Luxury Brands Case Study Burberry Bags

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The luxury market is currently in slowdown and big brands such as Prada, Mulberry and Burberry are feeling the pinch. Slow economic growth and political instability in China, Russia and the Middle East has led to a clampdown in spending which in turn has had a catastrophic effect on luxury goods firms. Consultants Bain and Company were recently quoted as saying that this slowdown will put the brakes on the global luxury goods sector for some time, with many brands reigning in any rapid expansion plans.

But what does this mean for British firms Mulberry and Burberry? Mulberry is a company in deep trouble. It has issued numerous profit warnings in the past two years and retail sales in the UK have slumped by 12% in the six months to end of September.

Part of the reason for this was down to the loss of their creative director Emma Hill and the subsequent leadership of Bruno Gallion, who arrived from Hermes aspiring to take Mulberry down a more traditional luxury route, concentrating on top end expensive handbags, thereby putting it in direct competition with global giants such as Chanel and Louis Vuitton.

This was the start of the brand’s demise. Increasing its price point put the brand out of reach and alienated its core consumer. Inflating the product price could only serve to undermine brand value in the eyes of the consumer.

Part of the problem was that savvy consumers did not see the value in paying inflated prices for bags that would have cost them much less a few years ago. Mulberry didn’t have the brand equity to justify the increases and consumers started opting for better established luxury labels as a safer investment.

Burberry’s problems are predominantly down to factors out of their control eg political and economic instability. These are very different from Mulberry’s issues, which rest internally, with decisions on pricing, product and management strategy. In fact their retail sales were up 15% to £748m for the six months to the end of September, while wholesale sales rose 13% to £317m. Burberry has also enjoyed strong sales for its new fragrance My Burberry.

Where Burberry also wins points over Mulberry is through story-telling and opportunity for personalisation, especially across digital channels. Story-telling is crucial and should be woven into a brand’s fabric; through communications, behaviours and above all, products. Brands like Burberry have put simple but meaningful stories at the heart of their products and this benefits the brand, the sales channels and ultimately the shopper, who can enjoy telling the story that lies at the heart of their purchase.

The Burberry Bespoke collection, which allows consumers to personalise their iconic trench coat purchase and share across social media channels, gives power to the consumer.

So whilst Burberry has continued to grow and is just weathering the external factors - albeit with a reduction in growth like many global luxury brands, Mulberry sadly is a victim of its own aspirations due to a culmination of external factors and internal decisions resulting in a very tough situation for the brand.

The tide does seem to be turning for Mulberry though. Godfrey Davis is now at the helm, and the brand are seeking to reposition themselves back in the middle market. But this requires significant investment, all while they are still looking to appoint a new creative director.

The brand are also digitally a long way behind Burberry, who are seemingly on their way to realising their global ambitions. Their concept stores or “retail theatres” are laden with smart labels (RFID tags) full of information and catwalk content that not only allows consumers to personalise and purchase items in a click but inspires at the same time.

Also worth bearing in mind is that many luxury buyers are what are often called “excursionists” – people who don’t usually shop luxury but buy one or two luxury brands that they connect with and feel reflect their beliefs or identity. Luxury brands need to stand for something beyond aesthetics and provide customers with something deeper and more personal.

In order to succeed Mulberry needs to keep its core customer at its heart. It needs to appeal to its core market, the upper-middle class female, but only time will tell if this will be successful, or if it’s place in the market will be filled by another brand. By trying to change their image from a domestic luxury brand to a global one, they have failed to maintain a credible high-end image and this may be irreversible.

But all is not lost for the luxury market. Some luxury brands that are genuinely timeless, such as Hermes and Cartier, have both maintained solid growth during this slump by finding ways to make themselves relevant today. Making stories or weaving brand narratives that consumers want to be part of and believe is worth paying a premium for is key to establishing yourself as a valued brand within the luxury industry.

Robert Wilson is director of strategy and creativity at RPM

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When reading about WeChat it’s impossible not to marvel at its popularity in China and the range of functionality it offers to both consumers and brands.

Western tech companies can only dream of delivering the same array of tools and features. While apps in the West tend to focus on doing one thing really well, WeChat can handle commerce, social networking, banking, and travel bookings, among other tasks.

Due to the app’s enormous user base and the way in which it is embedded in people’s lives, Western brands often use WeChat as a way of gaining a foothold in the Chinese market. If consumers habitually use an app on a daily basis, then it makes sense to try and use that platform for marketing.

To give an idea of the scale of the app’s reach, here are some of those incredible numbers for you to marvel at:

  • In Q3 2016 WeChat averaged 846m monthly active users, which represents annual growth of 30%.
  • In the same period the number of daily logged in users was 768m.
  • 50% of WeChat users use the app for at least 90 minutes per day.
  • The average user sends 74 messages per day, rising to 81 messages among younger people.
  • As of November 2015 more than 200m users had linked their bank card with WeChatPay, which can be used to transfer money between users, make payments online and also to buy things in-store. More than 300,000 brick-and-mortar stores accept WeChat payment.
  • In March 2016 Tencent said it banked over RMB300m ($46m) in a single month from commissions on WePay transactions. WeChat takes 0.1% on all payments, which indicates that app users made close to $50bn in payments that month.

And to give an idea of how Western brands are making use of the app, I’ve rounded up some interesting campaigns and activations from recent years. This is a topic I’ve previously touched on, but that was a few years ago so I’ve trawled the web for new case studies. 

You’ll notice that most of these campaigns involve either an event in the Chinese calendar or a competition, often both. Equally, we’re largely talking about luxury brands which have an existing cache among Chinese consumers. No doubt these brands are also using WeChat for ongoing content marketing and consumer engagement, but for the purposes of this post I’m only looking at one-off campaigns.

