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LUXURY
LUXURY This issue explores the changing luxury market – how prestige marques aim to bounce back as the economy recovers and the shifting expectations that consumers now have from their premium purchases.
CONTENTS 04 Considered Consumption 06 Eastern Promise 12 Exemplifying the Experience 14 Luxury Goes Online 20 McLaren MP4-12C 22 Green is the New Black 26 Premium Alcohol 28 Vera Kettle 32 Sharing Equity 34 Cylinda & Dot
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CONSIDERED CONSUMPTION AS THE ECONOMY RECOVERS PRAGMATIC LUXURY WILL BE THE GROWING TREND
As the economic climate begins to improve we will likely observe growth of luxury, indulgence, and brand names. It is unlikely that luxury will return to the same extent, but it is predicted that we will see smaller, regular indulgences in both mass and premium channels. Luxury is constantly being redefined and is now within reach of a much larger consumer segment. Before the recession, conspicuous consumption was in vogue with brand labels clearly on display, but now that has changed to a new ethos labelled ‘considered consumption’ – more consumers are evaluating what is worth paying extra for. As consumers have less money to spend they will be more selective in what they buy. The premium market is no longer about spending money on ostentatious fads, but about purchasing luxurious products and services for themselves. It is no longer about instant gratification, but something to aspire towards. Consumers are becoming more practical in their luxury purchases and are purchasing more of what they need rather than what they want. Brands that can tap into these new values will have the power to command premium prices.
Brands that succeed in being accessible to consumers whilst maintaining, or raising, their premium are likely to prove successful in the coming years. Brands should aim to reflect the values of their consumers, building tangible relationships with them, offering unique experiences that bridge indulgence and accessibility, meeting their basic functional needs whilst having an element of aspiration. Getting this combination right can result in the potential to charge more than competitors, gain consumer share, and in turn build a loyal base of consumers who are willing to pay extra for the provided products or services. A number of brands continue to strive for this space, as luxury marques extend their brand downwards, and mass brands extend theirs upwards. The challenge for these companies and their designers lies in maintaining exclusivity in the face of growing demand, requiring strong strategies that address the difficult paradox of exclusivity and availability.
Left Consumers are making more practical purchases
Consumers are becoming more practical in their luxury tastes and are purchasing more of what they need rather than what they want
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EASTERN PROMISE THE DEVELOPING ECONOMIES ARE SURPASSING THE WEST WHEN IT COMES TO LUXURY
With the future of the global economy still uncertain, more brands are looking to developing markets, specifically to the Chinese consumer – who might be able to lift the global economy out of recession. Consumption in China is changing rapidly – the luxury market didn’t even exist 20 years ago, and now they look set to dominate high-end retail. Unlike the West, developing economies with emerging middle classes are increasingly flaunting wealth with luxury goods. Whilst the recession has led consumers in the West to realize they can do without luxury goods, consumption in the emerging economies is on the increase. China now ranks alongside America and only behind Japan in their consumption of luxury goods. Moreover, analysts at HSBC believe that China may account for more than a third of the global growth in luxury goods this year. Last year affluent Chinese spent $8.6 billion in the luxury sector, and this number is expected to rise to $14 billion within five years.
There are already an estimated 825,000 millionaires in China, and new research indicates that, by 2015, China will be home to the world’s fourth-largest population of wealthy households, an estimated 4.4 million. However, success in China will be built upon targeting the 250 million middle class consumers – not just the affluent. Furthermore, these consumers are much younger than in other countries – 80% of China’s wealthy are between the ages of 18 and 45. Not only are these consumers young, but they are also mainly male – about three times more. However, this is predicted to change in the next few years, as more women are becoming economically independent, and start to account for a larger share of the luxury market. The targeting of younger and more feminine consumers has begun, and there is a large potential for luxury marques to attract the attention of these young females and gain their loyalty early.
