Upcoming IP Investor Dialogues: JDG.L, BKNG, CACC, ASSA-B.ST, POOL, HWDN.L, FAST, VCP.L, STMN.SW, FEVR.L, COST, HLMA.L, ATCO-A.ST - Register your interest at help@inpractise.com 

Anonymous

Former Chief Marketing Officer at Bottega Veneta, Kering

Formulating an Integrated Marketing Strategy

Evolution of the Marketing Function

Luxury Brands: European versus American

{audio:0:00:01} Lisa, can you provide some context to how the marketing function structure has evolved, over the last 15 to 20 years?

{audio:0:00:11} The marketing function, as well as marketing structure, I would say. But marketing function has evolved, most recently, I would say in the last 10 years, if that. Historically, marketing communication was limited to earned/paid. You had limited channels. You were looking at print, you were looking at broadcast and out of home, perhaps. Those were the three areas where you would, actually, engage with your potential customer, for any kind of brand awareness or brand messaging.

{audio:0:00:54} Today, fast forward, with the internet, as well as the increase in technology, the amount of channels in which you engage or where your potential customer could find you, has exploded, through the various social channels, through the internet, through the traditional, which is still there – the print, the out of home, broadcast, radio. It’s much more diverse; it’s much more fragmented. This has created a bigger challenge for marketers today, from not only a strategic perspective, but also from a skillset requirement and internal organizational structure. It’s fast. Everything is very fast. A lot of it can be tracked, with real key performance indicators, KPIs. Some of it still can’t. It’s really trying to understand, in real time, the efficacy of the strategy. The beauty is, you can change it in real time, unlike 10 years ago. Then, you bought an ad, you committed, you signed a contract, you put in your purchase order, you ran it. There was very little flexibility.

{audio:0:02:23} Today, you can look at a week’s worth of digital advertising and, based on insights, tweak it. That’s great, but it then requires a whole new requirement of data extraction, analysis and a team that can pivot and move, based on what you’re seeing.

{audio:0:02:49} What typical silos have you found in both large organizations, with different functions within them, but also within the marketing functions, in these big corporates?

{audio:0:03:03} I think, what I’ve seen most, and the last two companies I’ve worked for have had tremendous growth, so I had an opportunity to meet and interview hundreds of people. What I found, most of the time, were that the organization structures, internally, particularly from legacy companies – companies who have been around and are established – that the org was very much from the past, when business ran in a certain way and when the customer was, less so, in the driver’s seat. This meant that the brand was, basically, dictating to the customer, here’s the product you need; here’s why you’re going to buy it. Here’s why it suits you.

{audio:0:03:47} Whereas today, because of the fragmentation of the marketing communication landscape, and the amount of information that the consumer has and the research they do, they are now much more in the driver’s seat. The requirement for the company, in order to create a coherent, consistent ecosystem of brand, has to have, in real time, this integrated approach, because the customer has it. For any young person – millennial or Z – it’s a natural habit to research, to consume on various channels, various platforms, sometimes at the same time. They’re very aware, they’re very educated, whether it be brand story, brand promise, even price check. That puts a great onus on the brand, to be in step, which means that there are multiple departments, within the company, not just in the marketing comms team, but across the company and organization, from customer service, to product, to retail – whether it’s online or brick and mortar – to the marketing. They all need to be in step. It’s incredibly challenging and the orgs don’t, typically, really address this. They’re from, as I said, a legacy time. It creates a lot of havoc. It doesn’t set professionals up to really succeed, in my opinion. It doesn’t, necessarily, allow for the best outcome, in terms of your return on investment.

{audio:0:06:04} Maybe we could discuss now, the difference between marketing and communications. Can you just elaborate on how you see the differences between the two?

{audio:0:06:17} Marketing, typically, is paid or owned. It’s not organic. It’s a strategic approach to buying media. If we’re going to speak about a funnel, the traditional funnel of marketing, where the top is the brand awareness buzz, where you start to, hopefully, penetrate into the consciousness of the consumer, all the way pulling them down into the funnel, where they are considering the brand, to the point of where they purchase. They convert and then go back to the top, as an advocate.

{audio:0:07:02} If you look at that funnel, the communication, public relations, typically, lives at the top as an organic, earned activity. Whereas marketing is, typically, paid and owned. From an email campaign, to buying media, to boosting posts on social, to having an out of home billboard. The two, more so today than ever, really need to work in tandem. The PR now, is only as good as how it can be boosted through the social channels and vice versa. Because of this fragmentation and the way the communication landscape has been impacted, there are so many different touchpoints, throughout the day. If you consider that you pick up your phone 1,500 times a day, and you’re receiving thousands of messages, to receive news on a campaign, a new product, etc., in order for it to resonate and for there to be any type of recall, you need to be reading it, seeing it, across a multitude of touchpoints, in a way that’s appropriate to that channel.

