Month: December 2019

In a world where cultural boundaries are the channel of communication of diversity, for luxury brands is essential to incorporate different cultures in their cross-cultural marketing strategies (Kapferer and Bastien,2012).

For a long time, luxury fashion brands have been scrutinised for a lack of diverse delegates, both on advertising and runways (Mintel,2019). Diversity is not only about body size; where luxury brands have fallen short is in the inclusion of individuals of varying skin tones and ethnicity backgrounds (Mintel,2019). Ethnicity diversification in brands is vital due to the demand present from second and third generation of immigrants who have better educational opportunities and hold more economic power (Euromonitor, 2015). The majority of this market is principally generation Z and millennials who are expected to account for almost half (45%) of the market by 2025. This demographic expects to be supported with social issues but not only superficially but it must also be demonstrated with policies that are present in the brand, this may mean hiring staff from minority backgrounds (Canvas, 2019). Hiring in the management system people from all over the world delivers diversity- a broader perception of understanding various cultures (Danziger,2019). New hires are a step in the right direction but it is not the end of inclusivity if the brands want to diversify and appeal to younger generations. The ultimate goal is to create an environment where all individuals feel comfortable and have the opportunity to be hired, not only for entry level jobs but also for managers and board members to have the opportunity to speak up and have a say on the brand (Mintel, 2019).

Gucci Changemaker

In February, 2019 Gucci has announced the launch of a multicultural programme design to hire inclusively within key functions and leadership positions of the group, including the design office, and will invest in educating all of its 18,000 employees around the world “to achieve a much higher level of global cultural awareness” (Zargani,2019). Tirado, leader of diversity and equity at Gucci stated “Diversity is on the agenda of many companies, but Gucci has now assumed a leadership role in the industry through the breadth of initiatives it is undertaking and the prioritization it has placed on it as a part of the overall business” (Fashionista,2019).Despite the fact of hiring people from different ethnicities and backgrounds, according to Mintel (2019) international report on Luxury Goods Retail shows that diversity is also shown through digital world. Into their Technology factor contributes to enhance the young generation through social media which is common in higher education. The chief diversity officer at the fashion institute of technology, Ronald Milon has stated that significant pressure has been placed on companies to incorporate social media into their brands in order to diversify just as its been done in education (Garette, 2019). Is through social media that Gucci announced the action plan of promoting diversity and inclusion awareness within the company (Garette,2019). Therefore, according to McKisney & Company (2019) brands which illustrate diversity within executive terms are a third more likely to perform better that the competitors. Having gender diversity on executive teams, specifically, to be consistently positively correlated with higher profitability across geographies in the data set, are the bulk of strategic and operational decision which play in the financial performance of a company. Gucci took action by increasing the opportunities available to underrepresented individuals creating full time employment which creates a more diverse workspace.

The schools that will provide the training required will be located in New York (Harlem); Nairobi, Kenya; New Delhi; Beijing; Hangzhou, China; Seoul; Tokyo; Beirut; London, and Dubai (Zargani,2019). The decision to open schools worldwide has been made not only because of the advancement of social media and a shift in culture, but as well due to the political landscape that has had an impact on a society with mixed ethnicities (Kent,2019).

 Hence, brands like Gucci, serving globalised markets must be philanthropic and cultural conscious about the new generations (Kent,2019).

References:

1. Danziger P. (2019)Luxury Brands Need More Diversity to Prevent More Culturally Insensitive Mistakes ,Forbes[Internet] 3^rdMarch, Available from https://www.forbes.com/sites/pamdanziger/2019/03/03/dolce-and-gabbana-gucci-burberry-caught-being-culturally-insensitive-diversity-isnt-the-fix/#5e7afe67125d[Accessed 13 of December 2019]
2. Euromonitor,(2015) Cultural Diversity and its Impact on Global Consumer Markets [Internet] Available from https://www-portal-euromonitor-com.yorksj.idm.oclc.org/portal/analysis/tab[Accessed 12 of December 2019]
3. Fashionista, (2019) Gucci’s Concrete Plan Towards More Diversity Involves Immediate Design Hires, Fashionista [Internet]  30^thJuly, Available from https://fashionista.com/2019/02/gucci-diversity-initiatives[Accessed 13^thDecember 2019]
4. Garett B. (2019) Gucci Names Its First-Ever Diversity Head After Blackface Controversy, Forbes [Internet] 2^ndAugust Available from https://www.forbes.com/sites/briannegarrett/2019/08/02/gucci-names-its-first-ever-diversity-head-after-blackface-controversy/#62940755e29d [Accessed on 12 of December 2019]
5. Kapferer J.N., Bastien V. (2012) Luxury Strategies, Break the Rules of Marketing to Build Luxury Brands2^ndEdition
6. S (2019) Fashion’s Long Road to Inclusivity [Internet] Available from https://www.businessoffashion.com/articles/intelligence/fashions-long-road-to-inclusivity[Accessed 15 of December 2019]
7. McKinsey & Company (2018) Delivering Through Diversity [Internet] Available from https://www.mckinsey.com/business-functions/organization/our-insights/delivering-through-diversity [Accessed on 11 December 2019]
8. Mintel,(2019) Why More Luxury Brands are Focusing on Diversity [Internet] Available from https://www.mintel.com/blog/retail-market-news/why-more-luxury-brands-are-focusing-on-diversity [Accessed 13 of December 2019]

Tiffany .The New Diamond Policy

Like ethically sourced textiles and sustainably made jeans, diamond industry lately has had an ample impact on the younger generations, Millennials and Generation Z (Wharton,2019). The consumers of precious stones additionally to the quality, has shown interest in the provenance, transparency, human right and labour practice (Danziger,2019). Data from Euromonitor (2019) shows that 64% of consumers are trying to have a positive impact on the environment. Moreover, according to Mintel (2019), for Millennials and Generation Z is more relevant to buy jewellery if is from ethically sourced materials. Hence, the trend illustrates the idea that consumers are more likely to associate themselves with a brand that also meet their ethical values. The origin of a piece shows an increase in importance amongst customers (Mintel,2019). People today vibrate with the notion of a conflict-free choice and an eco-friendly sourced diamond (Hanbury,2018).

Consumers are much more informed and conscious. This can be seen through a Mintel report (2019) which shows that the decision of buying jewellery is also influenced by the conditions under which the stones were originated and the environment consequences of the jewellery trade, that creates transparency in the supply chain.

Another important element in the diamond industry is the traceability which is a significant data that concede clients to make a knowledgeable purchase. Furthermore, the traceability brings up a new question: the provenance of the diamond, if is socially and environmentally responsible and if human rights are respected (Danziger,2019).

Tiffany was one of the first big jewellery luxury brand that realised the importance of the supply-chain and the sourcing of its diamonds (King,2016), but only recently the company has announced that will start to make it known to the customer the provenance of the diamonds and the used materials. This kind of information that is not given by other global luxury jewellery (Sustainable Brands,2019). The Campaign called “Diamond Source Initiative” is a step closer toward transparency (Danziger,2019). This has been possible due to the technology that stimulated enormous modifications in the industry. In order to track each individual stone, sellers and suppliers will use a system called “blockchain technology” (Wharton,2019).

Anisa Kamadoli Costa, chief sustainability officer at Tiffany &Co stated “Tiffany & Co has long committed to diamond traceability, going above and beyond industry norms to promote the protection of the environment and human rights” (Tiffany & Co,2019).

Ethical and responsible mining is substantially important for Tiffany. The company has a direct relationship with the Responsible Mining Assurance, an organization that secure that mines are regulated responsibly social and environmental (Minthe,2019). This will help communities and consumers to have a better understanding which mines have ethical practice (Tiffany & CO,2019).

The brand also protects from mining locations like Yellowstone National Park, Alaska and Bristol Bay (Minthe,2019).

Despite the increasing demand from millennials on lab-grown diamonds, which are more environmentally friendly and less expensive (Harilela,2018) Tiffany is claiming that it does not consider synthetic diamonds a luxury material (Hecht,2019) this even though mining operation has an environmental negative impact (Danziger,2019). The Tiffany’s spokesperson states “Exceedingly rare and an incredible miracle of nature, diamonds are a romantic symbol billions of years in the making with an intrinsic value far beyond their chemical make-up. We do not believe that lab made diamonds are a luxury product and, as such, we do not intend to use in our jewellery” (Forbes,2019).

