What does it take to be a super brand in the world of high street fashion? If selling in over a hundred countries, clocking an annual turnover of approximately £400 million with pre-tax profits of over £ 50 million and being worn by A-list celebrities like David Beckham, Leonardo Di Caprio, Kate Winslet, Zac Efron and even Pippa Middleton is all it takes, then it is imperative we call Superdry, the British fashion label founded in 2004 a super brand. In today’s post, we profile Superdry, the British brand described famously as “vintage Americana meets Japanese graphics meets British fits” and track its rise to being one of the world’s youngest and trendiest fashion super brands.
Origin: The story behind the origin of Superdry is a very fascinating one as it explains to a large extent the design philosophy behind their brightly colored clothes and accessories. Many people who look at Superdry’s range automatically assume that the brand is of Japanese origin. The Japanese script visible on almost all their designs and even on the logo may be the reason for this confusion, but the brand’s tagline, “British Design. Spirit of Japan.” is the shining light here as it clearly points out that the brand is embellished with only the “spirit” of Japan. In fact, most of the Japanese characters and words used are used inaccurately and seem to be translated with the help of a dictionary rather than by someone who actually speaks Japanese.
The real story behind the label is that it was conceived in 2003 by designer James Holder (founder of skatewear brand Bench) and Julian Dunkerton (founder of university fashion brand CULT clothing) on an inspirational trip to Japan, where they merged Julian’s fascination for vintage Americana with James’ love for Japanese style graphics and tailored fits. The first design they came up with was the vintage OSAKA 6 T-shirt which is still in production 10 years later and has been their most iconic product till date. They then founded Superdry as a label with Theo Karpathios in 2004 (who headed the international and wholesale division until 2012 when he decided to quit).
The Rise: Superdry started out humbly as a brand retailing mostly through multi brand outlets and through CULT stores in university towns everywhere. The brand was slowly gaining popularity amongst students and urban hipsters until the moment came that changed Superdry’s fortune- David Beckham wore it in his annual calendar. David, who was at the pinnacle of his footballing career then, was one of the most influential fashion celebrities at the time and he wore the fledgling label in three different pictures from the same calendar.
This endorsement was soon followed up by celebrity sightings everywhere. In Malcolm Gladwell’s words, the tipping point was reached and Superdry started trending. University students everywhere were wearing Superdry and talking about it on campuses. Superdry took themselves way more seriously as well, creating stores which won several design awards for recreating the grungy, greasy, earthen chic mood that so well represents the brand.
Superdry’s marketing also pushed the brand into college towns by offering special discounts to college students and hosting exclusive student nights with live DJ’s and goodie packs for student shoppers. Their marketing concentrated on tie-ups and support for young and upcoming music artists and a very interesting design collaboration with Morgan, the British vintage car company to produce a limited range of “Superdry Morgans”- A classic Morgan three wheeler with Japanese style graphics and design in the Superdry way. These innovative marketing methods coupled with an effective social media and PR campaign led to an unmistakable buzz surrounding the brand and demand grew exponentially.
As demand grew, Superdry expanded quickly, both within the UK and internationally until bravely, they decided to file an IPO in 2010 after only 5 years in existence with 55 stores in the UK and 53 more internationally.
To their own surprise, the IPO was well received and their stock was trading at £ 18 per share within a year of being offered for 500 pence per share. This accelerated Superdry’s growth story and by 2012, Superdry was available in more than 400 exclusive stores worldwide. In fact, store of Julian Dunkerton’s CULT brand have also become Superdry stores.
The Customer: Superdry’s evolution into a global fashion super brand within 10 years of launch points to the arrival of a new kind of customer: One willing to experiment with abstract concepts and brave ideas and also willing to pay a premium for it. These are customers who have been described by experts as the “New Luxury Millenials” and they are instrumental in Superdry’s growth story, as also other new age brands like ASOS and Zara.
NLMs are described by retail consultants Sheridan & Co. as people born between 1980 and 1999 who spend a large portion of their disposable income buying brands and luxury products. These individuals have been shielded from the global recession to a large extent by the wealth of their parents and are expected to drive growth in the luxury segment at least until the next major financial crisis. Superdry has tapped these trend sensitive customers from the outset and keeps them coming back for limited editions it releases regularly in collaboration with designers like Timothy Everest and luxury shoemaker “Joseph Cheaney & Sons.”