{audio:0:08:33} PR is one of those channels. When it’s siloed, which I see often, because a lot of times, companies will use an external PR agency, for example, that agency is very good at PR and that’s how they approach their strategy. It’s traditional but it’s not, necessarily, thought of within this integrated approach of the marketing team. So again, you’re not going to benefit to the fullest extent that you could or that you should. I also think that traditional PR is a thing of the past. I really believe that the old days of taking a particular product and trying to convince a magazine or newspaper to place it, is really almost irrelevant. It’s not going to move the needle. It’s not going to do a whole lot. I think brands are better off working with their designer, their face of the brand, to build an online persona, for example. I think you can move the needle much quicker with that, where they have their own authentic, credible interaction with the customer. This is where the new social communication channels have, I think, impacted marketing more so than anything.

{audio:0:10:14} If you have a new product, it’s not really about pushing the product; it’s about pushing stories. I don’t think, in this new world, anyone is interested in just a product. There needs to be a story and how is it contextual in what is happening in today’s world? I think that the PR is as important, but it will not be as impactful as it has been, unless it’s integrated into the overarching 360 of the consumer-centric strategy.

{audio:0:10:51} What makes very good integrated marketing strategy, like you just explained, across all channels, across all touchpoints?

{audio:0:11:03} First and foremost, you have the product that you are wanting to put out there. The first question is, who is this product for? Who am I trying to attract? That’s critical. Once you establish who that is, then a little data and research around where that person is, most likely, engaging with content. Where are they looking for content? Where do they spend most of their time? Some age sectors will be more in the traditional; other ages will be more in the new means of content. It’s really important to figure out who it is that you are trying to talk to and then, where are they? What time of the day and which days? Then the type of content appropriate for those channels. I think, too many brands start in the opposite way. They go and they shoot a picture; they go shoot a campaign. Everyone wants to jump straight to the creativity. I don’t know if that’s because it’s the most fun or the easiest. Then they come back and they say that they’re the marketing communication team here, work with us. It’s completely backwards.

{audio:0:12:17} The first question I always ask is, who is this for? Are we sure that this is the right product, the right price point? Have we done our competitive, to see what’s already out there? Is there even a need for it? Is it feasible? Then, what’s the brand promise and is it really going to resonate with this group that we’ve decided is going to be our target audience? From there, that’s where I think the strategy starts, where you establish who the target audience is. Is this relevant? Right price, etc. Okay, where are they? Where are they getting their information, what time of day? How long are they spending and then what is the appropriate content, for each of these channels. Obviously, you have to add in, what is our budget and how are we going to allocate it. Then, only then, do you go and you shoot. But by this time, you have a very tight deliverables list that is very specific, ideally. That, in my opinion, is a far more efficient and sustainable approach to building a campaign.

{audio:0:13:35} Let’s talk about story-telling then. Just referring back to your time at Bottega. Maybe you can lay out the heritage and story of Bottega Veneta and that brand?

{audio:0:13:48} Bottega was a brand that was born in the 60s and it was family-owned and operated. Primarily, it was really the most known, from sales penetration and brand awareness, in North America, which was interesting to me, when I first joined, in 2000. The family were Italian, but they had moved to New York and had opened their first flagship on Madison Avenue, in the 80s. As a result, that’s where they had the greatest brand awareness. When Gucci Group bought Bottega, in 2000, the company was almost bankrupt. It was really hanging by a thread. We were really starting from scratch.

{audio:0:14:42} The creative director, at the time, Tomas Maier, had a very clear vision of what he saw for the brand. Having a vision is critical and a real thought around an identity. He mapped that out, which made it much easier, as a marketer, to start building out on his vision. The vision, really, was to take Bottega back to the original premise, which was always around craftsmanship, artisanal know-how, the Veneto, which is a northern part of Italy, not to confused with Venice; it’s very different. It’s the people of the land, versus the water. That’s a whole story, in itself.

{audio:0:15:34} The functionality, because, when the product was originally made, this cross intrecciato, this cross weave, that it was so known, it was the most iconic pattern, the reason that they made the bag that way, is that the Veneto, at the time, was really known for ready-to-wear. It was a region where mostly fabric products were being made. When the two guys that launched it, tried to make a handbag, the machines they had were for very, very thin fine leather. So once you made the bag and you put some things in it, it didn’t really work so well. There wasn’t a great functionality aspect. You would put things in the bag, it would, inevitably get heavier and it wasn’t really structured for that. So they ended up stripping the leather and weaving it. By creating this intrecciato, you were doubling the amount of leather and the ability to put more weight in it, and for it to function.

{audio:0:16:33} It came from a place of functionality and design, craftsmanship and the really finest quality materials and logoless, which was a big point of difference. The original tag was ‘When Your Own Initials Are Enough’ which had been coined, I think, in the 70s and had disappeared. That was his idea, to really establish brand tenets, pillars, that we would refer to and every decision would be made against, as deciding criteria, to keep the brand very much on the road to what his vision was.