Left Louis Vuitton Store in Beijing www.louisvuitton.com
Whilst the recession has led consumers in the West to realize they can do without luxury goods, consumption in the emerging economies is on the increase
As China becomes increasingly connected to global media the younger generation is becoming more exposed to global trends. The result of which is a large growth opportunity for European and American brands to increase the size of the market whilst it declines in the West. These consumers are increasingly conscious of brands and are beginning to use brands as an expression of their personal style, and as a representation of personal success and achievement. They are willing to spend a large percentage of their disposable income on luxury goods that they will use and display frequently – they wear their wealth on their sleeve. As a result sales of luxury mobile phones, bags, and wallets are growing.
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The East has much promise for western brands. To compete in a market where provenance and a story allows them to attract consumers from home-based brands that have traditionally been positioned for value
In China’s various metropolises western brand names have become commonplace. Retailers, including Louis Vuitton, Chanel and Dior, are looking to China to help them counter stagnating sales in other markets. China has already become the number one market for Hennessy cognac and the world’s second largest for fashion icon, Louis Vuitton. Audi expects China to become its largest single market by 2012 or 2013. But their expansion with new, more affordable models risk them being seen as too accessible, and with the Chinese luxury buyer’s desire for buying exclusivity, Audi could find that its China strategy ends up diluting the brand and leaving it vulnerable to losing market share to up-and-coming Chinese brands. Audi will have to work hard to maintain their prestige, whilst attracting less affluent consumers.
As other developing economies continue to grow major luxury brands will be keen to build their brands in these markets too. However, the cultural history of these countries may make it harder to grow than what is being witnessed in China. In India, for example there is a different outlook, as seeking value for money has been embed within their culture. A different strategy will be required – one by which consumers slowly upscale their purchases towards luxury, through more accessible products and services. However, as they become increasingly exposed to westernised markets via the proliferation of the internet, consumption patterns could alter dramatically. It is clear that the East has much promise for western brands. To compete in a market where provenance and a story allows them to attract consumers from home-based brands that have traditionally been positioned for value.
Above China is now Audi’s biggest market Below Rolls Royce showroom in Beijing www.rolls-royce.com/china
In 2009, affluent Chinese spent
$8.6 billion in he luxury sector 825,000 millionaires in China Target the 250 million middle class consumers – not just the affluent.
80% of China’s wealthy are between the ages of 18 and 45.
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Brands need to build tangible relationships with their consumers
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EXEMPLIFYING THE EXPERIENCE AS ONLINE RETAIL INCREASES STORES HAVE TO CREATE EXPERIENCES THAT ATTRACT CONSUMERS TO THEM
A superior experience is one of the fundamentals of a luxury brand. Service online and in-store, as well as aftersales are vital for luxury brands. Luxury brands don’t just create well-crafted products, but the experience around them is equally as important. Successful brands are those that surround a purchase with relevant experience that exemplifies the brand promises, and creates an experience that entices consumers into their store. Premium brands have built their reputation on providing unique shopping experiences, with luxury retail environments becoming places for consumers to gather and spend time, rather than only places for products. Creating retail environments with more emotional elements increases the amount of time that consumers will spend in store, thereby increasing their affiliation with the brand and the likeliness that they will leave with more purchases. Increasingly, premium brands are showcasing their exclusive products in an environment that complements them. Stores that position themselves like galleries and feature one-off pieces are becoming more common, for example Patrick Cox’s new boutique in Tokyo illuminates all the products on pedestals. It is not only the fashion industry that is utilizing its environment to accentuate the premiumness of their products. La Patisserie des
Reves in Paris, for example, sells desserts that are works of art. Each precious specimen is presented under a temperature controlled glass bell. In Sydney even premium meat is now being displayed like it’s in a gallery – Victor Churchill Butchers has been designed to intrigue and is setting itself apart from all other butchers. Today’s prestige brands are extending their brand values beyond the retail environment, finding new ways to connect consumers with the brand experience. Over the last few years we have witnessed Chanel open a restaurant in Tokyo which underscores refined French culture, and Louis Vuitton manage a private members club that distinguishes the brand from the status quo. Later this year Ferrari will open the world’s largest indoor theme park, complete with race track to host the Formula 1 Abu Dhabi Grand Prix. The park pays tribute to the passion, excellence, performance and technical innovation that Ferrari has established over the years and represents today, with rides including the world’s fastest roller coaster that will travel in excess of 200 km/h, emulating the sensation that Formula 1 drivers feel. As consumers demand better experiences and relationships with the brands they purchase, companies must find ways to bring their brands to life. They don’t have to build theme parks, but creating physical locations where like-minded consumers can gather and want to spend time will increase sales and boost profitability.