Today, as lab-grown diamonds are increasing its popularity among millennials, Tiffany has a challenge to face (Hecht,2019). Consumer’s priorities have shifted and as diamonds are an ethical issue many consider it as a threat for the environment as well as bad practice for working conditions (Mintel,2019).

Millennials are reshaping what luxury means (Danziger,2019) and jewellery luxury brands need to reconsider their approach to the responsible and more sustainable consumer.

Reference:

1. Danziger P. (2019) Tiffany’s New Mined Diamond Policy Ignores All That Luxury Customers Want: A Man-Made Alternative, Forbes [Internet] 16^thJanuary Available from https://www.forbes.com/sites/pamdanziger/2019/01/16/tiffanys-new-mined-diamond-policy-ignores-all-that-luxury-customers-want-a-man-made-alternative/#5eaab4cf507a[Accessed  15 of December]
2. Euromonitor (2018) Ethical Fashion: Why and How Can Fashion Industry Close its Elusive Loop [Internet] 7^thJune Available from https://www-portal-euromonitor-com.yorksj.idm.oclc.org/portal/analysis/tab[Accessed 10 of December]
3. Hanbury, M. (2018) Millennials Attitudes are Forcing a Massive Change in The Diamond Industry, Business Insider[Internet] 10^thMay Available fromhttps://www.businessinsider.com/millennials-want-cheap-ethical-diamond-engagement-rings-2018-5?r=US&IR=T[Accessed 13 of December]
4. Hecht A. (2019) Tiffany Beat Profit Expectations and Conflict With the Idea that Millennials aren’t Buying Diamonds , CNBC [Internet] 29^thAugust Available from https://www.cnbc.com/2019/08/29/tiffany-beat-expectations-but-millennials-still-arent-buying-diamonds.html[Accessed 16 of December]
5. King S. (2016) Tiffany & CO: Leading the Way in Ethically Produced Jewellery ,Telegraph[Internet] 18^thNovember Available from https://www.telegraph.co.uk/luxury/jewellery/tiffany–co-leading-the-way-in-ethically-produced-jewellery/[Accessed 15 of December ]
6. Mintel (2019) Jewellery & Watches Retailing [Internet] Available from https://academic.mintel.com/display/979272/?highlight#hit1[Accessed on 13 December]
7. Minthe K. (2019) Tiffany & Co is Very Serious About Sourcing Ethical Diamonds, Vogue[Internet] 15^thJanuary Available from https://en.vogue.me/fashion/fine-jewelry/tiffany-diamond-source-initiative-sourcing-ethical-diamonds/[Accessed 15 December]
8. Sustainable Brands (2019) Tiffany & Co. Begins New Era of Diamond Transparency, Sustainable Brands [Internet] Available from https://sustainablebrands.com/read/supply-chain/tiffany-co-begins-new-era-of-diamond-transparency[Accessed on 15 of December] 

Beyond buying luxury products, nowadays consumers want to live an experience while buying it. The affluent Millennials has more expectations when purchasing luxury brand. Elite customers have new aspirations, especially in the luxury sector (Woodworth,2019).

Luxury is considered with great value creation that involves artistry and empathy.It represents the high -end of a storytelling experience (Langer,2019). In our current days in time consumers would like to experience something unique and deliver through online platforms the stories they have experienced as well as showcasing their priorities and core value (Euromonitor,2019). Luxury companies have noticed the potential of distributing exclusive experiences that are memorable, have recognition in the brand’s DNA and allow themselves to be pointed out exclusively (Euromonitor,2019). According to Forbes,2019 customer trust and spend their money on the brands that besides the product, are more engaged and go beyond the “transaction”.

Technology is one of the main pillars that luxury brands are using to create and communicate personalised experience (Lala,2018). It opens doors to a tech-savvy audience that has different demands than previous generations (Euromonitor,2019).

