BrandWatch by Michel Gutsatz

Shang Xia creates emotion / not Bulgari

On February 16th, I was invited to the opening of the Bulgari exhibition at the Aurora museum in Shanghai. Entitled "125 Years of Italian Magnificence", the retrospective showcased 600 creations of the Italian jeweller – including the Elizabeth Taylor collection (presented for the first time in China) and jewellery that belonged to the stars, all related to Italian cinema of the 50s and 60s.  A thousand guests pressed forward to reach the canapés and drinks, crowding around a podium where a master of ceremonies finally appeared, to present a list of VIP guests, among them Nicola Bulgari, Maggie Cheung and Kisten Dunst.
Everything was over in 20 minutes, Nicola Bulgari contenting himself with a cursory, "I'm very happy to be here ... go see the exhibition".

Two points are worth noting:

1. Luxury brands need to build their "brand awareness" in China. The most important among them present exhibitions where products are projected with historical evocations and initiations to the codes of the brand.  In Shanghai, for example, "Chanel Culture" was followed closely by a Louis Vuitton exhibition (which I previously wrote about on Brandwatch).
2. One of the cornerstones of luxury brands is emotion: their narrative structure is fashioned to foster a strong emotional relationship with their customers.

But here, Bulgari just makes a stir: no emotion irradiated from the evening, the flat speeches, or the exhibition itself (that resembled all other jewellery exhibitions). The presence of a family member - something that should have been an important event - was nothing but froth; the uninspiring formula has already been seen a 100 times over.  Where was the Italian munificence? Where was La Dolce Vita? Where was Elizabeth Taylor?
In contrast, Shang Xia - to celebrate the first anniversary of its existence - opened its Bamboo House on 16th September 2011: a temporary structure, put up in a historical villa of the 20s, organized around two themes: "Tea" and "Bamboo".  580 hand-made bamboo screens enabled it to configure the space. Two areas dedicated to tea - an interior delimited by bricks of tea, the other outdoors under fine veil, a space for incense and meditation...

Artisans dramatized the expertise of the brand in porcelain and textiles ... No inauguration.  Anyone could, by registering online, enter the Bamboo House: 3,700 attended in a month. Each day the brand organized a private tour for about fifty guests - with music, dinner ... There were 1,500 attendees. Each of these visitors left, replete with a rare emotion, convinced they had had access to a unique brand.
On the one hand banality and lack of imagination – on the other emotion and creativity.  Bulgari has a long way to go before establishing itself as a benchmark brand in China.  Shang Xia, in less than two years, has built itself up as a real Chinese luxury brand: more than 60% of its customers are Chinese.

A bad Renault commercial!

When I saw the new commercial for the Renault Mégane I confess I found myself at a loss:  Why was the vendor speaking in pidgin Franco-German?
I just read, a little belatedly, a column dated 29 October in Monde Magazine which explained that Renault was parodying an Opel commercial "to vaunt the quality of its Mégane ... And it works ...".  According to the article, Renault is happy to have created "a message that can speak effectively of quality, a task that is extremely difficult", and prides itself that one week after its launch the video was watched by 700,000 surfers on YouTube.

I find all this rather upsetting - for two main reasons:

• Choosing Opel as a "benchmark" of German quality is a mistake: Opel, a subsidiary of General Motors, is a brand that is not faring well. The mere fact that Opel was forced to create a commercial in German to remind consumers that it is a German brand, and therefore of impeccable quality, speaks volumes about its complete lack of image. Today, the only German brands associated with German quality are Audi, BMW and Mercedes (and Volkswagen to a lesser extent) and they do not need ads in German to convince their clients (and others) of it.  Renault's choice of Opel speaks volumes about the disarray of the brand.
• The tone of the Renault commercial - with jokes somewhat xenophobic and typically French - is unworthy of an international brand.  Evidently, a huge success on the internet was to be expected - going by the number of times a video is viewed. But this success is by no means the confirmation that Renault is building an image of quality: it is merely the measure of interest that internet users have in something that gives them a good laugh.