{audio:0:17:21} I think that it was a very simple concept, but very out of sync with what was happening at that time. That was the height of the It bag and this craze around accessories, that was just starting to build. I don’t know if you remember, but Fendi, for example, had that Baguette, that was on Sex and the City and Carrie Bradshaw carried it. There was a new one, it felt like, practically every month. There was a real showy, glitzy, logoed fashion moment and so to launch this very quiet logoless, soft, very beautiful, very simple product it was very interesting. It was right before the Twin Towers in New York were bombed and was just a very strange time. We were really in the height of booming economy and this fashion moment and then after the Twin Towers were hit, I felt as if things had really stopped and quietened down, obviously, globally.

{audio:0:18:42} We had some economic issues, we had the war, there was SARS, which is quite interesting, when you think about what is happening right now, with Covid-19. It was a very similar moment; not as globally impacted. That was interesting, because it was almost like it was a palate cleanse, which allowed the brand to really, just be. As things started to come back, people were much more interested and open to, the idea of this timeless product that was never going to be marked down, that would have very controlled distribution. It was a new set of rules and a new set of standards that I never thought would be appreciated, as quickly as they were.

{audio:0:19:35} I always felt that Tomas Maier had an incredible vision and things that he wanted to do. I had never seen, showing the same bag on the runway, season after season. You just didn’t do that, because there was fatigue and boredom and everyone always wanted something new. Inevitably, you would move on to the next bag and there would be the new one and the new one. That’s how businesses were created. In fact, he did exactly what he said he was going to do, which, at the time, was quite revolutionary.  This was in 2000, so 20 years ago, and it was a completely sustainable approach to luxury fashion. Actually, not fashion; luxury design. He was very anti-fashion, because he wanted to create products that were timeless and his whole idea was, once you are in fashion, inevitably, you will be out of fashion. Let’s just not even enter into that fashion arena. Let’s just create timeless, beautifully designed, functional product, that can last forever.

{audio:0:20:43} What does timeless mean, to you?

{audio:0:20:46} Timeless means a product that lasts, over decades, that continues to increase in value. This means, I bought this bag in 2000 and now, in 2020, it costs five times the amount that I paid for it then, which is definitely the case with the bags he made for Bottega. It’s a product that looks as good today as it did 20 years ago, or that isn’t so obvious that someone could say, I remember, that was runway Spring 2014, which trust me, there are products out there that are very identifiable, from a specific season and moment. I think that it’s something that you feel there is an intrinsic value, that you would keep and, potentially, pass down or gift to someone, at a certain point and they would happily own it.

{audio 0:21:52} Then there’s just the brand promise of what that brand stands for. Forget about the product for a minute. There are very few products out there, today such as this. I would say that Hermès is probably the unicorn and Tomas Maier spent 10 or 15 years at Hermès, so it’s not surprising that he had this inherent perception. For Hermès today, the bags only increase in value. It’s been a very carefully controlled, very carefully crafted, brand promise and it works. It’s a very successful company, financially. They really drive their business, based on their own guiding principle. They’re not looking outwards, to what other companies, other brands are doing, to find the rhythm. It’s very much how they have envisioned.

{audio:0:22:53} I feel as if Bottega, definitely, would live in that space and that was Tomas’s goal, to create something that had a timeless quality, due to the design of the product. I’m not a designer, so I don’t know how one would even approach that. But if you think about it, it’s furniture, it’s watches, it’s architecture.

{audio:0:23:23} It’s an interesting concept, because it does seem to be those, as you said, less trendy, less fashiony, less glitzy, more soft, plainer products.

{audio:0:23:37} But no less interesting. It’s hard, because the words one uses can almost, at a certain point, mean less interesting. But you could look at a Neutra house, a watch from Omega, Rolex and they’re all as interesting today as they were 20, 30, 40, 50 years ago. I think that’s the differentiator.

{audio:0:24:10} You mentioned brand promise. First of all, how do you go about cultivating a promise and then communicating that promise to your consumer?

{audio:0:24:22} Again, I think that’s part of the brand DNA. As a brand is working through a brand key, which is a traditional exercise, to establish brand DNA, you’re looking at brand attributes, reasons to believe, the emotional and functional benefits. When you are working through that exercise that, typically, will also include a thought around the culture of the company. What is it that you want the company to stand for, because that then resonates with and impacts the type of people you are looking to hire?

{audio:0:25:03} Bottega, as an example, to join the company and through all the people I spoke to and interviewed, throughout the years, it was very important they understood that, sometimes, the thoughts or the view of how to present something to the market, how to communicate it, was not going to be the average, standard thought. Most of the time, you would have to think outside the box. Not everyone is, firstly, capable of that and, secondly, even understands what that means. A lot of the time in marketing communication, there was some very talented people, but I could tell were just not going to be the right fit, because they had very specific ideas.

