Helmut Lang by maddyhernandez

Madalena Hernandez

HELMUT LANG Strategic Fashion Management ARTD 3045

The New Era (Pfeiffer, 2017)

(Green, 2017)

CONTENTS

â&#x20AC;&#x153;A strategy for growth, increased market share, improved working environment or greater improved sustainable or environmental engagement.â&#x20AC;?

01.

02.

03.

Introduction

Company Overview

History and Timeline

04.

Internal Company Review

05.

06.

External Analysis

Competitor Analysis

07.

08.

09.

Sustainable Innovation

Financial Overview

Consumer Analysis

10.

11.

12.

Product Appraisal

Brand Equity

Key Company Insights

13.

14.

15.

Key Marketing Insights

Strategic Proposal

Risk

16.

17.

18.

Conclusion

Bibliograpy

Appendix

EXECUTIVE SUMMARY 01. Introduction

05. External Analysis

09. Consumer Analysis

13. Key Marketing Insights

An introduction to today’s consumer

A PESTLE analysis and Porter’s Five

Segmentation of Helmut Lang’s two

A summation of the key market trends

climate, and the importance of

Forces are used to identify the key

consumer groups, and analysis of their

impacting Helmut Lang’s business

‘organisational purpose’.

external factors affecting Helmut Lang.

buying behaviour.

today, and how the brand should

02. Company Overview

06. Competitor Analysis

10. Product Appraisal

Looking at Helmut Lang as a whole

This chapter looks at Helmut Lang’s

This chapter analyses the different

- its current business structure, its

market position in relation to its key

levels to Helmut Lang’s product.

ability to innovate, strategic drift, and

competitors, with focus on two main

opportunities for growth.

competitors.

03. History and Timeline

07. Sustainable Innovation

Key events in Helmut Lang’s history and a visual timeline.

11. Brand Equity A Brand Resonance Pyramid to

experience, customer relationships and sustainability for Helmut Lang.

15. Risk

Discusses what the business does in

Helmut Lang, and the importance of

This chapter explains Helmut Lang’s

terms of corporate responsibility, and

‘brand culture’.

risk appetite according to the model, and highlights the potential risks of the

12. Key Company Insights 08. Financial Overview

Analysis of Helmut Lang’s internal

Fast Retailing’s financial data and how

structure in terms of the 4 P’s,

this impacts Helmut Lang.

competence.

A strategic management plan to

illustrate consumer’s perception of

Review

customer service and technological

14. Strategic Proposal improve product exclusivity, store

areas for improvement.

04. Internal Company

address these.

strategic management plan.

This chapter highlights the internal business opportunities for improvement.

51%

84%

36%

‘of executives believe that an organisation that has shared purpose will be more successful in transformation efforts.’ (Harvard Business Review, 2015, p.14)

01.

10% 3% Innovation is not a priority for us

Innovation is one of our priorities

Innovation is our primary focus

We value innovation

Figure 1: Global CEO Pulse Survey on Innovation (PWC, 2013)

INTRODUCTION The disruptiveness of today’s business sector, in combination with rising consumer and employee expectations, declining levels of trust within companies, and rapid growth in digitalization (Keller, 2015, p.1), has redefined the way that ‘customer-centric’ businesses must operate. Increased pressure from macro and micro factors, mean businesses must design effective strategic management plans - centred around the needs and wants of their target customer. Strategies should consist of a ‘marketing strategy and a compatible technology strategy and sourcing strategy’ (Kotler and Keller, 2012, p.72), and it is only once this has been implemented, that a business may achieve its goals.

‘Organisational purpose’ (appendix 1) is a key component of a strategic management plan, giving organisations a ‘greater ability to deliver revenue growth and drive successful innovation’ (Keller, 2015, p.1), and businesses must be able to integrate organisational purpose, and articulate clear goals, to their stakeholders, customers, employees and shareholders (Norambuena, 2017). According to the Harvard Business Review Analytic Service, 89% of executives believe embedding purpose into the entire business increases employee satisfaction, whilst 80% also claimed it increases customer loyalty (cited ibid). If companies respond to macro changes without sacrificing their sense of purpose, then they can achieve consistent growth. 4

Laggards

13%

(purpose not well understood or communicated)

39%

Prioritizers (purpose clearly articulated and understood)

48%

Developers

Figure 2: Adapted figure from Harvard Business Review (2005, p.3).

(purpose understood by some areas better than others)

02.

COMPANY OVERVIEW Helmut Lang was an influential, self-taught artist and

purpose and its customer. Following Lang’s departure

designer, who founded his own brand in 1986, and became

from the brand in 2005, the business struggled to

one of the leading innovators in the fashion industry at

maintain such prominence, suffering a drop-in revenue

the time. Lang’s radical, avant-garde approach landed

to a low of $30 million in 2005 (Rotman, 2017). The

the brand at the core of the ‘anti-fashion movement’ in

brand stagnated and fell victim to strategic drift, making

the 90s. The brand experimented with technical fabrics

it more of a ‘Developer’ because, as stated by the

such as textiles mixed with metals, which gave a ‘new

Strategic Drift Model (appendix 3), its incremental

conception to how fashion could be done’ (Bain, 2015).

changes were ‘not enough on their own to remain in touch’ (Harvard Business Review, 2015, p.3) with the

The brand’s uniqueness and subversiveness in the 90s,

pace of the digital age. Today, the brand must embrace

made it a ‘Prioritizer’ (Harvard Business Review, 2015,

the ‘grow, change, grow’ cycle, which encourages

p.3) (appendix 2), with a clear understanding of its

responsiveness to the changing consumer climate.

â&#x20AC;&#x153;He was one of the first high-fashion designers to bring the street onto the runway.â&#x20AC;? (Bain, 2015)

C O M PA N Y OVERVIEW

Fast Retailing Co.

In 2005 Prada took full control of Helmut Lang, before selling the business to Link Theory Holdings in 2006. Link Theory Holdings is a fully owned subsidiary of the Japanese textile firm, Fast Retailing Co, who also owns Uniqlo, J Brand, Comptoir des Cotonniers, G.U and Princesse Tam-Tam (FastRetailing.com, 2017). Fast Retailing must split its time and investment between several businesses, which can lead to ‘ineffective decision-making’ (Hudson, n.d), but,

UNIQLO

Comptoir des Cotonniers

Theory

Princesse tam.tam

J Brand

the diversity of their assets also means that the business can easily raise capital for Helmut Lang. Both Link Theory and Fast Retailing’s headquarters are situated in Japan, whilst Helmut Lang’s head office is in New York. According to Helmut Lang’s LinkedIn profile, the business now has a total of 201,500 employees, and five of its own retail stores across the U.S,

PLST

Theory

Figure 3

Japan and China, with an additional three outlet stores in the U.S.

Helmut Lang

The brand is also stocked by multiple retailers who operate both online and on the high street. The CEO of Link Theory Holdings, Andrew Rosen, ‘recognis[ed] the

image to meet the needs of today’s consumer.

need for a transformational change in strategic direction’ (Tutor2u, n.d) for Helmut Lang, and employed Isabella Burley as the editorin-residence, a position which, as opposed to the omnipotence of a creative director, encourages company-wide creative cooperation. A recent press release disclosed that Burley is expected to ‘bring her editorial eye and network of creative talent to influence all departments of the company’ (Phelps, 2017), using her experience from Dazed and Confused magazine to update Helmut Lang’s

The SWOT analysis in figure 4 shows that one of Helmut Lang’s biggest weaknesses is its lack of transparency, since it does not publish a Corporate Social Responsibility report, which is ‘no longer a viable option for this new era of consumers who are savvier than any generation before them’ (ibid). The SWOT also draws attention to an opportunity for the business to expand its global reach, by offering international shipping, and with an estimated 1.61 billion people purchasing goods online in 2016 (Statista, 2017), it is vital that Helmut Lang uses its ecommerce platforms to maximise revenue. 7

Strengths

Weaknesses

Opportunities

Threats

Technologically advanced. Isabella Burley has a creative and techforward vision for the brand.

The real designer isnâ&#x20AC;&#x2122;t behind the brand = loss of brand identity and its originality.

Recognisable marketing style.

The brand has not been consistent, and thus has missed opportunities to build a reputation with young consumer groups.

British pound to fall to its lowest value in 168 years (Hatch, 2016). This affords U.S retailers an excellent opportunity to invest in the UK, since the dollar is currently strong against the pound (1 USD = 0.76).

Ethicality is hugely important to consumers today, with 88% of consumers saying they would be more loyal to a brand that supports social or environmental issues (Sustainable brands, 2015).

Celebrity endorsement - worn by the likes of Rihanna and Kanye West.

Lack of online engagement with customers. No clear Corporate Social Responsibility strategy has been published. Less followers on social media than their luxury competitors.

Offer international shipping on their website. Target a new consumer market. Use technology to improve their supply chain.

If Corporate Social Responsibility becomes mandated by law, like in India, Helmut Lang will struggle to attract customers and succeed as a well respected company. Increased competition from new high fashion streetwear brands.

Transparency with their customers regarding their supply chain. Figure 4

HISTORY

(Webb, 2000)

One of Lang’s first impacts on the fashion industry was

his unprecedented decision to show men’s and women’s collections simultaneously on the Paris fashion calendar, which made these collections the ‘highlight of the fashion calendar’ (Rotman, 2017).

03.