These NLMs are the customers driving market trends today and the brands of the future must take a cue from Superdry’s experience in tapping this segment.
- Rahul Sharma
A few months ago, during a CREAM (Certificate in Rural Enterprise Administration and Management) training session for micro-entrepreneurs in rural Bihar, we enquired about the professions of each. Turned out that each of the three women taking the course aced at multi-tasking ; apart from managing the house, each held down two other occupations. My first reaction was amazement at the amount of work that they packed into their day, but later I was struck by the fact that two out of these three women ran beauty parlours (or as they pronounced it, ‘saaluns’) out of their homes.
We asked these ladies which treatments their customers went in for and it was more than just hair-cuts – facial, eye-brow threading etc. In villages in Bihar ! So beauty consciousness is increasing not just in urban India, but in rural India too.
This article from the Mint also mentions this trend, albeit in passing. This article, from the Mint again quotes Mr. C.K.Ranganathan, Chairman and Managing Director of CavinKare, “The rural consumer has become more beauty conscious and is willing to spend more on personal grooming.”
Wonder which are the companies benefiting from this trend ? and whether they are using these ladies who run beauty parlours from their homes as influencers ?
We’ll try to dig deeper into this topic with time, so keep visiting this blog for more information on the topic.
- Zenobia Driver
In the penultimate post in this three part series, we gained insight into the spending habits of the super-rich and were able to outline a few trends or patterns which could help marketers targeting this segment in reaching out to the people who matter. It is important to understand the peculiarities in the consumer psyche in this segment in order to effectively develop any marketing strategies targeting them. In this post, we shall look at some of the current trends in luxury marketing and also see exactly how brands are striking profitable conversations with the super-rich.
Mobile is the hottest trend in luxury marketing today. A report by Fidelity Investments suggests 85% of millionaires use text messaging, smart phone applications and social media. Luxury marketers are creating highly customized and engaging experiences for their customers through smartphone and table apps, QR codes and mobile marketing in general.
Mobile marketing is particularly relevant for time-starved, on-the-move global citizens who may not have the time to visit physical stores or when they do, to check on the entire product range the brand has to offer. It is also a boon for those residing in smaller cities and towns, who have the means but not the access to luxury brands in their neighborhoods.
Luxury brands have been taking the mobile platform very seriously and many have launched mobile applications for smart phones and tablet devices. Fashion retailer Nordstrom for example offers a highly functional iPad application that allows users to explore their collection through a virtual dressing room. It also allows users to share the looks they create with their friends and check for the nearest store the clothes they have chosen are available at. Customers can also read other users’ reviews and also have fashion oriented conversations with other fans of the brand. It’s a lot of fun.
And it’s not just fashion, super luxury auto maker Rolls Royce also updated its iPad app for its Phantom and Ghost cars to allow owners and aspiring users to customize and personalize the Rolls Royce Phantom on their iPads. Swarovski allows women to browse their collection and recommend pieces to friends. Bloomingdale’s Big Brown Bag App allows users to find additional information as well as offers and promotions in store. It also allows them to scan bar codes and stay updated about in store events. In India, DIESEL designed an interactive installation (essentially, a 42” multi touch screen) in their stores that allowed users to mix and match styles and share them with their friends, in addition to helping users browse popular looks chosen by DIESEL stylists.
Thus, having a thriving and welcoming mobile marketing campaign is fast becoming a necessity in the luxury space. Marketers cannot afford to miss the bus as many fast movers are surging ahead on this platform.
Social is another buzzword trending amongst luxury marketers for a while now. Affluent people are forming interest clubs with other affluent people online as they have done offline for years and purchase decisions are being driven by online recommendations and reviews from peers. In addition, people are consuming increasing amounts of content online and social is now one of the best ways to propagate branded content.
Burberry, the British brand has revived its flagging fortunes by running an effective social media campaign that helped the brand connect to its customers directly and showcase its products independently of the ‘chav’ image it had built offline. Burberry and their famous checks had developed an image as one of the most faked brands in Britain, and these fakes were routinely worn by violent football fans and street hooligans. This meant death for Burberry as a luxury brand, until they hired a new creative director who put the checks back on the inside of the clothes and focused almost entirely on their higher end products. Burberry has driven this change using online media and technology to connect directly with their customers as a brand and reassuring them of their lineage and focus.