{audio:0:25:51} For example, Tomas Maier was never interested in dressing celebrities. He wasn’t interested in celebrities. There were no influencers, as such, at the time, at the beginning. His feeling was, if a celebrity likes my product and they want to go and buy it, that’s great. I’m very flattered; it’s wonderful. But why would I give something away, or pay someone to wear something? How does that work with the statement I’ve made around timelessness, authenticity, value? What’s the value proposition if I give something to this person, just so they’ll wear it and say they’re wearing it? Then I’m asking my customer to come into my store and spend a considerable amount of money on something and then they turn around and they see celebrity X, who is wearing this today and, tomorrow, is wearing something else and it’s all very obvious. Again, it was counter to what was the considered best practice and so people who were working in the company had to really buy in to these types of rules, per se. But they were very important in building the culture of the brand and the brand promise.

{audio:0:27:04} It was very important to him to make the customer’s life easier. He spent a tremendous amount of time, when he was travelling, always watching the way people travelled; men, in particular. That they were running through the airport, with these briefcases that had the shoulder strap and the strap was thin and narrow and it was cutting the shoulder and cutting the tailoring of the suit. It wasn’t comfortable looking, not elegant looking and probably ruining the shoulder. So he would obsess about these details and come out with a product that was, maybe, more ergonomic, that was more functional, that looked better, that was more comfortable. That was his obsession. How do I make my customer’s lives easier? Easier, happier, better. Whether it’s when they put their hand inside the bag and they feel a suede lining. He never used fabric; he never used synthetic linings. Everything was suede on the inside, because it was very important for him what that experience was like. It’s all very private and personal, to you, but it does make your day better.

{audio:0:28:23} When he designed a teacup and a saucer, one of his pet peeves was, when you would go and stay at a hotel or go to a restaurant and he would rest the spoon on the saucer and it would slide down, because the way the saucer was designed, didn’t allow for the spoon to sit right. He found it annoying. Some people may not notice, and they’re probably not our customer. Those that do, totally appreciate that. So it’s all of these small details that, for him, were everything. A zipper, a lining, a strap. Again, I think the brand promise was, very much about, I will make your life better, I will offer you these very private moments, that are just for you, that make you feel better. I will not put it on sale – he thought that was the worst, when you paid full price for something and then, three months later, you see it on sale and you feel like an idiot.

{audio:0:29:28} I think he was, actually, quite visionary, also in the sense that he was so focused on the customer which, today, CRM, customer relation management, is for me, the leading aspect of marketing. I think anyone who doesn’t believe that, is kidding themselves. The customer, today, is in the driver’s seat. They will decide what they want, when they want it, where they want it, to the point of how they want to read about it. If you don’t take that into consideration, they’ll just block you, unsubscribe, go to another competitor. They have every choice they want. Whereas CRM, 20, 30 years ago was the little weirdos in that odd office down the hall. We didn’t quite know what they did. Today, for me, that’s my first question. What’s your CRM strategy? Do you have one? Most brands don’t. What software; is it integrated? It’s almost like when you do a renovation and you put in the HVAC; it’s a bummer, because it’s a very expensive thing to do. You put in all the pipes and the venting and no one can see it. But without it, you either have a very cold house or a very hot house. It’s not really how you want it. I think that’s so important; it’s almost like the plumbing.

{audio:0:30:58} So taking a step back. You’re at Bottega, year 2000, how did you build a picture of your consumer?

{audio:0:31:06} I think we started with what we knew about the existing consumer, which was quite old. We had a very old customer. Then we looked at the landscape of our competitors and where we saw opportunity and the customer that we wanted to go after. Interestingly, Tomas felt, very strongly, that he would naturally attract a design-focused customer, someone who works in the world of art or design. So gallery owners, artistic agents, dealers, etc. He felt that they would appreciate a product that was, first and foremost, was made with a real design obsession.

{audio:0:32:00} When we went to go shoot our first ad campaign, rather than shoot with the traditional fashion photographer, with the traditional top model, Tomas was more interested in finding photographers that he collected and that he appreciated and that he felt were more inclined to see the product from their artistic perception. He thought it was interesting to take this commercial aspect – because quite frankly, as beautiful as an ad is, it’s really a marketing asset – and he wanted to have a fine art photographer shoot it, through their lens. It was an interesting approach. He felt that it made sense, because if the customer that he imagined appreciating the product, would recognize Tina Barney or Philip-Lorca diCorcia or any of the multitude of photographers he shot with. They would appreciate the photographer and their work and then, hopefully, notice the product.

