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Developmentof luxurybrands part 2

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  • 1. Development of luxury brands MARKETS Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 2. Development of luxury brands• Crisis or not ??? (Exemple : Tiffany profits Fall 29.6%)• Necessity to project a positive image AT ALL TIMES not to worry investors.• And Adapt to all situations Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 3. The current crisis is changing consumers trends : Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 4. Reduce & Reuse• Consumers “shop their closets”, reusing purchases from past years Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 5. Reduce & Reuse• Consumers “shop their closets”, reusing purchases from past years• Shoppers are trying to update their wardrobes inexpensively Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 6. Reduce & Reuse• Consumers “shop their closets”, reusing purchases from past years• Shoppers are trying to update their wardrobes inexpensively• ... refreshing their looks with few key items and accessories Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 7. Polarize• Down-trading on fashion items, investing in evergreen items Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 8. Polarize• Down-trading on fashion items, investing in evergreen items• Accelerating Cheap & Chic Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 9. Polarize• Down-trading on fashion items, investing in evergreen items• Accelerating Cheap & Chic• Fast Fashion players winning the game Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 10. Value for Money• Delay high-ticket and classic/basic purchases Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 11. Value for Money• Delay high-ticket and classic/basic purchases• Booming season-end sales and discount channels: outlets … Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 12. Value for Money• Delay high-ticket and classic/basic purchases• Booming season-end sales and discount channels• Willing to spend only for items and brands who pass the worth-it test Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 13. Understatement• Austerity is fashionable even for wealthiest consumers Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 14. Understatement• Austerity is fashionable even for wealthiest consumers• Extravagant spending considered irresponsible or disrespectful Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 15. Understatement• Austerity is fashionable even for wealthiest consumers• Extravagant spending considered irresponsible or disrespectful• Luxury shame, impacting negatively logo and showy products: logos are getting smaller Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 16. Despite the crisis, long-term prospects for the luxury market remain strong• Despite current negative trends, marketfundamentals remain strong in the long-run Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 17. Despite the crisis, long-term prospects for the luxury market remain strong• Despite current negative trends, marketfundamentals remain strong in the long-run• “New luxury segments” are emerging:working women, men, new generations,emerging markets Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 18. Despite the crisis, long-term prospects for the luxury market remain strong• Despite current negative trends, marketfundamentals remain strong in the long-run• “New luxury segments” are emerging:working women, men, new generations,emerging markets• Continuing growth of aspirational consumerbase (especially in Asian and emergingmarkets) Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 19. Despite the crisis, long-term prospects for the luxury market remain strong• Despite current negative trends, marketfundamentals remain strong in the long-run• “New luxury segments” are emerging:working women, men, new generations,emerging markets• Continuing growth of aspirational consumerbase (especially in Asian and emergingmarkets)• New opportunities may come from changingvalues and consumption habits Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 20. The markets of the Luxury Industry: Mature, New, Rising Mature ( 80%): Europe, USA, Japan New ( 14%):Middle East,Russia,South East Asia Rising ( 6%): China, India, South America Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 21. How the luxury industry adapts to those different markets:Each market is different and there is a necessity to adapt and diversify the way of doing things according to market specificities. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 22. However, CRM everywhere• Put in place a few years ago, it’s starting to pay off. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 23. However, CRM everywhere• Put in place a few years ago, it’s starting to pay off.• Data collection Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 24. However, CRM everywhere• Put in place a few years ago, it’s starting to pay off.• Data collection• Development of after sale’s service Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 25. However, CRM everywhere• Put in place a few years ago, it’s starting to pay off.• Data collection• Development of after sale’s service• Luxury brands loose on average 80% of their clients after their first buy Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 26. Distribution Europe : headquarters often settled there /Advantages- Retail network in free standing boutiques and department stores.- Franchise stores and identified corners- Distribution in multi brand stores Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 27. Best streets in Europe• Bond street & Knightsbrige London• Avenue Montaigne & Fbg St honoré Paris• La croisette Cannes• Rue du Rhône Genève• Via Monte Napoleone Milano• Via Condotti Roma• …/… Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 28. Distribution USA:• Presence in department stores : Bergdorf Goodman, Saks Fifth Avenue, Neiman Marcus, Barneys.• Presence with Retail free standing stores in key streets : Madison in NYC , Rodeo Drive in Beverly Hills.• Outlets Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 29. Bergdorf Goodman NYC Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 30. Bergdorf Goodman NYC Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 31. Bergdorf Goodman NYC Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 32. Bergdorf Goodman NYC Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 33. Bergdorf Goodman NYC Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 34. Distribution Japan :• Presence in Major Department stores: Isetan, Takashimaya, Mitsukoshi.• Presence with Retail free standing boutiques• Mostly Retail with dedicated structure locally Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 35. IsetanGilles Chavet pour EMC Campus MBA 2012 / 2013