For several years now Renault has been in quest of its brand DNA.  There were a succession of slogans:  1986 - Des voitures à vivre (Cars to live for); 1991 - Vive la vie en Renault (Live life in a Renault); 2000 - Créateur d'automobiles (Creator of automobiles).  It was the era of the Avantime and the VelSatis, a time when Renault believed it was creating haute couture in cars.  And now, Renault: la qualité version française (Renault: quality, French version).  In fact, Renault no longer has real brand substance, and so places itself at the mercy of the first ad agency that comes along that convinces it that such a film can endow it with an aura of "quality".  My advice would be to take a closer look at the work that Chrysler is doing to infuse meaning into the "Made in Detroit" label (see my post of March 20), or at the protracted effort made by Audi which has managed, in 20 years, to give real substance to a once-moribund brand.  But then, Audi is a German brand ...

Bernard Gaborit, Organic and Packaging

Bernard Gaborit is one of the most interesting organic brands in the market: a complete and original range of products, a story, and - what is rare - real taste. For a long time its packaging matched the image of the brand:  in a world dominated by white (and blue), here was a cream coloured pack, an important reminder of what the brand is built on - milk cream. In a world full of products stripped of cream, Bernard Gaborit was proud of its real cream.

But, sadly, now the brand has decided to change its logo and packaging. The logo itself has hardly been altered, except for the blades of grass that have been added … no doubt to reinforce the image of milk coming from cows grazing in pastures.  In any case, the grass is absolutely superfluous - it obscures the logo and hides the words 'agriculture biologique' ('organic farming').

 
As for the packaging, it has been radically altered:

• It has lost its cream colour, making way for green and white graphics;
• A naturalistic image of the product has appeared.

Here we see an example of how the identity of brand becomes commonplace, copying all the clichés one attributes to the 'fresh' category - adopting just a flat green background to signify organic.  An original brand, with a slightly old-fashioned packaging, but which proclaimed its taste (based on cream, its founding ingredient) loud and clear, has now become just one of the pack.  What a pity!

 

Lierac: modern or private label?

Lierac just introduced its new corporate identity at the recent Pharmagora exhibition. This is a revolution for a brand whose graphic identity was, so far, quite "reserved".  Nevertheless, one fact has become evident:  with the systematic use of gold and pink, the brand is positioning itself in the high-end women's category.  This is far from the pedigree of the brand - which is rooted in plants and research.   We therefore have a brand - sold in pharmacies - whose graphic codes are the opposite of its position. Inconsistent.




This new identity creates at least as many problems as the old one did - but for different reasons:

We have fallen into a combination of two very different trends heads first:

• A copy of Shu Uemura - a brand that originated in makeup, and which therefore adopts the codes that relate to fashion and style ... where the colours of its universe are instantly recognizable.
  
  
• A copy of the Sephora private label (which was also copied by Lierac for some of its products):
  
  

We immediately understand the instructions given by the brand: "Give us back some modernity!"  Alas, this comes at the expense of the identity of the brand, which, again, forgets its roots and does not highlight what makes it strong.  Anyhow, at least they will not go unnoticed on the white shelves of the pharmacies.

When Will Brands Grasp the 'Social' in Social Media?

You will find here an extract of my forthcoming book "Luxury Retailing" (written with my friend Michel Chevalier) to be published by Wiley.

In a recent A.T. Kearney study (“Socially Awkward Media”, Novembrer 2010) of Interbrand’s Top 50 Global Brands, they analyzed on Facebook 1,115 posts that had 60,570 replies across the top 45 brands, which boast an aggregate total of 70,016,541 fans. The results are fascinating:

• 5 of these brands have no presence on Facebook
• 7 – including Gucci and Louis Vuitton – allow only company initiated conversation
• Only ONE routes fans to an unfiltered Facebook wall – the 45 others initially choose to show consumers and fans a filtered selection of company posts only!

This means that these brands (amongst which are luxury brands) use social media as a variant of traditional marketing: a one-way communication channel – which is digitally irrelevant.
But there is more.
89% of consumer replies on Facebook go unanswered – “Gucci, for example, did not respond to a single consumer reply within the past three months” – and only 11 brands responded to more than one customer!
When brands respond – only 15% of these answers invite further conversation: this means, “we acknowledge you, but please do not bother us!”. This definitely has nothing to do with a conversation, and surely not with learning: this means that most brands do not really want to relate nor learn from their customers. We are a far cry from the 5 phases described earlier – and there is ample room for improvement.
We are once more faced, not only with a fear of loss of control, but with what can be labeled “marketing laziness”: 71% of company posts were promotional – offering discount coupons, free prizes and other amenities!
The 5% of company to consumer posts that engaged discussions are really insightful. They show that there are 3 major techniques – all involving emotional connections – that work:

• Invoking Nostalgia – like discontinued products, history of the brand, etc…
• Engaging in product discussions – and soliciting evaluations or even new colors, flavours, products..
• Rallying around common causes

Luxury brands - who are built on emotional bonding with their customers - have an open boulevard here.