Left La Patisserie des Reves in Paris www.lapatisseriedesreves.com
Successful brands are those that surround the purchase with a relevant experience that exemplifies the brand promises, and creates an experience that entices consumers into their store
Above left Patrick Cox boutique, Tokyo
Above right Victor Churchill Butchers, Sydney
www.dailyicon. net/2009/09/patrickcox-tokyo-store-bysinato/
www.victorchurchill. com.au/
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LUXURY GOES ONLINE WITH LUXURY BRANDS MOVING THEIR RETAIL ONTO THE WEB, HOW ARE THEY TRANSFERRING THEIR IN-STORE EXPERIENCE ONLINE?
What makes luxury products such a luxury? Beyond materials and craftsmanship, the retail experience is key to consumer’s perceptions of how luxurious and desirable a product is. The interiors of luxury brand retail stores are filled with a myriad of sensory experiences that relate the values of the brand to the consumer. But as more consumer purchases go online, how can these brands provide the experience that their premium prices demand? How can a brand transfer the service and sensoral experience of their stores onto the virtual world of the internet? Only in recent years have luxury brands moved their retail onto the internet, with better bandwidths meaning richer images and more detailed user experiences can be delivered quickly. Consumers seeking a luxury purchase will expect instant gratification and satisfaction – waiting for images or videos to download ruins the user experience and can damage the perception of the brand.
With premium retailers like House of Fraser, John Lewis and Selfridges, the internet could soon be congested with premium brands and retailers vying for consumers attention. With this is mind, brands are having to deploy a combination of technologies and services that enhance the online experience and bring it closer to the in-store experience. Fabergé, the luxury jeweler brand, recently set up a website instead of opening a global network of boutiques. The site offers 24-hour access to a large team of multi-lingual sales assistants who can provide oneto-one advice via live chat, text, telephone and video services. Chanel and Marc Jacobs are currently working on sites that will provide similar services, giving the consumer valuable sales assistance – a core feature of both brands.
Left Chanel’s site will provide a similar service to that delivered in their boutiques Below Selfridge’s Store in Birmingham
It is providing these dedicated, specialized services for consumers that will help luxury brands justify their premium prices online. Utilizing technology that offers consumers a more realistic experience is something that a variety of brands are looking to add to their online stores. The increasing proliferation of augmented reality will mean that the technology will soon find itself used by luxury retailers to offer users a life-sized 3D view of products. Advanced chat applications, such as Google Wave, will allow brands to offer richer, more detailed advice to customers.
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Building relationships with consumers is one way a brand can utilize the internet to provide a richer, more memorable experience. Linking purchases in-store to an online domain, where privileges, private events and interactions to other like minded people, is a way brands can use the maturing social networking market. Making the online portal an added benefit or accompaniment to the retail stores can slowly move consumer purchasing habits from the real world to the online one. Prada has been recently looking at ways to give consumers a chance to purchase products on their website before they land in-store, making its website a vital component to its business, and a key touch-point for the brands most dedicated followers. The upmarket UK retailer John Lewis has invested heavily in its website, seeing it as a supplement to its retail stores. This “bricks + clicks” approach is partly due to the profitability of online retail – the John Lewis website has the same turnover as its largest store, Oxford Street, yet is significantly more
profitable due to the need for less staff and lower overheads. The internet also opens up those areas of a brands business that might not necessarily be possible in a normal retail environment. Giving consumers the ability to customize their purchases to their own tastes, through material choice, patterns and special services, such as personalized engraving, is not something that can usually be offered in-store where space is at a premium. The internet also provides luxury brands with a format to engage with their consumers in a more personal and interactive format. Louis Vuitton, Dolce & Gabbana and Alexander McQueen have all streamed their catwalk shows live over the internet, making consumers feel as important and in-the-know as the VIP’s that are there at the event. Using social media and networking sites like YouTube and Twitter are efficient and effective ways of reaching to consumers in a personal and
Above left The Fabergé website exudes the brand values of quality and prestige www.faberge.com Above right Prada’s website looks to balance the desire for ‘bricks and clicks’ www.prada.com
casual way. Services like Twitter also allow brands to communicate special offers and promotions that their own websites wouldn’t be able to update easily or fast enough. It gives brands the option to be more flexible and responsive in their marketing, keeping them contemporary and current, and more likely to be top of mind for consumers. The 5% increase in like-for-like online sales for 2009-10 is the smallest on record, and yet we could see the growing proliferation of luxury brands going online bucking the trend. Transferring such a tactile and sensory experience as luxury retail into the online world requires the implementation of cutting edge technology that will provide the same high level of care and after-sales support that the real world does. High-end retailers will strive to innovate their services in order to give consumers a purchasing experience as valuable and as rich as they would get in store.
