UNIVERSITY OF SOUTHAMPTON Winchester School Of Arts
Saint Laurent Strategic Audit
Mengxuan Zhang BA Fashion Marketing Date Submitted 08/11/2013 Word Count: 2,767
Table of contents 1 Executive summary 2 Brand Value and Company Activities 3 Mission Statement 4 Positioning and Consumers Segmentation 4.1 Customer Pen Portrait 4.2 Consumer Segmentation 5 Financial and Sales analysis 6 Marketing Mix and Strategies 6.1 Product 6.2Price 6.3Place/distribution 6.4Promotion
7 SWOT Analysis 8 Competitive Environment 9 PESTLE Analysis 10 Conclusion Appendices
Ethics & CSR Policies Full SWOT Analysis Porter’s Five forces Price Hierarchy & LFL Kering Company Structure Sales Growth in Luxury Handbag Market Data Reference
Bibliography
1 Executive Summary
Owned by Kering, Saint Laurent is one of the world best-known luxury designers. It was recently rebranded as ‘Saint Laurent’ by the new Executive Director, fashion genius Hedi Slimane, who gives an edgy design identity that appeals to young consumers. This report aims to analyse the company’s situation and strategies after relabeling, followed by examinations of the micro, competitive and macro environments. The conclusion arrives at a series of recommendations that could accelerate the brand’s expansion and assist it with conquering the barriers for future development. extending a diffusion product line with lower price point increasing distribution and communication channels
investing in the digital market, improving usability of the online store and launching mobile shopping apps enabling the brand position to be clearer, and trying to reduce the negative impacts of rebranding continually expanding into overseas markets
1
2 Brand Value and Company Activities
The French luxury fashion house Yves Saint Laurent, which is described as ‘one of the great fashion names of the late 20th century and a brand with an unparalleled history’ (Gucci group, 2010), was established by its namesake and partner Pierre Bergé in 1962. The famous YSL logo was designed by A. M. Cassandre in 1963. Now it is a well-established global luxury brand owned by Kering Group (formerly PPR) that operates 121 standalone stores and concessions throughout the world. The brand also included many extensions ranging from jewellery to handbags. The beauty division is licensed to L’Oréal Group (Born, 2008). YSL’s success is not only because of its signature French chic brand identity and its elegant style, but also advanced product quality and fashionability, as well as a large amount of loyal consumers. The namesake designer popularised many significant fashion trends in the past, such as the women’s tuxedo and safari jackets. Saint Laurent was also an early adopter to feature black models (Tveite, 2011).
2
Brand Onion
In March 2012 Hedi Slimane returned to the company, replacing Stefano Pilati (Needham, 2013). Slimane gained great publicity for the brand by relabeling the RTW collection as Saint Laurent with the logo ‘Saint Laurent Paris’. The new contemporary identity that gives twists on its French aesthetic established itself in consumers’ minds after the launch of Hedi’s first innovative collection for SLP. Although the classic range will continue to sell and the YSL logo will be retained, the brand image is now modernised and a younger age group is targeted. 3
3 Mission Statement The parent company of SLP, Kering coined the slogan ‘Empowering Imagination’ with the change in name from PPR in June 2013 (Bergin, 2013). The rebranded image of SLP emphasises the dedication to creativity and agility, which certainly aligns with Kering’s group target and business mission of encouraging innovation and change. The corporation aims to develop the creative aspects of its labels while providing better customer experiences and achieving sustainable fashion.
4
4 Positioning and Consumers Segmentation
Saint Laurent is positioned in the luxury market to target global audiences. Now the brand is considered a fashion trend creator or early adopter. Its design celebrates stylish and provocative looks. As Jean-Noël Kapferer indicated in ‘Brand Mangement’ (2008), the product design concept is to celebrate the beauty of body, of charm, of surrender to romance. SLP’s products are catered to a certain consumer group of self-assured, strong-minded and fashion conscious affluent individuals aged between 20 and 40 (Female)/ 20 and 35 (male). SLP has two Major segments of consumers. First, the targeted group as described above consists the largest proportion. Second, the remaining middle-aged long-term loyal customers who were the key consumer group previously. Besides, fashion forward young consumers with middle-income level, who highly appreciate the legacy of the brand, would also invest in SLP, but they usually have low loyalty. Currently, the brand is undergoing fast changes on many perspectives including with the chef director, the brand image, logo, design concept, store concept, packaging etc. Due to those modifications, customers are believed to need time to embrace the new image of the brand. However, the biggest issue that confuses customers is that the brand does not want to reinterpret the classics whilst hardly seeking to have a brand-new image and identity that appeals to younger customers. The market position is expected to be clearer in the future. 5
Customer Pen Portrait Target Consumer: self-assured, strong-minded and fashion conscious affluent individuals Gender: Female and Male Age: 20 – 40 Income level: high Education : Bachelor and above Position : Fashion Industry, Celebrity, wealthy, students, directorial roles in an Industry Lifestyle: fashion trend early adopter, Adoring fashionable celebrities such as Kanye West Driving expensive cars and sometimes going aboard for holidays Loving parties and daring to try new styles Also buying: Givenchy, Versace, D&G, Dior
4.1 Customer Pen Portrait
6
4.2 Consumer Segmentation
Consumer Segmentation The Main Type of Consumer (Saint Laurent’s target consumer after rebranding) Self-assured, strong-minded and fashion conscious affluent individuals aged between 20 and 40 (Fe-
Long-term Loyal Customers (The previously targeted consumer tpye)
Fashion forward Consumers Consumers with middle-income level, who highly
Career oriented wealthy individuals aged between
appreciate the legacy of the brand, would also
30 and 50.
invest in Saint Laurent’s products. This type of consumer occupies smaller proportion than the
male)/ 20 and 35 (male).
other two.