 

 

At last, brands interact with their clients!

Last week I praised the interactive website that Lancôme created in China (rosebeauty.com.cn), while deploring the fact that too few brands were willing to engage in a real dialogue with their customers through social media.  Now here are three examples to reflect on - one that would earn a "Could do Better!", and two that call for a "Bravo!":

• Could do Better:  Three years ago, Clarins launched a "participatory" site called OrSérie - managed by an external service provider and intended to "federate amateurs of everything that's beautiful".  To quote the Web Journal, "OrSérie is for Internet users and bloggers between the ages of 35 to 50, eager to share their discovery of a new boutique spa, an exceptional beauty product, their opinion on the latest haute couture collection, or talk about a recent sojourn in a dream of a hotel".  The visibility of the brand is projected by the "credits" at the bottom of the home page and through the announcement of a big competition. This website is merely a "Beauty and Well-being Journal" – i.e., a space featuring articles from bloggers.  It is therefore an interface that is not interactive in any way – unless you consider that writing articles is interaction. The brand does not intervene, it is not called into question, there is no exchange of ideas... It is just another Web magazine on beauty.
• A (small) Bravo:  At the end of 2010, Migros launched a website that is fully interactive – Migipedia - where consumers are invited to discuss products, ask the brand questions and, recently, to "invent their favourite jam".  A real innovation - but with few takers: the home page displays the last 10 contributions, received over the 5 preceding days.  Migros offers opportunities but does not really maintain a dialogue. The brand is satisfied with just responding to some of the posts.  It takes two to maintain a dialogue.
  
• A (big) Bravo: The MyStarbucksIdea.com - Share Vote Discuss See website:  Here Starbucks customers share their ideas (on products, experiences in coffee shops, collective commitments, discuss among themselves, and with the brand, which commits itself to implementing their ideas. The Starbucks contacts are identifiable and a counter displaying the ideas that were shared and those that were implemented is shown to prove its authenticity. The brand assumes, discusses, listens, commits.
  

The Starbucks website is undoubtedly a model that is exemplary. But it requires a considerable investment in human resources for monitoring, and tangible commitments. At the same time, Disney announced the acquisition of Togetherville - a new social network for children under 10 (and their parents).  Brands such as retail chains will have to follow suit, their customers are expecting it.

Mind Your Ethics!

One after the other, two distributors were called to order on ethical issues: 

1. A report by Mediapart (in French) drew attention to the ethical contradictions of Marks & Spencer:  in 2006 the British brand organized a campaign, "Look Behind the Label" - which was hailed as highly innovative and won many awards. Marks & Spencer highlighted its commitments to fair trade, environmental protection, animal welfare, responsible fishing…  We are now in 2011 and the UK brand seems to have forgotten that responsible and sustainable policy today has to include the human dimension as well: the Mediapart report reveals that the working conditions in the Chinese textile factories manufacturing for M&S are unacceptable. As FashionMag.com reports, "in the Per Una factory, which manufactures skirts for the UK distributor, the workday extends from 8:00 a.m. to 9:00 p.m. or 10:00 p.m., with just two days off … per month; in another factory that manufactures swimwear, the working hours were 7:00 a.m. to 9:00 p.m. with lodging in premises considered as unhygienic".  These commitments – they were indeed innovative in 2006 - are not sufficient today: the Sustainability Index introduced by Walmart in 2009 – which devotes an entire section to "ethical and responsible production" raises new questions such as: "Do you have a process for managing social compliance at the manufacturing level? Do you work with your supply base to resolve issues found during social compliance evaluations and also document specific corrections and improvements?" This campaign was part of the strategic repositioning of a brand in decline - and has certainly achieved its goal.  However the concept of "responsibility" evolves over time: Marks & Spencer needs to revise its commitments.
2. Groupon - the group-purchase shopping site that became one of the Web wonders in just one year - made a strategic error in its advertising choices at the recent Super Bowl.  Promoting "causes" such as the survival of whales, Amazonian rainforests or Tibet, with the backing of stars (including Elizabeth Hurley) Groupon advertised its advantages with off-colour humour: "The people in Tibet are in trouble. Their very culture is in jeopardy... but they still whip off an amazing fish curry", and ended by advising its groupers to buy food in a restaurant!
   Having made honourable amends and rewritten their ads, Groupon is faced with another challenge: wishing to enter the Chinese market, they face an outcry from Chinese netizens drawing attention to these ads!  Even after attributing a part of the uproar to Chinese nationalism, it is clear that Groupon did not measure the direct (USA) and indirect (its entry into the Chinese market) consequences of its campaign.