{audio:0:33:15} It was very unconventional, at the time. Again, this is 20 years ago. It was also a lot of work to find these fine art photographers, who were all working on either a show or their own body of work – they’re not commercial; they’re not in the seasonal scheduling. They don’t have their own hair and makeup team that is available for them. Basically, we had to start over, every season, finding the right photographer for that product, the location that made sense. We had to put a team together, the talent, the hair, the makeup, the stylist, the models, because these photographers weren’t in that world. But I think, what it created, was a very interesting body of work that was further evidence of the brand promise, which was, design first. It’s not something that we really talked about, necessarily, although we did publish a book, ultimately, which was a collection of all the campaigns. It was just, again, through the visual of it and the art aspect and the talent.

{audio:0:34:34} In Tomas’s mind, his approach to design was always collaborative, because he had many ideas, but he was working with a group of artisans, that he inherited. Some of them were second and third generation artisans, that had been working at Bottega and knew how to weave, which is a very particular capability. Tomas saw himself as not, obviously, an artisan, because he’s not, but that he could inspire them and challenge them and collaborate with them, to evolve their capabilities, beyond what had, historically, been, which was a type of this intrecciato, but very much, one way.

{audio:0:35:18} Through the 18, 20 years that he was working with these artisans, his collaborative approach was, what about this, could this be done, how would you do this? The techniques were phenomenal. There must have been hundreds of different aspects of weave that you could never even have imagined, that he inspired them, asked them, drove them, to create. For him, it was born out of a desire to collaborate. I think, when he was working with his photographers, it was the same collaborative approach. That was, hopefully, communicated to the customer, that there was a collaborative effort in his making of the product, in his communicating of the product and then with the customer themselves. But also, very much respectful of their needs, their feedback – this was before social media, so there really was no dialogue – but wanting to, not dictate, but rather, suggest.

{audio:0:36:31} I remember, in the early days, journalists kept asking, what’s the iconic bag? What’s the It bag? He replied, I don’t have an It bag and I don’t believe in that. When asked what the iconic bag was, he said, it’s not for me to say, it’s for her to vote. She’ll decide. That’s how an iconic bag should be made. Not through marketing dollars, not through placing it on X, Y, Z celebrity, not through putting it on a movie. It should be through time and by letting the customer vote and decide. It was very visionary, in a sense, because this was before there was any kind of brand customer dialogue. It was one way, from the brand, to the customer.

{audio:0:37:25} In terms of how you said he would work with photographers, it’s almost like that is the message. That is the message to the consumer. You don’t need to state that in words. You can communicate many things by action, in a way.

{audio:0:37:44} Exactly. That’s where so many brands today say things, they have a tag line, they have a campaign, they have a hashtag; ad nauseum, hashtag. But really nothing that they are doing, has anything to do with what they’re saying. Or the people they choose to work with or collaborate with or do sponsorships with, it doesn’t ladder back. You leave the customer with a very vague sense of who you are and what you stand for and why they are buying you. They are not just buying the product. We could all carry a canvas tote bag, if it was just about functionality and carrying our things. They’re buying, to buy into an idea, a belief, a tribe, a promise.

{audio:0:38:40} Today, what’s happened is, it’s amazing with the internet and e-commerce and social media that it’s so much more democratic, in terms of being able to bring an idea to the market. I applaud that. I love that you don’t have to rely on the top department store or the most important magazine, to decide if you are allowed to. But at the same time, what I find amazing is, I wonder so often, have they looked at the market? Is there a need for this product? Have they done any research? Is this just a pure vanity? Are you looking just beyond your own little vacuum? If you’ve decided that there is a need and an opportunity, great, there’s a white space. But then, do what you say, say what you do. Don’t tell me that you’re a disruptor, millennial, democratic product, but then you just did, at your last event, you served a top-shelf spirit, that is unapproachable, from a price perspective. Sure, it’s a great product, but what does it have to do with your promise and how does it help you cut through all the noise and all of the messaging out there, as quickly as possible, so the customer knows who you are and what you stand for?

{audio:0:40:09} How do you look at the big challenge today? As you said, there’s so many different channels. You can communicate with that consumer in many different ways that it gets quite fuzzy and complex. Brands do seem to get lost, sometimes, I feel, where their message is not coherent across all different channels. What do you think is the biggest mistake they make?

{audio:0:40:33} Number one, not putting themselves in the head of the consumer. Not having gone through the brand work and defining the brand pillars, tenets, DNA, whatever you want to call them. And, if they have, not sticking to them. And have your really done the work and not just, what I call, a word salad. I get these PowerPoint decks, on a regular basis and I will go through them and I will circle words; I love to do this. Out of the 50 words, if you split them into two groups, they are completely incompatible. Almost the opposite and it just becomes these empty words that anyone can use and the, half the time, don’t ladder back to a very specific image. You’re trying to create an image, in someone’s mind. A feeling, some emotional attachment and if you don’t say it, show it, do it, over and over and over again. Good luck cutting through the noise.