7
Financial and and Sales Sales Analysis 55 Financial Analysis Š‡ Ď?‹Â?ƒÂ?…‹ƒŽ •–ƒ–—• Šƒ• „‡‡Â? ƒˆˆ‡…–‡† „› The financial status has been affected by macro environment issues, issues, luxury luxury marmarmacro environment ket competition, and the company’s inket competition, and the company’s internal factors. factors. SLP SLP recorded recorded â‚Ź255.3 â‚Ź255.3 milmilternal Ž‹‘Â? ‹Â? ”‡˜‡Â?—‡ ‹Â? –Š‡ Ď?Â‹Â”Â•Â–ÇŚÂŠÂƒÂŽÂˆ ‘ˆ ʹͲͳ;ǥ lion in revenue in the first-half of 2013, …‘Â?’ƒ”‡† –‘ ̀ʹʹ;Ǥ͡ Â?‹ŽŽ‹‘Â? ‹Â? –Š‡ Ď?‹•–nj compared to â‚Ź223.5 million in the fisthalf of 2012. The brand brand is is expanding expanding half of 2012. The globally; the the amount amount of of direct direct operated operated globally; stores increased to 98 in March 2013 stores increased to 98 in March 2013 compared to to 83 83 stores stores in in 2011. 2011. AccordAccordcompared ing to the statistics, the rebranded Saint ing to the statistics, the rebranded Saint Laurent demonstrates demonstrates strong strong sales sales with with Laurent growth of of 12% 12% on on aa comparable comparable basis basis aa growth shown in the third-quarter of the 2013 shown in the third-quarter of the 2013
Table 4 -2 Breakdown of Recurring Income
Table44––11Quarterly QuarterlyBreak BreakDown DownofofRevenue Revenue Table
Source: Kering Kering Financial FinancialReport Report Source:
Ď?‹Â?ƒÂ?…‹ƒŽ ›‡ƒ”Ǥ Š‹• ‰”‘™–Š ‹• ͜Ǥ͝ ’‡” …‡Â?– Š‹‰Š‡” –ŠƒÂ? –Š‡ ƒ˜‡”ƒ‰‡ financial year. This growth is 4.9 per cent higher than the average growth (7.1%) ofthe theluxury luxurydivision divisionin inKering. Kering.The The15% 15%increase increasein in growth (7.1%) of sales in in SLP’ SLP’ ss direct direct operated operatedstores storesisisalso alsohigher higherthan thanthe theKering Kering sales average (up 8%) (Kering Financial report, 2013). average (up 8%) (Kering Financial report, 2013).
Source: Kering Kering Financial FinancialReport Report Source:
Š‡ ’‘•‹–‹˜‡ Ď?‹Â?ƒÂ?…‹ƒŽ •‹–—ƒ–‹‘Â? ‘ˆ –Š‡ ›‡ƒ” ‹• †—‡ ‹Â? Žƒ”‰‡ ’ƒ”– –‘ –Š‡ The positive financial situation of the year is due in large part to the development focus of of the the distribution distributionstructure structureand andthe thenew newstore store development focus …‘Â?…‡’– (Third Č‹ Š‹”† Quarter —ƒ”–‡” sales •ƒŽ‡• review, Â”Â‡Â˜Â‹Â‡Â™ÇĄ 2013). Í´Í˛ÍłÍľČŒÇ¤ Although Ž–Š‘—‰Š the –Š‡ figures Ď?‹‰—”‡• concept are strongly strongly impacted impacted by by the the macro macro environment environmentsuch suchas asthe theecoecoare nomic recovery in Europe, the sustained growth reveals that at least nomic recovery in Europe, the sustained growth reveals that at least –‡ˆƒÂ?‘ Â‹ÂŽÂƒÂ–Â‹ÇŻÂ• †‡’ƒ”–—”‡ †‹† Â?‘– …ƒ—•‡ ƒ Š—‰‡ ‹Â?Ď?Ž—‡Â?…‡ ‘Â? ǯ• Stefano Pilati’s departure did not cause a huge influence on SLP’s sales. On thecontrary, contrary,the therebranding rebrandingdelivered deliveredgreat greatsales salessuccess. success. sales. On the is reported reported that that men’s men’s and andwomen’s women’sready-to-wear ready-to-wearreached reached41% 41% ItIt is sales growth growth during during the the quarter. quarter. Regionally, Regionally, sales salesgrew grewby by41% 41%in in sales Japan, 12% in Western Europe and 12% in North America during Japan, 12% in Western Europe and 12% in North America during the third thirdquarter quarterof of2013. 2013. the 88
6 Marketing Mix and Strategies
6.1 Product Saint Laurent offers a wide range of luxury fashion products including accessories, apparel, bags, jewellery and shoes with fine quality and ground-breaking styles. The women’s RTW line is launched respectively as S/S pre collection, S/S collection, Pre-fall collection, F/W collection and Saint Lauren Cruise collection each year. Hedi Sliame introduced many petite silhouettes in regard to his preference for the ultra-slim proportion (Needham, 2013). Therefore, the size range of RTW collections is scaled up for the sake of wider demographic targeting along with the global expansion strategy. Hedi’s design at some degree gives fresh and powerful add-on to YSL’s refinement, however, it is argued that his design for the SLP menswear collection is too similar to what he did in Dior Homme. Emphasise of SLP brand identity could thus be expected in his future menswear collections. Secondly, YSL previously targeted middle-aged consumers and the product design was more elegant, but now its creative design seems to engage younger customers more, which could potentially alienate loyal middle-aged shoppers as well as potential elder customers who have significant buying power in premium consumption. Most luxury brands guarantee exclusiveness via limiting product offering. This is known as the hunger marketing strategy. Famous hardware and software company Apple adopts longterm hunger sales to add brand value, create demands, and maintain high commodity prices (Bradshaw, 2013). Also, SLP strategically introduces limited quantity of inventory that evokes associations of rarity.