One social media disaster however, has been Abercrombie & Fitch, the American cult brand famous for their casual wear range. They were the target of a social media campaign which asked users to post videos of them donating their A&F clothes to the homeless and the deprived, in protest of the A&F CEO saying his clothes were meant to be worn by attractive and fit people, and not by “fat people”. The protest has been a PR disaster for A&F and CEO Mike has had to issue a public apology for the same. This incident showcases the importance of effective online reputation management.
Brands like Victoria’s Secret and BMW on the other hand have used social media brilliantly by giving the medium the respect it deserves. Victoria’s secret runs promotions and offers discounts specifically for their fans, in addition to creating content specifically for social media. It has become the most talked about fashion brand on social media today and is definitely the most engaging. BMW made a series of brand movies with top Hollywood directors recently and released them to users only through their social pages. Such innovative strategies are required to get people talking about your brands today.
The best part about the social medium is that it allows customers to be a part of a global brand movement and get updates straight from the source. Customers thus become ambassadors of the brand and generate buzz in their private localized communities. DIESEL, for example has the highest number of fans on its global facebook page from India in spite of having global content and imagery with very little localization.
Events and causes have long been important to luxury marketers as a means to offer affluent people a chance to be part of their brand stories, a trend started by Tiffany’s more than a century ago. Today however, customers seek to be part of brand stories that are personalized and unique, in addition to being authentic and engaging. “The importance of experiential marketing is rising. It’s more than product- It’s about storytelling,” according to Jean-Marc Belliachi, Sr. Partner and global leader of BCG’s luxury, fashion and beauty practice.
Rolls Royce has played this game well. They gained access to high net worth customers through an event in Britain where they hosted select customers, prospective high net worth customers, special guests and media at their March Motor Works showroom in London over a weekend. The showroom was refashioned to be a 1960s dealership for the event complete with vintage signage, memorabilia, a large 1960s style safe and even showroom managers dressed in 1960s style suits and bowties. Scottish whiskey major John Walker & Sons is inviting its guests in the Asia Pacific onboard a yacht to partake in activities that explore the history of the brand, in addition to being a showcase event for their triple malt label “John Walker & Sons Odyssey.”
In India, the mobile and social platforms are yet to develop as much as they have in the west and events are still the medium of choice among luxury marketers. Ermenegildo Zegna did an event recently where they hosted a private art show at an art gallery in Mumbai for select guests and media. DIESEL launched its India store with a massive “Fake Party” which celebrated the many fakes the brand has spawned in the country, clearly in tune with its ironic positioning. The guest list however, was limited to a few select customers, brand partners and influencers. Roberto Cavalli (pictured below), Kenneth Cole and Renzo Rosso have all been in attendance at launch events for their brands in the country, indicating their seriousness in this regard.
In addition to this, the use of technology for innovations in Out of Home advertising, Print and Direct mail is also a big trend. Augmented reality is no longer in the realm of science fiction and the lines between offline and online are blurring fast. 3D printing has been a boon for customization and phone companies have started customizing phones for those willing to pay a premium.
We hope you liked our exploration into the lives of the 1%. Do leave us a line in the comments if you have any specific opinion about the same.
- Rahul Sharma
In our last post, we established the context for our exploration into the lives of the super-rich. We saw just how wealthy the 1% at the top is in comparison to the rest of the world’s population. In this post, we shall try and decode their consumption habits and gain deeper insight into the mind of the luxury shopper.
A survey conducted by Prince and Associates in association with Elite Traveller Magazine, which is popular among private jet travellers uncovered these spending habits of the Jet setting elite:
- 89% purchase fine jewelry per year, spending an average of $248,000 (INR 1.24 Cr.)
- 32% purchase luxury watches per year, spending an average of $147,000 (INR 73.5 Lakh)
- 90% purchase fashion/accessories per year, spending an average of $117,000 (INR 58.5 Lakh)
- 65% stay in a hotel/resort for leisure per year, spending an average of $157,000 (INR 78.5 Lakh)
- 73% use a hotel/resort for a meeting or event per year, spending an average of $224,000 (INR 1.12 Cr.)
