MP MARKETING PROPOSAL
Source: Veganism (Google, 2019)
VEGAN LUXURY YOANN HUI MAY • 2019
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CONTENTS TREND REPORT Where did we begin?
P.03
What is happening now?
P.04
What does veganism mean?
P.05
Why does it matter?
P.06
Where are we today?
P.07
What needs to change?
P.08
Luxury getting on board with veganuary
P.09-10
What does luxury mean today?
P.11
COLLABORATION A world known department store - Harrods
P.12
How Harrods turns to what is it now?
P.13
Where is Harrods position today?
P.14
SWOT analysis of Harrods
P.15
What is the gap between Harrods and the
P.16
market? How Harrods can make a move from now?
P.17
The next step of Harrods - vegan concession
P.18
Conclusion
P.19
Bibliography
P.20-21
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WHERE DID WE BEGIN? 1949 Leslie J Cross suggested a clear definition of veganism and was clarified as 'to seek an end to the use of animals by man for food, commodities, work, hunting, vivisection, and by all other uses involving exploitation of animal life by man' (The Vegan Society, 2019). 1970s Public recognition of animal rights increased, as the idea of stopping animal exploitation was raised by the animal welfare organisations. In the meantime, the animal right movement slowly expanded, they began to form alliances with interest groups working in related areas, especially those connected with environmental protection. 1975 A period of mobilisation and transformation took place, it made a start to change the animal right movement. The organisations began to work more strategically, the language of rights and liberation being used increasingly since then. They also linked with newer animal advocates who interacted with new ethical contacts. Today, veganism and animal right movement have led to work to influence and raise consumer products and choice. There is now greater awareness of the ethical implications of lifestyle choices, such as diet, household, beauty and other purchases.
1944 A new term called “vegan” was coined by Donald Watson to describe who doesn't eat meat, dairy or eggs. The vegan society had been established.
1964 The society was registered as a charity in August and be transferred to a new charity when it also became a limited company in December 1979. In the meantime, the definition of being vegan has been reshaped as '[…] a philosophy and way of living which seeks to exclude —as far as is possible and practicable—all forms of exploitation of, and cruelty to, animals for food, clothing or any other purpose; and by extension, promotes the development and use of animal-free alternatives for the benefit of humans, animals and the environment. In dietary terms it denotes the practice of dispensing with all products derived wholly or partly from animals.'(The Vegan Society, 2019). And remains so today.
From 1990 The animal right movement marked an era of consolidation and dropping off of the novelty value and impact of animal welfare. Its impacts have been changing popular culture and the diffusion of animal welfare values.
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WHAT IS HAPPENING NOW? Source: Climate change (Google, 2019)
Ethical questions about animal rights and climate change rapidly expanding in different industries such as fashion, food, vehicle, hospitality, and cosmetic in the past decade. Consumers now take to heart what they are using in their lives, the study from GlobalDate with 2000 UK consumers in July 2018 found 51% of survey participants mentioned that they changed their lifestyle for ethical reasons, and 47 % of consumers switched to lead a healthier life.
VEGANISM AND SUSTAINABILITY BECOME A CRUCIAL UNSTOPPABLE TREND IN DRIVING OUR SOCIETY NOWADAYS.
Source: Climate change (Google, 2019)
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WHAT DOES VEGANISM MEAN? According to The Vegan Society, the definition of veganism nowadays is "A philosophy and way of living which seeks to exclude—as far as is possible and practicable—all forms of exploitation of, and cruelty to, animals for food, clothing or any other purpose; and by extension, promotes the development and use of animal-free alternatives for the benefit of humans, animals and the environment. In dietary terms, it denotes the practice of dispensing with all products derived wholly or partly from animals." (The
Source: (Canva, 2019)
vegan society, 2019)
VEGANISM IS EXPANDING IN THE UK 350% increase in the number of vegans in Britain from 2006-2016; 542,000 people said they were vegans in 2016. A survey in 2018 has put the figure as high as 3.5million people. 168,000 Veganuary 2018 participants, of which 60% were under 35, up from 3,300 on its 2014 launch. 185% Increase in vegan products launched in the UK between 2012 and 2016. 54% of UK vegans are under 35, 20% of under-35s in the UK have tried a vegan diet. According to Google Trends, searches for veganism was up to 90% in the UK. The top five most-searched questions on veganism in the UK ask what does veganism mean and what are the arguments for and against to cut out animal products.