9
Product Category
Yves Saint Laurent
Saint Laurent
Beauty
(L’Oréal Group)
Women
Saint Laurent Paris RTW
Handbags
Jewellery
10
Men
Shoes
Accessories
6.2 Price To reinforce the distinct image and premium position of the brand, SLP adopts premium-pricing strategies accommodating to its target group of upper class consumers. Currently, the opening price point of the SLP womenswear collection is £190 for a cotton tank and the highest price point is £13,175 for a fur coat. The menswear collection has a lower price architecture that starts from £170 for a plain white t-shirt and reaches to £4,400 for a leather biker jacket. High price points can differentiate the brand from the mass market and help maintain brand value, but at the same time the price range has to be justified to secure consumers’ willingness. SLP bags’ prices ranged from £165 to £1,935. The prices of the timeless bag collection are increased twice a year from 4 per cent to 10 per cent according to market competition and economical environment. Compared with the price point of other luxury brands, SLP is niched between brands such as Channel and Dior, and brands such as Balenciaga and Alexander McQueen.
11
Price Architecture
Top Price
£22,525 - Sac De Jour Alligator Leather Tote £13,175- Fox Fur Coat £7,305 - Beaded Tulle Gown £5860 - Shearling Long Fur Coat £5,860 - Bead and Sequin-embellished Crepe Jacket £4,755 - Ruffled Metallic Flocked Silk-blend Dress £4,199 - One Shoulder Gown In Chiffon
£4,000 - £13,175 Premium Price £2,000 - £4,000
Mid-Price £750 - £2,000
£3990 - Double Breasted Soft Leather Trench Coat £3,360 - Silk halterneck dress £3,190 - Leahter Biker Jacket £ 3,395 - Slit Leather Trousers £ 2,970 - Floral-print Wool and Silk-blend Dress £2,545 - Embellished Plaid Wool Dress £ 2,510 - Duffle 6 Leopard-print Fur and leather Bowling Bag £2,210 - White Diamond and Gold Open Top Ring £2000 - ‘Sac De Jour’ tote £1,796 - Betty Structured Leather and Suede Studded Shoulder Bag £1,660 - Silk-Chiffon Printed Dress £1,075 - Lulu Small Leather Shoulder Bag £810 - Mohair-Blend Plaid Sweater £760 - Star Intarsia-knit Cardigan
£ 680 - Leather Logo Clutch £ 595 - Floral-print Cashmere Scarf £470 - Belle De Jour Patent-leather Clutch £315 - Mid-rise Skinny Jeans £215 - Studded Leather Bracelet £ 150 Brushed Leather Small Flap Wallet
Lowest Price
£150 - £750
12
6.3 Place/Distribution
SLP operates more than 121 standalone stores and concessions over 26 countries (YSL.com). To accelerate the global expansion, it retails through concessions in most upmarket department stores such as Selfridges, Harrods, Lafayette, and Macy’s. Engaging with the e-commerce trend of luxury peers, products can also be purchased online at the SLP online shop and many Internet fashion retailers such as Net-A-Porter, Farfetch, and Louisaviaroma. Local saucing enables a better supervision to the manufacturing practice as well as a speedy distribution network. Its products are manufactured in the Europe and distributed to its
directly operated stores and online store, or supplied to intermediary department retailers as a second distribution channel. SLP is headquartered in Paris, though the design studio of Hedi Slimane was recently relocated to Los Angeles, U.S. The brand recently focused on expanding to the emerging market. 9 stores were opened in 2013 and most of them are located in Asia. 13
6.4 Promotion Unlike high street designers, SLP only communicates on selected media platforms to maintain exclusivity. It runs a brand site, official e-shop, mobile apps, and Facebook, Twitter and YouTube pages. However, it does not have language-specific sites, and the online store is only available to customers from selected countries. Saint Laurent has a multichannel marketing technique. It endorses adverts on fashion magazines such as Vogue, Love, and Elle, and proliferates the brand via PR agencies, fashion bloggers, and celebrities. In 2012, it gained great publicity via relabeling. Luxury brands rarely adopt sales promotions, which can potentially devalue the brand’s reputation. Saint Laurent gives slight discounts via channel retailers that offer annual sales or loyalty points, for example, customers who own a black Harrods reward card can have 10% off on everything offered in Harrods, twice a year (Griffin, 2012). In addition, many luxury brands boost sales by developing lower-priced diffusion product lines, such as MCQ by Alexander McQueen, T by Alexander Wang, and Armani Exchange of Giorgio Armani. Saint Laurent can also adopt this strategy to attract more consumers and promote the brand.