In 1998 Helmut Lang was one of the first fashion houses to relocate to a different continent, moving the company from Vienna to New York. The brand made its mark in the American market by becoming the first to advertise on New York taxi roofs. Following the success of the jeans collection in 1996, ‘the brand’s annual revenue exceeded $100 million’ (ibid), and this soon caught the eye of the luxury house, Prada, who bought a 51% stake in the Helmut Lang company in 1999 (ibid). Prada felt that Helmut Lang was better suited to producing purses and scents, but, this was not in-line with Lang’s vision, and the brand began to stagnate, forcing Lang to leave his own brand in 2005 to pursue his interests in art and sculpture.

In 2010 a fire destroyed part of Lang’s studio, and most of his collections. Lang donated some of the remaining pieces to museums, and shredded others, using them as material for sculptures. Today, this overlap between fashion and art, is central to the works of designers like Alexander Wang and Raf Simons, who have taken inspiration from Lang’s interdisciplinary industrial and erotic pieces. 9

â&#x20AC;&#x153;To comprehend Lang it is critical to understand that he never strove to be a fashion designer.â&#x20AC;? (Rotman, 2017)

10 (Teller, 2008)

(Sperone Westwater, 2015)

(Teller, 2008)

TIMELINE

1987

1977 First studio. Lang opens his first studio designing t-shirts and jackets.

Menswear.

1986

Introduction of the first menswear collection.

1993 Juergen Teller. Collaboration with Juergen Teller on backstage documentation and advertising.

1994 â&#x20AC;&#x153;Hawaiian technoâ&#x20AC;?, high-tech and air-tech collection using new nylon fabrics.

Founded. Fashion designer Helmut Lang created his own brand. Shows his first womenswear collection in Paris. 11

TIMELINE

1995 First underwear and shoe collections. Kate Moss models for Helmut Lang.

1996 First jeans, eyewear and accessories collections. Helmut Lang works with Louis Vuitton to personalise their signature monogram bags.

1998 New York. Shows collections in New York. First designer to live stream a runway show on the internet.

1999 Prada buys 51% stake in the business.

2000 First purfume collection.

TIMELINE

2004 In September 2004, Prada bought the remaining 49% of the company. Helmut Lang chose to continue as creative director of the company, designing the clothes.

2002 Opens made-tomeasure studio in New York.

2005 Lang leaves. Following the Prada takeover, revenue falls from upwards of $100 million to about $30 million. As a result, Helmut Lang leaves his own brand.

2006 Link Theory Holdings Co. Prada sells Helmut Lang to Link Theory Holdings Co.

2017 Celebrity endorsement. Kanye West and Rihanna start wearing Helmut Lang. Isabella Burley starts working as editor for Helmut Lang. Original brand logo is restored. Website and social media are refreshed. Travis Scott X Helmut Lang Collection.

“Without Helmut Lang there would be no Céline, no Raf” (Bernhard Willhelm, 2016)

Moodboard 1

Creative Fashion leader Future thinking Unique Innovative Contemporary Anti-fashion

Values/ Personality/ Character: Substantiators:

Works with the world’s largest apparel manufacturer

Points-of-Parity: Luxury store design Quality products High price points Charity donations

Brand Mantra

“The only company that cares for you”

Points-of-Difference

04. Figure 5: Helmut Lang bull’s eye (appendix 4).

Executional properties/ Visual identity:

Black, white and neutral colours Leather Androgynous

Unique advertising eg. Taxi campaign Brand heritage Avante-garde Bondage-styled products Middle-aged models

INTERNAL COMPANY REVIEW

Figure 6: Adapted from Rogers’s model (Hernandez, 2017) Laggard

Innovator

Early Adopters

Early Majority

Late Majority

INTERNAL COMPANY REVIEW According to Rogers’s 1962 ‘Diffusion of Innovation Curve’ (appendix

Growth Matrix, which describes how businesses may expand into

5), in the 1990s, Helmut Lang was an ‘Innovator’ in the fashion

new geographical markets, use different price policies, or in Helmut

industry, taking risks and constantly experimenting, such as when

Lang’s case use new marketing strategies and collaborations to

the brand live streamed its catwalk show online. However, during the

target new consumers (Professional Academy, n.d).

business’s management handovers, it descended along the Diffusion of Innovation Curve.

Isabella Burley’s editorship is predicted to bring a ‘New Era of Helmut Lang’ (Dazed and Confused, 2017), which should re-position the

Helmut Lang’s 2017 revival has been strategized towards re-

brand as an ‘Early Adopter’. The first sign of this can be seen in the

positioning the brand in today’s competitive affordable-luxury market,

new 2017 collaboration with Shayne Oliver, which includes inventive

and targeting the new modern consumer. This type of growth strategy

pieces like the bra-come-purse.

can be described as ‘market development’; a term from the Ansoff

“The time may be right to bring back Helmut Lang, in spirit if not in fact.” (Schneier, 2017)

17 (Vogue, 2017)

Price Product Promotion Place

The ‘4P Marketing Mix’, is a concept that was first developed by E. Jerome McCarthy, and can be used to review Helmut Lang’s internal structure in terms of

INTERNAL COMPANY REVIEW

Product, Price, Place and Promotion (refer to appendix 6).

(Green, 2017)

PRODUCT Menswear Womenswear Accessories Jewellery Shoes American sizing

19 Moodboard 2

$900.00 - $3,000.00 eg. Outerwear Mens leather coat: $2,450.00

Top priced products

Premium priced products

$150.00 - $400.00 eg. Knitwear Womens knitted top $275.00

$400.00 - $900.00 eg. Shoes Mens shoes $645.00

$84.00 - $150.00 eg. Sale items Womens sale top $84.00

Mid priced products

Lowest priced products

PRICE

Price Architecture

(Lang, 2017)

Figure 7: (Hernandez, 2017) Adapted from: (Posner, 2011)

PLACE Inventory

Although Helmut Lang does not ship internationally, the business still believes that its eCommerce platforms are ‘what generates the revenue’ (Helmut Lang, 2017). Whilst ‘most operations are spending 80% of their budgets simply maintaining current infrastructure’ (ibid), Helmut Lang is able to keep inventory costs down by not having distribution centres spread across various countries. The brand still reaches its international consumers through stockists such as End Clothing and FarFetch, and this also means that the business hands over the cost implications and responsibility involved with international shipments and returns, to a third-party company. 21

PLACE S TO R E E N V I R O N M E N T

Moodboard 3

Stockists: UK Stockist: Berlin Flagship store: West Hollywood Store: California Outlet stores: Las Vegas and California

Head office: New York Store: New York Stockists: New York

Stockists: Turkey

Stockists: Saudi Arabia, Dubai, Kuwait

Store: Shanghai Stockists: Hong Kong and China

Fast Retailing head office in Japan Link Theory Holdings head office in Japan HL store: Tokyo

PLACE

PROMOTION Over the years, Helmut Lang’s ‘iconic anti-advertising campaigns’ (Manning, 2017) such as the ‘I Smell You on My Clothes’ installation, have reflected the brand’s ‘stark, minimalistic, artistic and unique’ (Hunger, 2017) identity. Today, Lang’s ‘evasive approach to advertising’ (ibid) is seen less so, with the brand adopting a much more mainstream marketing style. In addition to the ‘4Ps’ it is also important to analyse People. ‘People add value along the entire supply chain’ and are ‘...integral to the service provided by any company’ (Posner, 2011, p.47), and this much is clear from the success of Helmut Lang since the appointment of Isabella Burley. Though Lang’s absence from the brand no doubt detracts from its value, the association with Link Theory Holdings’ reputable CEO, Andrew Rosen, adds value to the business’s reputation. Rosen’s investment into emerging designers such as Rag & Bone, prompted Anna Wintour to say ‘We don’t have a Gucci or LVMH in this country, but in his own way, Andrew is creating a kind of American equivalent’ (ibid).

(Holzer, 1999)

(Oliver, 2017)

TECHNOLOGICAL COMPETENCE Technology enables businesses to streamline their supply chains

a website must express the brand’s identity. When entering Helmut

and improve efficiency, reach large audiences for free, forecast

Lang’s website, a slideshow of photographs captures the visitor’s

trends, and more accurately target customers. However, this is not

attention; immediately communicating the brand’s creative values. The

to say that it does not also present brands with threats. One of these

website is easily navigable, relevant content is communicated clearly,

threats, is the increased competition from online players that brick-

and advertising is kept to a minimum, so that consumers feel part

and-mortar stores have experienced, making it even more difficult

of a luxury online experience. Advcanced web analytics are used to

for brands to differentiate themselves. Since visitors usually take

monitor the performance of their website (appendix 8), with tracking

around ‘two to six seconds to decide whether to stay on a website’

information that allows the brand to see how many times a customer

(Harris, 2017, p.48), a website’s first impressions are crucial, and

has visited the site, ensuring that the website is as efficient as possible. 25

To meet the technology standards set by the likes of Burberry and

Often the intergration of these technologies however, has human

this, especially given that 37% of 25-34 year olds claim in-

Alexander Wang, huge financial investment is required. In 2014,

costs too, with a report by PwC (cited Elliott, 2017) claiming 30%

store technology ‘improves their perception of a brand’ (ibid).

Alexander Wang raised the bar with a high-tech and colour-

of British jobs are ‘under threat from breakthroughs in artificial

changing collection, and to avoid falling behind, Helmut Lang

intelligence,’ which of course, is hugely damaging for the future of

must also invest into new technologies, to satisfy the ever-rising

the world’s labour force, and also has the potential to reduce the

standards of their luxury consumer. Helmut Lang was considered

level of craftsmanship involved in the production of luxury goods.

