BrandWatch by Michel Gutsatz

Naming: AccorHotels Arena – what is it?

Paris has a multi-sports complex at its eastern entrance that was built 30 years ago - the Palais Omnisports de Paris Bercy. It has just been renovated and the landlord, the City of Paris, has just given it a new name: AccorHotels Arena. The Accor hotel chain acquired a 10-year 'naming' right over it. I propose an analysis of this strategy: Will it be advantageous to Accor?

Let us look at it from two angles:

1. The coherence between the site and the brand - if the sponsor's sector is directly related to that of the site (in this case, sports), the brand will come out a winner. Many insurance companies (for example, Allianz in Nice and Munich, MMA in Le Mans) have invested the sports domain - believing that there is a direct link between practicing a sport and sports insurance. Will not the first reaction of those visiting the Arena be, 'Oh, here's a new hotel!' What relationship is there between sports and the hotel industry?
2. The public's practice of giving their own diminutives to such buildings – in other words, the name by which they are familiarly known. Since 1984 this complex has had two different names:

• Its 'administrative' name, POPB, which is the acronym of its official name;
• The name it is commonly known by: most people call it simply 'Bercy'.

We see in this a two-step move towards simplification: On the one hand, from the Palais Omnisports de Paris Bercy (much too long) to POPB (unpronounceable), and on the other, to 'Bercy'. The public thus gave it a short and simple moniker that also indicates its geographical location. What will be the diminutive of Accor Hotels Arena? The answer is clear – either 'Arena' or 'Bercy'. In all evidence 'Accor Hotels' will simply fall by the wayside and people will pick the simplest name.  

What can we conclude from this? In both cases, the name is ambiguous (is it a hotel? What name should one retain?), compounded by the large logo where the hotel's name takes precedence over the name of the site (Arena). Could there have been another choice? Yes, of course: it would have been much more elegant and effective to call it ARENA by ACCORHOTELS.

Hyundai enters the luxury segment (!): The real story

Hyundai has just announced the creation of a luxury brand, Genesis - whose first two models had until now been marketed under the Hyundai brand: Genesis and Equus. Hyundai here is merely following the business model introduced long ago by Toyota (with Lexus) and Nissan (with Infiniti) and more recently by Citroen (with DS). Japanese brands realised long ago that it is impossible to develop a medium-end brand into a premium or luxury brand: Consumers have a definite concept of car brands and they clearly distinguish the mass market from the premium. This latter segment has been defined and invested by German brands (Mercedes, BMW and Audi) - and it is practically impossible to access it from the lower rungs. Renault lost a lot of money in a vain attempt to develop its brand into high-end sedans (remember the Avantime and the Vel Satis).

However the Hyundai approach is far from being as clear as it claims! "Hyundai did such a good job in executing its Genesis sports sedan and Equus luxury model and subsequent treatment of their owners that the brand had no choice but to spin off its own premium brand", says Michael O'Brien, VP of Corporate and product planning Hyundai America. But this is merely an idealized rewriting a posteriori of the real story.

Hyundai has always been positioned as an entry-level brand. Much work had been done on the design of the cars since 2007 (introduction of the concept of 'fluidic sculpture'), which enabled the brand to position itself at the entry-level end of the medium-end segment with models like Elantra (from $ 14,000 in the US market in 2010) and Sonata (from $ 19,000). Its new design had given the brand an undeniable appeal to Generation Y – in particular when compared to American brands. The consequence was that the brand outperformed the US market by an average of 10% until 2011. Since 2012 however the trend has clearly reversed, Hyundai underperforming in the US market by about 5%. What is this due to?

In 2008 the US subsidiary brought out a strategic document according to which there was a "perception gap" between perceived quality and the actual quality of the brand - and that its perceived low quality "stigmatized" it. It deduced from this that Hyundai had to reposition itself and move up to the luxury segment - and decided to launch two new Genesis models (prices starting at $ 38,000) and Equus (prices starting at $ 58,000). The brand – with a good mid-range image – was torn between the $ 14,000 models and the models over $ 60,000! Consumers no longer understand the brand and move away.