Transferring such a tactile and sensory experience as luxury retail into the online world requires the implementation of cutting edge technology that will provide the same high level of care and after sales support that the real world does
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Brands need to create better experiences that bring their values to life
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McLaren MP4-12C www.mclarenautomotive.com McLaren’s eagerly awaited new road car, the MP4-12C was launched this month, with production due to begin next year. Costing about £150,000 McLaren hopes it will be seen as the motor industry’s equivalent of an expensive Swiss watch. McLaren Chairman, Ron Dennis, believes that demand will be strong – “We are in a world where there is an ability to express your personality and your personal achievements by owning efficient products and well designed products. So you can accurately tell the time for £2, but if you have an appreciation of craftsmanship, of style, of brand values, you can sit comfortably with a watch that costs £100,000”. Their explicit intent is to sell fewer cars than their competitors, in order to remain exclusive. Equally importantly McLaren plan to focus on delivering customer experience during their years of ownership, further enhancing the prestige that being a McLaren customer brings.
GREEN IS THE NEW BLACK THE GROWTH OF A NEW MARKET SEGMENT – ECO-PRESTIGE
Being green brings cachet
We are witnessing an increased desire from upmarket consumers for green products as it becomes increasingly ‘cool’ to be seen as green – being green brings cachet. The market where this is most evident is the car industry, with drivers turning away from prestige brands towards sustainable vehicles. This has been highlighted in recent years with a number of celebrities driving cars like the Toyota Prius. Sales of luxury cars have suffered more than most brands in this economic recession. While overall car sales are set to drop by 60% this year, the market for top-end marques has dived by almost 100%. As well as the poor economic climate, green taxes have been penalizing the prestige brands that typically consume more fuel, and incentivizing their consumers towards other brands. As electric vehicles often cost more than their polluting counterparts it is the affluent consumers that car brands will target. The emergence of the eco-prestige consumer will have implications on how car manufacturers design and market their environmentally friendly vehicles.
In this market it may not be the traditional luxury marques that succeed as their current consumer base becomes attracted to different brands that meet their needs to be outwardly eco. Tesla have been leading the way – developing vehicles that are both eco-friendly and dynamic, and thereby satisfying the demands of the eco-prestige market. The Model S, which was unveiled last year, is touted as the environmentally friendly luxury car of choice, and as a sign of their growth they will open four more stores in Europe this year. Another new green car brand will enter the market later this year – the Fisker Karma luxury sports plugin hybrid will retail at approximately $80,000, comes with a solar roof, and can be recharged with a solar power station. When the car is on, it uses power captured from the solar roof, and when off, the solar energy can either keep the passenger compartment cool, or charge the car’s batteries. Inside the car is trimmed with wood trim from salvaged trees. It is not just small manufacturers that are developing eco-prestige vehicles, as sustainability is increasingly becoming a central focus of the car industry. At this month’s Geneva Motor Show we witnessed a number of the bigger brands present sustainable models, as they chase the reputational boost that Toyota got from the Prius.