(Sprout Socal, 2016)

a technological leader in 1998, when the brand live streamed its catwalk show, however, today the concept of live streaming a catwalk show is entirely unremarkable. Indeed, Vetements designed

360-degree

catwalk

show,

which

captivated

the audience of the 2017 fashion week show, and further

Social media has created a place for interaction between brands

pushed the technological boundaries of the traditional catwalk.

and their consumers, and its growth over the last decade has been so immense that today ‘we are “living in”, rather than with media’ (2012 Mark Deuz cited Harris, 2017, p.17). Social media platforms should embrace the three Vs: value, voice, and visibility (ibid, p.94). Helmut Lang’s Instagram has a high level of value, as it is well targeted towards the brand’s millennial consumer, particularly in its use of celebrity endorsement. Its YouTube (The Independent, 2012)

however is pretty much inactive with just 186 subscribers, Facebook is used regularly to provide supporting content to

Technology has transformed the retail landscape, enabling

Instagram, and additional campaign videos. A consistent formal

traditional

omnichannel

and informative tone of voice is used across all platforms,

retail spaces with integrated personalisation, ‘seamless mobile

and although posts do receive comments, there is no sense

payments...’ and ‘...lighting navigation systems that can direct

of dialogue between the brand and its consumers. In terms of

you around’ (Barker, n.d). Burberry’s high-tech flagship store

visibility, Helmut Lang’s social media following is much lower

on Regent Street, uses technology to blur the lines between

than competitors, for example Vetements has an Instagram

digital and physical retailing, and Helmut Lang ought to emulate

following of 2.4 million, whilst Helmut Lang has only 327K.

brick-and-mortar

stores

create

(Now Fashion, 2016)

TECHNOLOGICAL COMPETENCE

YouTube

Facebook

Twitter

Instagram

â&#x20AC;&#x2DC;15.14% drop in engagements per postâ&#x20AC;&#x2122; (Forbes, 2017).

800 million users (Statista, 2017)

(updated weekly) Followers: 82.1K Following: 1,023

(updated weekly)

(updated yearly)

(updated daily)

Likes: 194,495 Followers: 188,692

Subscribers: 186

Followers: 327k Following: 108

A 27

In December 2017, the US senate passed a tax bill, which cuts corporation tax from 35% to 21% (Siddiqui, et al., 2017), a move which will benefit Helmut Lang. However, minimum wage rates in the US are expected to rise to $15.00 per hour (Department of Labour, n.d), which could increase Helmut Lang’s underline costs. Similarly, The Japanese Prime Minister, Shinzo Abe has introduced a

POLITICAL

structural reform plan which includes ‘liberalizing the labour market’ (McBride and Xu, 2017), meaning wages will also rise in Japan, effecting costs for Helmut Lang’s parent company, Link Theory Holdings. Furthermore, America’s withdrawal from the Trans-Pacific Partnership trade deal means US companies must pay trade tariffs, which will add to Helmut Lang’s costs. McKinsey’s apparel report claims this increase in costs, combined with ‘rising labour costs in many traditional manufacturing hubs...’ is likely to make ‘re-shoring more commercially viable for fashion companies in the US’ (McKinsey & Company, 2017).

05.

EXTERNAL ANALYSIS The disruptive nature of today’s consumer climate has forced businesses to re-align their strategic management pathways to respond to the ever-changing external environment. The state of the U.S and Japanese markets are of most relevance to Helmut Lang, both of which can be examined through a PESTLE analysis.

EXTERNAL ANALYSIS

The outlook of the global economy has been ‘clouded by the UK’s decision to exit the EU, the global refugee crisis and a less buoyant Chinese economy’ (Fast Retailing, 2016, p.62) (refer to business cycle in appendix 8). An annual GDP rate at 4% (Partington, 2017), suggests the Japanese economy is expanding, but the chief executive of Link Theory, Ricky Sasaki, believes ‘Japan is

ECONOMIC

not

growing.

There

are

too

many

brands

and

too

much

competition’

(2006).

Nevertheless, a recovery has been predicted for 2018, with forecasts for sales growth figures to reach between 3.5% and 4.5% (McKinsey & Company, 2017, p.223). The main sources of this economic growth will come from ‘emerging market countries across Asia-Pacific, Latin America and other regions’ (ibid), with over 50% of apparel and footwear sales originating outside of Europe and North America (ibid). Strong growth is predicted for the affordable-luxury segment, as ‘more consumers trade down from luxury to affordable luxury and trade up from discount to value’ (McKinsey & Company, 2016). The Deloitte Consumer Tracker reported a ‘three percentage point increase in confidence for the third quarter of 2017’ (Deloitte, 2017). This increase in consumer confidence can be partly attributed to the fall in unemployment figures to 4.3% in August 2017 (Deloitte, 2017). Despite consumer confidence, concerns about rising debt levels mean UK spending on clothing and footwear was down 9.0% in October 2017 (Visa, 2017), as consumers are forced to choose between ‘essential

and

discretionary

purchases’

(ibid).

EXTERNAL ANALYSIS

Fear of terrorism is likely to impact foot-fall into Helmut Lang stores, with a report by UBS (cited Popken, 2016) claiming global tourism spending fell 14% in June 2016, following a spate of attacks in Europe.

SOCIOCULTURAL

Furthermore, the luxury-obsessed Chinese consumer, who would once travel to fashion capitals to take advantage of lower prices, is now ‘increasingly inclined to spend at home’ (Agnew and Handcock, 2017), making two-thirds of luxury purchases domestically (ibid). Nevertheless, the continued expansion of the Chinese middle class who have high disposable incomes, and a desire to ‘showcase their social status’ (Deloitte, 2017), is still driving sales in the luxury market, and so Helmut Lang should continue targeting the Asian market. There has been a shift in consumer interests, with affluent consumers valuing experiences and services over material goods (Dennis, 2017), thus, Helmut Lang will need to work on developing experiential store environments and building brand equity to persuade customers to spend on high luxury price points. According to Euromonitor, Millennials’ expectations of convenience have changed, ‘due to an on-demand culture’ (Malison, 2016), with 39% of consumers asking for home deliveries (Deloitte, 2017) and 45% wanting products and services to be more personalised (ibid). This is in part due to the “Amazon Effect”, and particularly Amazon’s ability to offer same-day delivery, which has raised customer expectations of brands today.

EXTERNAL ANALYSIS

According to data from PWC (2017) 40% of global shoppers prefer to purchase clothing and footwear online, and through technology brands can provide a seamless shopping experience, allowing customers to shop from wherever they are, and from whichever platform they wish. The Porterâ&#x20AC;&#x2122;s Five Forces model shown in figure 8 draws attention to the way in which technology has lowered entry barriers for new brands. Whereby

TECHNOLOGICAL

there were once high capital costs involved with starting a new business, e-commerce now offers a low-cost method of entry. Todayâ&#x20AC;&#x2122;s consumers expect high levels of online customer service, and so retailers must decide which platforms provide the best means of delivering this. Data from Statista (cited Dunn, 2017)(refer to appendix 9), shows that whilst Twitter has gained just 31m users over the past two years, Whatsapp and Messenger have gained over 500m, perhaps making them the most effective means of communication with customers.

EXTERNAL ANALYSIS

The rise of ethically and environmentally-conscious consumers has driven demand for sustainable fashion, with one third of consumers choosing to buy from brands who have a positive social and environmental impact

ENVIRONMENTAL

(Vizard, 2017). â&#x20AC;&#x2DC;Understanding this revolution and adapting to it could be a source of competitive advantageâ&#x20AC;&#x2122; (Marchessou et al., 2014) for brands, and with luxury competitors, like Tome, already launching sustainable collections, it is essential that Helmut Lang also strives for sustainability.

PORTER’S FIVE FORCES

Technology has lowered entry barriers for new entrants. Threat of new entrants

Quality risks incurred with switching suppliers, as well as time spent re-negotiating deals. Fast Retailing has substantial bargaining power, as much revenue is generated from UNIQLO.

Bargaining power of suppliers

New entrants can’t benefit from economies of scale, unlike established companies. New brands can’t compete with Helmut Lang’s strong brand heritage, and thus their profit margins start low.

Flagship stores incur significant capital costs for new entrants, especially in the luxury market.

Competitive rivalry Competitors like Vetements are a threat in terms of their disruptiveness, popularity, and sustainability. Helmut Lang has weak customer service compared to competitors like Acne Studios who offers immediate and personal responses to customers through a ‘live chat’ option. Helmut Lang has a low social media following.

Consumers prefer to spend on experiences rather than fashion, eg. Gym memberships, Netflix.

When consumers purchase products in small amounts and the seller's product is very different from any of its competitors’ (Martin, 2017), buying power is kept low. Consumers have choice when buying Helmut Lang from retailers and department stores.

Few original Helmut Lang garments exist, and this makes it difficult for people to create counterfeit products. Saturation in the high-end streetwear market, with start-up labels selling similar styles for lower prices.

Bargaining power of customers

Threat of substitutes

High consumer expectations in luxury market.

When

looking

Helmut

Lang’s market environment specifically,

Porter’s

five

forces model can be used to identify the factors that impact ‘the competitive power and profitability’ (Posner, 2011, p.70) of the company.

Figure 8: Porter’s Five Forces model (Hernandez, 2017)

(Hernandez, 2017)

06.