The decision to create a new premium brand is the consequence of this major strategic mistake: One cannot manoeuvre such a move to the upmarket segment except by losing one's customers. Hyundai was thus obliged to create Genesis and market the two models in question under this brand name. Hopefully this wise decision will be positive and that the two brands will be able to develop, each within its own segment.

Ferragamo: the devil is in the details

If there is one message I try to convey through BrandWatch, it is definitely the importance of consistency and attention to detail for a brand.
During a recent trip to China, an Italian friend – a recognized specialist in luxury products and head of a brand himself – stayed at the Waldorf Astoria in Shanghai.  The beautiful bathroom was filled with accessories from Hermès.  So imagine his surprise when he saw another brand next to them: two products from Salvatore Ferragamo.
In fact, for several years now, the Italian brand has been creating a range of perfumes and cosmetics under the name "Tuscan Soul " - a tribute to the Tuscan origins of the brand.  It completed the range last month with the launch of four new fragrances ('the Quintessential Collection') with names evocative of the region such as Violets and Carrara marble. "I wanted to speak of the excellence of Tuscany and Florence through its symbols, representative of art, architecture, purity and beauty", said Massimiliano Giornetti, the Creative Director of the brand.  At an evening, while the soft strains of arias from Puccini's Turandot played in the background... Michele Norsa, CEO of Ferragamo, upheld the idea that perfumes are a wonderful vector for penetrating the Chinese market: "Perfumes are increasingly appealing to consumers in China, which is a market that has a bigger growth potential than other countries".  That was the vision.
Reality, however, lay in the bathroom of a luxury hotel in Shanghai:  a Ferragamo shower cap, and sanitary bags for women.




As my friend wryly said to me: "surely a little marvel in plastic made ​​by Tuscan craftsmen... ".
It's no secret that some luxury brands have decided to create a range of complimentary products in order to be present in luxury hotels patronized by their customers.  Hermès and Bulgari (which has its own hotels) being the most prominent among them.  Their offers, in addition to body and hair care products, often include other accessories as you can see in the Hermès list below.


Among them there is of course the ubiquitous shower cap, and "cotton tips" ... but none of us has yet seen a plastic sanitary bag!
How far should a brand go to promote its products in hotel bathrooms?  Will offering a shower cap and a "sanitary bag" help to sell Salvatore Ferragamo perfumes and cosmetics?  It's highly doubtful, especially when the hotel – which the brand does not control - places the two brands side-by-side.  A study in contrast - one noble (Hermès), and the other plebeian (Ferragamo).  In other words, the Ferragamo products contribute nothing to the image of the brand. Some brands should really clean up their act!

Alexander Wang: stupidity or arrogance?

Alexander Wang - who replaced Nicolas Ghesquière at Balenciaga - has for several years been the darling of the American media. His eponymous brand is growing internationally and has many aficionados, particularly in the USA. Now it has engaged in an exercise in communication that raises eyebrows.

Just before summer, the fans of the brand were asked to participate in an event without knowing for what brand or what they would find. They found themselves before a warehouse - and what followed was filmed by the brand and posted on YouTube.



Here is the part of the film that has since been removed by the brand!

You can see the full version at: http://www.stuff.co.nz/life-style/fashion/8996498/Alexander-Wangs-crazy-giveaway-stunt

It shows the fans of the brand behaving like savages, capable of fighting (it seems that some of them sustained injuries) for a garment, capable of amassing others like the spoils of war.  What we see here is a real scene of pillage: We hear about such scenes every day –during riots (like in France at the Trocadero during the event celebrating the PSG’s victory in the football championships) or during civil wars. These are, however, the young, well-dressed people, well behaved (most of the time), that we first saw waiting calmly in the queue. In a few seconds they turned into savages. All that for free clothes! It is at all possible to walk away from this film with an optimistic view of human nature?

