DCA Luxottica's Monopoly


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Does Luxottica's domination of the high end eyewear market provide consumer choice?

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DCA Luxottica's Monopoly

  1. 1. Luxottica Sees Itself As King, Raising Questions About Brand Authenticity Can A Monopoly Provide Consumer Choice? By Dean Crutchfield Associates
  2. 2. Are we being robbed blind? Whether you plan to worship the sun or can’t find the doorwithout them you’ll likely need to fork out over $350 for luxury eyewear - a price that’sframed through one lens of an $8.5B public company majestically shielded in themountains of Italy, Luxottica. Eyewear was invented in Italy around 1284. Today over80% of major eyewear brands, including the world’s number 1 seller, Ray Ban, aredesigned and retailed (over 7,000 stores US alone) by Luxottica, raising questions aboutbrand authenticity, price and customer choice. Dean Crutchfield Associates
  3. 3. Products exist in the mind andThat pair… brands live in the heart Products exist in the mind and brands live in the heart: luxury brands conjure up lifestyle interpretations we want to buy into. Over 500M people don Luxottica’s products and CEO, Andrea Guerra, insists that “customers have the brand choice for their lifestyle,” and it’s prevalent in their offering: "Luxottica has been able to deliver eyewear collections faster, enriched with more sophisticated decorations and innovative materials, to stores.” If you owned 80% of the high-end eyewear market and were doing what any CMO desires – achieving brand growth, relevance and revenue, one would likely Dean Crutchfield Associates say that.?
  4. 4. That maybe the ‘business’ of brands, but if the product itself hashad zero design input from the name on the frame what ofauthenticity and brand promise? Is brand authenticity an issue –the tension point between the poles of charlatan and the realthing? Last week the Economist quoted Rodney Collins, a Directorat the advertising agency, McCann, saying, “above all else brandsmust appear to be ‘authentic” if they want to succeed.” Dean Crutchfield Associates
  5. 5. “Appear” is the crux of the issue: authentic brands truly live and breathetheir story, it’s reflected in their core purpose of who they are, what theystand for and why we believe. We trust their story because we experienceit through the living of their values and brand personality with the brandnarrative embedded in their standards of detail and the consistency inthe delivery of the promise they make and keep. Many of us assume thatit’s highly unlikely the name on the frame designed the product - teamsof gifted designers design them, but Luxottica have they’re owndesigners translating their brand sense into successful eyewear designs. Dean Crutchfield Associates
  6. 6. Eyewear is a fashion purchase that doesn’t bust the bank. If consumers knew, however, would they feel that Luxottica had a monopoly? Their empire straddles house brands, Persol, Ray-Ban and Oakley and licensed brands including Chanel, Prada and Versace. Given their premium pricing are these brands presenting who they really are, what they really believe or stand for? If the customer identifies with a luxury lifestyle brand and connects with its values that guide herThe Opposite Of Emotion Is Not Irrational behaviors and standards does that make it an authentic luxury brand? Perhaps the principles of luxury marketing can provide guardrails: Dean Crutchfield Associates
  7. 7. Principles of LuxuryLuxury brands are elevated to a higher standard - that perception is paramount.Protecting it affords Luxottica a very strong margin along with the ability to focuson flexibility and efficiency delivering the products that will reflect positively intofuture shareholder value In luxury, less is more. Brand equity is preserved by controlling unit sales and byowning retail Luxottica achieves that and simultaneously has decreased time tomarket for new designs by 44% and its revenue’s were up 15% this summer Brand equity is the metric. Luxottica has played a superlative role enhancingpartner brands by extending their franchise into eyewear: a category that’sestimated to be nearly $2B in the US according to ABC News. Sub-luxury association with the brand dilutes brand equity. Clearly making thecase for Luxottica being a best kept secret. As management guru, PeterDrucker, pointed out in his Power 5 theory, supplier power can deplete standoutand competitiveness Dean Crutchfield Associates
  8. 8. Principles of Luxury If it’s been done before, don’t do it. Like, running a monopoly, but knowing and doing are two different things and this category has clearly not been tough to have a monopoly on   Detail is a key differentiator for authentic luxury brands and Luxottica have promised more sophisticated decorations and innovative materials  Luxury brands are ‘seen’ by the company they keep. If the public acknowledged that virtually all high-end eyewear is designed and manufactured by one firm itwould likely destroy franchise value and erode the ‘authentic’ brand message to consumers   Don’t look where you don’t want to go. Luxury brands align goals and rewards with luxury principles, revealed in Luxottica’s exponential growth and bolstered share price performance. Dean Crutchfield Associates
  9. 9. If these are the hallmarks of authentic luxury brands, theoreticallyLuxottica accomplished it with a determination, self-confidenceand degree of success that deserves bright lights, but is the logoon the side enough? Dean Crutchfield Associates
  10. 10. Empowered ConsumersCMOs know they’re tasked to build lasting relationships so they mustunderstand and deliver real value to empowered customers. People weareyewear up to 14 hours a day, representing a tiny piece of terrific real estate fora brand to live! Especially luxury where the brand idea as opposed to the productis the foundation of perceived brand value. At its core authenticity to most of usis about being legitimate: being true to who we are and our addiction to do whatwe do best. Alter that incorrectly or allow your rhetoric to step out of alignmentwith customers’ actual experiences and you’ll end up in rude financial health.