A brand perceptual map (figure 9) visualises Helmut Lang’s market position in relation to its competitors in the high-end streetwear/ affordable luxury market. It is no longer enough for luxury brands to compete solely on product quality and high prices, they must also ‘convey a particular symbolic meaning; a story behind the product that can be linked to the consumer’s perception of luxury’ (Seo and Buchanan-Oliver, p.84, 2015). A customer-centric experience will add value to a brand and enhance its desirability, since ‘consumers are not willing to

(Hernandez, 2017)

accept high prices as the only representation of luxury’ (Vecchi, p.58, 2016). Brands should therefore consider attributes such as ‘fashionability’ ‘brand awareness’, ‘technological capability’, ‘price’, ‘social media engagement’ and ‘brand transparency’, when trying to earn a competitive advantage for their business. From the perceptual map, it can be concluded that whilst Helmut Lang’s ‘technological capability’ is relatively high, areas such as ‘brand transparency’ and ‘brand awareness’ need improvement.

COMPETITOR ANALYSIS

Fashionability

Brand Transparency

Brand Awareness 8 Figure 9: Brand perceptual map Adapted from Posner (2011) Based on survey data carried out on 40 people (Hernandez, 2017).

Social Media Engagement

Technological capability Price 35

(Carlotti, 2015)

COMPETITOR ANALYSIS One of Helmut Lang’s most competitive rivals, Vetements, burst onto the fashion scene just three years ago, using conceptual designs and high-profile celebrity endorsement to generate huge popularity and profitability. Whilst most high-street brands use mass-production and low price points to entice customers, Vetements has been able to generate mass ‘hype’ through marketing its brand on scarcity, ‘Vetements have been hot and hard to get hold of since their first collection’ (Plevin, 2016).

Although Helmut Lang does not stock an extensive amount of product on its website, the brand does have three outlet stores, which, in the opinion of Gurum Gvasalia, co-founder of Vetements, is a sign of a brand ‘trying to hide the truth’ (Gvasalia cited Ellison, 2017). Selling unsold merchandise to outlet stores means that the outlets ‘end up with deadstock that they resell to other countries’ (ibid), which can have a huge impact on the value and exclusivity of a brand, as well as on its sustainability. 36

Helmut Lang £225.38 ($295)

Vetements £1290.77

Raph Simons £355

Acne Studios £260

Rick Owens £311.37

J.W Anderson £590

MisBHV £221.90

Alexander Wang Tshirt: £240

LIKE FOR LIKE

100% COTTON TINTED WASH

100% COTTON

BELT LOOPS FADED DENIM RIVETS MADE IN THE USA OF AMERICAN FABRIC

TONAL STITCHING SUBTLE DISTRESSING BELT LOOPS CUT OUT KNEE LEATHER LOGO PATCH WHITE LOGO ON LEG RIVETS

HELMUT LANG

VETEMENTS

100% COTTON BLACK MATTE DENIM BELT LOOPS BUTTONS RIVETS

EXTREME DISTRESSING 5-POCKET DETAIL TONAL STITCHING RIVETS

RICK OWENS

MISSBHV

100% COTTON MID BLUE WASH JAPANESE DENIM COTTON BLEND BRANDED METAL HARDWARE BELT LOOPS LOGO PATCH ON BACK OF JEANS

RAF SIMONS

5-POCKET DETAIL BRANDED RIVETS JACRON LABEL ADDED FOR VINTAGE LOOK

100% COTTON

93 % COTTON 3% POLYESTER 1% ELASTANE GREY FADE WASH 100% COTTON

MADE IN ITALY (CRAFTSMANSHIP)

STAINED GLASS TAPESTRY PRINT DESIGN BELT LOOPS SILVER STUDS

ACNE STUDIOS

J.W ANDERSON

LEATHER BELT LOOPS (100% LAMBSKIN) MADE IN THE USA

ALEXANDER WANG

LIKE FOR LIKE

High brand awareness

Low market share

High market share

COMPETITOR ANALYSIS With expectations of technology rising, businesses

competition, and how businesses outside of the

must deliver instant customer service if they want

fashion industry influence consumer spending.

to ‘grow revenues and profits, while also improving

Millennials today are more interested in experiences

customer

p.14).

than ‘stuff’ - ‘a trend that’s ultimately helping fuel

Competitor Acne Studios has implemented a live

growth of billion-dollar-plus start-ups like Uber,

online chat, which is not just convenient for the

WeWork and Airbnb’ (Saiidi, 2016). As can be

customer, but also makes them feel valued. The

seen from the brand positioning map in figure

Service-Quality Model (see appendix 10), highlights

10, experience-based businesses like Netflix and

how a ‘past experience’ of good customer service,

Spotify have gained much larger brand awareness

leads to an ‘expected service’ (Kotler and Keller,

and market share than Helmut Lang, in much shorter

2012, p.395), and this is why Helmut Lang’s

time periods. To respond to this prevalent consumer

typical customer may be unsatisfied with the lack

desire for experience, Helmut Lang must look at

of engagement from Helmut Lang on social media,

integrating experiential marketing into its business,

and its failure to respond to customer emails.

allowing customers to enjoy positive shopping

satisfaction’

(Deloitte,

2014,

Figure 10: Brand Perceptual map (Posner, 2011)

Low brand awareness

experiences which they can relate back to the brand. Helmut Lang must also recognises in-direct

(Hernandez, 2017)

SUSTAINABLE INNOVATION John

07.

Elkington,

the

Director

‘SustainAbility’,

uses

the

their transparency, and with no information about the companies

term ‘The Triple Bottom Line’ in reference to the fact that a

supply chain on its website, Helmut Lang is worryingly opaque.

‘business does not have just one single goal – namely adding economic value – but that it has an extended goal set which

Customers must instead look to Helmut Lang’s parent company,

necessitates

Fast Retailing, who published a Corporate Social Responsibility

adding

environmental

and

social

value

too’

(1998 cited Crane and Matten, 2010, p.34)(appendix 11).

(CSR)

report

2016,

outlining

the

company’s

sustainability

objectives, which involved the charitable donation of second-hand Though many brands see using expensive sustainable fabrics as

clothing. The report also discusses Fast Retailing’s commitment

the only way of becoming sustainable, there are lots of other, and

cheaper means of promoting sustainability, such as using promotional

Retailing, p.30, 2016) that they carry out on their manufacturers.

ethical

supply

chains,

and

the

‘on-site

inspection’

(Fast

campaigns to change consumer mind-sets. Years of want, need and growth have led to overconsumption and overproduction, and

Some have called for the need for brands to publish a CSR report

Helmut Lang’s outlet stores are a clear example of this. The fact

to be enshrined in law, however, if it were a legal obligation, there is

that the business sells much of its stock on sale, makes products

no guarantee that Helmut Lang would truly incorporate sustainability,

less psychologically valuable to its consumers, which in turn,

since it takes a management who strongly believe in such values,

‘makes it easier to throw them out’ (Gvasalia cited Ellison, 2017).

and all employees working towards them, for it to be achieved.

Much of our perception of a brand’s sustainability comes from

SENDER

ENCODING

MESSAGE

DECODING

RECEIVER

SUSTAINABLE INNOVATION The ‘sender-receiver’ model claims a business ‘must

Some of the brand’s other actions have, perhaps

know what audiences they want to reach and what

unintentionally, also been sustainable. Whilst brands like

response they want to get’ (Kotler and Keller, p.502,

J.W Anderson offer international delivery, Helmut Lang

2012). For Helmut Lang, implementing a sustainable

does not, thereby minimising its carbon footprint. This

strategy directly targets a millennial demographic who

is known as ‘the last mile problem’ which ‘comprises

would ‘spend more on a product if it came from a

of the most costly and highest polluting segments of

sustainable brand’ (Nielson cited Landrum, 2017).

the supply chain in which companies deliver goods

Indeed, the brand has already made some sustainable

to end customers’ (Brown and Guiffrida, 2014). On

inroads. In October 2017, Helmut Lang launched a

the other hand, the brand has several stockists who

campaign called the ‘Artist Series’, which donated 15%

will deliver their products worldwide for them however,

of all proceeds to the charity, Nature Conservancy,

so they are not entirely innocent in this regard. A

which works to conserve the lands and waters of

more sustainable delivery option for Helmut Lang to

the world, perhaps in an attempt to compete with

invest in, would be a click & collect service which

Acne Studios, who is a member of the Fair Wear

reduces the amount of delivery vans on the road

Foundation and publishes CSR reports regularly.

stopping at individual houses each day (Doddle, 2017).

Comptoir des Cotonniers, Princesse tam tam and J Brand

SALES BY BRAND

Revenue ¥328.5 billion

+11.3%

GLOBAL BRANDS

Theory

Figure 11: (Hernandez, 2017) Data from: (Fast Retailing, 2017)

Figure 12: (Hernandez, 2017) Data from: (Fast Retailing, 2017)

The total revenue of the luxury market is expected to ‘rise

Fast Retailing is ranked as the third Major Global Apparel

to 254 billion-259 billion euros’ from ‘...249 billion euros

Manufacturer and Retailer, with a total of $16.8 billion

in 2016’ (Bain & Co 2017 cited CNBC, 2017). Across

sales at the end of the 2016 fiscal year, falling just below

the top 100 global luxury companies, growth is highest

Inditex and Hennes & Mauritz (Fast Retailing, 2017).

in the bags and accessories sector at 13.4% in FY2015

08.

(Deloitte, 2017, p.26)(refer to appendix 12), indicating

Fast Retailing operates three business segments: UNIQLO

that in a time of economic uncertainty, consumers are

Japan (46.4%), UNIQLO International (35.9%) and the

perhaps choosing to invest in long-term, staple products,

Global Brand segment (17.6%) (Fast Retailing, 2015).

like handbags which are less effected by seasonal trends.