Why did Alexander Wang want this exercise in communication?  I see only two explanations:

• Arrogance: the brand shows that its fans are capable of going to extremes to obtain the clothes it creates – and thereby implicitly shows off its power. The video showing Alexander Wang himself has something about it that reminds one of the first Apple commercial in 1984.
• Stupidity: Alexander Wang is known for his provocative approach and unconventional advertising.  By organizing this event and posting the video on YouTube, the brand shows its fans for what they are: despicable. Which brand today can dare allow itself to say to its best customers: You are despicable?

The clients themselves do not come out of this unscathed.  That said, it is questionable whether this will prevent them from buying Alexander Wang clothes in the future ... How about you?  By the way, what does François-Henri Pinault think of it – a man who, like all men of luxury, is extremely sensitive about his reputation? Was he the one behind the withdrawal of the video?

Gasp! When the internet kills a brand

September 2011 - Melbourne: a client, a bit chubby (size 42), enters the trendy boutique of the Australian brand GASP, with two friends. They're looking for bridesmaids’ dresses and an evening gown for their bachelor girl party. They come across a salesman ('Chris') who, after receiving them well, but seeing that they decided not to buy the dresses they tried on after all, begins to mock them and tell them that the brand does not have clients that size.  Urged on by her friends, the client addresses herself to the customer service of the brand to express her surprise at this treatment. The response of the PR Manager is unambiguous: his reply is that GASP is for a trendy and very fashion conscious customer (implying thereby that the client was not) and that she had been dealing with one of their best salesmen ("retail superstar"), whose only problem is that "he is excellent in everything he does" (implying that the opinion of the client counts for nothing). He then adds, "as you know, talented people in general cannot bear to waste their time, which led him to ask you to leave the store" (so the client made him lose valuable time and should not have come to GASP).
Shocked by this response, the client posted the conversation on the Internet: the uproar that ensued on social networks is easy to imagine.  The buzz spread beyond Australia to ignite the entire Anglo-Saxon world ("I can't believe GASP called themselves fashion forward... Sweetheart you sell polyester dresses u ain't no Prada").  Invited by an Australian television channel, the representative of the brand stuck to his guns as we see in this video:

December 2011: After refusing to apologize to the customer for more than two months, GASP suddenly changed its tune. "This apology is genuine. We would also offer Keara and her friends to come into our stores and pick out a new outfit, and GASP will match the value of that outfit, and we will give it to the Make a Wish Foundation for Christmas”.  The owner and CEO of the brand herself apologized.  Maybe it was as a consequence of this that the store where the incident happened had to close down, boycotted by clients, and the brand had to launch a -90% discount campaign to revive its sales?
Moral: GASP should have adopted the company rules and regulations of the Stew Leonard supermarkets, which contain just two clauses:
Article 1: The customer is always right.
Article 2: If the customer is wrong, reread Article 1.

Shanghai Tang - where is it headed?

I met David Tang in Hong Kong in 1997, during a visit to Shanghai Tang's flagship store in Pedder Street. I was struck by the "emporium"  style of the boutique, combining traditional Chinese jackets and usurped 'Mao' objects. The Independent spoke of it as the era of "high-quality China kitsch".  Richemont had just bought the brand, seeing behind the glibness of the creator an attempt to build a Chinese brand. After several years without a clear direction, it decided to make it the first Chinese luxury brand.  Since 2001 Shanghai Tang projects itself as such. Where does it stand in 2013?
We can only applaud the tremendous work that has been done in terms of style and design under the direction of Joanne Ooi. The boutiques have been modernized and there is, evidently, a stylistic Shanghai Tang identity, in bright colours and dark wood. But is that enough to make it a Chinese luxury brand?


My answer is, on the whole, negative, for two reasons:

1. During my courses on luxury in China (with MBA audiences, where the majority of students represent the main target of the brand - sophisticated young urban Chinese) to the question: "Is Shanghai Tang a Chinese brand?", the answer is always the same: non-Chinese students answer 'yes' and the Chinese say 'no'. The Chinese consider that the style does not correspond to them: too Chinese, too colourful. Foreigners love it and are willing to buy products to take home.
   In the Shanghai Tang boutiques in Shanghai all the vendors speak English. When mystery shopping in luxury brand boutiques in the west of Shanghai, it is clear that most of the sales personnel do not speak English. The Shanghai Tang vendors speak English because their clientele is essentially non-Chinese. I therefore deduce that Shanghai Tang is a Chinese-inspired brand for an international clientele - not a Chinese brand for Chinese clients.