Canada Goose is one of the leading players in retail that delivers memorable store experiences using the latest technology. This happens because of strong knowledgeable consumer importance that drives brands to create and deliver magic via digital experience. As many others luxury brands, Canada Goose attracts its clients through an authentic and unique storytelling (Dennis,2019).  Recently the brand has created an uncommon experience named “The Journey” which is a cold room inside the store with arctic temperature that goes down to -12 degrees Celsius and conceive the experience through “the crevasse” which reproduces the sound of cracking ice (Rastello&Sambo,2019).Moreover, now people can try a Canada Goose  jacket  in a room that recreates the artificial snow storms and decide weather is worth the money. Finally, the experience edge with an employee that will guide the customer to shop online through a digital kiosk (Stevens,2019). The chief executive officer of Cana Goose, Dani Reiss stated “We are pushing boundaries of traditional retail and experimenting to see how an inventory-free format, where experience comes first, works. Brand awareness and customer engagement are the key goals for the store” (Rastello&Sambo,2019).The CEO of the brand has a clear idea about retail, stating that experience is everything and that the experience store “amplifies that moment by creating an environment that digitally and physically transports people into the Arctic in innovative, surprising and inspiring ways”

Recent research shows that brick-and-mortar stores will survive if retailers will convince the millennial to shop in store by offering a genuine novel, a meaningful and sharable experience, like Canada Goose has created (TrendWatching,2019). However, the emerging trend of creating experiences of “transactions” can boost the bar too high. According to Giesler, an associate professor of marketing at York University’s Schulich School of Business in Toronto “store experience creates expectations that become higher and higher. Consumers get easily bored. They are expecting for you to come out with an even greater and more captivating experience next season” (Bloomberg,2019).

By 2020, customers are expected to demand a personalised experience with the brand they care, but also there is a growing concern about the impact brands can have on the environment and on all surroundings, 65% of the shoppers stating that this has become a priority (Euromonitor,2019).

Being a sustainable luxury brand, Canada Goose attract their affluent customers not only with the experience created in the store but also by providing ethical practices. The Company is committed to environmental and social issues, supporting especially through an organization the polar bears (Danziger,2018).

Canada Goose is memorable, sustainable and conveys compelling stories: a product that delivers unique experience in stores, provides excellent customer service and use ethical sources- ingredients that engage the luxury consumer with the brand (Dennis,2019).

Reference:

1. Danziger P. (2018) Why Canada Goose Will Continue to be The Proverbial Goose that Lays Golden Eggs , Forbes [Internet] 17^thJune Available from https://www.forbes.com/sites/pamdanziger/2018/06/17/why-canada-goose-will-continue-to-be-the-proverbial-goose-that-lays-golden-eggs/#792d62e77380[Accessed 18 of December]
2. Dennis S. (2019) Is Canada Goose Luxury’s Retail Next Highflier? , Forbes [Internet] 11^thApril Available fromhttps://www.forbes.com/sites/stevendennis/2019/04/11/is-canada-goose-luxury-retails-next-highflier/#6a683d6d613c[Accessed 18 of December]
3. Euromonitor (2018) Ethical Fashion: Why and How Can Fashion Industry Close its Elusive Loop [Internet] 7^thJune Available from https://www-portal-euromonitor-com.yorksj.idm.oclc.org/portal/analysis/tab[Accessed 10 of December]
4. Hyken S. (2018) Your Best Opportunity for Growing Business: The Customer Experience, Forbes [Internet] 1^stApril Available from https://www.forbes.com/sites/shephyken/2018/04/01/your-best-opportunity-for-growing-business-the-customer-experience/#3588665f3a3e[Accessed 18 of December ]
5. Lala A. (2018) How Technology Can Help Create New Age Luxury Experience, Entrepreneur Asia Pacific[Internet] 26^thDecember Available from https://www.entrepreneur.com/article/325346[Accessed 18 of December]
6. Langer D. (2019) How Experiences Are Defining Today’s Luxury Market, Jing Daily[Internet] 28^thOctober Available from https://jingdaily.com/how-experiences-are-defining-todays-luxury-market/[Accessed 17 of December]
7. References:
8. Stevens B. (2019) Canada Goose Opens Experiential Store With Artificial Snow Storms but No Products, Charged [Internet] 5^thDecember Available from https://www.chargedretail.co.uk/2019/12/05/canada-goose-opens-experiential-store-with-artificial-snow-storms-but-no-products/[Accessed 18 of December]
9. Woodworh S. (2019) Inside The Experiential Transformation of Luxury Goods , Luxe Digital[Internet] Available from https://luxe.digital/business/digital-luxury-reports/experiential-luxury-goods/ [Accessed 17 of December]

