luxury watch

Kering's Gucci Brand Takes a Hit in Asian Luxury Slump

Posted by Barry Silverstein on October 30, 2013 02:47 PM

Gobal luxury brand conglomerates such as Kering, previously known as PPR, the parent company to brands such as Gucci, Yves Saint Laurent, and a slew of other high profile brands, are a double edged sword: They can gain profits from a diverse brand portfolio, yet they can see sales sink when the luxury market is sluggish in a particular region of the world.

At the moment, the region in question is Asia, and more specifically China. While China is still consuming luxury goods, it seems that "Chinese shoppers are cutting back on designer duds, leather handbags, and pricey watches" according to the Associated Press. In fact, sales of luxury goods in China are expected to limp along and grow just 2.5 percent this year—a far cry from the double digit growth of a few years ago.

Chinese publication Jing Daily confirms that, "Chinese consumer tastes continue to quickly shift toward logo-free products and niche brands. ...The rise of popularity of niche designer labels in contrast to major logo-focused brands was exhibited this fall in the openings of three major department stores in mainland China..." Also a likely contributor is China's national austerity drive, which has put a negative connotation on luxury goods and experiences of all kinds.Continue reading...

sporting brands

In China, Under Armour Looks to Brand the Workout Experience

Posted by Kristen Van Nest on October 29, 2013 07:07 PM

Earlier this month, Under Armour introduced a completely different retail concept to the Chinese sporting apparel market—a market that has proven hard to crack even for the most seasoned retail veterans, including Nike and Adidas. But Under Armour's new Shanghai retail theater experience aims to do much more than just sell clothes and sneakers. 

Located in the Jing An Kerry Centre, the store features a 270-degree screen that covers 90 percent of the relatively small boutique, encapsulating store-goes in the sights, sounds and experiences of athletic training—a truly foreign concept in China and greater Asia. 

In China, especially, working out is not a common activity. Seeing joggers is a rarity and oftentimes in the gym, Chinese are seen wearing jeans or leather shoes as opposed to sporting apparel. Sports participation is also low due to lack of time, the single child policy, and limited governmental support to popularize sports. But, there is still huge market potential; after the Beijing Olympic Games, there has been dramatic growth in sporting brands. 

Still, the market has proven difficult, with Nike, Adidas, and others struggling to localize their retail approach to fit the unique needs of Chinese consumers, both young and old. In fact, Nike and Adidas have spent much of their time in the country with a hard focus on building a lifestyle brand around young consumers, capitalizing on consumer trends towards creativity and self-expression. Still, Nike recently saw a three percent decline in its China sales while it experienced an increase in all other geographic locations.Continue reading...

luxury watch

Apple's Gain, Burberry's Loss? Parsing the Future of a Luxury Icon

Posted by Barry Silverstein on October 18, 2013 02:58 PM

Maybe Steve Jobs was even more of a seer than people think. It was Jobs who had the vision to shape Apple into an upscale consumer brand that, in many ways, set the standard for both technology and design. In fact, Apple has become truly fashionable and a luxury/premium brand in its own right. Witness the apparent rejection of Apple's lower-end iPhone 5c by consumers.

The just-announced addition of Angela Ahrendts, the American CEO of British luxury brand Burberry, to Apple's senior management team in a move that will occur next year, may well be the exclamation point on Apple's evolution. Ahrendts will bring a deep understanding of the marriage between fashion and technology to her role. She also will bring the shine of a luxury brand that has been a fashion and digital innovator under her guidance, and another invaluable asset: her ability to turn around Burberry's business in Asia and particularly China, a market Apple craves.

For Ahrendts, who as the new SVP of retail and online stores becomes the first woman in Apple's upper echelon, it's an intriguing career move. Could it be that she stepped down to eventually step up? Business Insider speculates that "if Ahrendts fits into Apple's culture and does an excellent job running its retail business, she probably has a good chance to become the company's next CEO."

From Apple's perspective, says Gartner Research analyst Carolina Milanesi in a Computerworld interview, it's all about the brand: "I think Apple looked at Burberry and the challenges they had in the market, and saw her as the one that brought back that aspirational brand, and then grew it in places like China, Korea, and elsewhere. Those speak to the challenges Apple is having. Like Burberry, Apple has to deal with the fact that its brand is everywhere because of the iPhone, but they cannot run the risk that the brand is seen as cheap."Continue reading...

sip on this

Coca-Cola CEO Muhtar Kent Steers Ship Through Positive Third Quarter

Posted by Dale Buss on October 16, 2013 10:53 AM

Buffeted by what CEO Muhtar Kent called "headwinds" and aided by "tailwinds" around the world, Coca-Cola reported a good but not great third quarter and vowed once again to meet its target of doubling 2010 revenues by 2020.