{audio:0:41:38} If you put yourself into the mindset of the consumer and you say, I want to make it as easy as possible for them to understand exactly who I am, then you are going to approach everything that you do – whether it’s a sponsorship, a collaboration, an influencer that you engage with, a photographer that you shoot with, a charity you donate to – really thinking through, do they reflect your own brand tenets, brand pillars? How many boxes can you check off when you’re looking at the criteria. You use these as criteria, to decide every aspect, whether it’s a hang tag or it’s something as big as an ad campaign. You have to go through this exercise.

{audio:0:42:25} I don’t know, if today, there just isn’t the knowledge, the experience; perhaps it’s so democratic, they think it doesn’t matter. Name, for me, any brand today, such as Coca-Cola, Walt Disney, Hermès, Cartier, these brands are all built on this same concept of brand promise. Whether it was, in the early 1900s, to today.

{audio:0:43:01} Moving on to look at your experience at Michael Kors. Arguably, more affordable luxury, if that makes sense. That’s a paradox; as you said, those two words don’t really go together in the truest sense. How was the target customer different for Michael Kors’ Collection line, versus Bottega, which was the older, more mature customer?

{audio:0:43:26} I would say that Bottega had a very clear vision and brand promise, brand DNA and every decision was taken through these criteria, this exercise. Michael Kors, because the goals of Michael Kors, the size of the business that they wanted to build and this was during the IPO, so taking the company from private to a public company and the growth and the size of the business and the market cap, they needed to reach a massive audience. In order to do that, they used the halo of the Michael Kors Collection, which was the original designer brand, that Michael Kors created, which was more at a designer price point. They used the halo of that and established a second line and they, kind of, blurred the marketing story and imagery around it. I believed that the customer didn’t really understand the difference between the designer and the second line, because all of the marketing was by the same photographer, who was Mario Testino, for over a decade, shooting both the high-end and the low-end and making it all look very similar.

{audio:0:45:06} That was the beginning. After we went public and we needed to really grow quickly, we started to create the second and third tier campaigns, that allowed us to start to build out different segments. So talking to different countries and making it relevant. For example, jet set, which was always the underlying brand promise, this jet set glamour. It didn’t resonate in China; China didn’t know what jet set meant. Nor could they really relate to these six-foot-tall, blonde, Amazon women, that he always portrayed in his ads, because that was going back to the very original Michael Kors Collection. How do you take that and broaden it and build out different facets of brand story, that would then appeal to a much broader audience? Whether that’s different parts of the world, different socio-economic, different ethnicity. We really had to be a very broad focused marketing communication team, which meant tons and tons and tons of content, constantly being pushed out, very segmented to the different audiences, but all under this halo of this jet set.

{audio:0:46:37} What we did is, we pivoted the idea of jet set from being, literally, getting in your boat, your helicopter, and I’m sure everyone has seen these ads. The woman and the guy are always jumping off a boat or a plane or a helicopter. They’re living this magical life. What we did is, we pivoted to more of it being a jet set state of mind and what does that mean? It means that, whether you are taking the subway to work or you’re in your private car or you’re riding your bike, it’s more about the mentality. It’s waking up in the morning and wanting to look your best. It was just taking what was already part of his DNA and creating a broader scope from which to work. Jet set became jet set state of mind and what that meant. Michael Kors, the man. He had many years on Project Runway, he became well-known. He became almost a celebrity, in a sense. People always say, was that the reason for the success of the brand? No, it’s not. It didn’t hurt, obviously, because it helped brand awareness. But he wasn’t really the face of the brand, when it started to grow.

{audio:0:47:48} We decided that that it was important to use him, not just as a fashion designer because, quite frankly, the second line never even had a fashion show. It wasn’t considered a fashion brand in the very specific sense of what that means. It never had a fashion show, we never showed the second line on a runway, or even a presentation. We decide to use Michael, the man, as a content creator. Then Michael started to have his own dialogue, through content and opportunities where he started to, not on Project Runway, but through being his own media publisher, almost, rather than relying on third parties, we started to create media, from him, to the audience, on different topics, whether it was how to get dressed or a celebrity moment conversation. All kinds of different content.

{audio:0:48:53} Michael is very optimistic, very upbeat, as a person. He was a child actor and he’s a completely different personality from a Tomas Maier, let’s say, who’s very private, who doesn’t want to tell the press what he ate for breakfast; he doesn’t know why it’s relevant. Michael is much more of a performer and he engages. That was really a unique attribute to the brand, that no other brand had. Again, it’s also looking at, here’s my original brand DNA, I’ve been in the business now for 10 years, times are different. Do I need to pivot? How can I move left or right, in that X, Y axis, because maybe the space that Michael was in, has started to get really crowded? It had. There were the Coaches, there were a lot of brands that had created this accessible luxury idea, Tory Burch, for example. Times had changed and so we looked, very carefully, at what do we have? This goes back to the brand key and unique attributes. What is special about your brand that you can use to your benefit?