- 59% stay at a spa per year, spending an average of $107,000 (INR 53.5 Lakh)
- 21% take a cruise per year, spending an average of $138,000 (INR 69 Lakh)
- 17% take an experiential trip per year, spending an average of $98,000 (INR 49 Lakh)
- 75% make home improvements per year, spending an average of $542,000 (INR 2.71 Cr.)
- 85% purchase wine or spirits per year, spending an average of $29,000 (INR 14.5 Lakh)
- 30% purchase fine art per year, spending an average of $1,746,000 (INR 8.73 Cr.)
- They own/lease 4.4 luxury vehicles currently and 85% are planning to acquire a new vehicle in the next 24 months
- They own 2.5 primary homes valued at $2 million + (> INR 10 Cr.)
Thus, these people spend considerable amounts of money on things others might consider luxurious. If you thought only the Americans and Europeans were crazy about luxury, the super-rich in Asia are also quickly getting up to speed with the west. Japan has long been one of the biggest markets for luxury goods in the world, and India and China are fast catching up thanks largely to growing economies and young populations with large expendable incomes.
However, it’s not just the amount of money they spend, but the manner in which they spend it that suggests the lengths this segment is willing to go to in order to satisfy their desire to consume.
Consider, for example these shopping behaviors exhibited by some of India’s super rich and reported by the Economic Times :
- Shahnaz Husain, Cosmetics Diva, has a Louis Vuitton collection in her wardrobe—not crafted at any factory of the French fashion giant, but at her bungalow in South Delhi, designed by herself and stitched by an in-house tailor. She always buys LV Bags in pairs: One to be used as a bag and one to be cut up and shredded for use by her tailor.
- Diljeet Titus, one of Delhi’s top lawyers, has bought 40 handsets of luxury phone brand Vertu in the last couple of years. Vertu phones in India cost between INR 3 lakh and INR 66 lakh. Titus also loves to splurge on luxury watches, suits, phones and vintage cars for himself.
- A lady in Delhi sent 3 specially imported Hermes Birkins worth INR 60 Lakhs to a family friend whose daughter’s wedding she was unable to attend. She also sent an apology note.
This is not just a Delhi phenomenon, although Delhi is fast establishing itself as the nation’s luxury capital. The Delhi stores of most luxury brands with a presence in India are their best performing stores in the country today and cities like Bombay and Bangalore are only just catching up. As far as luxury malls are concerned, Delhi’s Emporio, Mumbai’s Palladium and Bangalore’s UB City are the most preferred destinations for luxury brands seeking to open in the country.
Data gathered from one of the world’s top apparel brands with operations across India suggests that approximately 55% of all revenues come from a small portion of the total customer base (~10%) and spending is concentrated even further amongst the top 1%.
Interesting anecdotes from those in the industry bear this out. One customer, for example, a rich businessman from the Mumbai area spends approximately 2 million INR annually at just 1 store of a brand selling premium casual wear, in addition to shopping at the brand’s stores in Thailand, London and at other locations across Europe. Another customer in a different city once deposited approximately 1 million INR at a certain luxury brand’s store in cash! He said it was too inconvenient for him to carry cash around every time he had to buy something. Even more surprising, he used up his store credit within 90 days.
A 2008 research amongst affluent households (Household Income >$100K) and Super-Rich Households (>$250 K) also provides keen insight on the media consumption habits of the Super Rich, as compared to the affluent. The richer one gets, the more time one tends to spend reading and surfing the web, versus time spent watching TV and listening to radio.
Thus, the super-rich individual today is:
- A big spender on luxury products and experiences
- An eccentric and a stickler for personalization, both in experience and in product
- A global traveller, in tune with the latest luxury trends around the globe
- An avid reader and a digital native
The Super Rich Customer’s wallet is the Holy Grail most luxury marketers are after and the quest isn’t an easy one. “What do you sell to someone who has it all?” is the question most are trying to answer. In the next post, we shall take a look at what Luxury and Premium Brands the world over are doing to serve this ‘Over served’ segment.
- Rahul Sharma