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Some more great stories from around the web surrounding all things fashion and digital over the past week:
Over the past couple of weeks I’ve been completely and utterly engrossed in both attending and then writing up everything from the International Herald Tribune’s annual Luxury conference, which was held this year in São Paulo.
I was lucky enough while I was there to spend a few extra days immersing myself in everything to do with how the fashion / retail industry operates – meeting with everyone from ad agencies and local brand owners, to publishers, editors, bloggers and sales assistants. I was blown away.
Here’s an attempt at summarising everything I learnt:
Rising middle class and growth of luxury brands
- Brazil has a rising middle class. There are currently 100m people considered in this category, up from 50m less than five years ago. By 2014, Carlos Jereissati, CEO of Iguatemi, says there will be 120m, or 60% of the population. That’s a lot of growth.
- That and the fact the country has a new sense of economic stability – 7.5% growth in 2010 – remaining relatively unscathed while Europe and the US have weakened in the global crisis, means the luxury industry is thriving here. And the country’s presence on the global stage is only set to increase further as the eyes of the world turn to it in 2014 and 2016 for the FIFA World Cup and Olympics respectively.
- Having said that, São Paulo is the first major city I’ve been to in the world where I don’t recognise most of the stores along the street. In fact, in the malls – where most of the true luxury sits – only 25% of the space currently belongs to international brands. Local designers still rule the roost. But although local consumers are rightfully very attached to that fact, they’re also pushing for more and more of the fashion world on their doorstep.
- Next year will see two new shopping centres: one from JHFS, Cidade’s Jardim group, and another from Iguatemi, the JK mall. International stores are headed out in droves to the latter including: Lanvin, Prada, Dolce & Gabbana, not to mention the first Topshop Brazil.
- A couple of other specific cases: Gucci is planning to have 25 stores in Latin America by the end of 2012. Diane von Furstenberg’s store in São Paulo’s Iguatemi mall is her second most successful in the world, after New York. Sarah Burton of Alexander McQueen had never before been to Brazil but held meetings while in town for the conference to discuss opening a store there soon. Coach will open its first store in Brazil in the new JK mall next spring, but has plans to quickly increase to up to seven stores. CEO Lew Frankfort says he estimates the market to be worth up to $350m per year to them.
Complicated and expensive
- It’s a highly complex market though. There isn’t a culture of multi-brand stores, for instance, the result of sky-high import taxes restricting a regular wholesale model. Most designers entering the market therefore have to do so by opening own-brand stores. Needless to say, that’s quite a risk in what could still be referred to as unknown territory.
- With those import taxes through the roof, everything in Brazil is expensive, not least the fashion. But people still buy. There is an overwhelming desire for access to international labels no matter what the price is. Some stores, like Zara, are getting round this however by also producing in the country. There’s likely to become more of this, although it’s currently the exception rather than the rule.
- An interesting fact: shoppers in Brazil buy on credit; deferred payments in two to three installments is absolutely the norm. According to a few people I spoke to, it provides a false sense of security – they don’t see what they’ve bought as the total price, but rather as the individual installment prices.
Lacking fast fashion but digitally savvy
- In amongst all this new luxury, fast fashion as we know it doesn’t really exist. One couple I spoke to – admittedly both of whom work in the industry and both of whom travel often – buy when they’re abroad. They raid Topshop and H&M and otherwise only spend occasionally when they’re in Brazil. When they do, it’s inevitably on expensive items, but they see these as likely to last. Investment pieces.
- Local stores such as Marisa, who are turning to this faster fashion route, feel it is necessary to educate the middle class consumer they’re targeting. These shoppers are not used to buying ‘fashion’ nor are they used to thinking about ‘trends’, the store’s ad agency explained to me. A heavy proportion of marketing therefore is based around advice, hints and tips.
- The only thing fast about fashion in Brazil is the response seen when actors in the infamous soap operas wear items or bloggers post about them. Where they go, the market follows. Simple.
- Given this is a digital blog, it’s also worth noting this is one of the most digitally savvy consumer markets there is. Period. In fact, I’ve never seen such obsessions with Twitter, Foursquare and Facebook (or local site Orkut).
- One in three Brazilians is currently online, and they spend an average of nine hours connected, said Jessica Michault, online style editor of the International Herald Tribune. Real growth is set to follow however as the internet infrastructure improves – things are currently being put in place on a national scale to enable widespread broadband access for instance.
E-commerce versus service
- What’s interesting though, is the complete lack of e-commerce acceptance there is in the marketplace so far. Why? In the main part, because of customer service. I have never seen anything like it – not only do the shop assistants actually speak nicely to you, but everyone is treated like a VIP. Suzy Menkes, fashion editor of the IHT, told a great story at the conference about Tom Ford saying his role model for service in opening his first New York store was Brazil’s most upmarket one, Daslu.
- On top of the service aspect however, consumers in Brazil are used to shopping as a truly social experience. Friends hit the mall in groups, and they continue it back at home, trying on outfits, sharing with others and getting ready en masse ahead of a night out. The interesting thing is, this isn’t restricted to a teenage activity; women of all ages reportedly partake.
- Combining this service and social aspect means two things then: brands coming into this market will really have to up their game (it’ll be interesting to see what Topshop does), but so too will the e-commerce experience need to evolve to get this consumer truly on board. Thinking bigger picture, you could say e-commerce is likely to follow once some marrying between service, bloggers and fast-fashion occurs. There’s definitely business opportunity there.
And finally
- My favourite quote from IHT, came from Diane von Furstenburg. She said: “If Brazilians could put their joie de vivre in a bottle, it would be bigger than Coca-Cola’s”. Just about says it all, not to mention summarises my trip.
- On a truly final note, if you haven’t checked out the local activation of Puma’s After Hours campaign in São Paulo, you should. Run by the team behind by the Brazilian edition of Vice magazine and its counterpart agency Virtue, it’s a brilliant example of turning global creative into experiences specifically relevant to the market at hand. It did so with a variety of events throughout the year that transformed regular nightclubs into old fashioned social clubs; offering games and sports such as table tennis, snooker, darts and more. The outcome was so successful, it opened its own fully operational bar for three months. If you’re visiting, be sure to stop by, it’s there until December 23, 2011.
Enormous thanks to my incredible friend, and tour guide, @carolalt
Coach has launched an interactive online campaign in the build up to Mother’s Day in the US.
“Mother’s Day Stories: You, Your Mom & Coach” encourages consumers to share their Coach-related mother-daughter memories through Coach.com and Facebook.
“Our heritage, your legacy,” runs the tagline.
“We hear so many passionate stories from our customers on the store level, that we wanted to take this opportunity to invite them to engage in our brand message for Mother’s Day and share their Coach memories with us online,” a spokesperson told WWD.
The campaign launches with stories from key fashion insiders including Gretchen Gunlocke Fenton, accessories director at Glamour magazine; Eva Chen, beauty director at Teen Vogue; and Lauren Sherman of Fashionista.com.
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