New Business Models in the Luxury sector

Next session, we will be discussing those new business models developing in the luxury sector, in particular second-hand luxury and luxury for rent.

Read Vestiaire Collective and Armarium cases. Describe the business models: how is value created through these platforms? Conduct a SWOT analysis of both brands. Describe the client profile. What are the competitive advantages of VC and Armarium (ie. study briefly the competitive landscape). What future do you foresee to both models?

You might find interesting reading chapters of the book Vintage Luxury Fashion: Exploring the rise of the Second-Hand Clothing Trade (2018), Palgrave: London, UK. I co-autored two chapters:  Chapter 6 “Emotional and narrative accounts of second-hand Luxury Fashion purchases” and Chapter 12 “Vintage Fashion: A cross-cultural perspective”.

Also interesting regarding second-hand luxury, two posts on my blog: 2017 Trends, Second Hand Luxury and Christie’s on Luxury handbags as an Investment (Feb 24, 2016 based on a conference by Christie’s, really interesting on the value of Hermes vintage bags).

Please reflect also on my interview in Trends&Tendance magazine https://trends.levif.be/economie/entreprises/luxe-a-louer-s-abonner-pour-rever-et-paraitre/article-normal-883707.html

In addition please watch Sebastien Favre CEO of Vestiaire Collective on Youtube.

 

 

Onefinestay: Luxury in the sharing economy

Next session, we will be discussing Onefinestay concept. Onefinestay is a concept of luxury home rentals founded in 2009 in London. When it was acquired in April 2016 by Accorhotels, it was managing around 2600 private homes in London, New York, Paris, Los Angeles and Rome. Visit the webpage https://www.onefinestay.com/, watch Greg Marsh inspiring story on Youtube (below) and read all relevant information you will find on internet. Conduct a SWOT analysis and identify Onefinestay customer segments. Do you think Onefinestay has a product and service strategy adapted to luxury clients? Is it a serious competitor to luxury hotels?

YOOX and Net-a-Porter: The Place to Be?

During this session, we will be discussing the online distribution strategy of Luxury brands. To prepare for discussion, read the case “Is YOOX strategy a little Farfetched?” and the article based on an interview I gave to Trends Tendances April 2017 at

https://trends.levif.be/economie/entreprises/net-a-porter-the-place-to-be-pour-les-marques-de-luxe/article-normal-644781.html

What are the advantages and disadvantages for Luxury brands to be present on these platforms? is there a difference between YOOX and Net-a-Porter? YNAP and Farfetch? Does the YNAP merger makes sense? Should online platforms open brick-and-mortar stores? What is the interest for NAP to develop a media platform?

You might find interesting to watch the following video published by FT on YouTube.

Oberoi Hotels: Extreme personalisation at the heart of Luxury

This week you will discover the true meaning of personal attention and extreme personalisation, at the heart of Luxury. The case of Oberoi hotels is a perfect illustration. Think about the following questions:  How is customer experience orchestrated at Oberoi? What is the relation between customer experience and customer satisfaction? What are Oberoi’s competitive advantages? What strategic and operational factors contribute to Oberoi’s service excellence?

Watch the YouTube video below India by Oberoi (you could refer to our discussion on Taj)

 

TAG Heuer: Digital transformation in Swiss watchmaking

In March 2015, TAG Heuer announced the launch of a connected watch at the Baselworld show. It was considered a paradigm shift in the traditional Swiss watch sector. Describe the challenges that TAG Heuer had to overcome to develop this connected watch. Are connected watches a threat or an opportunity to the (mechanical) Swiss watch sector? To provide rationales to your answers, watch both videos below, the first one introduces TAG Heuer  connected watch in November 2015; the second one introduces the modular 45 watch in March 2017.

Brunello Cucinelli: a lesson from a humanistic businessman

Brunello Cucinelli is an italian luxury house specializing in cashmere. The philanthropic founder Brunello Cucinelli has a humanistic approach to doing business that contributed to build the worldwide recognition of his ethical fashion brand. After reading the case and watching the YouTube video below, explore Brunello Cucinelli website and code of ethics http://www.brunellocucinelli.com/en/home.html.

Are they different from other traditional luxury brands (eg. competitor in cashmere Loro Piana)? In what is Brunello Cucinelli a humanistic business? In your opinion, does this ethical positioning influence consumers’ buying habits? What are the positive and negative implications of building a business on values?

Valuable Resources on Sustainable Luxury

We are not discussing anymore “is sustainable luxury an oxymoron?”… Responsible luxury is luxury. All luxury houses have stringent CSR policies, but several companies apply those rules better than others. In two different sectors, watch the videos on Kering sustainable luxury philosophy and ITC hotels, which is leading sustainable innovations in the hospitality sector.  Last, watch the talks on sustainable luxury at New York Times International Luxury Conference 2016.

