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
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Tags: #hotlux, #pumasocial, Alexander McQueen, bloggers, Brasil, Brazil, Coach, conference, customer service, Diane von Furstenberg, digital, Dolce & Gabbana, fashion, fast fashion, Gucci, Hot Luxury, Iguatemi, IHT, IHT Luxury, International Herald Tribune, Lanvin, Marisa, multibrand, online, Prada, Puma, Puma Brazil, Puma Social, retail, Sao Paulo, Sarah Burton, soap operas, Topshop
Sorry Dior, your new online magazine misses the mark
29 FebDior has unveiled a new online magazine in a continuation of its quest for greater digital presence, but unfortunately the result just isn’t fit for purpose.
According to WWD, Diormag.com launches with eight articles to coincide with the fact the number is a good luck charm to the company. It will follow with daily updates based on a variety of content designed to “both entertain and inform”. News from its 30 Avenue Montaigne headquarters will be included, as well as details on its other activities worldwide.
The aim is to tell the backstory of the brand and its products. As WWD’s piece explains, there is therefore also “house lore galore: The site’s introductory letter notes that Christian Dior was so superstitious, he would sew sprigs of lily of the valley into dress linings for luck on the day of his show.”
In theory, it sounds great. But in practice, it unfortunately comes across way too much as corporate spiel than it does anything that closely resembles that of “news” or a “magazine”.
Take this title: “Silver screen stars and fashion icons: femininity as seen by Christian Dior“. From that, I expect a real insight into the women of Dior, why they’ve been chosen, who they are, history of where they’ve come from. Maybe, even hopefully, then some insight into a fresh campaign, at the very least the latest update on one of its ambassadors like Charlize Theron (though the images of her that are provided are beautiful, if not fresh).
Alas, the text intros as follows: “Backstage Dior: the other side of the show coin. Behind the scenes, the action continues. But it’s another film that’s showing here, a more intimate one. Flanking the runway: director Jean-Jacques Annaud’s cast of four hundred. In the wings: Marilyn, Grace, Marlene, Charlize – Dior-ified, brought together through the magic of cinema.” A further three very similar paragraphs follow.
Unfortunately, the only phrase that comes to mind from that is: PR jargon. Or worse yet, utter mumbo jumbo. The team might have hired a “full-time editor in chief, whose identity has not been disclosed”, but the writing doesn’t come close to offering anything slightly resembling that of true magazine editorial quality. Beautiful if it’s on a page about the history of the brand, a piece of text designed to inspire or merely illustrate, but for a blog? (as that’s essentially what this is trying to be). Don’t expect digitally-savvy consumers to embrace it is all I’ll say.
This post on the house’s latest couture show, is much the same. It claims to offer a “look at it”, but the gallery doesn’t actually overly show the collection itself, and the copy, once again, reads exactly like a press release. Or maybe the show notes.
The post on Miss Dior, or Christian’s little sister Catherine, is better, but not by much.
The key thing that’s missing from Dior’s puzzle here, is creating content that’s shareable. Nothing in any of these pieces screams out “share me on Twitter” or “post me on Facebook” (where it has almost 7m fans), although that functionality is, quite surprisingly, built in.
There are some incredible branded content offerings out there from luxury fashion houses: Dolce & Gabbana’s Swide, Mr Porter, not to mention LVMH’s own Nowness, so plenty for Dior to have learnt from. Even Chanel’s very elusive attempts do a better job.
According to WWD, Diormag.com will cover Friday’s Paris Fashion Week show as its inaugural headline event, live-streaming it for the first time too. There’s also plans for blogger Susie Bubble to oversee a feed on Twitter at the same time. In both of those, therefore there may come something of much more value.
The entire concept has real potential, but from a content standpoint, I just hope they start to drive it properly. When you’re a brand as rich as Dior, you are naturally sitting on an enormous bed of information that people want to know, hear and see more of. By all means tell us about the past, but also show us behind-the-scenes, take us into 30 Avenue Montaigne, and give us a sneak peek at what’s coming next.
Either which way, just write it in a straightforward manner… for if you do, we’ll probably start talking about it. And better than that, we’ll also come back again.
***
ps. This piece from The New York Times fashion desk is worth reading: Editing as a brand investment
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Tags: blog, Chanel, comment, content, digital, Dior, diormag, Dolce & Gabbana, editorial, fashion, lvmh, magazine, Mr Porter, Nowness, online, share, swide