Helmut Lang is in the Global Brands segment, which had a total revenue of ¥328.5 billion in 2016, up 11.3% year

Helmut Lang is a part of one of the largest apparel manufacturers

on year (Fast Retailing, 2017). Fast Retailing’s Annual Report

and retailers in the world, Fast Retailing Co, who, according to

in 2015 claims a downturn in the U.S luxury market saw

Forbes (2017), has a Market Cap of $31.8 billion as of May

a downturn which knocked profits for Helmut Lang’s parent

2017. Its share price has increased 21.9% in the last year,

brand, Theory. However, in fiscal 2017 Theory has ‘generated

making it a profitable option for investors (Bloomberg, 2017).

a significant increase in operating profit’ (Fast Retailing, 2017) because of strong sales and improved profitability.

FINANCIAL OVERVIEW

09. CONSUMER ANALYSIS (Helmut Lang, 2017)

(Kohl, 2017)

Today, two types of Helmut Lang customer exist: the

‘Art Dad’, who prefers to shop from the latest on-trend

original 90s diehard Helmut Lang fan, and the new

brands, but also desires brand heritage. Off White’s recent

fashion-conscious ‘urban creative class’ (Cartner-Morley)

ART DAD capsule collection shone light on this consumer

of 2018.

group, who have a ‘relentless creative drive’ (Allwood, 2017) and a desire to uphold a unique personal style,

The original consumer

making Kanye West the prime example of an Art Dad.

In the 90s Helmut Lang’s bondage-inspired collections

This places the traditional Helmut Lang customer at the

somehow appealed to a T-shirt wearing, jean-loving,

‘Social Belonging’ stage of Maslow’s Hierarchy of Needs,

anti-fashion cult, who at the time were part of the punk

since they are willing to spend more on brands that they

and rave scene. Today, this customer has become a

trust and which allow them to ‘fit in style tribes’ (Posner,

demographic which Dazed and Confused’s calls the 2017

2011, p.116).

“Art Dad”

Pen Portrait

32-45 Music Creative Cultured Well-travelled Wealthy

Pascal Matthias is a forty-two-year-old fashion designer at Dickies, who regards himself as a creative, well-travelled and educated individual. He is originally from New York, but he now lives in London, spending much of his time socialising at exhibitions and hip-hop events. He acts young for his age, and this is perhaps because he is not married and doesn’t have children. In the 90s Pascal was a keen skateboarder, and he used fashion as a form of self-expression and rebellion. Today, most of his inspiration comes from music and art, and he struggles to relate to mainstream fast-fashion brands like Primark, instead he shops from brands like Off White, Helmut Lang and Raf Simons, and one of his biggest style icons is Kanye West. He prefers to stay away from discounted retailers altogether and shop from supermarkets like Waitrose, since he values product quality. Although Pascal grew up in an era before technological innovation, he now relies on technology to carry out his to day-to-day life; using it for work, to stream music, connect with friends, in the design process and photography.

HELMUT LANG

(appendix 13)

‘Communal self-confidence’: customers’ hybrid need for self-worth, achieved both in the act of purchasing itself, and from belonging to a community of like-minded consumers.

Self-actualization: full potential, including creative activities Esteem needs: prestige and feeling of accomplishment

Social belonging: relationships, acceptance, friends, dressing to fit in style tribes

Safety needs: security, safety

Physiological needs: basic life needs

Figure 13: (Posner, 13 Figure ___: Adapted2011, theoryp.116)

The new consumer

(Posner, 2011, p.116) Adapted: (Hernandez, 2017)

The Demand Institute has defined a new group of wealthy

disseminate fashion, style or artistic ideas’ (Rogers 1962

millennials, who have a ‘distinctive consumer mind-set

cited Posner, 2011, p.119).

and propensity for brand engagement’ (cited Deloitte, 2017 p.6), and a high disposable income, allowing them

Figure 13 shows an adapted version of Maslow’s

to buy from brands like Vetements and Alexander Wang.

Hierarchy of Needs, where the level ‘Communal selfconfidence’ has been added to define a stage which more

(Hernandez, 2017)

CONSUMER ANALYSIS

Given that consumer habits tend to differ geographically,

closely resembles that of the new Helmut Lang customer.

with two-thirds of Chinese consumers preferring to buy in-

Characteristics from the stages ‘Esteem’ and ‘Social

store, and European and US consumers preferring to buy

Belonging’ combine to form a stage where purchasing

online (Deloitte, 2017, p.16), Helmut Lang must recognise

decisions are made with the intent of improving self-worth,

that not all wealthy millennials shop in the same way, and

and fitting into a community of like-minded ‘fashionistas’.

thus it is vital to develop different strategies in response to the demands of different locations.

Helmut Lang’s recent revival of re-edition archive pieces has attempted to ‘capture the attention of a whole new

This consumer group also prefers to wear the newest and

generation and appeal to the Lang die-hards’ (Sebra,

most innovative fashion products, and would be defined

2017), with a collection which both reminisces its style

by Everett Rogers’ ‘Diffusion of Innovation’ theory as ‘Early

in the 90s, and meets the needs of today’s consumer

Adopters,’ who are ‘cultural opinion leaders or those that

through its current and on-trend pieces.

Pen Portrait Aliana is a twenty-two-year-old fine art student at university in Hong Kong. Coming from a wealthy family who provide her with considerable financial support, Aliana shops at Alexander Wang, Vetements and Helmut Lang. Aliana has built up a large social media following through advertising her artwork, and posting regular outfit and street-style inspired pictures. Her close-knit group of friends have similar tastes in fashion and art, and regard themselves as fashion innovators, often receiving invites to catwalk shows and other VIP fashion events because of their online reputations. Aliana has been a vegetarian for ten years, and has made lifestyle changes to try and reduce her environmental footprint, but when it comes to fashion, she does not always buy from the most sustainable brands. However, if there was a sustainable streetwear brand, which was also fashionable, she would favour it over competitors.

â&#x20AC;&#x153;The new consumerâ&#x20AC;?

“I cannot emphasise enough the importance of product. It is the key. All the advertising in the world can’t help sell pant that makes your butt look wide, or a dress

”

that makes you feel fat.

10.

(Tom Ford, 2001)

(Hernandez, 2017)

Figures from Barclaycard support the recent trend towards experience over product, with increased spending in restaurants, theatres and cinemas, and decreased spending in department stores, and on vehicles and household appliances (Usborne, 2017). However, whilst consumer experience is vital to growth in today’s market, product remains a priority, since product is the output of the fashion design process – and thus represents a brand’s tangible assets, and what consumers are prepared to trade for money.

PRODUCT APPRAISAL 47

(Hernandez, 2017)

PRODUCT APPRAISAL Product is a ‘brand[s] statement of quality’ (Jackson and Shaw,

for shipping will impact their purchasing decision (Hernandez, 2017).

2009, p.87), and as a luxury brand, consumers expect high

Although Helmut Lang does offer free shipping within the U.S, next day

quality in terms of fabric and detail from Helmut Lang. For

delivery costs $25.00, something which is likely to deter consumers

example, a consumer buying the Helmut Lang fur jacket, shown in

who are perhaps looking for last minute outfits.

the conceptual map in figure 15, will expect it to be made from thick durable material that keeps them warm and is long lasting.

A Fashionability Diamond has been re-structured to represent the overall offering of Helmut Lang’s product categories. Unlike the typical

Whilst Helmut Lang is known for its leather products and jeans, it

diamond, which is made up of premium, core, and basic ranges,

is not a market leader in any product range, and according to the

Helmut Lang’s is made up solely of premium products, and whilst

BCG growth-share matrix, the brand sits more comfortably in the

having lower priced basic ranges would not be a strategic fit for the

‘Question Marks’ category, since it is operating in a high growth

Helmut Lang brand, a core product sold throughout the seasons could

market but has little market share (Jackson and Shaw, 2009, p.306).

perhaps help enhance brand awareness in the way that Burberry has

The augmented product includes aspects that add value to a brand’s core product. One of the most significant value-adding elements that brands offer today, and one which has a huge influence on sales, is free next day delivery. Primary data from a survey conducted on 40 people (appendix 14), shows 55.26% of respondents said that paying

Premier Premier Premier

Figure 14: Fashionability diagram

The future transformations that the product will go through, eg. fur jacket:

Potential product Additional factors which make products different to competitors, eg. fur jacket:

• Make from sustainable fabric • Wearable technology

Augmented product

• Respected brand image • Stylish bomber shape jacket

What the consumer expects from the product, eg. fur jacket:

Expected product The qualities of the product, eg. fur jacket:

Generic product

• Faux fur minx • 100% MODACRYLIC • Hood - warmth and rain protection • Zip fastener

Value for money

The core product

Free shipping Next day delivery: $25 Tracking number No international shipping outside of the US

Product quality This describes the purpose of the product eg. Helmut Lang jacket is intended to keep customers warm.

Sizing Colour variants

Warranty • • • •

Service

Styling

Packaging Women’s clothing size range (UK): 4-16 Men’s clothing size range (UK): XS-XXL

• Warmth • Comfort • Fashionable

The majority of products follow a monochrome colour pallette, with the occasional additions of grey, red, pink, yellow, beige, blue, orange and khaki.

Fashionability

eg. Fur jacket has no colour variations

Shipping

Figure: 15 According to Kotler (1998) there are five conceptual levels to a product: the core benefit of the product, generic product, expected product, augmented product and potential product, exemplified for Helmut Lang above.