14
6.4 Promotion
15
15
7 SWOT Analysis Strengths · · · · · · · · · · ·
significant brand history, strong identity, recognition and credibility successful rebranding results
strong financial supporter: Kering
vast amount of loyal customers worldwide forward design aesthetic
wide distribution coverage
Weaknesses · · · · · · · · · · ·
negative impacts of relabeling: unclear market position, loss of previous loyal customers, opposing voices about renaming new target excludes older consumers who are considered an important composition of the luxury market ultra-slim design style limits demographic targeting less developed digital market
brand awareness lower than counterparts
16
Opportunities · · · · · · · · ·
growing amount of Internet shoppers
emerging BRICS and MENA courtiers (Cart 7 -1)
technology enhancements largely improve operational efficiency and in-store customer experience nowadays, customers from the high street market also invest in luxury products courtiers tend to cut down tax for imported brand-name goods
Threats · · · · · · · · · · ·
competition in the high-end market is increasingly high due to fewer luxury consumers in the poor economy cultural implications plagiarism
other emerging affordable luxury brands
potential of losing brand reputation due to rebranding suppliers’ bargaining power is relatively high
17
8 Competitive Environment An influential player within the luxury goods market, Saint Laurent has a number of direct and indirect competitors on a global scale. Internally, it competes with other brands categorised in the luxury tier within Kering, such as Gucci, Alexander McQueen, and Bottega Veneta. Though Saint Laurent is distinctively associated with fashionability and desirability, the above brands are parallel to Saint Laurent in many instances. It is vital for Saint Laurent to perform better than opponents in order to win larger corporate resources from Kering. Externally, it faces intense competition from labels homed in the diversified luxury group, LVMH, which is the key competitor of the Kering group. High fashion brand Givenchy and sophisticated luxury designer Dior, especially, exude an almost identical French aesthetic to that of Saint Laurent. Balmain, Versace and Dolce & Gabbana are competitors, based on their design direction and product style aspects, since they are innovative brands that similarly celebrate edgy design concepts and ground breaking styles. Additionally, there are threats from such premium brands as Louis Vuitton, Prada, and Balenciaga, which possess similar brand equities and share price points, product categories and distribution channels with Saint Laurent. Next, affordable luxury brands are in the niche layer of the fashion market, which indirectly compete with Saint Laurent in regards to fellow factors. Many of them are edgy and chic and thus greatly engage young customers, such as Rag & Bone, SuperTrash and Maje. It is reported that luxury customers often purchase those brands in accordance with economical fluctuation. Many of the affordable luxury brands, including Karen Millen, Michael Kors, Tory Burch and Kate Spade, have successfully gained a great share in emerging developing countries, because their price ranges can be more accessible and they have fairly high price-performance ratio. Lastly, there is also an indirect sense of competition from high street brands, because modern consumers buying luxury goods often mix this with fast fashion products. A great example of this is the collaboration range of H&M, which attracted a large amount of luxury shoppers. On the other hand, those high street consumers who appreciate the legacy of luxury designers are tempted to invest in high end merchandises. Despite this, Saint Laurent has competitive advantages over the aggressive competition. Kering is finally supportive, and the brand maintains great credibility and reputation with its contemporary design concepts, fine product quality and high level of distribution coverage. 18
Price Point Comparison - Women’s ready-to-wear
FROM
Printed Cotton Tank £190
Scoop Neck Tank Top £137
Fox Fur Coat £13,175
Mink Fur Jacket £14,089
Scoop Neck Ribbed Cotton Vest £70
Logo T-shirt £125
TO
Animal Print Mink Caban £22,000
19
Shiny Python Peplum Jacket £4,460
9 PESTLE Analysis
Political Import duties on luxury products are generally higher than that of other merchandise, which adds difficulties to foreign brands competing with local ones. The VAT on luxury goods is as high as 30% in Thailand (BangkokPost, 2013) and 17% in China (Zhang, 2013); but an increasing number of countries have recently lowered the tax on imported luxury goods. Governments are also paying increasing attention to sustainability issues. Fashion retailers are now to examine their CSR operations and measure green credentials. Occupational health and safety policies are pressuring retailers to review their workplace environments and other labour-related issues.