Above Fisker Karma karma.fiskerautomotive.com/ Left Tesla Model S www.teslamotors.com/
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Citroen unveiled a glamorous all-electric sports car concept. Citroen claim the Survolt delivers the ultimate driving experience but in ‘absolute silence’. The design blends glamour, elegance and extravagance with sporting passion. But a number of the luxury marques are now waking up to the opportunities presented by the eco-prestige consumer to turn their ailing fortunes round. At the show, Ferrari exposed their 599 HY-KERS electric hybrid concept that incorporates a road-going derivative of the Kinetic Energy Recovery System from their Formula One stable. Under breaking, the hybrid system captures energy and uses it to recharge the batteries, which in turn can propel the car by electric power. This vehicle aims to cut pollution and fuel consumption while retaining the brand’s breathtaking acceleration and performance. The aim is to have the green technology as an option across Ferrari’s entire range of cars by 2015. But incorporating the
KERS system is very expensive, doubling the retail price. The result of which is that such a car will only be accessible to the eco-elite. Other luxury vehicles on show include Bentley’s Continental GT Supersports, which runs on 85% bio-ethanol, and Mercedes’ F 800 Style which is said to be able to go up to 30 kilometers solely on electricity. Porsche unveiled three hybrid models including the ultra-highperformance plug-in hybrid 918 Spyder prototype, and Lotus showed off their Evora 414E Hybrid concept that can travel up to 35 miles on the battery power alone, using the petrol engine to only keep the batteries topped up. Aston Martin have taken a different approach from the other prestige brands, and are set to start selling the Cygnet by the end of 2010. This luxury mini-car will be available to Aston Martin owners only as an ‘optional extra’ to help them round congested cities like London. However,
the Cygnet is nothing more than a restyled Toyota iQ, and such a move may dilute the brand. These examples are a clear indication that prestigious supercar makers are beginning to take environmental concerns seriously. But it is important that as the high-performance car manufacturers start to reduce their impact on the environment they preserve the experience. As eco becomes increasingly chic, we will witness a number of fashionable brands across different industries compete to lead in the sustainability stakes as they look to gain consumers from the growing eco-prestige segment.
It is important that as the high-performance car manufacturers start to reduce their impact on the environment they preserve the experience
Far left Aston Martin Cygnet
Overall car sales are set to drop by 60% this year, the market for top-end marques has dived by almost
100%
www.astonmartin.com Left Porsche 918 Spyder prototype www21.porsche.com
The Fisker Karma luxury sports plug-in hybrid will retail at approximately $80,000 The Mercedes’ F 800 Style is said to be able to go up to 30
kilometers solely on electricity Evora 414E Hybrid concept that can travel up to 35 miles on the battery power alone
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PREMIUM ALCOHOL HOW LUXURY ALCOHOL BRANDS CONTINUED TO GROW IN TOUGH ECONOMIC CONDITIONS
Despite the recent economic gloom, sales of premium alcohol brands have increased in the UK. Sales of premium gin, vodka and champagne all increased throughout the last two years, despite some of the lower end brands losing considerable turnover. What has been driving this growth forward, and can we expect it to last? The recession affected how many drinks companies viewed their portfolios, resulting in them investing more in high-end products. In order to gain market differentiation and a premium price point, some of the high-end brands have produced innovative products or invested in luxury packaging. Many of the ‘super-premium’ brands gain their equity through the collectable nature of the packaging, as well as the actual product itself. An example of this would be the
Iordanov vodka brand, who released a bottle made from an ‘unbreakable’ material, studded with thousands of Swarovski crystals. Each bottle retails at around £2,500 – and is highly collectable with consumers. Macallan, a whisky brand, have forged a partnership with French crystal makers Lalique. Filled with a 57 year old single malt, only 400 of the Finest Cut decanters have been made. The design takes many of its cues from perfume packaging, invoking connotations of preciousness and rarity. This strategy has worked in the bottled water sector too, where brands like Evian have produced striking bottle designs that utilize precious materials in order to make the packaging a suitably precious container for the
product. These designs can generate media coverage for the brand and even have a positive ‘halo’ effect over the rest of the portfolio. Yet they aren’t meant to be mass-produced, with no more than a few hundred, or even less, produced for the global market. The more mass-premium brands rely on less extreme and excessive methods to enhance the quality of their brand. Using limited editions to increase the rarity and value of a product is a strategy that is used in a variety of markets, from food and beverages to automotive and furniture. This is also true of alcohol, where designers and brands have worked together to produce striking products that will be valued for their packaging by consumers as much for what’s inside them.