  • 36. Distribution Middle East:• Boutique on Franchise contracts• Wholesale thru agent or distributor• Very rare to have Retail unless key man in country Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 37. Beware : Villa Moda Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 38. Villa ModaGilles Chavet pour EMC Campus MBA 2012 / 2013
  • 39. Villa ModaGilles Chavet pour EMC Campus MBA 2012 / 2013
  • 40. Villa ModaGilles Chavet pour EMC Campus MBA 2012 / 2013
  • 41. Villa ModaGilles Chavet pour EMC Campus MBA 2012 / 2013
  • 42. Princess Deena Jeddah Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 43. DNAGilles Chavet pour EMC Campus MBA 2012 / 2013
  • 44. DNAGilles Chavet pour EMC Campus MBA 2012 / 2013
  • 45. Distribution Russia• Boutique on Franchise contracts• Wholesale thru agent or distributor• Very rare to have Retail Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 46. Tsum MoscouGilles Chavet pour EMC Campus MBA 2012 / 2013
  • 47. Distribution South East Asia :• Boutique on Franchise contracts• Wholesale thru agent or distributor• Very rare to have Retail unless key man in country Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 48. Focus on Luxury Business in CHINA a singular market ? Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 49. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 50. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 51. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 52. British carmaker Bentley sells more Mulliner728 limousines, the world’s most expensivecar at US$1.2 million each, in Beijing than inany other city in the world. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 53. Facts :• 80% of sales of luxury goods are purchased by mens• As of 2010, China is the worlds second largest consumer market for luxury goods, next only to Japan,and having surpassed the United States in 2009.• By 2014, China could surpass Japan by representing 26% of luxury goods sales Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 54. Facts ( cont .):• Chinese luxury goods consumers are younger than their European counterparts, belonging to the 18-50 age group, compared to Europes consumers who are generally in the over 40 age group. For this reason, Chinas luxury goods market is expected to grow faster than that of Europes. Many of the young luxury goods buyers are self-employed or professionals. According to the consulting firm McKinsey & Company, 80% of Chinese luxury goods buyers are under 45, compared with 30% of luxury goods buyers in the United States and 19% in Japan. According to a report by the World Luxury Association, Chinese consumers spend a larger proportion of their income for luxury goods compared to the world average of 4%. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 55. Facts ( cont. ):• According to 2007 Global Luxury Survey by Time magazine, most luxury goods buyers in China buy luxury products as a status symbol. The top five luxury watch brands in the country are Rolex, Omega, Cartier, Vacheron Constantin, and Breitling. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 56. Cosmetics, perfumes and personal care1.Chanel2.Lancôme3.Dior Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 57. Watches1.Rolex2.Omega3.Cartier Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 58. Suitcases and handbags1. Louis Vuitton2. Gucci3. Chanel Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 59. Menswear1.Giorgio Armani2.Ermenegildo Zegna3.Versace Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 60. Jewelry1.Cartier2.Tiffany and Co Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 61. Shoes1.Prada2.Chanel Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 62. Womenswear1. Chanel2. Burberry3. GiorgioArmani Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 63. How luxury brands have to adapt to Luxury market in China:• Implement retail networks, dealing with local landlords and possible investors. Necessity to increase margin to overcome duty cost & implantation costs ( rent, fees to investors, banks …)• Lack of workforce at the managing level: necessity of settling training programs. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 64. Cont. :• Necessity of not manufacturing locally• Watch and deal with counterfeits production.• Adapt communication to this particular market : choose “icons”: Nicole Kidman, George Clooney• Adapt to younger age group Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 65. Distribution in China :• Boutique on Franchise contracts• Wholesale thru agent or distributor• Very rare to have Retail unless key man in country Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 66. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 67. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 68. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 69. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 70. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 71. Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 72. Distribution : Indias Luxury Market Up 20% in 2010 Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 73. Distribution India :• Boutique on Franchise contracts• Wholesale thru agent or distributor• Very rare to have Retail unless key man in country• Very often stores are being developped with luxury hotel chains Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 74. Depatment store in Bombay Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 75. Distribution South America :• Boutique on Franchise contracts• Very few wholesalers thru agent or distributor• Very rare to have Retail unless key man in country• Exemple Daslu in Sao Paulo Gilles Chavet pour EMC Campus MBA 2012 / 2013
  • 76. DasluGilles Chavet pour EMC Campus MBA 2012 / 2013
  • 77. DasluGilles Chavet pour EMC Campus MBA 2012 / 2013
  • 78. Quizz1. Bergdorf Goodman is a store in London ?2. Luxury brands have to adapt to market’s specificities ?3. Chinese women are bigger spenders that men?4. It’s easy to start retail operations in China ?5. On average,chinese luxury goods consumers are younger than their European conterparts? Gilles Chavet pour EMC Campus MBA 2012 / 2013