20
Economical It is a trend that luxury companies are heavily expanding into Asian market. It is reported that China will have the world’s fourth largest population of affluent households by 2015 (Interparters, 2011). Economical downturn greatly boosts the development of affordable luxury retailers, as well as high street designers and inflation raises the operational and production costs. Saint Laurent targets young consumers; yet it can be argued that many of them are financially unable to afford luxury.
Chart 7-1 Global Sales of Luxury Product (Source: InterPartners, 2011)
Social Consumers from different cultural backgrounds have varied preferences on purchasing premium products. Even though many consumers are said to purchase logo-less products these days, Louis Vuitton’s success in the Asian and Middle East markets largely relies on its highly branded merchandise (Shi, 2011). Research has concluded that Asian and Arabic consumers prefer buying the classic YSL handbag range of Saint Laurent, while Europeans prefer the products not to have the logo. Additionally, the market levels of Western brands are convoluted in some emerging countries. Consumers ranked Chanel, Rolex and Lacoste as representing Western luxury in China. Indian consumers cited Park Avenue, Will Lifestyle, Rolex and Omega as luxury brands; while the first two are local brands (Kapferer & Bastien, 2009). Saint Laurent ready-to-wear collection’s expansion to Muslim countries can also be challenging due to religious factors.
21
Technological Internet shopping is a trend among young consumers. Saint Laurent should enhance the user experience of its online shop to engage its customers. The phenomenon of mobile shopping is also growing nowadays. Developing brand apps with a shopping function could help Saint Laurent to penetrate the market. Retailers have attempted to use many emerging social media platforms to communicate. Technology innovation in packaging and delivery can improve operational efficiency and reduce costs. It can also help enhancing in-store experience. Digital pioneer Burberry, for example, successfully boosted its brand value via adaptations of digital innovations both in-store and online (Cronin, 2012).
22
Legal Legal loopholes around plagiarism have caused the fake designer bag market in some countries. The demands are mainly from women who desire top end handbags but are unable to afford them (Coley, 2013). This issue negatively impacts designers and even the economy. Furthermore, most fake products are made in developing countries where employees are in terrible working environments and are paid extremely low salaries that do not meet the country’s legal requirements. Moreover, despite the custom duty, the cumbersome legal monitoring system is also one of the key factors impeding the global expansion of fashion retailers.
Environmental/Ecological Luxury companies greatly profit from using animal skin. Even though retailers try to market fur as green, the facts are undeniable: animal skin trading is severely detrimental to the environment, and many organisations have stopped trading in animal skins. Nowadays, for example, fur products are prohibited from being sold in major department store, Selfridges. Eco-brand Stella McCartney even disuses any leather materials. Reducing energy consumption is another major environmental trend, which encourages retailers to become dedicated to improving their energy efficiency in recent years.
23
10 Conclusion
Consumer behaviour can change rapidly, and the decreasing demand for products with overt branding has now hit many fashion giants such as Gucci and Louis Vuitton. By contrast, the image of this historical brand, Saint Laurent, has been enhanced by rebranding. Hedi Sliame’s no YSL logo collection has proven to be successful, with a 41% sales growth this year. The chic brand identity, the strong brand reputation and credibility, the innovative design, the sophisticated products, along with the large loyal consumer group, the wide distribution coverage and the strong financial backup from Kering, have all contributed to Saint Laurent’s success. They will have the potential to rise to the top of the luxury market by enhancing the following perspectives: · extending a diffusion product line with lower price point · increasing distribution and communication channels
· investing in the digital market, improving usability of the online store and launching mobile shopping apps · enabling the brand position to be clearer, and trying to reduce the negative impacts of rebranding · continually expanding into overseas markets
24
Appendices
Ethics & CSR Policies With the increasing ethical awareness of consumers, sustainable development is increasingly important to a company’s success. Kering Group has a good ethical foundation. It appears to have great CSR strategies that enhance the company image. Information of its ethical and CSR commitments is open to public on the Internet. François-Henri Pinault, chairman and CEO of Kering announced, “we place sustainability at the core of Kering’s business activities and in all areas of governance.” Kering is involved in a number of foundational and CSR projects (Company Sustainability report, 2013). It published 8 sustainability targets to archive by 2016, and launched its own sustainable measurement tool, the EP&L, to examine its supply chain and manufacturing progress. Next, organic packaging and eco-friendly store design concept have been taken into consideration with the arrival of Hedi Slimane. All Saint Laurent’s shopping boxes and bags are made of recyclable cardboards that are 100% FSC (Forest Stewardship Council) certified (Kering.com). The newly opened stores are refurbished according to the organisation’s sustainable design concepts concerning the optimisation of HVAC (Heating, Ventilation and Air-Conditioning) use. However, the company has achieved corporate social initiatives in mainly socially responsible business practice and corporate philanthropy parts. It is not involved much in aspects of cause promotion, corporate social marketing and community business practices. In comparison, many of its competitive brands such as Givenchy, Valentino and Dior have stepped ahead of SLP in these perspectives. 25