Left One of 400 Macallan Finest Cut decanters www.whiskyintelligence.com
Using design to increase and enhance the premium nature of the product through its packaging is a valuable and cost efficient method in order to achieve a luxury perception with consumers
Campari has celebrated its 150-year anniversary with a range of limited edition art labels, designed by three international, contemporary artists. Grey Goose, the premium vodka brand, have also had limited editions produced for them by artists. French designer Jacques Garcia recently produced a range of designs for the brand, inspired by his love of 19th century French interior design. The bottles were only available for a limited time, and sold in Paris. We should expect the trend for alcohol brands collaborating with famous designers and artists to carry on, as consumers continue to buy into products that have rare and collectable packaging. A slightly more innovative approach has been undertaken by the 360Vodka brand. Claiming to be the worlds first
eco luxury vodka, the brand uses recycled material for its packaging and a highly energy efficient distillation process to produce a five times filtered, premium vodka. The packaging in particular is eco-friendly, being made of recycled material and using paper that is processed chlorine free. Being eco-friendly doesn’t mean that a brand loses quality, and current consumer perceptions of environmental issues mean that any brand that is sustainable and transparent is more likely to be perceived as of a higher quality.
nature of the product through its packaging is a valuable and cost efficient method in order to achieve a luxury perception with consumers. We can expect brands to continue to invest in innovative strategies and packaging designs in order to elevate and differentiate their products in an increasingly congested market.
We can expect further growth in the luxury alcohol market, as brands continue to push for the high price points and margins that the upper end of the market offers. Using design to increase and enhance the premium
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Vera Kettle By Casa Bugatti www.casabugatti.it Beautiful, elegant, and intelligent this eye-catching kettle has digital controls so that you can heat the water to any desired temperature between 45oC and 100oC – making a consistent and perfect cup of tea for any family member’s tastes. It also has a timer so that it can be programmed to boil water in time for breakfast. The display on the handle allows you to accurately measure the volume of water inside, and even watch the temperature rise as it boils. It shows that even a basic household item, that has become a commodity, can become a desirable item with good design. At little under £200 it is probably going to be the ‘must-have’ item for fashionistas this year.
Before diverging into new markets it is imperative that brands build and extend on their core values, and any new product or service should continue to deliver experiences that their consumers aspire towards
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SHARING EQUITY BORROWING THE LIFESTYLE, IMAGE, AND TECHNOLOGIES OF OTHER BRANDS TO DRIVE GROWTH
Although co-branding is nothing new, it is on the up and many industry experts have highlighted it as a growing trend for 2010, as consumers want brands to be more experimental, and more open – a reflection of our changing society. Brands are borrowing some of the lifestyle image, glamour, and luxury from fashion labels, making their products more desirable, drawing in new customers and gaining greater recognition. Co-branding opens up new market opportunities to companies, helping them gain recognition in markets where they have little traction. It’s a powerful way of introducing one company’s products and services to the market of another. Sharing the equity of another brand allows a company to push the design of their products in new directions, uplifting the brand. Collaborating with another brand allows for the development of innovations that cross form, brand, and technology, resulting in new products and services that delight consumers in new ways. It allows companies to extend their product lines and attain instant credibility.
Many of these collaborations are in the production of limited editions that generate a buzz. Ferrari often ‘lend’ their badge to companies for special editions. Acer are one of the latest companies to sport the red livery and Prancing Horse badge, but there is nothing special about the computer, and Acer appear to be the only ones that gain from the partnership, as it allows them to emphasize performance and design, attracting more attention to themselves and thereby moving away from being a commodity brand. Similarly, TAG Heuer recently released a special edition phone that features a Lamborghini signature on the battery cover. Only 1963 units of the MERIDIIST Lamborghini phone will be made – as tribute to the year Lamborghini was founded. Both brands are well suited as they share the ethos of high-performance, design-demanding and perfection-driven. However, this collaboration appears to do little for either brand, as both already share similar market positioning, technologies, and status.