The global wellness market is increasingly growing, according to Global Wellness Institute, in 2018 the market was evaluated at $4.2 billion (Proctor,2019). Numerous research show how consumers are shifting their spending from buying products to investing in life-changing experiences (Proctor,2019). The interest in treating their bodies like an ecosystem, looking for a conscious healthy lifestyle has driven businesses of health and wellbeing to have a holistic approach to the consumers (Mintel,2019).Moreover, we can see an increasing demand especially from Millennials, which are experiencing challenges like rapid technological inventions as well as dealing with extraordinary unpredictable challenges  in the economic and political sphere (Scott,2018).

Clinique La Prairie

The strategic decision of converting the scientific research Clinique La Prairie into an experiential luxury Medical Centre came in 1990s, foreseeing the current trend and necessity for med-spas (Financial Times,2019). Therefore, transforming the Clinique’s vision and mission to deliver to its clientele “longer and healthier life” (Gibertoni,2019). The Clinique offers a holistic approach to healthcare and wellbeing in a unique and sophisticated environment between the Swiss Alps and shores of Lake Geneva (Forbes,2019). It combines the latest technology with medical science and qualified therapists to deliver a customised and luxurious service (Taylor,2019).

As the attitudes and behaviour of the current customer is changing due to the advancement of technology that allows personalization of medical care (Mckensey,2012) La Prairie is offering an exclusive experience by creating hyper-customised, tailored programme based on consumer’s personal needs. More than that, the technologies La Prairie has developed can be taken with the customers (La Clinique La Prairie,2019). They created a holistic brand campaign that makes some of the technology that the client experience in the clinic, available even after leaving the Spa (La Clinique La Prairie,2019). Simone Gibertoni, Chief Executive at Clinique La Prairie states that “It’s important for luxury brands to come back now to this kind of concept” (Hoang,2019). The Medical Spa offers two personalised programmes: Revitalization, a program that regenerates cells in order to resist the negative effects of aging, a product of 85 years of research in longevity and Master Detox, a program that provides a reset of mind and body (Taylor,2019).

Weekly, the clinic is receiving between 35-40 patience, most of them international clients that are travelling from Middle East, Asia, Russia, North and South America to Switzerland to experience the uniqueness and personalised programs that La Prairie is offering (Hoang,2019). Having available only 35 rooms but with 350 staff, Clinique La Prairie’s strategy is to contemplate the culmination of exclusivity and with its private chalet the clinic revives the idea of a personalised medical spa experience. Gibertoni states that “We have always focused on the needs of our clients, who are quite unique,” “This is why we don’t want to open clinics with 100 rooms – quite the opposite, in fact. We aim for hyper-exclusivity because the idea is to create a totally personalised clinic, just for you” (Financial Times,2019).The approach to the customer differs from age and nationality  but the core value of the clinic is to contribute to a life-changing experience (Clinique La Prarie,2019).Is to create a space where people can switch from the technology to connect with natural environment (Gibertoni,2019).

In the future , the clinic gears up to extend the experience of personalised medical service by expanding its locations in several places like Madrid, Singapore, United States and Middle East as well as in small city hubs to offer their exclusive services at a regional level (Hoang,2019).Moreover, in order to keep the experience of personalisation , the company is also developing a business model that will assure the client’s further treatment that will include regular check-ups on nutrition, personal trainer as well as provide the benefits of a long-lasting customised programme (Clinique La Prairie,2019).