11. 11.

BRAND EQUITY Brand equity is the cumulative value of a brand’s intangible assets. It has an immense impact on a consumers’ perceptions of brands, brand loyalty, and the ‘prices, market share, and profitability the brand commands’ (Kotler and Keller, 2012, p.265). Helmut Lang’s success in the 90s arose largely from their ability to sell more than just a product. Although primarily, the brand was successful for its innovative collections, it was the way these collections were marketed, what they represented, and how they made consumers feel, that made the brand a market leader. The brand thrives on uniqueness, from their production of spray-painted jeans, to Lang’s decision to rearrange the fashion calendar in 1998, its unique innovations are what made the brand a symbol of ‘the coming age of cool’ (Mower, 2015). Helmut Lang used a ‘raw, stripped-down’ (ibid) and architectural style to attract consumers who were rebellious and saw fashion as a way of self-expression. This is perhaps how the brand holds such an influence today, with collectors such as David Casavant dedicating their time to preserving original Helmut Lang pieces. Lang regularly used the same cast of recognisable models at catwalk shows, to create the sense of a ‘Helmut Lang family’, which emotionally engaged the audience. Vogue claimed audiences often cried when watching Helmut’s “family” walking

(Pinterest, n.d)

in the shows (ibid), and this type of emotional engagement allowed consumers to feel part of the brand, which resulted in stronger brand loyalty. 50

HELMUT LANG LVMH’s chief digital officer, Ian Rogers believes: ‘if a customer doesn’t buy into the culture of the brand, they’re not going to buy the product’ (Rogers, 2017).

51 (Hernandez, 2017)

BRAND EQUITY A Brand Resonance Pyramid has been drawn to illustrate Helmut Lang’s brand equity in terms of the businesses identity, meaning, response and relationships with its consumers (Kotler and Keller, 2012, p.271). The different stages of the model reflect the necessary building blocks for attaining strong brand equity. For example, Helmut Lang’s customer feels a sense of

Resonance:

‘high social status’ when wearing the brand, because the brand Loyal

has established a strong history of innovative products which

Formal

have been ‘cool’ and ‘current’. The Brand Resonance Pyramid also highlights how Lang’s departure, as well as the business’s inconsistency, may cause

Judgements:

Feelings:

consumers to perceive the brand as ‘fickle’ today, potentially

Fickle

High social

affecting its equity. That being said, the positive response

Unique

status

from consumers to Helmut Lang’s ‘re-emergence’ in 2017, is evidence of the true value of the brand’s heritage, a heritage to which Isabella Burley has ensured that the revival stays true, particularly in the re-edition of archive pieces which aimed to ‘activat[e] and solidif[y] Helmut Lang’s heritage’ (Ahmed,

Performance:

Imagery:

High prices

Premium

Good quality

Fashion status

2017). Here Burley can employ her experience with Dazed

Salience:

and Confused magazine to help create coherence: ‘you put a

Broad awareness amongst older members of Generation Y. Strong brand history. Recognisable advertising style (logos on taxis).

magazine together every month with different cover stars and treatments throughout the year, but it still looks like Dazed’ (2017).

Figure 16: Brand Resonance Pyramid (Kotler and Keller, 2012, p.271)

12.

KEY COMPANY INSIGHTS

There are several key opportunities for growth within Helmut Lang’s

evaluation, since, in an article about over-production, Vetements’

business, perhaps the most notable of which is in the area of

founder Guram Gvasalia, pointed out that deadstock-filled outlet

transparency. Transparency allows brands to ‘identify potential

stores often heavily contribute to landfill sites (cited Ellison, 2017).

operational improvements, promote good corporate citizenship...’

Furthermore, pieces bought on discount are usually seen as less

and ‘...reinforce the strength of their brand’ (Deloitte, 2014, p.12),

valuable, which has a psychological impact on a consumer’s

and therefore Helmut Lang must improve this aspect of the business

perception of Helmut Lang, forcing them to question its exclusivity.

by addressing sustainability and ethicality in its supply chain, and

Helmut Lang could look at using Artificial Intelligence to analyse large

sharing these policies with its customers.

amounts of trend data to ensure supply always meets consumer demand, helping to minimise waste and prevent over-production.

McKinsey and Company’s trend predictions for 2018 suggested sustainability will become ‘an integral part of the planning system where circular economy principles are embedded throughout the value chain’ (McKinsey & Company, 2017, p.13). Helmut Lang’s production of real leather is perhaps its least sustainable aspect, since ‘1MG of raw hides yields altogether about 700kg of waste’ (Famielec and Wieczorek-Ciurowa, n.d, p.43), due to minute skin imperfections. Companies like Modern Meadow are developing ways to bio-fabricate leather without harming animals, thereby pathing the way for a more sustainable fashion industry. However, expensive options like these are unviable and instead, Helmut Lang should stick to incremental changes, monitoring consumer’s responses, to assess whether a larger concept would be wellreceived and profitable. The sustainability of Helmut Lang’s three outlets also needs re-

(Hernandez, 2017)

Refer to appendix 15 for further company insights.

13.

(Hernandez, 2017)

KEY MARKETING INSIGHTS After Brexit, the UK will no longer be part of the TTIP’s trade deal

Lang should also consider physical expansion, since data from

with the US, so Helmut Lang must prepare for changes on tariff

Deloitte (2017) shows: ‘two-thirds of Chinese buyers prefer to buy

prices when exporting goods from distribution centres in the US, to

in-store’ (appendix 16), the financial benefits of which would likely

stockists in the UK.

justify the initial capital costs.

The growth of emerging Asian markets, mean consumption has

With consumers today choosing to shop from e-commerce

shifted towards the ‘manufacturing centres of the world...’ and thus ‘...

giants like Amazon, spending in department stores is down 1%

local brands and retailers in China and India are growing’ (McKinsey

(Barclaycard cited Usborne, 2017). When millennials are shopping

& Company, 2017, p.32), meaning increased competition from

in brick-and-mortar stores, they spend most in retailers with an

emerging designers in Korea, India, China and Japan. Terrorism

integrated omnichannel experience that allows them to buy ‘in

in Europe, and the Chinese authority’s clampdown on personal

store when they need to touch and feel the product’ and re-order

shoppers bringing back luxury goods to mainland customers, have

‘online when convenience dictates’ (Deloitte, 2017, p.9). Therefore,

resulted in considerable growth for Chinese domestic shopping,

Helmut Lang must consider how profitable their department store

meaning Helmut Lang could expand further there. Though online

concessions are, and whether investment into a digitally immersive

expansion represents a quick, low-cost way of doing this, Helmut

and experiential store would be a better strategy.

14. STRATEGIC PROPOSAL It’s clear from Helmut Lang’s audit, that the brand needs to deliver a concept which further strengthens its brand equity, giving them a competitive advantage in terms of technological innovation, whilst also increasing transparency, improving sustainability, and generating hype. In terms of Strategic Drift, the business has already made recent transformational changes to introduce the new era of Helmut Lang, and thus incremental changes should now be made to help the brand ‘remain in touch with the external environment’ (Tutor2u, n.d).

HELMUT LANG

Cherish and Kelsea - UK. SEEN BY Maddy Hernandez 2017 @ HELMUT LANG

ket Segmentatio r a M n

Figure 17: Segmentation, Targeting and Positioning model

-32. Millenn e 21 ials Ag .M a

(Hernandez, 2017)

and not readily available to others’ (Zaczkiewicz, 2017),

will have the dual effect of reducing waste and building

exclusivity has never been more important. Today’s on-the-

product desirability.

move millennials tend to stay away from department stores, which they find inconvenient and outdated. Therefore, one of

A move towards sustainability will emphasise the brand’s

the brand’s strategic management proposals is to minimise

mantra: ‘The ONLY company that cares for YOU’.

la ra

ated.

de.

la ra

ensure that consumer demand always meets supply. This

rket Targetin g Ma

Millennials

ivity. Tec us

pt Position nce ing o C ce. Excl ien

re exper sto

today’s millennial customer looking for ‘something exclusive

t, fashio n. L sic, ar mu oy , al. film e l / g m n i arr S g. ied vin ttitu

stores, and limit stock production for new collections, to

Segmenting, Targeting and Positioning

exclusivity has always been central to the industry, and with

Sustainability

ology. Inhn

Helmut Lang should eradicate its deadstock-filled outlet

should have restricted distribution’ (Rosa, 2012, p.4), and

creative in d u str y

Lang should seek more viable, incremental changes.

n in sio fes ro

Since ‘real luxury items cannot be mass-produced and

ibe

supply chains to produce sustainable collections, Helmut

Easy

es sn

Whilst brands like H&M have completely re-organised their

re. Ur b a cultu n li sic s. L

(Mind Tools, n.d).

Sustainab . Educ

among the power-spending Millennials of tomorrow’ (ibid).

ated.

g. Fash ion livin n a ttitud

creative indu str y.

n in sio s e of

e/ wealthy fam om i l y .P inc r

over competitors who use a “one size fits all” approach’

h ig

opportunity to not only grow market share but build loyalty

g. High in orkin co m .W e. ale P M

needs of this consumer, giving them ‘a huge advantage

Travels. So cia

co sciou le

department, an environmental approach gives brands ‘an

lved w i t h Invo m e. u bl n

the brand to tailor its strategic proposal to the specific

-45. Genera e 32 tion Ag

-going

According to Grace Farraj from Nielson’s sustainability

strategy. Millennials are Helmut Lang’s most profitable consumer group for the future, and this model enables

in Berlin.

-savvy. U ech r . T ess. Lib b

its two consumer groups for the implementation of a new

. Educ

the most innovative and conceptual retailers, like Voo store

e. On the m emal o df ve .H an

Positioning model shows how Helmut Lang has segmented

ocial even ss ts nd

its concessions in department stores, limiting stock to only

consciou le

An adapted version of the Segmentation, Targeting and

Dem

anding

STRATEGIC PROPOSAL

Sustainab

Travels. A tte le. b a

Fashionability Brand Transparency on Corporate Social Responsibility

Brand Awareness 8

Figure 18: Updated brand perceptual map to show the new position of Helmut Lang after the implementation of the strategy.

Technological Capability

Social Media Engagement Price

STRATEGIC PROPOSAL For millennials, luxury is ‘more about experience and authenticity rather than monetary value’ (Yeoman and McMahon-Beattie, 2010). To accurately target this new consumer group, Helmut Lang’s strategy must incorporate what millennials value: ‘sharing time together, transparency or realness...’ as well as the opportunity to learn something and do ‘good along the way’ (Hoang, 2017). Therefore, Helmut Lang will improve its store technology, by integrating interactive screens on which customers can watch videos about the craftsmanship involved in the production of garments, which will require Helmut Lang to build better relationships with its suppliers. Michael Porter’s 1980 Value Chain Model (appendix 17), discusses how companies develop a competitive advantage strategy by adding value to their business. Helmut Lang’s new strategies will use ‘technological development’ to manage and process supply chain information and stay current in the new digital era (Mind Tools, n.d). Having closer relationships with its suppliers will require Helmut Lang to make changes to the businesses ‘inbound logistics’, whilst reducing output will require changes to their ‘operations’ (ibid).

58 (Hernandez, 2017)

Strengths

Weaknesses

Opportunities

Threats

Product desirability.

Financial risks.

Consumer disinterest.

Helmut Lang â&#x20AC;&#x2DC;Hypeâ&#x20AC;&#x2122; generated = disruptive for competitors.

No new product range consumers might not engage with the concepts.

Helmut Lang becomes a platform for promoting sustainability.

Sustainability = Stronger brand reputation.

Closer relationships with customers allows the business to better understand their customer.

Reduced brand exposure. Short term falls in revenue.

Increased footfall to stores

SWOT FOR STRATEGIC PROPOSAL

FIVE YEAR STRATEGIC PLAN 2018

2019

2020

2021

2022

Research and Development.

Improve brand image.

Close outlet stores.

Exclusivity.

Store updates.

Build closer relationships with third party members in the supply chain. Educate employees on the businesses entire supply chain process.

Publish an annual report including supply chain information. Reduce the number of department store concessions.

Upcycle deadstock items.

Limit the stock availability in new collections - supply = demand.

Develop film footage, educating consumers on the Helmut Lang story and production process. Storytelling and increased transparency will help consumers feel involved in the brand. Investment into store technology: interactive screens allowing consumers to find out more about the brand and its products.

Capacity

Appetite

Profile

Upper trigger Lower trigger

Profile Profile

Lower limit

Acceptable range for risk

Upper limit

Figure 19: Risk appetite model. (Deloitte, 2017) Adapted by (Hernandez, 2017)

15. RISK

Helmut Lang at present

Risk appetite of strategic proposal

Competition: Off-White

Helmut Lang must learn from the failures of risk

18), which is of course a risk in itself in a company

management that resulted in the 2008 financial crisis,

whose success has been based on its risk-taking.

conducting extensive research into the internal and external risks hat their strategies may present.

Helmut Lang’s recent revamp has seen the business

(High Snobiety, 2017)

develop a ‘healthy’ risk appetite. However, many In the 90s Helmut Lang’s risk appetite was at the

strategies have relied on the brand’s heritage,

upper trigger limit, and their disruptive and experimental

and for Helmut Lang to grow and compete in its

campaigns lead to considerable success. When Link

competitive environment, it must take more risks like

Theory attempted to make the brand more commercial

competitors Off-White and Vetements. Off-White’s

by ‘lowering the prices and making the designs, well,

recent collaboration with Nike was such a risk, as

less like those of Mr. Lang’ (Wilson, 2006), they may

their trainers were styled unusually with a plastic tag,

have felt they were taking less risk, but in reality they

but the risk paid off as the trainers were incredibly

were merely failing to ‘identify, consolidate, and prioritise

popular and received recognition over social media

the risks’ (McKinsey & Company, 2010, p.2), positioning

for being creative and in line with the brand’s unique

it at the lower limit of Deloitte’s 2014 risk appetite model.

identity.

The business was guilty of risk avoidance (appendix

RISK Whilst the reduction of department store concessions might seem like

High

a risk to brand exposure, the brand must remember that people always

Brexit

want what they can’t have, and that limiting the availability of stock will drive product desirability, and satisfy ‘the pronounced desire of Millennials

Terrorism

to have the latest, greatest and most exclusive products’ (Mintel cited

U.S minimum wage increases

Long, 2016). Although eradicating outlet stores may cause a fall in shortterm revenue, it will be compensated by the reduced production costs and expenses of being sold in an outlet store. Additionally, the long-term benefit of predicting demand for stock, rather than mass producing, will

Europe declines following Brexit

increase profit margins since mark-down goods won’t be sold. The environment is likely to change over the next five years, and Helmut Lang must look at external risks outside of its control. The stress test shown

Robotisation

Likelihood Decline of the Asian market

in figure __, draws attention to risks like robotisation, which would likely decrease the level of craftsmanship in Helmut Lang’s supply chain, giving the brand less of a story to share with their customers. Helmut Lang is not yet as rich as other luxury houses, so investment into store technology, comes with financial risk. The development of film footage will be time-consuming and does not guarantee that it will interest today’s

Climate change

busy and on-the-move consumers, who, according to Deloitte (2007) say

U.S financial crash

their luxury purchasing is more ‘episodic than routine’. With 80% of UK consumers wanting brands to increase their level of story-telling (Mortimer, 2015), this is a risk worth taking. Helmut Lang can monitor the risk of its strategy through Enterprise Risk Management, where ‘risks, mitigations, and monitoring activities are explicitly linked’ (Minsky, n.d), enabling businesses

Low Low

High

Impact

to track their tolerance to risk (ibid). The stress test can be related to risk heat map in appendix 19.

Figure 20:

Source: (McKinsey & Company, 2010, p.7)

Adapted by: (Hernandez, 2017)

16.

CONCLUSION

HELMUT LANG

‘In fashion we have to accept that there is an end to success’ (2017), remarks Jean-Jacques Picard, claiming that all brands have a finite life cycle. However, Helmut Lang has, it seems undermined this, showing how strong heritage can aid the revival of a brand, even after many

The only brand that cares for you

years of low profit. This report highlights the relationship between the failure to understand the changing demands of a target customer and strategic drift, which Helmut Lang experienced during Prada’s takeover. A decline, which saw Helmut Lang lose sight of its original identity, and shows where the businesses weaknesses lie, and the opportunities for growth. The traditional 4 P’s marketing theory underestimates the complexity of the new advertisement-cautious, and tech savvy millennial consumer, so this report’s new strategic

SEEN BY

Maddy Hernandez

management plan looks not towards the 4P’s, but to the 4 E’s: Emotion, Experience, Engagement and Exclusivity (ibid), which aim to ‘engage individuals in a deeper, multidimensional way’ (Lusensky, 2011) The restoration of the brand’s original logo, and renovation of the website and social media channels (Sebra, 2017), have received positive responses thus far, but to reassume a leading position at the forefront of fashion innovation, the brand must understand and adhere to the mantra, ‘grow, change, grow’. 64

CONCLUSION ‘Sustainability or responsible innovation is by far the biggest trend in the industry right now’ (Eva Kruse, 2017), and it is important for businesses like Helmut Lang to evaluate suitable and viable ways to achieve sustainability. The Journal of Fashion Marketing and Management suggests

HELMUT LANG

that the industry should move away from the in-out trend culture of fashion, and look at fashion as an art form, focusing on ‘craftsmanship and artisanry’ (Norell et al., 1967, cited Henninger et al., 2016) than seasonality. By reducing the levels of production, and providing customers with in-store videos about the production process and history of each product, Helmut Lang will foreground ideas of craftsmanship and heritage, thus enhancing the luxury experience for consumers, and adding value to their products, whilst also demonstrating their ability to compete on the technological stage – a vital aspect to business in the 21st Century. If implemented, these proposed strategies would have wide-reaching effects on Helmut Lang, allowing it to simultaneously redirect itself towards a sustainable future, whilst also generating, through scarcity, the sort of hype which has proven itself to be central to success in today’s millennial driven industry. The plan would allow Helmut Lang, through several small, incremental changes, to recover the reputation they forged for themselves in the 1990s, and reclaim the value which their products had lost on the shelves of outlet stores for all those years.

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Page 14: Moodboard 1

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Primary photograph “Mass-Production”: Hernandez, M. (2017) Primary photograph Helmut Lang inspired photograph: Hernandez, M. (2017) Page 43: “The Art Dad”: Kohl, F. (2017) OFF-WHITE c/o ART DAD Debuts in Paris. i-D. Available from: https://amuse-i-d.vice.com/off-white-co-art-dad-debuts-in-paris/ [Accessed 18 Dec. 2017]. Kanye West: Helmut Lang (2017) Kanye West and Solange take centre stage in Helmut Lang’s latest campaign. Evening Standard. [online]. Available from: https://www.standard.co.uk/fashion/news/kanyewest-solange-helmut-lang-fashion-a3732936.html [Accessed 18 Dec. 2017]. Page 44: Pen Portrait (The Art Dad)

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Primary photograph: Hernandez, M. (2017)

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Appendix Appendix 1: Organisational Purpose Organisational purpose can be defined as ‘an aspirational reason for being which inspires and provides a call to action for an organization and its partners and stakeholders and provides benefit to local and global society’ (Keller, 2015, p.1). Andrew McFarlane, a Consultant at Prospectus discusses the importance of Vision, Mission and Values as part of defining an organisations purpose. Figure 1 shows the relationship between an organisation’s vision, missions and values, and how these transform into future strategic actions. Helmut Lang can use this theory to design a suitable strategy for the business. Appendix 2: Prioritizer A survey conducted by the Harvard Business Review categorises companies as either Prioritizers, Developers or Laggards. Prioritizers are ‘companies that already have a clearly articulated and understood purpose’ (Harvard Business Review, 2015, p.3,), and Developers ‘do not yet have clearly articulated purpose but are working to develop one’ (ibid) and Laggards are ‘companies that have not yet begun to develop or even think about purpose’ (ibid).

Figure 1: (Mcfarlane, 2012)

Helmut Lang’s change of management from Prada to Link Theory Holdings, has meant the brand has lost its sense of focus, positioning it as a ‘Developer’. With Isabella Burley as the new editor, the brand is trying to develop a new ‘articulated purpose’, in order to regain the position as a ‘Prioritizer’. Figure 2: (Harvard Business Review, 2015, p.3)

Appendix 3: Strategic Drift Model

Appendix

Figure 3 shows The Strategic Drift Model. Strategic Drift can be defined as ‘a gradual deterioration of competitive action that results in the failure of an organization to acknowledge and respond to changes in the business environment.’ (Bonnici, 2015, p.1,)

Helmut Lang has realised that a transformational change is needed to reposition the in brand to today’s market. By employing Isabella Burley as the new editor, the brand hopes her creativity and experience in the industry will help take the business into a new strategic direction.

Figure 3: (Johnson et al., 2008, p.179)

Appendix 4: Bull’s-eye theory ‘A brand’s bull’s-eye provides content and context to improve everyone’s understanding of the positioning of a brand in the organization’ (Kotler and Keller, 2012, p.309). Helmut Lang’s bull’s-eye highlights the brand’s advertising, heritage, products, and use of models as ‘points-of-difference’ (attributes which differentiate Helmut Lang). Whilst ‘points-of-parity’ (benefits that aren’t unique to the brand as they are shared by competitors, but are necessary for Helmut Lang to be considered a luxury brand), are the brand’s store designs, product quality, high price points and recent charity donations. The brand’s ‘visual identity’ is its colour scheme, statement leather pieces, and androgynous collections. The ‘substantiators’ are the evidence that support points-of-parity and points-of-difference, and for Helmut Lang its success is evidenced by the fact that it works with the world’s largest apparel manufacturer. Helmut Lang’s ‘values, personality, character’, can be summarised as future thinking, unique, innovative, contemporary and anti-fashion.

Appendix Appendix 5: Diffusion of Innovation curve ‘Diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system’ (Rogers, 1983, p.5). The Diffusion of Innovation Curve is regularly referred to within the fashion industry to explain how new fashion trends are adopted by consumers and brands.

Appendix 6: Marketing Mix The marketing mix is made up of the strategic ingredients to an effective marketing plan. The original 4P’s marketing mix has been expanded into the 7P’s marketing mix which now includes physical evidence, process and people (Posner, 2011). The reason for this is to emphasise that fashion is not just about product, but is a service industry that provides experience for its customers.

Appendix 7: Helmut Langâ&#x20AC;&#x2122;s website

Appendix

The website publishes policies explaining how the brand uses website analytics track consumer data and improve their marketing and website.

86 (Helmut Lang, 2017)

Appendix Appendix 8: ‘For the past several years, the U.S. has remained in a steady expansion while the rest of the world has experienced greater cyclical fluctuations’ (Hofshchire et al, 2017). The global economy is now expanding more consistently, with a more sustainable path of gradual improvement (ibid). As seen in the business cycle below, the U.S economy is exhibiting signs of a more mature (mid to late) phase of the business cycle, with a low unemployment rate putting pressure on wages which are limiting business profit margins. Although this typically shows signs of positive consumer spending, it is also a ‘mid-to late-cycle transition’ (Hofschire et al., 2017).

(Hofschire et al., 2017)

Appendix Appendix 9: Statista data

(Statista cited Dunn, 2017)

Appendix 10: Service Quality Model Customers form expectations of service based on ‘past experiences, word of mouth, and advertising’ (Kotler and Keller, 2012, p.395), therefore Helmut Lang must ensure that they exceed the level of expected service. The service-quality model shows the ‘main requirements for delivering high service quality’ (ibid).

Appendix Appendix 11: Archie Carrollâ&#x20AC;&#x2122;s four-part model of corporate social responsibility. (cited Crane and Matten, p.53, 2010)

Appendix 12:

(Deloitte, 2017, p.26)

Appendix 13: Pen Portrait inspiration

Appendix

This Helmut Lang poster was inspiration for my visual pen portraits, in terms of composition and colour scheme. I have tried to use Helmut Langâ&#x20AC;&#x2122;s visuals as inspiration throughout my report to ensure that it is inline with the visual identity of the brand.

(Pinterest, n.d)

Appendix

Appendix 14: Survery data A survey for the purpose of this report, conducted on 40 people (Hernandez, 2017).

WHAT DO YOU THINK IS MOST IMPORTANT WHEN SHOPPING FROM A LUXURY BRAND?

WOULD YOU PAY MORE MONEY FOR REAL WOULD YOU PAY MORE MONEY FOR REAL LEATHER? LEATHER?

WHAT DO YOU THINK IS MOST IMPORTANT WHEN SHOPPING FROM A LUXURY BRAND?

I would never buy real leather

None of the above 3% Sustainability 13%

Yes

Brand reputation 11%

Customer Service 0% Price 8%

Product Quality 65%

IF YOU HAVE HEARD OF HELMUT LANG, HOW DID YOU HEAR OF THE BRAND? Other

Through friends/ family From visiting a store

DOES IT BOTHER YOU IF A BRAND DOES NOT OFFER FREE SHIPPING? I haven't heard of Helmut Lang

Social media

No Yes

Seen on a celebrity News or article

Appendix

WHAT AGE RANGE DO YOU THINK HELMUT LANG TARGETS? 16-21

I don't know

WHICH BRAND DO YOU THINK IS THE MOST WELLKNOWN? Acne Studios

Alexander Wang

51-60 60+ 41-50

Rick Owens

22-30

31-40

Vetements

WHICH BRAND DO YOU THINK IS THE MOST FASHIONABLE?

JW Anderson

Acne Studios

Misbhv Raf Simons

Helmut Lang

Alexander Wang

Rick Owens Vetements JW Anderson

Misbhv Raf Simons Helmut Lang

Appendix Appendix 15: Further company insights Helmut Lang’s failure to respond to customer emails and social media messages, supports the notion that the brand needs to re-vitalize its customer service strategy. By investing time and money into developing a technology-based strategy that improves customer satisfaction rates and relationships, Helmut Lang would gain a competitive advantage positioning the brand it ahead of its competitors. According to McKinsey and Company, personalisation is defined as the fourth biggest trend for 2018. Helmut Lang can respond to this by integrating personalisation into its improved customer service strategy, ensuring that it is one of the businesses main purpose-driven goals. One way for Helmut Lang to contend with the level of service in the luxury market, would be through the addition of a live chat on their website, redirecting customers to Whatsapp for further communication with a ‘product genius’ of their choice. This concept would enable customers to receive a more accurate advice, based on a customer’s personality and purchasing history, in turn making customers feel more valued. Appendix 16: This information from Deloitte shows the shopping habits of consumers in Italy, China, US and the UK, with an overview showing that 52.2% of global consumers prefer to shop in store.

(Deloitte, 2017)

Appendix Appendix 17: Michael Porter’s Value Chain In 1980, Porter proposed a ‘general-purpose value chain that companies can use to examine all of their activities’ (MindTools, n.d). This allows companies to see how activities are connected, and how they determine costs and affect profits. ‘Porter described a chain of activities common to all businesses, and he divided them into primary and support activities, as shown below’ (ibid).

(MindTools, n.d)

Helmut Lang is not currently associated with sustainability, so this strategy could confuse customers and cause detatchment from the brand’s identity.

Appendix 18: Risk Culture The diagram to the right highlights the five dimensions to risk.

Appendix Appendix 19: Risk heat map â&#x20AC;&#x2DC;A risk heat map is a tool used to present the results of a risk assessment process visuallyâ&#x20AC;&#x2122; (CGMA, 2013). A heat map represents qualitative and quantitative evaluations of risk probability, and the impact that risk will have on an organisation if it were to occur. For instance, the risk of a financial crash in the U.S can be said to be relatively unlikely (2), but the potential impact on Helmut Lang, if this were to occur, would be (5).

Page 61: Helmut Lang promotional campagn video for new strategy : Hernandez, M. (2017) Photograph inspiration:

(CGMA, 2013)

Madalena Hernandez Student ID: 27617408 Word count: 7,700 ARTD3045 Strategic Issues in Fashion