{audio:0:50:02} Definitely, Michael, the person, is a massive asset to the brand. That definitely came to the forefront. Philanthropy. We spent a tremendous amount of time choosing a very specific, philanthropic focus. Kors had always given money to different charitable organization; he’s a very philanthropic person. But it wasn’t really targeted around an idea. We spent a lot of time discussing this and what would resonate globally and what could we activate and really be true to the promise of the brand. It was around hunger and solving hunger. We joined forces with the United Nations World Food Progam. Michael, ultimately, became an ambassador; he was at the UN, recently, speaking. We created a watch campaign, because the Michael Kors watch was a massive product, for many years. The idea of the campaign was Watch Hunger Stop. For every watch that was purchased, a certain number of school meals would be served, which would ensure that kids would be sent to school, specifically girls, who sometimes would be pulled out of school, to work at home. This ensured that, not only would they be sent to school, to be fed, but they would also be educated.

{audio:0:51:32} Very thoughtful idea, around something that Michael really felt strongly about and that created another facet that, if you weren’t, let’s say, someone that obsessed about fashion, you weren’t really interested in fashion, but you would buy a nice handbag, once a year, you might find the brand through philanthropy, just because you like brands that have a strong voice, a strong approach to solving an issue. To date, I think they’ve served over 15 million meals. It’s an incredible thing that he’s done, but I think it helped attract new audiences to the brand, but still making sense, within the original DNA.

{audio:0:52:22} What was the biggest challenge you faced at Michael Kors, as a marketer?

{audio:0:52:27} I think the growth trajectory and how you could balance that with the desire to avoid this ubiquity, which started to become more evident, as Michael Kors, the company, moved from a wholesale model, to retail. This was in 2011, 2012 when they had been predominantly reliant on wholesale and they decided to start to build their own retail fleet. It happened very quickly and, before you knew it, you had stores popping up like mushrooms. They seemed to be everywhere. One could say, that’s a requirement to increase revenue and show growth and drive brand awareness, but at the same time, it’s always that balance of, how much, where and what kind. How do you do it in a way so that the customer never perceives you as being ubiquitous, over-saturating a market, seeing the product coming and going. It’s always that balance of how far can you go and how do you shift? A good example is a Louis Vuitton. It’s a massive company, much bigger than Kors and they’ve done it perfectly. They have done a phenomenal job. They are everywhere; they are huge. But you don’t perceive that because of how the real estate is selected, the amount of product that they allow, from material to shape, and how they assort. Never on sale, no outlets, they control their wholesale distribution, through having their own shops; they own them.

{audio:0:54:33} There is a way to do it and I think, at Kors, the biggest challenge was managing this growth and this expectation of 30% increase, quarter over quarter. That’s not a slow burn.

{audio:0:54:48} How would you describe the difference between the European versus the US way of building brands?

{audio:0:54:57} I think Europe builds for legacy. Luxury; now we’re back to talking about luxury. I think Europeans have this obsession that drives their vision, when they’re building a luxury brand, it’s always with a thought of, what are we leaving behind? What will this stand for and what’s the value proposition? Every decision that’s made, that is very much in the back of their mind. I think, in America, it’s about building a business. I don’t think that there is a lot of thought in the same way. It might be said; Ralph Lauren could say that that’s a legacy. But, again, when you’re selling primarily polo shirts at outlets and sheets and towels at off-price, maybe, in a P&L, it might look as if there is a future for it, but it’s not legacy in the same way that the Europeans have built these legacy businesses.

{audio:0:55:58} That’s the number one priority. Every decision that is made, is made with that in mind. It’s not that they don’t grow, they’re not profitable. They’re the behemoths. LVMH, Richemont, the Kering Group. They’re the beacons. But they do it in a very thoughtful, calculated, disciplined way, always ensuring that these brands will be there, for the duration.

{audio:0:56:29} American brands, from what I see, they come and go. How can Calvin Klein no longer exist? When I think about it, it just makes no sense. If you think about that being one of the most important American brands, at one point. Anne Klein, Perry Ellis, Bill Blass; where are all these brands? It’s sad, in a way. But it’s a different mentality. It’s a business, like any other business. Like producing pencils, I guess; it’s a commodity.

{audio:0:57:04} How do the European brand houses roll out those entry products to recruit consumers? It seems, with the US brands, to get into the mass market or to grow a business, to a large extent, you have to go down that price point ticket, to capture the mass consumer. How do the brands, the Louis Vuitton, Bottega, the European brands, get that entry point or recruit that younger customer, into the brand?

{audio:0:57:36} Very carefully, very thoughtfully. Firstly, starting with the brand promise and what is authentic. Looking at the landscape and where there is opportunity. That includes, what are the styles, what are people looking for? What seems to be trending? Most recently, it’s been the smaller, cross-body bag. When everyone started to have a cell phone in their hand, all of a sudden, hands free became critical. This cross-body bag was everywhere, where you could have a way to put the bag across your body. This then led to a smaller, almost like a wallet on a chain idea, which then allowed the luxury players to have an entry price point. What I appreciate is that they don’t come at it from, how can we make more money; let’s just make up this thing and put it out there. They’re very thoughtful about, what’s going in today’s world that we could participate in, that would allow us to do this, but only in the most authentic way, where it’s believable that it’s coming from us. We’re not going to start making yoga mats now, because that’s another thing we could stick our logo on.