Full SWOT Ananlysis Strengths Saint Laurent processes four major strengths: brand story, strong identity and credibility, successful repositioning, and financial back up from Kering. It is a well-established brand with a large loyal consumer base. The successful rebranding brought huge publicity and positive financial performance. Hedi Slimane fans are now loyal to the brand. SLP has mega supporting parent company Kering and its products are sophisticated with forward design aesthetic that attracts global customers. The strategy of continually selling iconic and timeless merchandises retained longterm customers. The huger marketing strategy increased the desirability. Multichannel marketing and wide distribution coverage built brand recognition and enable great market share. High brand accessibility helps the brand penetrating to emerging markets. The CSR policy transparency gives good brand image and reputation. Weaknesses
Weaknesses the brand facing are negative impacts of rebranding. Hedi’s design highly depends on his own preference, and his ultra-slim cutting caused limitation in demographic targeting. Saint Laurent announced to continually manufacturing handbags with Y or YSL logos serving as the timeless collection to retain loyal customers, which could potentially result the brand falling into an awkward time of having unclear market position. The new brand identity seems to engage fashionable 20-somethings, while most of whom are not reaching the high end level of consumption. On the other hand, the target market of relabelled SLP seems excluding affluent elder consumers, who are considered large consumption group of luxury products. Next, Saint Laurent’s brand awareness is lower than similar high-end brands such as Dior, Prada and Louis Vuitton. The brand becomes less-known particularly in emerging market, which is partially because of the lack of iconic pieces or highly branded merchandises. Saint Laurent has only English site and products offered from their E-shop can only be shipped to selected countries.
26
Opportunities SLP can focus on opportunities in emerging countries, expanding to BRICS and MENA markets. The brand awareness and accessibility can be improved via increasing distribution and communication channels. More directly operated stores can be sited in major cities. The company can also strategically make an alliance with agencies or regional high-end department stores to speed up the growth internationally. To grasp more sales opportunities in the digital market, the usability of Saint Laurent E-shop can be improved. Both brand site and online store are recommended to expand to more languages. Payment methods, currency types acceptance and shipping countries are also expected to increase. The brand can create more publicity and raise brand awareness through new media platforms, such as introducing mobile apps. Now customers from high street market buy also luxury merchandises. Saint Laurent can have great profit opportunities if it extends a second product line with a slightly lower price range. This trading down strategy would assist SLP to include a new segment of those middle-class customers who desire the brand. Threats
SLP’s position is threatened by not only peer high end designers, but also emerged affordable luxury brands, which are recently gaining increased share from premium market by their edgy styles and high price-performance ratio. Rebranding stimulated hot debate that threatens the brand’s reputation. Sarah Andelman, owner of Colette, even sold thousands of T-shirts with the slogan of ‘Ain’t Laurent Without Yves’ (Davis, 2013). Some people think it is risky to rename from Yves Saint Laurent to Saint Laurent Paris because the previous name is a valuable asset that represents the tradition and history. In their opinion, rename estranges the brand from its origin, and adding Paris devalues its identity.
27
Porters five forces Suppliers bargaining power – high
Since all SLP’s manufacturers are centralised in EU, the inflation-caused rising of material and labour costs could increase the bargaining power of suppliers. Some of suppliers have long-term relationships with the brand. They have high bargaining power because the company may need to compromises to secure the supply chain. Buyer bargaining power - low
Saint Laurent targets to affluent individuals and it acquires customers by creative design and product wearability instead of attractive price points. In general, luxury brands seem to not compete by lowering prices. Consequently, buyer bargaining power is relatively low. Potential new entrants - moderate
Most of SLP’s existed competitors are historical brands that are already well established globally with wide product offering. It is difficult for new entrants to join in the competition as it takes time to build up the brand reputation and business scale. However, some emerging luxury brands are increasingly appreciated by consumers via dilivering contemporary and edgy design, such as Rick Owens and Gareth Pugh. Threat of substitute product – increasing
Due to economic recession, affordable luxury brands or second tier luxury brands such as coach, Michael Kors and Rag & Bone can potentially take over customers from high-end market. The rivalry among competing sellers – moderate and increasing
Economy downturn results in the reduction of luxury consumers, so the competition in high-end market is increasingly aggressive. Luxury brands also intensively compete in oversee markets to seize market share.
