Friday, July 17, 2009

Track Presentation: How to Continue Building Luxury Brands in a Down Economy

Bette Chabot, former SVP, Marketing, Saks Fifth Avenue
Luisa Uriarte, EVP, Maddock Douglas

Luisa begins our discussion this morning talking about the three main issues that she wants to discuss during today’s presentation:

• Innovation best practices—infusing outside experts
• Innovation success stories
• Real implementation choices and lessons

Luisa and Bette each chose a video to represent who they are—Luisa chose a piece from 30 Rock in which Jack uses “market research” to figure out Liz Lemon’s personality and demographic.

Bette chose a video that uncovers an engaging customer experience—the first time that Julia Robert’s character in Pretty Woman has an unlimited credit card and, coupled by “Pretty Woman” by Roy Orbison, we see a customer in love with the retail experience.

Need + communication + idea = Innovation.

For innovation to be successful we need to think outwardly, to think about our consumer’s needs and we need to work together to overcome the roadblocks that keep innovation from being successful. We must work to infuse outside investors to help us achieve innovation.

“You can’t read the label if you’re inside the jar.”

What Maddock Douglas has done is create an outside network of experts called the GEN: Global Expert Network. These are senior level executives who love to help clients solve problems.

What are the four benefits of your business? As an assignment, look to what the four things that your business does for the industry. Looking at the four benefits, what experts can you employ to help move your business forward?

In addition to understanding the demographic through segmentation, it’s important to look at how the particular person actually interacts with the media and the retail stores that they encounter.

Classroom Activity:
We did an “in classroom” activity in which participants today were asked to use a board provided to solve a puzzle and create a solution to a difficult problem.
Thinking about the exercise we were asked:
• What was the solution?
• How long did it take?
• How did you find it?
• How quickly could you do it again?
• Who raised their hands?

We found out that many of us didn’t ask for help, even though it was an explicit part of the exercise to do so. Its important to ask for help, to ask for questions and it will help you to embrace the challenge and work for the best possible way to solve a particular issue with a great outcome.

Bette discusses the role of retailers for innovation:

What do retailers do now to innovate?

The current economy has caused a major change in consume behavior and consumption, its integral to know about your customer right now, what issues are driving them to make particular purchases.

Consideration and behavior may vary by category and occasion. They may maintain spending in some categories; whereas they could drastically reduce spending in other categories.
Its important to look at customer focused retail innovation, today, Bette takes us through four case studies: Apple, Starbucks, The Buckle and Best Buy.

Apple stores represent the most productive retail square footage within the retail space, with $4000 per square foot. Steve Jobs had a vision and he infused a solid strategy for retail by inviting experts—to create a retail space and a gathering place.
“It’s not about selling. It’s about creating a place where you belong.” Ron Jonson, SVP/Retail, Apple

Starbucks transformed a commodity into an experience.
Our stores become a haven…a place where you can meet with friends. It’s about enjoyment at the speed of life—slow and savored, sometimes faster. Always full of humanity.” Starbucks Mission
What went wrong? It compromised itself leading to a reduction in value to customers. Things are turning around now for Starbucks as they are working to redesign themselves to return themselves to their original focus.

The Buckle
Buckle is a mall-based mall chain that targets fashion forward men and women, ages 12-24. This relatively small company’s performance is knocking the socks off of the competition. The specialty store experiences have been very difficult, but the Buckle has reached 33 month of store increases and 22 months of double digit increased.
What are they doing right? The Buckle is focused on fashion, balanced formula of private label and branded clothing—and sticking with denim. The company emphases personalization and offers layaways, free altering and they take pride in their “guests.”

Best Buy
“Any business only exists because it meets the needs of its customers.” Brad Anderson, Vice Chairman & fmr CEO of Best Buy

In conclusion, look to:
Opportunities created by trends, the shopping experience, helping customer’s choose and use technologies and media to drive your brand forward at retail.

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