{audio:0:58:57} I think that there has always been the licensed products and a lot of them are now in-house. Eyewear, fragrance, lipstick, that’s obviously been around for a long time and it’s a great way to start to engage a younger consumer and have them enter into the brand world. The story, the promise of that brand. From there, ideally, you move them up the purchasing frequency and price point. But I also look that a Louis Vuitton, for example, who is selling a lower price point, in a leather good product, through watching and learning and seeing how consumers are evolving and what end use do they need? What are they looking for? All of a sudden, it became the tech toys, so all of the tech accessories, from the phone case with the wallet, where you could put your credit cards, with a chain that comes out, so you can loop it across. Just really keeping their ear to the ground and being globally, constantly, looking at consumer behavior and how you react. Having a very organized supply chain vertical, where you can quickly bring product to market. That is also important.

{audio:1:00:38} When they market these things, it’s very much under the guise of the overarching brand DNA. It’s not a product that’s pulled out, per se, and marketed to you. It’s very subtle in the way they always include it under the umbrella of the bigger brand promise. Whereas, I would say, the Americans are far more likely to focus specifically on that item and really drive it home until they’ve sold the numbers. One could argue, well, the money that’s made could be the same and maybe it’s faster here or slower there. But I always question, then, how are you denigrating the brand? If anything, that your most valuable asset is your brand – brand story, brand promise – and your customer. If, in any way, shape or form, you are eroding the authenticity and the credibility, long term, you are going to have a problem.

{audio:1:01:51} You keep mentioning brand DNA and brand key. Is that something that you use, typically, when you approach any problem with marketing or a brand?

{audio:1:02:00} It’s the first step. I do a lot of consulting for brands that will call me in and they will say, we want to engage you to help us with an email campaign. Or, we really want to up our online business and we want to look at performance marketing. Inevitably, it will be one aspect of marketing. I’ll start working with them and what I, ultimately, find is, when I start to ask questions about the why, the what, why this message, what does it have to do with, they can’t answer the question.

{audio:1:02:30} So then we’ll back up and half of the time, they’ll agree and understand that they need to go through this brand exercise. It’s a very simple document I use, which is a brand key, which breaks out the various steps, that include these unique attributes, the reasons to believe, the emotional, functional assets. Basically, it’s asking yourself, if your brand disappeared tomorrow, what would disappear from the market? If you don’t have anything to refer to in that, you probably have a problem.

{audio:1:03:15} What would be your advice to young marketers, today, given that you’ve experienced both types of businesses, in the luxury space? What would be your key lessons that you’ve learned, that you’d tell a 28-year-old Lisa, today?

{audio:1:03:33} I would tell them to try and get as much work experience as possible. I would really encourage them to work in all aspects of the business that they are interested in. If they’re interested in marketing in CPG, or they’re interested in marketing in luxury or hospitality, whatever it is. I would encourage them to consider working in all of the various departments, whether it’s in the product itself and the making of that product. It’s the selling out of that product. In fashion, it would be wholesale; you’re selling into the department stores. Working in retail, it means working on the sales floor and actually having engagement and experience with what it takes to be on the front line and sell to a customer who walks in the door, to run a store, to train your people.

{audio:1:04:33} The marketing piece, the consumer data, insights and analytics. I would work across as many of these different departments as possible, because it is all connected. If you really believe that the customer is in the center and if you are really building a customer-centric brand – this could be a restaurant, it could be a liquor label, it could be luxury – if you really want, today, to build a brand that is going to resonate and be successful, the first question is, what’s going on in the head of the customer and how can I present this idea? What does it look like, feel like, smell like, taste like?

{audio:1:05:23} I think the more experience you have, in these different expertise of a company, the more realistic your understanding is of the departments that you’re working with and your colleagues. If you’ve been there and you’ve had that experience, your expectation and your assumptions change, because you have a much better understanding of how the entire chain functions, from concept of a product through to, when you bring it to market, you engage with the customer and post-customer-experience engagement. I think that too many people, young professionals that I meet, are afraid to work across these different expertise, because they think that it, somehow, will create this idea, this perception of lack of focus or depth. But it’s all very related, if you are focusing on the customer first. That would be the biggest piece of advice.

Bottega Veneta: Luxury Brand Building

Formulating an integrated marketing communication strategy

The heritage of Bottega Veneta and how the brand connected with consumers

The importance of communicating what you stand for as a brand

How Michael Kors built a brand and challenges scaling

Core pieces of advice for young marketers entering the luxury world