CBS and what makes it a unique place to get a MBA. Here is the link for the full interview, and please feel free to reach out if you have questions about CBS!

Accepted.com: Experiences & Advice from Columbia MBA Student Kendall Miller

Yoox Swoops In

Yesterday Yoox announced a merger with Net-a-Porter on what seemed like an offensive move against rumors that Amazon was going to purchase NAP. I haven’t seen much more speculation on the Amazon rumblings, but nonetheless, it proves that Amazon will have to continue to search for their entry into the luxury market. As a former intern of Yoox, I couldn’t be more excited for them in this next venture and believe it will give them even greater power to become the luxury ecommerce powerhouse Federico has always meant for them to be. After spending time there, I think one of the biggest benefits (as laid out in a Bloomberg article) will be NAP’s editorial prowess. It was my understanding that Italian laws were holding back Yoox in this regard, but with publications like The Edit and Porter, there will be a ready-made outlet and talent pool from which to draw and grow Yoox’s presence in editorial.


I’m envious of any interns who will be in Milan this summer, as I can only imagine how interesting it would be to work in the office of the CEO post-merger!

Off to the Middle East

Starting next week I will be guest blogging for Columbia Business School's Chazen Global Immersion Program as I travel to Abu Dhabi and Dubai for class, and I'll be reposting here! I have already fled the cold weather in New York for Paris, Burgundy, and now Oman, spending my first day in the Middle East as a solo female traveler - something I didn't expect to do. However, any previous hesitations were laid to rest today while driving around with my guide, Ali. Riding in the front seat of his Toyota SUV (are there any other SUV's in developing countries?), we chatted as best as possible in his limited English. It's a relatively new country, development wise, with many buildings in Muscat dating to the current sultan, Qaboos bin Said Al Said. It's been a peaceful and quiet respite from New York, and obviously a warm escape. Tomorrow we head out to the desert, before the class trip formally starts on Saturday night in Abu Dhabi. Looking forward to sharing more!

see: CBS Chazen Institute Student Blog

Sultan Qaboos Grand Mosque; the men's prayer room can hold 20,000

Sultan Qaboos Grand Mosque; the men's prayer room can hold 20,000

Instagram Takes a Step Forward

So last week I wrote about a new Instagram service from Piqora that wanted to offer a way to make the photo app shoppable. It wasn't perfect, there were still a few steps involved, but it seemed like social media and software startups were going to need to develop workaround solutions since Instagram itself wasn't making any moves towards better shopping integration. Instagram wanted users to stay on the platform, not follow URL's off to the web, never to return.

Well, yesterday Instagram introduced a new advertising format that allows brands to create a carousel of photos, and ends with a "Learn More" button that takes the consumer to a brand page on an internal browser. With one touch, the user is taken back to the regular platform. 

While this still exists within an advertisement perspective, and not on a brand's own Instagram photo feed, it at least shows the company recognizes both brands and users want a better solution. Not everyone is willing to click around to the URL  in the main profile, to end up on a mobile site, to then navigate further to the specific product you saw in a picture. Pinterest - with its newish shoppable pictures and analytics - serves as an important and lucrative referral channel for the luxury eCommerce company I'm currently working with, I can assume Instagram wants in on the action. 

Techcrunch: Instagram Starts Letting Ads Be Clickable

Shoppable Instagram: Keep on Tryin'

Today a company called Piqora, which does social media analytics and has services like Instagram contest management, launched a new product called Tapshop. As its moniker may imply, Tapshop enables (a form of) shoppable Instagram pictures. I put "a form of" in parentheses because no company has come up with a full solution - and I'm not sure they would without getting Instagram's blessing or help.

LiketoKnow.it launched its attempt at building a solution last year, with the help of Vogue's praise. A user must register with the platform, and then once she or he likes a photo (assuming the photo is also tied to the platform), the user gets an email with shoppable links to the products in the photo. It's a solution, but not perfect; one still has to wait till the end of the day to get a summary of all the products they liked on Instagram. It still doesn't feel truly shoppable. The platform is popular with style bloggers seeking affiliate revenues. 

Tapshop is a form of Like to Know It, but is being pitched to brands. As a clothing brand, I would have my Instagram followers register with Tapshop (via a link in my profile), then after the follower likes a brand post on Instagram they get an email of the products. The difference is, this now links to a Tapshop landing page for my brand. This seems like a quick solution for brands looking to capitalize on a wealth of Instagram followers. 

Yet there's still a major flaw, in my opinion. The email sent to users with liked products links to a page that is hosted by Piqora/Tapshop, not the brand. The brand (or multi-brand company) loses editorial control over the shopping experience. Seeing as this is already such an important, and often tricky, part of the eCommerce user experience, I wonder who and how many will sign up for the service. For current Piqora users it might make sense, because you just continue rolling up social media analytics in one place. For others, I would either suggest sticking with Like to Know It, or follow in Yoox's steps and develop a solution on your own (yoox.ly/instayoox). I was at Yoox over the summer when the social media manager was working on this with internal developers. The link in the profile takes the Instagram user to a mobile site that is a page of all the Instagram posts. Any picture with a shopping bag indicates the products are shoppable directly from the site. It's such a user-friendly solution, I'm looking forward to Yoox potentially white labeling the product and implementing it with the brands whose websites they host. Maybe I'm biased because I worked there over the summer, but I do believe Yoox is quite an interesting company, too often flying under the radar.

Amazon Couture (?)

While I would like to assume, along with many in the industry, that Amazon will not succeed in their push to sell high-end clothing and accessories, I am very interested to see what Jeff Bezos' persistence can achieve. I also believe there's a bigger reason behind the interest in luxury fashion, because that market is fairly small, compared to Amazon's market prowess and goals. Is it attracting that customer to buy other things? Attracting other vendors with the allure of luxury brands listing on the site? 