Jaguar Land Rover goes for Vegan Interiors

Today, ethical concerns have an impact on the consumer behaviour (Euromonitor,2019) who are more informed about the provenance of the product they purchase. The consumers choices are influenced by how they represent themselves in the society (MOF,2019) and show through  them how they are connected to the way they use the world to create products (Euromnitor,2019).The current generation of consumers are aware of the climate issues like global warming so they expect that the brands they support would follow a sustainable practice (MOF,2019).

The luxury industry is encouraged to become more innovative, in order to meet the millennials and generation Z expectations (Euromonitor,2019). Brands able to deliver their ethical core values that is in accordance with the consumers new values will build loyal clients (Euromonitor,2019).

Land Rover foresees the big global trend that has to do with consumers understanding more and more the implications of how people inhabit the environment,

 a value shifting towards an eco-conscious consumer’s taste (Elliot,2019). Amy Frascella, Chief Designer, colour and materials Land Rover stated “We have been noticing that the landscape has been shifting quite quickly in the luxury market. People want to understand what they are purchasing, how is made the work, where does it come from. We need to be conscious about this and offer choices that reflect their values” (Youtube,2019).

The company has developed a new line of fully vegan materials and leather-free interiors that will be used in the Jaguar I-Pace Suvs, Range Rover Velar and Range Rover Evoque for its launch in 2020 (Elliot,2019). This step to an ethical environment will attract those customers for whom the ultimate form of luxury line up with their environmentally values.

“Fifty years ago a leather couch was the height of luxury “said Massimo Frascella,Land Rover’s creative director. More than that, there is a shift in all industries toward a conscious consumption, and cars companies are trying to implement the change (Elliot,2019).

Leather creates a lot of CO2 emission and chemicals waste. Preventing the pollution with a sustainable and ethically sourced textiles is a huge step for the cars makers as well as for the transport regulation that gives credit for reducing CO2 emission through this new eco-friendly innovation (Cooley,2019).

According Deloitte, there will be 4 trends that a promising to revolutionise the car industry. One of the challenges is the concept of creating vegan interiors. Future car concept must be measured by their impact on the modern world (Deloitte,2019).

References:

1. Cooley B. (2019) Will Your Next Car Have a Vegan Interior? [Internet] 17^thSeptember Available from https://www.cnet.com/roadshow/news/will-your-next-car-have-a-vegan-interior/[Accessed 15 of December]
2. Elliot H. (2019) The Seats in Your Next Luxury Car may be from Soybeans and Eucalyptus, Bloomberg [Internet] 29^thApril Available from https://www.bloomberg.com/news/articles/2019-04-29/audi-land-rover-add-sustainable-options-for-interiors[Accessed 30 of November]
3. Euromonitor (2018) Ethical Fashion: Why and How Can Fashion Industry Close its Elusive Loop [Internet] 7^thJune Available from https://www-portal-euromonitor-com.yorksj.idm.oclc.org/portal/analysis/tab[Accessed 10 of December]
4. MOF (2019), The Luxury Report: The State of the Industry in 2020 in Beyond,[Internet] Available from https://matterofform.com/the-luxury-report/[Accessed on 25of November]
5. Youtube (2019) New Range Rover Evoque. Sustainability [Internet] 11^thMarch Available from https://www.youtube.com/watch?v=jPX__OpOf1Q[Accessed on 5 of December]

References:

MOF (2019), The Luxury Report: The State of the Industry in 2020 in Beyond,[Internet] Available from https://matterofform.com/the-luxury-report/[Accessed on 25of November]

Elliot H. (2019) The Seats in Your Next Luxury Car may be from Soybeans and Eucalyptus, Bloomberg [Internet] 29^thApril Available from https://www.bloomberg.com/news/articles/2019-04-29/audi-land-rover-add-sustainable-options-for-interiors[Accessed 30 of November]

Cooley B. (2019) Will Your Next Car Have a Vegan Interior? [Internet] 17^thSeptember Available from https://www.cnet.com/roadshow/news/will-your-next-car-have-a-vegan-interior/[Accessed 15 of December]

Youtube (2019) New Range Rover Evoque. Sustainability  [Internet] 11^thMarch Available from https://www.youtube.com/watch?v=jPX__OpOf1Q[Accessed on 5 of December]