2. One can also question the idea of a ​​"luxury brand". The shops are often poorly maintained: products not properly arranged, non-existent service, decoration showing signs of premature wear. But above all, a misconception of the brand, its history and the themes of the collection by the sales staff, unacceptable at this level. One understands it better when one goes to Shanghai Tang's website where there is no page that gives us this information: even the "World of Shanghai Tang" makes no reference to it. Shanghai Tang is therefore a lifestyle brand with no real history or heritage.

Which means that Shanghai Tang's problem is one of positioning.

A fascinating bit of information confirms that the brand positioning is not what it seems. It currently has 40 shops, including only 19 in China. Thus we see that the development grew first on an international plane before it was constructed on its supposedly "domestic" market.  But more interesting is an analysis of Chinese boutiques: there are 6 boutiques in the centre of town (including 3 in Shanghai), 9 boutiques at airports, and outlets in four hotels (like the Peninsula in Shanghai). This combination again shows that the clients targeted are international travellers - among which the Chinese are probably a minority (but would the brand agree to provide statistics?).
Nevertheless, one point deserves all our attention: the 3 other downtown boutiques of the brand were opened in 2nd tier cities in 2012 (Kunming, Xiamen, Shenyang). This shows that Shanghai Tang has finally decided to take an interest in its "home" market and go in search of a Chinese clientele. This is a very good sign - but the question of style raised earlier, will it not come up again very soon?

LV: a dreary invitation to a voyage

Louis Vuitton has unveiled its new campaign "L'invitation au voyage" – an ad film currently shown in theatres in France. An enigmatic teaser (a woman / a key / a letter / the Mona Lisa...) whetted the appetite of internet users. One could not help but be reminded of the method used by Dior two years ago when it launched the "Lady Dior" series.  When it finally screened, what a disappointment!

A woman and a man as expected - still enigmatic. The Louvre and Paris are there to remind us that LV is a French brand.  A balloon (and the title of the film) evokes, of course, the core value of the brand: travel. But what more does the film tell us?  In short, nothing. Nothing that reminds one of the real world of travel - exoticism, fantasy, trains… - such as those the brand has been using over the last decades (from the oneiric photographs by Jean Larivière to the recent Shanghai Express). Nothing about the codes of the brand or its iconic products (just the faintest glimpse of a trunk).
Uninspiring to the nth degree, much closer to perfume commercials than the multidimensional universe that luxury brands unfurl. A comparison is called for with two of the biggest recent successes: "Lady Dior" and Cartier’s "Odyssey". Here are two brands that have managed to delve into their history and their imagination to present us with authentic creations. Everything that Louis Vuitton’s "Invitation au Voyage" is not.

Once I loved Serge Lutens

I offer you a new "Real Life Story" by Virginie Michelet.  After taking us to the Guerlain Spa of the Trianon Palace and the thermal baths of Saint Malo, she now tells us of her disappointment at Serge Lutens at the Palais Royal in Paris. Luxury brands have a long way to go in terms of customer relations!

by Virginie Michelet

There was a time I used to love Serge Lutens perfumes, the aesthetic advocacy of its brand and boutique at the Palais Royal in Paris. 
It was a musky and dusty summer day.  We strolled along the gallery of the Palais Royal that was, fortunately, in the shade. As usual, I was drawn to the Serge Lutens show window with its perfumes.  It has this 'je ne sais quoi' that is both historical and mysterious, an attractive display midway between the literary and revolutionary fantasy of the eighteenth century and a vision of an olfactory and visionary beyond.  My friend and I entered this kingdom of the senses. The languor of summer gave way to curiosity. Discovering perfumes, smelling them, almost tasting them, we are caught up in a game of bemused seduction, the outcome of which - admittedly - was to buy a perfume. Led by my nose, encouraged by my friend, helped by the assistant accomplice, I walk through forests of Cedars, groves of Myrrh, alleys of Tuberose, lingering to smell the fragrance of Musks and notes of Ginger, losing myself in mazes sprinkled with Vetyver, Violet, Sandalwood, Honey, Rose and Leather. 