Meanwhile, PepsiCo today reported a 1.5 percent revenue increase for the period while US beverage sales slid by 2 percent.

While much of the attention to the Coke brand these days is how marketers wrangle with the obesity issue, sales of the globe's leading soft-drink brand still grew 2 percent by volume during the period. About 70 percent of the company's sales are soft drinks.

Overall sales volumes including non-soda drinks such as teas and bottled waters grew by 2 percent in the United States. But it was emerging economies that gave Coca-Cola enough momentum to post a 4 percent rise in earnings per share for the period, in line with analysts' expectations.Continue reading...

executive decision

Burberry CEO Angela Ahrendts Goes to Apple as Brand Looks to Keep Forward Momentum

Posted by Sheila Shayon on October 15, 2013 03:42 PM

In a move preempted by high-profile collaborations, Apple has successfully poached Burberry CEO Angela Ahrendts to be its senior vice president of retail and online stores. 

Over her eight-year tenure at Burberry, Ahrendts guided the global fashion brand through a period of great growth alongside creative director and newly appointed CEO Christopher Bailey, and her move to Apple represents just how well she utilized digital innovations and technology in her strategy that transformed Burberry's brand and overall customer experience. 

Apple, which essentially set a new standard in retail with its streamlined brick-and-mortar stores, 'Genius Bar' customer service and in-store training is looking to keep its momentum as its recent succesful launch of its two new iPhones has set the stage for the brand to further infiltrate the Asian market—a key to future growth and success especially in mobile. Ahrendts will no doubt bring her knack for truly unique retail experiences to the personal tech giant—and her fashion prowess won't hurt either.Continue reading...

brand mascots

Fukuppy: Japan's Latest Attempt at Mascot Greatness Has the World Snickering

Posted by Abe Sauer on October 15, 2013 11:52 AM

When the reaches of humanity's ability to create art looks for a metaphoric warning to address the disastrous arrogance of science, it creates Godzilla, a lasting icon of the world's nuclear past. When the reaches of humanity's ability to create public relations campaigns looks for a mascot to address the disastrous arrogance of science, it creates Fukuppy, a lasting icon of the world's nuclear present.

Welcome to Earth, Fukuppy; you will go down as one of the top three worst mascots of all time.

To get the giggles and eye rolls out of the way up front, "Fukuppy" is the new mascot for Fukushima Industries, a manufacturer of refrigerators. The damaged Fukushima nuclear reactor, which just saw radiation levels hit a two-year high, is located in Fukushima prefecture.

In the wake of the (ongoing) Kumamon craze, brandchannel recently explored "Japan's robust history of anthropomorphized mascots" and how it fits into the island nation's "kawaii culture" ("kawaii" means "cute" or "adorable"). This cultural, maybe compulsive need to give every single thing its own adorable anthropomorphized mascot probably goes a long way in explaining the thinking behind Fukushima Industries' cute new spokes-egg.Continue reading...


The Week in China: Coke Gets Bieber Fever, Gold iPhone Decals, General Tsao Arrives and more

Posted by Abe Sauer on October 4, 2013 12:39 PM

China is the second largest economy in the world and every significant brand's future is impacted by its growth (or collapse)—but who's got the time?! Here's the week's reads that will make you look like a keen China observer in case you find yourself immersed in a cultural conversation.

This (National Day holiday) week: Andy Lau is everywhere… how to fake a gold iPhone… Adidas sells more freedom… Shanghai Free Trade Zone from a kid's POV… Volvo booms… hybrids bust… General Tsao comes to Shanghai… China Open turns 10… 7-Eleven is the new Radio Shack… and more.Continue reading...


Kellogg's Hopes to Create New Breakfast Habits in Asia from New Base in Singapore

Posted by Dale Buss on September 18, 2013 06:37 PM

Kellogg's helped create the American breakfast habit. And brand executives believe they've got a good shot at helping recreate breakfast habits in their crucial but underdeveloped markets in Asia.

The Michigan-based cereal purveyor increasingly has broadened its repertoire over the last several years to include a huge variety of grain-based products beyond breakfast cereals (including Keeblers and Pringles), some healthful proteins (Morningstar meat analogs) and even services (Special K weight-loss apps). Now the company is positioning itself for geographic diversification that could be just as significant.

That's why Kellogg's, echoing moves by other American CPG giants such as Procter & Gamble, recently moved its Asia-Pacific headquarters into the heart of the region. Kellogg's move was to Singapore from Sydney.Continue reading...

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