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WHY DOES IT MATTER? Source: (Canva, 2019)
’Buying is often an emotional decision, and customer experiences have to trigger the right emotions to get them to buy — and keep buying. When customers are engaged emotionally, they are much more compelled to take the actions that drive business.’ (IBM, 2018).
mentioned ‘Consumers, especially the Millennials (green generation), who are the growth engine of luxury demand, are becoming more and more aware and involved in sustainability issues. Therefore sustainability choices are influencing more than their purchasing behaviours,’ (Banks, L. 2018) Also, the industrial production process is one of the most significant contributors to environmental footprint. There are adverse
Today's market is shifting to emotion economy from attention economy according to the IBM 2019 marketing trends report, and people tend to support a brand or organisation which they have an emotional connection. The main concern for a consumer is not just about how great a product is. However, also what is a brand representing; what a product is made of and a production process as well. Luxury-industry consultant Mario Ortelli
WHY DOES IT MATTER
effects of water, energy and land use. The material mix is one of the significant cases. For example, producing pieces of denim leads to water consumption; the production of natural animal fibres, such as wool, leather and silk, can entail not just unethical farming practices. When it comes to leather, the heavy use of chemicals for tanning is particularly problematic not only for the environment but also for the labourers.
WHAT NEEDS TO CHANGE WHERE ARE WE TODAY
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WHERE ARE WE TODAY? Source: Spider silk - Microsilk (Screeshot from Bolt Threads Website, 2019)
Due to the threats of resources shortage, the problem with landfills, animal right and climate change. A lot of innovative scientists have taken on the challenge of creating sustainable and new materials in the recent decade. San Franciscobased biotech company Bolt Threads creates spider silk without spiders by isolating the proteins and recreating them using yeast and sugar. While pineapple waste, apple peel, mushroom Source: Alexandra K. Vegan Leather Bag (Alltrueist, 2019)
and coffee waste are being used to create Vegan leather. In 2017, vegan designer Stella McCartney collaborated with Parley for the Oceans, and create trainers by using the recovered plastic waste from the sea. Biomaterial, Vegan leather and 3D printing are a growing scene that has started being used in the market.
Source: Adidas 3D printing trainers(google, 2019)
WHY DOES IT MATTER
WHAT NEEDS TO CHANGE WHERE ARE WE TODAY
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WHAT NEEDS TO CHANGE? Source: (Canva, 2019)
Veganism is unstoppably expanding in the world. However, the market is still not up to speed to meet customer's needs. Based on the above topic, I have surveyed with 11 vegans, and the result shows that more than 50% of survey participants said lack of options is one of the challenges to be a vegan in daily life. Even though the new material market is on the growing, there is still a lack of investors in the market. Today, in a competitive economy, in order to substantially grow, ethics is the key leading a brand to success. That is a valuable investment for companies, not just to embed the loyalty of the customer with consistent ethical behaviour and increase positive public image as well as other considerations core to latent investors and current shareholders.
WHY DOES IT MATTER
WHAT NEEDS TO CHANGE WHERE ARE WE TODAY
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LUXURY GETTING ON BOARD WITH VEGANUARY 2001 Stella McCartney established the first vegetarian luxury fashion brand and build into as a core of her business. 2003 she launched the first vegan-friendly fragrance. (refer to source: Vegan Stan Smith) Source: Vegan Stan Smith (Stella McCartney website, 2019)
2016 Luxury vehicles brand - Tesla offered leather-free electric car. Audi, Range Rover, BMW and etc consecutively join this market. (refer to source: Tesla Leather- free electric car )
Source: Tesla leather-free electric car (Google, 2019)
2017 Luxury cosmetic Brand - Hourglass committed to creating its entire beauty line with 100% vegan ingredients in 2020. (refer to source: Hourglass vegan products) 2017 Due to public pressure makes it very clear that they do not want to wear the skins of animals. Luxury fashion brands such as Gucci, Calvin Klein, Giorgio Armani, Ralph Lauren, Hugo Boss, Burberry and Michael Kors consecutively announced they are going cruelty-free.
Source: Hourglass vegan products (Google, 2019)
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LUXURY GETTING ON BOARD WITH VEGANUARY 2017 Zayn Malik (superstar singer) collaborated with a luxury fashion brand Versus Versace launched a collection using vegan leather. (refer to source: Vegan leather collection by Zayn Malik and Versus Versace)
Source: Vegan Leather Collection by Zayn Malik and Versus
2019 Food design studio Bompas & Parr collaboration with a luxury hotel - Hilton created the "world's first" vegan guest suite in London. Bompas & Parr in an attempt to evidence that veganism is "no longer only a dining trend, but can also influence a wider lifestyle choice". (Levy. N. 2019) (refer to source: "world's first" vegan guest suite)
2019 Fashion Brand - Ralph Lauren offered a new collection "The Earth Polo" which production by recycled plastic bottles, and pledge to recycle 170 million plastic bottles by 2025. (refer to source: "The Earth Polo" collection)
Versace (Wmagazine, 2017)
Source: "world's first" vegan guest suite (dezeen, 2019)
Source: "The Earth Polo" collection (Ralph Lauren Wevsite, 2019)
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WHAT DOES LUXURY MEAN TODAY? In a traditional luxury goods market, we often see specific materials being used. Such as fur, leather, silk and wool, it represented high quality, luxe and comfortable. However, the change in society and consumer behaviours created a new definition of Luxury. Alessandra Frega, the author of FG magazine explained it in three aspects ‘Democratisation – Customers of Luxury have grown exponentially, making Luxury more affordable, without implying an intrinsic vulgarisation and the loss of value ; Globalisation – The access to new luxury products from new cultures and markets; Communication – The global mass media development have made us more aware of the diversity and cultural richness of our planet and the many other ways of living (in our Source: (Pinterset, 2019)
societies).’ Frega, A.(2019)
She also mentioned ‘In the future, therefore, luxury brands will have to worry about redefining their products’ quality, setting new higher standards, to keep their “reputation”. In other words, luxury, to be leader, must be “sustainable”, having to worry too much about the welfare of those who work for them.’ Frega, A.(2019)
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A WORLD KNOWN DEPARTMENT STORE Harrods motto is "Omnia Omnibus Ubique" means "All Things for All People, Everywhere" (BBC, 2010) Recently, Harrods has been named as the world's bestperforming luxury department store according to a new study. Research compiled by architects Sybarite and analyst GlobalData, it mentioned that the iconic Knightsbridge store is the strongest performer by sales per square foot. (Bourke, J. 2019). As a leader in the luxury retail industry, it commits to creating a 'world of shops' within Harrods, providing everything from everywhere for everyone. The mainstream attraction of Harrods is not just only the products they are offering, but also the experience of unrivalled service and the permanently and elegant Egyptian interior style. Every year it attracts 15 million visitors across from the world. And Russian, Arabic and Chinese currently are the three main customers in Harrods.
Source: Harrods (booking.com, 2019)
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HOW HARRODS TURNS TO WHAT IS IT NOW?
Source: Harrods (booking.com, 2019)
1849 Charles Henry Harrod established the Knightsbridge store mainly sold tea and groceries.
1883 The store had been rebuilt due to a fire, with the architect Charles William Stephens's help, which into what it is today.
1880 It steadily expanded to a thriving department store and selling everything from medicines to perfumes and clothing to food and attracted wealthy customers.
1985 The store belonged to private ownership by Egyptian-born owner Al Fayed.
1890s It became a public company and had established a bank, and estate agency. It also sold exotic pets until the 1970s.