Currently only 16 of the top 100 global prestige brands sell on Amazon, according to L2. My guess is that most brands will watch and wait to determine if and when there is ever a need to jump onto Amazon. Personally, I hope that takes a long time. Other, much smaller sites, are working hard to curate and create an optimal luxury shopping experience online. Yes, many customers want a discounted designer item, but the allure of the purchase must remain, and buying from Amazon completely removes that feeling.

“It’s a prize that everybody would love to get. The idea is that if luxury brands will work with you, everyone else would fall in line,” said Forrester Research analyst Sucharita Mulpuru... “The truth is, Amazon is not Neiman Marcus, and the consumer recognizes that.”

Business of Fashion: "Jeff Bezos Makes Another Push for Amazon Fashion. Will it Work?"

Digital Catharsis Exists for Women

The Wall Street Journal came out with an interesting piece the other day, citing research that says women "who use Twitter several times a day, send or receive 25 emails a day and share two digital pictures via their mobile devices per day, experienced 21% less stress than women who do not use those technologies." Interestingly, no such stress reduction existed for men. Yet at the same time, women also experienced more stress through social media when learning about close friends' pain. 

In a group discussion in a recent class at Columbia (entitled "Personal Leadership & Success" - worth checking out the external site), it was mentioned that same-sex friendships between men and women differ largely in the way we connect with each other in hard times. Women want to talk about it, guys offer to buy their friend a beer. This study seems to put some numbers behind our proclivity and need to share. Would be interesting to try and connect the dots further.

- Women Who Tweet and Share Photos Are Less Stressed, Pew Study Finds; WSJ

Adam Grant and Sheryl Sandberg Talk Women at Work

While I admittedly never finished "Lean In," I have really enjoyed the "Women at Work" series in the New York Times by Adam Grant of Wharton and Sheryl Sandberg of Facebook. The most recent column focused on why women did not speak up more at work. I identified with this article, found the research and insights behind the writing interesting but not surprising, and promptly shared with my father and boyfriend. There's lots to be done in order to improve this, with a focus on the bigger picture:

"The long-term solution to the double bind of speaking while female is to increase the number of women in leadership roles. (As we noted in our previous article, research shows that when it comes to leadership skills, although men are more confident, women are more competent.) As more women enter the upper echelons of organizations, people become more accustomed to women’s contributing and leading."

Speaking While Female, NYT Opinion

Branded video increasingly important as a controlled content source

This week Marriott International announced they would be taking a page out of Red Bull’s book and launching their own in-house content studio. The group will develop, produce and distribute content that will include web series, short films, TV shows, music events and movies. Marriott’s global marketing officer notes “the purpose is to create and establish original content as a key component of the company’s global marketing strategy,” moving away from focusing only on traditional hotel marketing to sell rooms. Specifically, Marriott is looking to become the Red Bull of the travel industry, producing content to build “communities of people passionate about travel that will drive commerce.”

Recently, a survey by media software company Levels Beyond took note of consumer and marketer attitudes towards branded video. 42 percent of consumers say they like when brands share a video online, and 61 percent watch videos when shared by a friend. However, 75 percent of marketing professionals say they “rarely or never” produce videos to share with their followers online. The disconnect is somewhat alarming, and highlights a huge opportunity for brands to fulfill those customer needs in the digital space.

Lack of funding and other resources is often the reason why companies have not invested in branded video content, yet marketers need not have Fortune 500-like deep pockets to invest in video marketing. Companies like Volkswagen, Virgin Mobile, and NASA have used Vine and Instagram as part of broader campaigns, and the short broadcast times are both free and easier to experiment with.

For Marriott, they will look to leverage their 45 million Marriott Rewards members as a loyal base around which to build further brand enthusiasm. The company plans to promote the new video-based content through its website, mobile app, social media channels, and in-room TV network – a captive audience. Through content, Marriott plans to build relationships with people (and particularly millennials) to both inform and entertain in hopes they’ll return to a familiar and trusted brand.

Luxury microsites want your undivided attention

Starwood Hotel’s The Luxury Collection is the latest luxury brand to launch a microsite dedicated to marketing a new product, service, or facet of the company. The site is eCommerce-focused, featuring The Luxury Collection Store, where consumers can purchase bedding, towels and robes, as well as art. All products on the site are those that are used in the various Luxury Hotel Collection properties, bringing the guest experience home.

The microsite has become an increasingly popular medium through with luxury brands introduce new products, largely because the channel allows for a much more focused message, free from the distractions of current products already shown on the full brand website. By definition, a microsite is a discrete entity within or complementing an existing website or offline identity. Often it is much more editorial than the brand’s regular eCommerce-based site. Video and other content on the microsite allows the user to narrow their focus and “creates a ground for greater awareness among consumers and social media followers.” Some brands have exclusively promoted their microsite via social media outlets, particularly on Instagram.

Donna Karan launched her microsite for the perfume Cashmere Mist solely through the brand’s social media accounts, and the microsite even now cannot be accessed through the Donna Karan full website. Similarly, Dolce & Gabbana created a limited time microsite for their Light Blue fragrance, and Aerin Lauder’s Aerin Beauty built a microsite that educated the customer about the brand’s scent profile. 

Because microsites are focused in their message, they can convert more efficiently, attract a better quality audience and are often easier to manage from a content quality perspective – the latter of which is very important to digital teams that do not always have the resources internally to drive frequent content creation. Additionally, a microsite with focused content helps map semantic associations to the benefit of the main site.

Microsites are certainly not a new concept, but are being used in increasingly creative ways by luxury brands, perhaps as greater budget is allotted to digital - a trend which hopefully continues in the future.