Far left Jaeger-LeCoultre AMVOX2 Transponder watch www.jaeger-lecoultre.com Left TAG Heuer MERIDIIST Lamborghini phone meridiist.tagheuer.com
These collaborations must be built upon genuine synergy with a fit between values that maximize the power and prestige that each brand has to offer
Collaborations should be built that offer benefits to both brands, and as a result a longer relationship can be established that allows the companies to build sustained growth. Unlike Ferrari, Aston Martin have developed a watch with Jaeger-LeCoultre that can lock and unlock the new Aston Martin Rapide. Costing over twenty thousand pounds the watch has been specially developed for Aston Martin owners and ties perfectly into a brand that has close ties to James Bond and his archetypal gadgets. The AMVOX2 Transponder is the first mechanical watch developed with the ability to control access into a luxury sports car by means of a built-in micro transmitter system, while maintaining the key functions of the chronograph. It demonstrates the design and engineering expertise between these two prestige brands; both leaders in their respective fields. The teamwork, research, and development jointly undertaken by the brands has created the ultimate accessory for the ultimate sports car. Earlier this year we witnessed another successful partnership – during Milan Fashion Week, Emporio Armani and Reebok presented a collaborated collection. Armani want to offer their consumers the possibility of wearing sports clothes that are stylish and comfortable, whilst Reebok look to upscale their brand and gain fashion-conscious, active
consumers that prefer to wear Nike. Together both brands are likely to gain new consumers, in new markets, driving growth in both new and established markets. This year we will continue to witness a number of collaborations between brands as they look to extend into new markets with minimal risk. These co-brand initiatives will come from both short and long-term relationships. But in order to provide real innovation for consumers these collaborations must be built upon genuine synergy with a fit between values that maximizes the power and prestige that each brand has to offer. When considering entering a co-branding program, brands should guard against diluting the power of their brand message and look to build more sustainable growth. Successfully merging values and identities of brands originally engaged in different industries, co-branded products and services can gain consumer choices, loyalty and ultimately make the brand unique and distinctive. You only need to look at the Nike Apple relationship to see how two brands can work together to delight consumers in new ways, developing products and services in markets that hadn’t existed before.
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Cylinda & Dot By Paul Smith For Stelton www.paulsmith.co.uk To mark the 50th anniversary of Danish brand Stelton, British designer Paul Smith redesigned tableware from the Arne Jacobsen collection giving them a refreshing and contemporary update, with his signature palette of colors on the handles. As a result the tableware extends its appeal to new consumers attracting them to the prestigious brand. This limited edition range will be available from May.
NewEdge + The Brewery is a dynamic innovation consultancy with a world-class team of strategists, trend forecasters, researchers and designers. We bring a fresh approach to growing business and brands through upstream and downstream innovation. Our Antennae Trends team are continually researching emerging design trends, ideas and creative thinking – from global product innovation through to changing consumer lifestyles. These trends indicate how markets are being shaped in the future, giving us the ability to anticipate how consumers are likely to respond to future solutions.
If you would like to know more about our innovation consultancy, our trends research, or if you would like to comment on anything you have read in this issue, please email The Antennae team: antennae@newedge-thebrewery.com
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ANTENNAE TREND REPORT MARCH 2010
London Richmond Brewery Stores 18 Petersham Road Richmond London TW10 6UW UK T +44 (0)20 8439 8400 Richland 1350 Spaulding Ave Richland WA 99352 USA T +1 (509) 737 9900 W: www.newedge-thebrewery.com E: antennae@newedge-thebrewery.com Copyright Š 2010 NewEdge + The Brewery Limited The entire content of this document, both physically and intellectually, remains the property of NewEdge + The Brewery Limited. Please apply to us for written permission required to copy, or amend, in full or part. Opinions, conclusions, and other information contained within are not necessarily expressed by NewEdge + The Brewery Limited.