Today, Harrods is the leader in luxury retail, named the world's best-performing luxury department store with customers travelling from across the world, and employs around 12,000 staff members.
2010 Qatar Investment Authority bought the ownership of Harrods.
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WHERE IS HARRODS POSITION TODAY? RESPONSIBLE
AFFORDABLE
DELUXE
INSUPPORTABLE
Although, Harrods is currently the strongest performer in the industry, I mentioned earlier, society and consumer behaviour frame a modern definition of luxury, ethics is the key that drives future businesses. To better understand the luxury department store market and Harrods position in the UK, I made a market positioning matrix (see diagram above) based on ethics, responsibility and deluxe aspects. Through my research, it clearly shows Harrods as the leader of luxury in the market, but in ethic responsibility aspect, it's behind than its competitors such as House of Fraser and Liberty.
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SWOT ANALYSIS OF HARRODS STRENGTHS In-store customer experience Famous Reputation Reliable Customer loyalty (through rewards Scheme) Strong partnership (Exclusive collaborations) Online engagement (Website, newsletter & social media)
OPPORTUNITIES Promote existing ethical brands/products in the store Increase the younger target age (Millennials and Gen Z) Digital Trunkshows/Preorder System Exclusive pop-up marketing (Windows) Expand the brand
WEAKNESSES Not innovative Focusing on three main customers Lack of ethic responsibility (selling Fur, the signature green plastic bag) Lack of focus on the green generations - Millennials and Gen Z
THREATS Increasing competition (competitors taking over the green generations market eg. Selfridges / Content - new vegan department store) Target market
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WHAT IS THE GAP BETWEEN HARRODS AND THE MARKET? The market positioning matrix and SWOT analysis above, clearly shows Harrods is not up to speed with Corporate social responsibility (CSR) "is how companies manage their business processes to produce an overall positive impact on society (Baker, M. 2004), which includes sustainability, social impact and ethics. And also, the target audience group will be a threat for Harrods, as they are still selling fur in the store, it shows the green generation - Millennials is not their main target audience.
According to Nielsen global online study, the result shows that the green generation - Millennials mentioned sustainability is a shopping priority. (Nielsen, 2015). However, luxury fashion labels which have been performing well lately have a high percentage of sales from Millennials. For example, UBS appraises 65% of Saint Laurent’s revenues to have come from this age group in 2017, as well as Gucci's sales have been estimated at 50% from Millennials (Elven, M. V. 2018). Millennials have become the most powerful consumer group. The biggest competitors to Harrods are Selfridges, new department stores such as Content, which mainly focus on sustainability and ethics, who are taking over this generation market share. Although Harrods is the strongest performer in the today market, due to the above reasons its future is unpredictable.
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HOW HARRODS CAN MAKE A MOVE FROM NOW? To better understand the situation of Harrads, I did primary research in store. During my visit, I found several eco-friendly and vegan brands/products from food to cosmetics, from accessories to clothing. For example hourglass - vegan cosmetic; Vega - vegan shoes; Stella McCartney - vegan fashion brand from shoes, bags to clothing; etc. However, those products are organised within their own categories. The customer can not know unless they look through the ingredient list or they discovered the brand before visiting the store. Based on this issue, I did a survey with 33 customers and staffs in Harrods who are vegan and non-vegan. The key insights of questionnaire as below:
Do you know any vegan product in Harrods? for example: Skincare / Shoes No Yes 0%
25%
50%
75%
100%
If you knew the product was vegan would it have affected your purchase decision? Yes No 0%
20%
40%
60%
80%
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THE NEXT STEP OF HARRODS - VEGAN CONCESSION According to the research I found, I came to the conclusion that there is an opportunity that Harrods can create a vegan concession, to re-organise the vegan and eco-friendly products that already exist in the store. This idea would help Harrods to increase the green generation consumers but also improve its image to move forward to be CSR.