We are finally entering the 21st century which - as The Scriptorium Company, in its analysis of Megatrends shows - will be an age of accountability. Web Power will only further assure the development of these new ethical rules and the demand for the empowerment of citizen-consumers (as we are seeing today with the 2.0 revolutions in the Arab countries): brands will really have to be irreproachable.

Do Brands know how to use Social Media?

A spate of recent studies ("Social Media in Marketing Mix: Budgeting for 2011, Debra Aho Williamson, e-marketer / "How Engaged is Your Brand?" Alterian 8th Annual Survey / "Why Social Media Projects Fail: a European Perspective ", BSI) tend to prove that brands, whether in Europe or in the USA, do not know how to make use of social media. I propose to take another look at the salient points of these surveys:

1. Brands do not incorporate social media into their overall strategy: all too often they are just used as "one-offs" or driven by a fad ("this is something important so I'm going to do it even if I don't know why", so says another study).  Poor integration into distribution channels, CRM, or customer service, reduces social media to merely a tool for marketing and/or communication.  This shows a basic misconception of the influence that social media can have in building customer relationships.
   
2. Brands continue to consider social media as just another "top down" communication channel: they overlook their very spirit, which is to maintain a conversation. Besides the fact that some of them (including luxury brands) are reluctant to build a relationship as "equals" with their consumers, they do not equip themselves with the tools to track online discussions in which their name is mentioned – although these exist and have proven to be very useful (a member of The Scriptorium Company network is an expert in the matter).
3. The marketing strategy is too often stereotyped, and lacks real personalization of the relationship: this contrasts with one of the mega-trends that The Sscriptorium Company points out in its reports - the need for personalization. They need to go beyond traditional CRM - and build real "personalized consumer journeys".
4. Brands find it very difficult to determine the ROI of their Web initiatives: unlike Internet pure-players where all data is computed, all the brands hailing from the offline sector do not know how to equip themselves with ad hoc measuring tools.
   

The White Paper published last week by The Scriptorium Company ("Case Study: Customer Experience Design for Luxury Brands / Re-engaging with consumers to design integrated customer journeys in the luxury industry") shows how customer relationships have to be placed at the core of brand strategy today. Once it has been defined, "social media", CRM, and communication then become so many tools at the service of customer relationships.

Aaah! The new Starbucks logo...

Decidedly, major American brands are having a rough time managing their graphic identities! After the new Tropicana packaging fiasco in 2009 (read my analysis), and the rapid backtracking on the new Gap logo in 2010 (read my analysis), will 2011 see Starbucks saying mea culpa?
On 5 January (just three days ago!) a recast of its logo was announced by Starbucks - penned by Howard Schultz ("Looking Forward to Starbucks' Next Chapter"):

"…our new brand identity will give us the freedom and flexibility to explore innovations and new channels of distribution that will keep us in step with our current customers and build strong connections with new customers".

In the same blog, its design is explained, in a style that smacks too much of marketing:

"Here we are today. Our new evolution liberates the Siren from the outer ring, making her the true, welcoming face of Starbucks. (...) She stands unbound, sharing our stories, inviting all of us in to explore, to find something new and to connect with each other. And as always, she is urging all of us forward to the next thing. After all, who can resist her? "

The reaction was vehement. The first of the 774 comments in response to the CEO's post was brutal: "Who's the bonehead in your marketing department that removed the world-famous name of Starbucks Coffee from your new logo?".  All the others, like the majority of comments from professionals (such as bnet: "New Starbucks Logo Signals Onset of Brand Worsification"), are in the same vein and say, "Give us back our Starbucks logo".
I am also appalled by the total incomprehension that Starbucks has of the significance of an iconic logo. It plays three roles:

1. It is an identification mark – made even stronger if the brand is an icon.
2. It is a primordial emotional link between the brand and its consumers.
3. A logo is most often binomial, composed of the brand name and a symbol.  Displaying the name is essential (and luxury brands whose logos use ONLY the brand name are proof of this): the name serves as a representation - it invokes a worldview shared by the community built around the object / person / brand. It indicates power - one that allows us to evoke the object, to relate to it with our own interpretations.