  11. 11. Business is booming and the trend for luxury is up as reflected inLuxottica’s increased revenues ($4.8B by July) and it’s a passion foracquisition, exchange and accumulation; it’s success they feelassured by tapping into the fast-fashion revolution by givingshoppers fresh products each time they enter a store – a strategymastered by Zara. Dean Crutchfield Associates
  12. 12. Luxottica’s business model is clearly good for business – it’sbooming, and so is the trend for luxury, reflected in Luxottica’sincreased revenues ($4.8 billion by July). And the multitude ofproduct designs is good for brands and in turn good for fashion-conscious consumers willing to pay the high-brow price.As for whether Luxottica’s business is good for the public’sinterest, the court of public opinion should decide, if only theycould see. Dean Crutchfield Associates
  13. 13. as consumers search for greater meaning and sincerity from the brands they choose –fuelled by a desire to connect with things that feel safe, certain andunambiguous, authentic brands are best captured by Oscar Wilde, “To know the price of everything is to know the value of nothing.” Dean Crutchfield Associates
  14. 14. Seize More Opportunity Brand Strategy Team Building Personal Branding Brand Building Business Activation Sell More Services Selling Presentation Skills Ambition Planning Pitch Forum Win More Business Sharpen Offers New Business 101 Pitch Boot Camp Growing Clients Pitch DoctoringDean Crutchfield Associates
  15. 15. Dean Crutchfield Associates Sell More, Seize More, Win More Growth Advisors Dean Crutchfield Associates
  16. 16. Delivering Your Best Case & Winning Face Dean Crutchfield Associates
  17. 17. In the pursuit of opportunity without regard to resources held, Dean Crutchfield has targeted and won millions in new fees from the world’s leading brands. By convincing senior executives at Fortune 500 companies on brand architecture, portfolio rationalization, go-to-market brand strategies, product and business innovation, Dean Crutchfield has directly helped clients generate billions in new business growth.Dean Crutchfield Associates
  18. 18. Armed with rich content, deep knowledge, 2x2 matrices and a white board, we rapidlycreate targeted, multi-channel growth programs that generate immediate Impact Dean Crutchfield Associates
  19. 19. What DCA Delivers Achieving growth For ambitious leaders who are driven to grow fast Creating new business Orchestrating and activating accelerated outreach programs Building efficiencies Rapidly sourcing the best talent for the business   Improving margins Rallying teams behind the brand and go-to-market strategy Boosting win rates Delivering your best case and winning face forward    Dean Crutchfield Associates
  20. 20. Working with DCA Catalyzing top line growth for clients is what we thrive on: delivering your best case and winning face, encourage your people to move the needle north and sharpen the product offering. DCA (Dean Crutchfield Associates) achieve growth for clients by tailoring brand-led techniques that are uniquely participant centered. We guarantee results. Whether it’s a better pitch, winning new mandates, a better team or more fees, you will find our fee in your business within weeks. DCA programs have been thoroughly tested and proven with start-ups and the world’s greatest brands, uniquely adding immediate value. When you hire DCA, you get results. If you have the right people attend the sessions and complete all of your committed decisions and pilot initiatives and are still not satisfied or seeing results by the agreed time frame, we will coach and advise you free until you do!Dean Crutchfield Associates
  21. 21. Working with DCA By deploying real world strategies and hands-on collaboration to inspire teams we create content backed by actions that will assure you of seizing every good opportunity, selling more services and winning new business. For 20 years Dean Crutchfield has advised the worlds most iconic brands, built businesses, created new companies, opened international offices and spoken about the role of brands at Duke, Kellogg, Wharton and the Google Speaker Series. He has made appearances on all major TV news networks, commentary in the global press, editorials in major business publications and is a Contributor to Forbes. With a proven ability to inspire and push the boundaries beyond the notion of what was thought possible, DCA excel with clients who are looking to run fast, led by CEOs, CMOs, entrepreneurs and executive teams eager to capture dominant levels of success.Dean Crutchfield Associates
  22. 22. If You Don’t Like Selling You’ll Enjoy Irrelevance Even Less Dean Crutchfield Associates
  23. 23. Global Client Experience Aviva* McKinsey BP Metsä Serla* BT* Nomura* BSkyB* PepsiCo Camper & Nicholson PG&E Carter’s Pitney Bowes Cellcom* RBS* CITI Scanfinest* Comcast Shell“Dean always cuts to the core of what needs General Electric Smirnoffto be done and said. He helps bring clarity and Kraft Staplesprovides value by being an outsider with noagenda, so he can help you stand back and see Fila Sunglass Hutthings from different perspectives. Frito-Lay TargetDean helped us think through solutions and Littlewood’s* Tower of London*then form the best way to present those McDonald’s Warburg Pincussolutions in a persuasive and compelling way.” M50 WGM*References upon request * Overseas Project Dean Crutchfield Associates  
  24. 24. LET’SGROW Dean Crutchfield Associates
  25. 25. Contact: Dean@deancrutchfield.com +1 917 239 3303333 East 34th Street, Ste 15A/B, New York, NY 10016 Dean Crutchfield Associates