"Now the industry is taking notice, proven by a palpable shift towards sustainable fabrics and mindful production that’s far more than just a trend." - Liberty London (2019)
IDEA BENEFITS Enlarge the current target group (vegan/green generation) Improve the image of ethic and sustainability Influence the current customers (Russian/ Chinese/ Arab) Influence other brands as a leader of its sector Promote and create an awareness of sustainability create positive impacts of social and environmentally
IDEA RISKS Change something that may contradict (fur product/signature green plastic bag) Affect the current target group (Russian/ Chinese/ Arab) Affect some of the partnership
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CONCLUSION Marty Neumeier mentioned in his book - 'The Brand Gap' said "Because as our society has moved from an economy of mass production to an economy of mass customisation, our purchasing choices have multiplied. We've become information-rich and timepoor. As a result, our old method of judging products - by comparing features and benefits - no longer works." (Neumeier, 2003 p.8). Today, customer lack of time to search and compare for purchasing choices, they tend to go to the same brand/store that they trust again and again as long as the shopping experience is positive. One of the main challenges for a vegan to maintain their lifestyle is the availability of items and time according to my survey. This concept is able to help vegans maintain their vegan lifestyle, increasing the current target group, especially vegan and the green generation. While it would close the gap between Harrods and the moving market, moving towards sustainability, although this may be affecting the current consumer (mainly Russian, Arab and Chinese). Through the interview with one of the Arab staff working in Harrods, she said the awareness of ethics and sustainability are lacking in her culture. But people are easily influenced especially by luxury brands and influencers due to the sensitivity of social class. Once seen as a lifestyle choice, vegan products have become perceived not just as beneficial but also as lavish. Today, consumers are willing to invest in ecological value, giving birth to the awareness of modern luxury defined as much by its ethics as by its finish. Brands have to re-define their products to meet the expectations of the customers for the future.
Source: (Canva, 2019)
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BIBLIOGRAPHY Make (2018) Timeless elegance Harrods Superbrands. Available at: https://www.makearchitects.com/projects/harrods-superbrands/ (Accessed: May 15, 2019). Neumeier, M. (2003) The Brand Gap. New Riders Publishing. Nielsen (2015) GREEN GENERATION: MILLENNIALS SAY SUSTAINABILITY IS A SHOPPING PRIORITY. Available at: https://www.nielsen.com/uk/en/insights/news/2015/green-generation-millennials-say-sustainability-is-ashopping-priority.html (Accessed: May 10, 2019). Pownall, A. (2019) Vegan design products will become as popular as vegan food, say designers. Available at: https://www.dezeen.com/2019/02/12/vegan-design-popular-feature/ (Accessed: May 09, 2019). Rapid transition (2019) The vegans have landed. Available at: https://www.rapidtransition.org/stories/the-vegans-havelanded/ (Accessed: May 10, 2019). Settembre, J. (2019) Vegan luxury vacations are the hot new travel trend. Available at: https://www.marketwatch.com/story/vegan-luxury-vacations-are-the-hot-new-travel-trend-2019-02-04 (Accessed: May 09, 2019). Shelton (2018) 'Brands & stands social purpose in the new black', Shelton, . Trotter, C. (2016) How London’s department stores are innovating. Available at: https://www.insider-trends.com/howlondons-department-stores-are-innovating/ (Accessed: May 15, 2019). Vegan Souls Ethical Veganism – Not Just About Food, but a Way of Life. Available at: http://www.vegansouls.com/ethical-veganism (Accessed: May 10, 2019). Vegan trade Journal (2018) https://www.vegantradejournal.com/almost-half-of-uk-vegans-made-the-change-in-thelast-year-according-to-new-data/. Available at: https://www.vegantradejournal.com/almost-half-of-uk-vegans-madethe-change-in-the-last-year-according-to-new-data/ (Accessed: May 10, 2019). Vegconomist. (2018) 'Plant-Based Rennet: Vegan Lifestyle Drives Demand', . world animal History. Available at: http://worldanimal.net/brief-history (Accessed: May 16, 2019).