Burberry

In my previous post on Western brands using WeChat I detailed Burberry’s impressive 'Art of the Trench' campaign. But the British fashion brand didn’t rest on its laurels; to coincide with Chinese New Year in February 2016, Burberry sent all of its followers an image of a letter tied with a pink bow. User were told to ‘Shake, tap and swipe’ to try and open the gift.

Images pinched from Digiday

Once opened, the letter gave users the option to send a personalized Burberry greeting to a friend to celebrate Lunar New Year. They could then shop the brand’s New Year collection within Burberry’s WeChat store. This kind of seamless activation within WeChat’s walled garden is the kind of thing Facebook yearns for.

Burberry also gave users the chance to win limited edition Lunar New Year envelopes that could only be picked up in one of the retailer’s boutiques, demonstrating a neat way of using mobile to drive footfall in-store.

Coach

Coach uses WeChat to help run its Chinese loyalty scheme, asking all new followers to enter their mobile number for a chance to win a handbag. There is also a members section where users can manage their accounts and unlock exclusive offers.

In addition, for Mother’s Day in 2015 Coach ran a clever campaign called #MyFirstCoach, which celebrated the fact that mothers were their daughters’ first coach. The brand’s WeChat and Weibo followers were encouraged to upload photos of themselves with their mothers in order to be featured on Coach’s homepage and win a wristlet.

Backed by paid media, the campaign increased Coach’s WeChat followers by 35,000, as well as receiving more than 5,000 submissions and 2m impressions in three weeks.

Montblanc

Swiss accessories brand Montblanc ran a WeChat campaign that tied into China’s cultural association with the moon’s phases. The brand’s followers had to type in their gender and date of birth to receive information on their personal moon phase and the impact on their personality, love, hobbies and work. A Chinese astrology expert was drafted in to advise on the results.

The campaign was to promote Montblanc’s new Meisterstück Heritage Perpetual Calendar and Bohème Perpetual Calendar watches, which feature a dial displaying the specific moon phase.

In a separate campaign, Montblanc used WeChat to tell the story behind its luxury range of fountain pens.

Users were invited to scroll through an interactive history lesson which begins with the Industrial Revolution and ends with a showcase of the brand's Rouge et Noir range of pens. The story is intended to hammer home Montblanc's heritage and luxury credentials. Users can even choose to have some suspenseful music play as they scroll through the story.

Photo pinched from Jing Daily

Roger Dubuis

Another luxury Swiss watch maker - I did say there was a theme among these brands. Roger Dubuis launched a campaign last year called ‘Who is your daring partner?’, which aimed to offer users product suggestions that matched their personality.

Upon arriving on the dedicated landing page, users had to answer a series of questions. This included asking people to choose between two city skylines and whether they’d prefer a luxury yacht or a sports car.

Photo pinched from Jing Daily

After answering all the questions, users had to shake their phone to reveal which of Roger Dubuis’s watches they had been paired with. There was no option to purchase the watch within WeChat, with users instead being directed in-store. Participants could also win trips to various branded events by sharing a picture of themselves. 

Michael Kors

In April 2016 Michael Kors launched a WeChat campaign in cahoots with Grazia China to promote its spring/summer collection.

The ‘Chic Together’ campaign featured five pairs of Chinese celebrities wearing the brand’s bags and shoes. Users could scroll through the interactive app, complete with optional music, and click on each image to find out more about the products on show.

At the end of the photo series, users were encouraged to upload a selfie with a friend, with their friend then qualifying for a free gift if they bought some Michael Kors products. Users could also vote for their favourite picture by sharing it on social.

Estée Lauder

Estée Lauder worked with Chinese supermodel Liu Wen for an ‘EyeQ’ campaign to promote its eye care products.

An interactive brand post encouraged users to click on a diary that appeared to be falling out of a handbag. The notebook opened to reveal ‘handwritten’ notes from Liu Wen, which all happened to relate to a different Estée Lauder eye care product. Users could also click on Polaroid images to find out more about each of the products.

After scrolling through all the photos users were asked a multiple choice question to make sure they’d been paying attention. If they could correctly guess which product can take years off your eyes, users were offered the chance to win a surprise gift in exchange for their phone number and city of residence.

Clinique

Another cosmetics brand on the list, Clinique created a retro Snake game to lure consumers into learning more about its ‘Even Better Clinical Dark Spot Corrector & Optimizer’. Catchy product name, really rolls off the tongue.

Players had to navigate a snake made of skintone squares round the screen, chomping down ‘dark spots’. I can’t pretend to know what dark spots are, but you can see the obvious link between the product and the WeChat game.

If players scored more than 300 points they won a limited edition sample of the product, and could also share their score to see how they ranked against other WeChat followers. This is another instance of the trend for creating a game or competition within WeChat to encourage user engagement.

British Airways

British Airways used WeChat as part of a broader marketing campaign around Chinese students using the airline to travel to college in England.

The central creative idea in ‘Flying the Nest’ was one of those dreadful videos which purport to show someone being totally shocked by an event that just happened to occur while they were casually sitting around with a film crew.

In the video a Chinese student called Fangfang is mildly surprised when her parents show up in London unannounced. Apparently Chinese students abroad often get stressed when their parents visit due to language and cultural barriers. British Airways sought to solve this problem by creating a handy travel guide that was downloadable within WeChat.

At the end of the video a QR code links the viewer to the HTML5 guide, which details everything a traveller needs to know when flying with British Airways. This includes information on what they should bring, airport signage translations, immigration steps, and more. The guides could also be personalized and printed out.

As is common with the examples on this list, British Airways also ran a competition. In this instance users could win flights from China to the UK by sharing an image with a specific hashtag. This is a really neat campaign from British Airways, offering followers something of genuine use via WeChat rather than just a gimmicky competition.

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