 

The new Starbucks logo disregards these factors:

• It drops the name "Starbucks Coffee" – ostensibly with a wish to expand into other categories. But this rejection is also of one of its roots and its history. Starbucks stands emptied of its meaning and turns commonplace. To achieve the desired diversification, simply deleting the word "Coffee" would have sufficed.
• It abandons its identifying form: the "seal"/"label".  By doing so Starbucks rejects the whole discourse on quality and authenticity conveyed by the symbol.
• It abandons one of its two iconic colours, black.  Black is also the colour of elegance, luxury, and it emphasizes the green.  But it is the black/green combination that has been copied all over the world. Starbucks lays the door open to counterfeits that will continue to capitalize on it, thanks to a recollection of the classic image in the minds of consumers.
• The choice of retaining just the Siren again shows a poor judgement that amazes me: consumers do not know who this feminine image is in the centre of the Starbucks logo. In other words, the brand preserves the least identifiable feature of all... and in the end retains only a vague feminine image, devoid of meaning. Is it blindness or arrogance?

Starbucks was smart enough to announce its new logo three months prior to its induction planned for March. Does it mean that they have factored in the eventuality of pulling back?

Customer Experience: United Airlines vs. JetBlue

Two recent examples highlight - in the same industry, airlines – the adverse consequences, in terms of image, of poor management of customer relationships and the role that the Internet and social media can play:
In 2009, Dave Carroll, a Canadian singer, who flew United Airlines, realized that his guitar - although well protected - had been irreparably damaged. He asked the airline to reimburse him ($1200) - which it refused, arguing that his claim was not filed within the 24-hour regulation limit. After 9 months of negotiations and realizing that the company would not acknowledge its error, he composed a song, "United Breaks Guitars", and posted it on YouTube in July. In just a few months more than 6 million visitors had viewed it (today they number almost 10 million).  This song was followed by two others, including one describing the problems he had had with United Airlines' customer service.  In fact, the most remarkable reaction was that of the brand that made his guitar: they presented him with two guitars!

My second example may at first seem very different but I find many similarities between them.

The New York Times tells us that on 9 August, on a JetBlue flight (the low-cost American airline whose unusual media campaigns I have described on BrandWatch), a passenger rose from her seat well before the plane came to a halt, and started to retrieve her baggage from the overhead bins. Refusing to obey the steward's orders to sit down, she insulted him and threw her bag in his face. The steward, Steve Slater, activated the emergency slide and quit the plane, saying that this incident was the one incident too many in his 20-year career. He was arrested later in the day at his home and went on trial for endangering the lives of others by operating the slide.
The Internet unleashed its wrath - coming to the aid of Steven Slater.  The surfers, almost in unison, asked JetBlue to reinstate him and appoint him as … head of customer relations.  Laying the blame on the growing number of incidences of rudeness while flying, they took sides with the steward. Others found posts that Slater had written on forums analyzing the deterioration of relations with passengers after certain airlines started charging for luggage. In the end, employees of the company hailed him as a "hero" – saying they themselves were at the end of their tether.  A "Ballad of Steven Slater" has even been viewed over 100,000 times on YouTube.

After a long silence (in Internet time) and after being pressed for answers several times, JetBlue finally responded on their blog on August 11 by creating a space for discussion called "Sometimes The Weird Things Is About us", where anyone could express their opinion on the Slater case.
In both cases the Internet (and YouTube in particular) played a decisive role in implicating the company.  JetBlue - more reactive than United Airlines – was able to establish a dialogue with its customers and allow them to communicate among themselves. In both cases we see that building a customer relationship is not achieved through training alone, but by a real reflection upstream on the reasons for lack of interest or even conflict … and accepting that this could also be one of the repercussions of the business model of the company.