MEC

Fashion and Beauty 2.0

The Delux Forum Highlights

Editors Letter
Last week I had the pleasure of attending Delux The Global luxury brand forum held at the Art
Gallery of NSW. The event has been running for a few years now, established by the founder of
MO Luxury, Melanie ORourke. Many interesting topics were discussed over the course of the
day, from the retail outlook to the significance of social media to the importance of retail design,
all with luxury brands at the heart of the communication.
There were a plethora of fantastic speakers, who brought with them a wealth of knowledge from
their various areas of expertise. Paul Zahra, former David Jones CEO, spoke about how he
evolved David Jones from a bricks and mortar based retail chain to a multichannel shopping
offering. Margaret Zhang spoke of her experience in growing her own brand as well as
participating in partnerships with brands which are mutually beneficial.
This months newsletter highlights key take outs from the event that I think are important for
anyone in marketing to keep in mind when making decisions to grow the foot print of a luxury
brand.
Happy reading,
Lauren Turner

Online shopping

Insight
There is much debate about the values of online shopping. Some argue that it can be as
enjoyable as an in store experience; with the exquisite gift wrapping, convenience of shopping in
your home and the fast delivery services. For a brand it can add value to the relationship they
have with their customers. Others believe that consumers still desire the tangible in store
experience, especially when it comes to luxury shopping which has historically been a consumer
event.
From a business point of view, a lack of infrastructure and distribution issues, matched with
small gross margins are huge barriers for companies who already are, or are considering, selling
products online. The simple fact is that a lot of online companies arent turning a profit, as the
above-mentioned business costs outstrip the costs of running a retail space, even with the high
cost of wages in Australia.
MEC opinion:
The success of online shopping definitely depends on the expectation and experience that a
consumer has of the brand. If they have already been exposed to the brand and need to restock
an item, a simple click of a button might be a far easier process than having to visit a store.
Furthermore, some might want to use the online platforms to research products to select in
store. There is definitely a role and a need for both online and offline offerings omnichannel
experiences are vital to brand survival in this day and age.

Geo Targeting

Insight
GPS/Bluetooth facilities give marketers the ability to geo target consumers, capturing them in
real time with time sensitive data. For retail specific brands the opportunities that this
technology presents are huge and stand to have a big impact on their bottom line. The
Bluetooth facilities on everyones mobile phone will mean that marketers are able to deliver
messages to consumers when they are nearby their favourite store, notifying them of new
collection arrivals or that a sale is on. Conversely, sales staff will know when their top customers
are approaching their store and can tailor their services to a persons historical needs.
Data, like the above, is power. This kind of data obtained from online services and via mobile
phones gives marketers the opportunity to modify their products, distribution and marketing
based on trends and results delivered in real time.
MEC opinion:
Whilst this technology seems to be beneficial from a marketer/brands perspective, there are
many questions at the moment around privacy and information. The online world continues to
collect a vast quantity of data about each individual, with the aim of delivering tailored
advertising and communication to their needs and behaviours. This, however, has the distinct
possibility of evoking the opposite effect - annoying and upsetting the potential customer base
who feel that they may have been invaded and violated. Personalisation is vital but marketers
will have to test and learn to determine the demand and the effect.

Social Media

Insight
Luxury brands should without question run their own brands social media accounts. Essentially
the social media conversation is happening irrespective of their involvement and as such these
brands should be the leaders of their own brand story.
The beauty of social media from a brands perspective is the ability to have a long form, always
on storytelling platform. To access this kind of always on strategy within media is extremely
costly. However, on the flip side there are costs associated with creating content for social.
Some of these costs can be avoided by filming additional content whilst creating ATL advertising,
because the delivery of fresh content is vital to a good social media strategy. Original content
gives the brand a sense of authority and ensures that it remains aspirational.
Social media shouldnt be shied away from; it is a conversation platform between a brand and
their consumer or follower. A brand can reinforce its ability to deliver excellent customer
service by responding to online comments. This interaction has influence beyond this one
conversation as it is seen by many, delivering or reinforcing a positive brand image.
MEC opinion:
Social media are rich platforms which give brands the opportunity to communicate information
which cannot be portrayed within traditional media channels. If done well, it can attract the
aspirational audience and reinforce other ATL communication.

Brand Ambassadors

Insight
Brand ambassadors with in depth stories and backgrounds can bring to life a brands values and
simultaneously intrigue consumers. Partnerships such as Rihanna for Dior and Blake Lively for
Gucci gives these brands personality beyond what can be delivered within an advertising
campaign. They have the ability to influence consumer sentiment towards the brand and bring
to life brand attributes on a global platform.
Depending on the personality, the partnership has the power to attract new consumers to the
brand; those who are fans of the personality. Brand ambassadors have their own social
platforms which means they can extend the reach of brand communications beyond what is
delivered from a marketing perspective. Essentially these media partnerships and associations
can build content without huge marketing investments behind them.
On the subject of associations, partnerships with relevant brands (Mercedes Benz Fashion Week,
Virgin Australia Melbourne Fashion Festival) allows a brand to build relationships, to associate
their brand values with like minded companies and their customer base.
MEC opinion:
These partnerships might not instantly impact on the bottom line of a company but they offer
invaluable opportunities to build reach and attract new customers to a brand. Brands must be
weary about who they partner with, as consumers can see through partnerships that feel forced.

Growth Opportunities

Insight
The primary growth opportunity for luxury brands in Australia is expansion. It was reported at the
end of 2014 that 15 new luxury boutiques had opened around the country in the past 18 months;
the likes of Burberry in Brisbane and Tiffany & Co in Adelaide. The Australian appetite for luxury
has been noted on a global scale. A study conducted by corporate advisory firm, the Boston
Consulting Group, identified Melbourne and Sydney to be in the top 25 of 550 growth cities for
luxury - ahead of shopping destinations such as Abu Dhabi, Miami and Rome.
Some argue that the primary reason for the store openings is to satisfy the tourist demand,
specifically the Chinese tourists, of which there were over 750,000 that visited Australia from July
2013 - June 2014. It is reported that they spend over $5m collectively during their stay. Many
stores have appointed Mandarin speaking staff in an endeavor to cater for the audience and
deliver the level of service that they expect from luxury brands worldwide. However, there is
some concern that perhaps the consumption of luxury goods has reached saturation point in
China, with a slowing economy this could seriously impact the profitability of major retailers.
MEC opinion:
When there are concerns over the validity of the economy, marketers must look at alternate ways
to communicate the benefits of an investment in luxury goods. Consumers will need greater or
new reasons to believe in the brands and what value the products will deliver in their lives. Brand
affinity is more important than ever, loyalty is key.

Contact

For more information about any of the articles please contact either
Lauren Turner
Director- Client and Communications
lauren.turner@mecglobal.com
Office : +61 2 8356 0689
Hannah Cole
Executive- Investment and Activation
hannah.cole@mecglobal.com
Office: +61 2 8356 0683

Sources
Delux forum: http://deluxforum.com/
Speaker information can be found here: http://deluxforum.com/program-2015/
Other sources of information include:
http://travelinsider.qantas.com.au/australia/other/shopping/luxury-boutiques-in-australian-cities
http://www.smh.com.au/money/chic-desires--spending-up-on-luxuries-20140628-zsf2t.html
http://www.businessoffashion.com/articles/intelligence/top-10-risks-luxury-industry
http://www.tourism.australia.com/documents/Markets/Report_QMU_August2014.pdf

Editors Photos credited to www.snappystreet.com.au

All other images are sourced from Google images