Smelling so many fragrances eventually made me feel a bit dizzy, but the time caught up with us and it was time to choose. 

However, I found it hard to decide.  What exactly was I looking for?  What smell buried deep in my childhood? 'Santal Blanc' wins by a nose over 'Encens et Lavande'.  The ritual of purchase completed, pleasure dissipated and we shook ourselves out of this enchantment.  Listless!  After taking just a few steps, back in the harsh light of summer, I was seized by a horrible doubt.  On my right wrist … I was hit by a sudden realization: I should have chosen 'Encens et Lavande'!  That was it, the fragrance, magical and full of meaning, the perfume talisman, the one that would protect me from the aggressions of the day helping me to refocus on my intimacy.  "Go and exchange it", said my friend. 

I spun around gaily and walked back into the shadows of the Palais Royal and found myself at the door. I turned the handle. In vain. I rang.  There was no answer.  Suddenly, a figure emerged from the bowels of the earth. "Here she is", I said to myself.  Error.  Someone else, a stranger, stood in the door that was ajar.  She barks, "It is closed".  I try to remonstrate, gurgle a few words, profess my desire to exchange my purchase for the coveted one. "It's the special collection, we don't exchange!", in a surly voice. "But ..." "I'm telling you we're closed!".  The slamming of the door plunged me into the hell of non-existence.  But wait, did I imagine it - the slightly triumphant smile of the shrew? Frustration and anger get the better of me. Quick! A Tweet to signal my cruel disappointment to the world.  A rather ridiculous gesture, considering the overwhelming betrayal of which I was a victim.  Since then, the worm has worked its way into the apple.  I regard even the perfumes that I loved such as Féminité des Bois with suspicion. I have not even opened the package purchased that day. 

What was that little phrase from Serge Lutens about luxury? Ah, yes! "Wanting to make luxury is like wanting to be sexy, it's wasted ... or vulgar!"

Kellogg's called into question on “natural”

In October 2011, the Cornucopia Institute (an American activist organization) published a document entitled "Cereal Crimes" - warning consumers about the extensive use of genetically modified cereals and the presence of pesticide residues that are injurious to health in the breakfast products of major brands.

This report might have remained restricted to those concerned by the issue, except that last April, a supermarket in Rhode Island (Green Grocer) decided to withdraw one of the products named in “Cereal Crimes” from its shelves: Kashi cereals from Kellogg's.  Even if they are USDA certified, these contain GMOs.

The retailer placed a notice on its shelf explaining its decision:
"You might be wondering where your favourite Kashi cereals have gone. It has recently come to our attention that 100% of the soy used in Kashi products is genetically modified, and that when the USDA tested the grains used there were found to be pesticides that are known carcinogens and hormone disruptors."

This image quickly spread through the Internet: consumers posted comments on the Facebook page of the brand, used Twitter to condemn the fact that a brand that projects itself as “natural” and certified was not beyond reproach.  They also discovered that the brand is one of Kellogg's - information that cannot be found either on Kashi’s website or its packaging.

One can establish a parallel between this example and the information published by the Detroit Legal News: the growing number of suits filed against the "natural" claims of food brands in the U.S.A.  The most recent concern Ben & Jerry's, ConAgra, Frito-Lay, Kashi, Naked Juice, Snapple and Trader Joe's. The same article tells us that 95% of these complaints are squashed through a monetary settlement in favour of the complainants.
"Recent deceptive advertising suits that have settled include $550,000 paid by the maker of Nutella over claims that its hazelnut spread was a "an example of a tasty yet balanced breakfast" to a $2.5 million fund for a class of consumers who alleged Kellogg's falsely advertised that its Rice Krispies and Cocoa Krispies cereals could support the immune system."
One is able to take the liberty of making such farfetched claims in the U.S. for want of a legal definition of "natural", but the power of the Internet is now compelling food brands to rethink their positions: these examples illustrate the consumers’ growing demand for transparency.

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.