The Role of Creative directors at Luxury Houses

Luxury is about… Creativity. In March, we will be discussing the role of creative directors at Luxury Fashion Houses. Read the Insead case “Raf Simons at Dior”. Try to document yourself on the House of Dior. Then think about answers to the following questions: What is the role of a creative director in a luxury fashion house? In your opinion, are creative directors at Dior respectful to Christian Dior DNA? Why such a turnover of creative directors in the luxury industry?

You might find useful watching The Business of Fashion video below:

EDHEC roundtable: Impact of terrorism on French tourism

France has been plagued by terrorist attacks over 2015-2016, in Paris and Nice, two of its most attractive touristic cities. Tourism is central to the French economy. It accounts for 7 percent of France’s GDP, with 83 million visitors a year spending about $38.3 billion.  Following November 2015’s attacks, luxury tourism has faced the steeper decline of all sectors. Many affluent travelers canceled their trips, leaving luxury hotels half-empty. A survey by Travel Leaders Group indicates that France competes with nations that have long standing times of peace like New Zealand, Canada and Japan. For first time since 2011, Paris is not among the top 10 destinations chosen by affluent travelers.

Travelers’ behavior has changed; increasingly, they report waiting until last minute to book a hotel or delay their travel plans. According to three speakers at the roundtable, the French service sector is on its way to undertake profound changes. Hotels and restaurants are more responsive and adaptable than in the past. They work on providing compelling experiences, grounded in French culture and patrimony. Security is in the background.  Influencers showing solidarity with Paris and Nice help revitalize the sector. Among the organizations partaking in the solidarity alliance, Galeries Lafayette broadcasts, on social media and in physical stores, a promotional film on Paris, capturing the emotions yielded by the city.

Thank you to the speakers on October 27th : Jérôme Oddo (Groupe Lucien Barrière), Renaud Scalliet (Best Western Opera Liège Hotel) and Clément Duchatelard (Disney).

 

Pequignet, the unique French luxury watchmaker

Over our last sessions, I referred to the Swiss watchmaking tradition and exceptional craftsmanship. In the next session, I will shade lights on an independent watchmaker, Pequignet, the only French watchmaker. Pequignet Manufacturing facilities and Haute Horlogerie laboratory are located since birth in 1973 in Morteau, French Jura.

Go to Pequignet website: http://en.pequignet.com/. For those of you who understand French, there are interesting documentaries aired on French TV that you will find on YouTube. Watch also this video posted by Pequignet :

In order to feed our discussions, read the case and answer the following questions:

  1. What elements foster authenticity in the Haute Horlogerie sector?
  2. Conduct an analysis of Pequignet situation (SWOT). What challenges does Pequignet face and how does the watchmaker tackle them?

Hermès Strategic consistency

Hermès is one of those brands that is part of our (French) collective culture. Read the document I shared with you and answer to the following questions:

  1. Explain P.Thomas (2011) quote “Hermès’ performance has been driven by strategic consistency since 1837”. Highlight the elements of this strategy.
  2. Many firms operating in the luxury sector, such as Hermès have been family-owned businesses across generations. Identify reasons why family-ownership was dominant until recently.
  3. Explore Hermès digital initiatives and explain how this brand manages to be appealing to your generation without alienating the others.
  4. Explain the reasons behind Shang Xia’s introduction

It is important that you would visit the site Les Ailes d’Hermès and watch the playlist on Hermès contemporary artisan since 1837.

Burberry’s Digital Strategy

In the coming days, we will be discussing Burberry’s digital strategy. You will provide arguments on the value of innovation to Burberry DNA. Also, you will give your point of view on Burberry’s digital transformation and adaptation to changing consumer demands in recent years. Last, you will reflect on the new challenges facing Burberry in the digital world and the actions which should be undertaken to sustain Burberry’s growth.

Watch the Youtube video of Angela Ahrendts as an introduction to Burberry strategy and the art of storytelling:

Arthur Dietrich (EDHEC 2012) on Harley Davidson

On November 5th, Harley Davidson released a video featuring Arthur Dietrich (Edhec 2012). Discover who is Arthur and why he endorses Harley Davidson.

Who are you Arthur?

My name is Arthur Dietrich, I’m an entrepreneur, pro bmx rider and Edhec alumnus (2012).

Why does Harley Davidson associate its image with BMX and yourself?

Since 2009, Harley has been renewing its product range and rejuvenating its brand image. The objective is to be relevant to a younger adult target in terms of design and prices, while keeping the core values, freedom and adventure. In 2012, Harley was looking for an ambassador who could enhance this new brand image. They were looking for a young adult who would own a Harley and would have visibility in action sports (BMX/skate/ motocross etc…). I have fun riding. I was chosen and I couldn’t be happier.

You are a rider, what makes Harley a luxury brand?

Harley is wild luxury; prices are high, the level of customization is at its finest, the number of bikes is limited which increases the level of scarcity. It is a very exclusive brand, which pays attention to details.