28
Price Hierarchy & LFL Comparison OPP
Good
Better
Best
Object : Women's Blouse
Clolour: Black, Red, White 100% Silk Size Range 6-12 classic blouse £435
Colour: Black, White 100% Cotton Size Range 10-14 Collar-detail shirt £410
100% Wool Size Range 6-12 Lumberjack Shirt
£750
83% cotton, 17% wool Size Range 6-12 Tartan And Floral Print Shirt
£825
29
77% Silk, 23% Polyester Size Range 6-12 pussy bow blouse £1,289
100% silk Size Range 6-10 Plissé Silk Shirt £1,399
100% Silk Size Range 6 -18 sheer polka dot blouse £1,863
100% silk size range 8-12 Patchwork Silk Shirt £1,825
Kering Company Structure Kering
Luxury
Sport&Lifestyle
Gucci,Bottega Veneta, Saint Laurent, Alexander McQueen, Balenciaga, Brioni, Christopher Kane, McQ by Alexander McQueen, Stella McCartney, Sergio Rossi, Boucheron, Dodo, Girard-Perregaux, Jeanrichard, Pomellato, Qeelin
30
FNAC
Redcates
Puma, Volcom, Cobra, Electric, Tretorn
Sales Growth in Luxury Handbag Market
Forcasted Luxury Handbag sales growth 2013-2018 Source: Euromonitor, Quartz
The Growing Man handbag market Source: Euromonitor, Quartz
31
Data References
32
33
World GDP Ranking
34
World top ten gross domestic countries map
35
36
Bibliography
Arora, R. and Guif, B. 2013. 8 P’s of luxury brand marketing. [e-book] Dubai: Brand Channel. pp. 4-10. Available through: BrandChannel.com http://www.brandchannel.com/images/papers/533_8ps_of_luxury_branding.pdf [Accessed: 1 Nov 2013]. Belge, A., Rambourg, E. and Dargnies, S. 2012. Luxury Goods. [e-book] HSBC. pp. 5-7. Available through: HSBC official site http://www.hsbcnet.com/nutshell/attachments/pdf/emea-luxury-goods.pdf [Accessed: 7 Nov 2013]. Bergin, O. 2013. PPR confirms name change to Kering. Telegraph, [online] 22 March. Available at: http://fashion.telegraph.co.uk/news-features/TMG9947846/PPR-confirms-name-changeto-Kering.html [Accessed: 7 Nov 2013]. Bhushan, R. and Bureau, E. 2013. Luxury cream seen as affordable indulgence than a Prada purse: Maud Pansing, Amway. Economic Times, [online] 5 Aug. Available at: http://articles. economictimes.indiatimes.com/2013-08-05/news/41093374_1_beauty-products-amway-india [Accessed: 2 Nov 2013]. Born, P. 2013. L’Oreal Gains YSL Beaute. [online] Available at: http://www.wwd.com/beauty-industry-news/financial/loreal-gains-ysl-beaute-1892463 [Accessed: 1 Nov 2013]. Bradshaw, T. 2013. Apple investors digest cash return but hunger for hardware. Financial Times, [online] 25 April. Available at: http://www.ft.com/cms/s/0/33471bf2-acfa-11e2-945400144feabdc0.html#axzz2jyOOfuKS [Accessed: 1 Nov 2013]. Businessweek.com. 2012. Yves Saint Laurent Company Information. [online] Available at: http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=6490488 [Accessed: 1 Oct 2013]. Cai, M. 2011. Apple’s ‘hunger marketing’ triggers doubt. China Daily, 09 May, p. 4. Cowles, C. 2013. Saint Laurent’s Star-Print Sweaters Are Selling Out Fast. [online] Available at: http://nymag.com/thecut/2013/10/saint-laurents-star-print-sweaters-selling-fast.html [Accessed: 7 Nov 2013]. Cronin, E. 2012. Burberry: entrenched in the digisphere. Telegraph, [online] 24 Nov. Available at: http://fashion.telegraph.co.uk/news-features/TMG9694181/Burberry-entrenched-in-the-digisphere.html [Accessed: 2 Oct 2013]. Davis, A. 2013. Hedi Slimane Is Not Amused by Parody Tees. [online] Available at: http://nymag.com/thecut/2013/10/hedi-slimane-is-not-amused-by-parody-tees.html [Accessed: 4 Oct 2013]. Dodes, R. and Schechner, S. 2013. Luxury-Goods Makers Brandish Green Credentials. The Wall Street Journal, Available at: http://online.wsj.com/news/articles/SB124650107013784081 [Accessed: 7 Nov 2013]. Frith, M. 2005. Animal rights groups celebrate as Selfridges stops selling fur. The Independent, [online] 27 May. Available at: http://www.independent.co.uk/news/uk/this-britain/animal-rights-groups-celebrate-as-selfridges-stops-selling-fur-223370.html [Accessed: 7 Nov 2013].
37
Griffin, J. 2013. Store Wars: Harrods and Fortnum & Mason. The Guardian, [online] 1 June. Available at: http://www.theguardian.com/money/2012/jun/01/store-wars-harrods-fortnum-mason [Accessed: 30 Oct 2013]. Heller, N. 2013. Hedi Slimane Thrills and Scandalizes as Creative Director of Saint Laurent - Magazine. [online] Available at: http://www.vogue.com/magazine/article/hedi-slimane-thrillsand-scandalizes-as-creative-director-of-saint-laurent/#7 [Accessed: 4 Oct 2013]. ISPO. 2013. Report: Adidas is once again the giant among Europe’s apparel vendors. [online] Available at: http://www.ispo.com/newsblog/2013/09/26/report-adidas-is-once-again-the-giant-among-europes-apparel-vendors/ kering financial [Accessed: 2 Oct 2013]. Jackson, T. and Shaw, D. 2009. Mastering fashion marketing. Basingstoke [England]: Palgrave Macmillan. Joy, A., Sherry, J., Venkatesh, A., Wang, J. and Chan, R. 2012. Fast fashion, sustainability, and the ethical appeal of luxury brands. Fashion Theory: The Journal of Dress, Body & Culture, 16 (3), pp. 273--296. Kapferer, J. and Bastien, V. 2009. The luxury strategy. London: Kogan Page. Kapferer, J. and Kapferer, J. 2004. The new strategic brand management. London: Kogan Page. Kering Group 2013. Third Quater Revenue-financial Report. [press release] 24 Oct 2013. Kering.com 2013. Sustainability & traceability. [press release] 18 Oct. Kering.com. 2013. Finance | Kering. [online] Available at: http://www.kering.com/en/finance [Accessed: 7 Nov 2013]. Kering.com. 2013. About Kering | Kering. [online] Available at: http://www.kering.com/en/group/about-kering [Accessed: 1 Nov 2013]. Kering.com. 2013. Saint Laurent stores & packaging | Kering. [online] Available at: http://www.kering.com/en/sustainability/achievements/saint_laurent_stores_packaging [Accessed: 2 Nov 2013]. Karaian, J. 2013. Don’t laugh at the “man purse”—it’s now a $9 billion luxury business. [online] Available at: http://qz.com/133668/dont-laugh-at-the-man-purse-its-now-a-9-billion-luxury-business/ [Accessed: 8 Oct 2013]. Kotler, P. and Keller, K. 2009. Marketing management. Upper Saddle River, N.J.: Pearson Prentice Hall. Laurent, Y. 2013. Yves Saint Laurent Fashion Designer biography. [online] Available at: http://www.fashionmodeldirectory.com/designers/yves-saint-laurent/ [Accessed: 20 Oct 2013]. Liu, C. and Wang, Z. 2012. Karen Millen brings ‘affordable luxury’ to mainland. China Daily, 11 Oct, p. 1. Morsing, M. and Beckmann, S. 2006. Strategic CSR communication. Copenhagen: DJØF Publishing. Needham, A. 2013. Hedi Slimane lifts the lid on Saint Laurent. The Guardian, [online] 19 Sept. Available at: http://www.theguardian.com/fashion/2013/sep/19/hedi-slimane-yves-saint-
38
laurent-ysl [Accessed: 2 Nov 2013]. Posner, H. 2011. Marketing fashion. London: Laurence King. Shi, J. 2011. No Logo. Financial Times, 14 Oct, p. 6. Shuayto, N. 2013. Elie Saab: Growth of a Global Luxury Brand. [e-book] Ontario: Richard Ivey School of Business Foundation. pp. 1-3. Available through: Harvard Business Review http://hbr.org/product/elie-saab-growth-of-a-global-luxury-brand/an/W12092-PDF-ENG [Accessed: 7 Nov 2013]. Smith, S. 2013. Interview to Sales assistants about the sales performance in Saint Laurent concessions in Selfridges. Interviewed by Daisy Zhang [in person] Selfridges, 10 Oct 2013. Socha, M. 2013. Kering Adds Specialists to Sustainable Development Committee. [online] Available at: http://www.wwd.com/fashion-news/fashion-scoops/kerings-green-way-7062345 [Accessed: 7 Oct 2013]. Teran, A. 2013. An Essay on Hedi Slimane and the Saint Laurent Paris Fall 2013 Collection. [online] Available at: http://www.thefoxisblack.com/2013/03/05/an-essay-on-hedi-slimaneand-the-saint-laurent-paris-fall-2013-collection/ [Accessed: 25 Oct 2013]. Tveite, M. 2013. Untitled. WordPress, Available at: http://moriahkathleen.files.wordpress.com/2012/01/binder2.pdf [Accessed: 1 Nov 2013]. Unknown. 2013. Import tariffs on luxury items may be cut. Bangkok Post, [online] 9 Sept. Available at: http://www.bangkokpost.com/news/local/368773/tax-cuts-likely-on-imported-brandname-goods [Accessed: 27 Oct 2013]. Unknown. 2011 China- A Booming Luxury Goods Market. InterPartners, [online] Available at: http://www.interpartners.info/public/china-a-booming-luxury-goods-market.php [Accessed: 27 Oct 2013]. Walliman, N. 2011. Research methods. London: Routledge. Wilson, R. and Gilligan, C. 2005. Strategic marketing management. Amsterdam: Elsevier/Butterworth-Heinemann. Wisker, G. 2009. The undergraduate research handbook. Houndmills, Basingstoke, Hampshire [England]: Palgrave Macmillan. Wolfe, M. and Wolfe, M. 2009. Fashion marketing & merchandising. Tinley Park, Il.: Goodheart-Willcox Co.. Wood, M. 2005. The marketing plan handbook. Upper Saddle River, N.J.: Pearson Prentice Hall. Whittington, R. 2012. Living In a Multi-Screen World. [online] Available at: http://www.rickwhittington.com/blog/marketing-for-laptops-smartphones-tablets/ [Accessed: 8 Oct 2013]. Zhang, S. 2013. Import-Export Taxes and Duties in China. China Briefing, 11 March, p. 2.
39