Could you tell us more on your collaboration with Harley?

My aim is to endorse the brand through special projects and events in order to help the brand reach their new target. Harley sponsored my world tour in 2013. Also, I am invited at Harley events in order represent the new adult target and I answer to interviews about the new image of the brand.

Watch the latest video (released on November 5th), also the world tour that I did in 2013 :

SHanghai

https://www.youtube.com/watch?v=1aGOYXC-nfI

Tokyo

https://www.youtube.com/watch?v=-JMqCfehWso

Hawai

https://www.youtube.com/watch?v=DcUcM-u0la0

Mexico

https://www.youtube.com/watch?v=eEtOQRsUfV8

New york

https://www.youtube.com/watch?v=if6VL2Iz1qI

Thanks for the interview, you can find more pictures and video on my Instagram @arthurdietrich

 

Nespresso strategy: how to make coffee aspirational?

This week, we will be discussing Nespresso strategy. In your opinion, is Nespresso a luxury product? Analyze the strategy followed by Nespresso in Europe, with a focus on its retail strategy. Should it be adapted for the US market?

In order to provide sound rationales, please watch the Youtube video embedded below.

The Blonde Salad business

In November, we will be discussing the emergence of blogs in the luxury communication arsenal. Explain the phenomenon The Blonde Salad. Identify the opportunities and risks of these blogs for luxury brands. What make luxury blogs complementary to other digital communication tools?

Watch the CBS news on Chiara Ferragni business as well as the Youtube interview embedded below.

http://www.cbsnews.com/news/chiara-ferragni-fashion-blogger-became-8-million-dollar-business/

The strategic role of Porsche online communities

In the coming days, we will be discussing the role played by online communities in luxury brand strategies, illustrated by the launch of the Porsche Cayenne SUV. Be prepared to discuss: Explain what makes Porsche an iconic brand. Does Cayenne fit with Porsche identity? What role did online communities play in Porsche strategy regarding Cayenne ?

In order to discuss the case, visit www.Rennlist.com and www.porsche.com; Also, watch the 2015 commercial for Porsche Cayenne Turbo S embedded below:

 

 

Kering cares for digital customers

On October 14th, we will be discussing the Kering group digital strategy. Read the case and be prepared for discussion: What are the challenges faced by luxury brands when they engage in e-commerce activities? Evaluate the advantages and disadvantages of the different business models of e-commerce, including the most recent ones.

You will find interesting this link about the Kering Digital Academy at:

http://www.kering.com/en/talent/digital-academy

Watch the Youtube video featuring Federico Barbieri, Kering Digital and Ebusiness manager:

Stella, Substance with Style

This fall, we will shed lights on British designer Stella McCartney and her beautiful mind. We will discuss the case published earlier this year by Harvard Business School researchers, Anat Keinan and Sandrine Crener. Stella McCartney is a pioneer in sustainable fashion. She is the first and only fashion designer committed in excluding leather, exotic skins and fur in all her collections. The brand ethos is rooted in the protection of the environment. In order to complement the case, watch Stella’s interview during WWD 2009 Fashion/Apparel CEO summit (Youtube video embedded below).

Be prepared to defend your position: is socially responsible luxury an internally consistent proposition or a nice oxymoron? What are the (positive and negative) implications of building a business on values? Are consumers’ motivations regarding sustainable luxury always altruistic?

In order to feed your thoughts, read the articles quoted on p.35-p.36. They will be presented in class:

Achabou, M. A., & Dekhili, S. (2013). Luxury and sustainable development: Is there a match?. Journal of Business Research, 66(10), pp.1896-1903.
Cervellon, M-C & Shammas, L. (2013). The value of sustainable luxury in mature markets: A customer-based approach, Journal of Corporate Citizenship, special issue Sustainable Luxury, 52, pp.90-101

Cervellon, M-C (2013). Conspicuous Conservation: Using semiotics to understand sustainable luxury, International Journal of Market Research, Vol 55(5), pp.695-717

The Phy-gital Revolution at FT Luxury Summit, Monte-Carlo

On June 5-7th, Monte-Carlo hosted the 11th FT Business of Luxury Summit, dealing with a hot topic in the industry : “Technology, Legacy and the New Consumer”. Issues discussed by top luxury managers encompassed: the changes in manufacturing processes due to new technologies, the orchestration of the luxury omnichannel experience, and the preservation of brand identity in a social media era. For those who could not attend the summit, the Financial Times shares videos on YouTube.

For further discussion, please have a look at this video “The Phy-gital Revolution: What is Luxury Doing Online to Woo its Consumers?” with Martin Bartle (Global Communications and Ecommerce Director, Agent Provocateur), Ulric Jerome (Partner & Chief Operating Officer, MATCHESFASHION.COM), Chris Morton (Founder & CEO, Lyst) and Nathalie Remy (Partner, McKinsey & Company) at: