21 c luxury consumer

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Strategic Brand Marketing In The Über Competitive Global Denim Market

Case Study: “Joe’s Jeans”


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Global Brand Marketing Analysis:

I. Luxury Category & ConsumerII. Denim MarketIII. Case Study: Joe’s JeansIV. Presentation SummaryV. Q&A + Joe’s Jeans Pictorial


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I. GLOBAL LUXURY MARKET“21st Century Realities”


moda360°Market Statistics

Luxury market is stronger than ever; expected to grow to $2TN USD by 2010Luxury fashion market represents about 5% of total luxury market by 2010, estimated to be $100BN USDAt current growth rate (10-15% annually), luxury market will reach $2.4TN USD by 2012 and $3.22TN USD by 2017


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Luxury Category (in $ USD trillions)Luxury Fashion (in $ USD trillions)

Projected Market Growths


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Western markets (US & Europe) are less brand loyal vs. Eastern countries; seek the “best”US & European consumer demand a luxury “experience” at all touch points that resonatesEastern consumers desire “status symbols”; flashier, ostentatious, & more iconic the betterConsumers are willing to pay any price for “quality, service, design, & cachet”



Luxury goods are very selectively distributed by geography in limited quantities to control brand imageThe unattainable & exclusivity is what consumers want, and will allocate income for it fantasy and dream fulfillmentConsumers want an “ego-boost”; women especially are compliment-seeking when deciding luxury purchases



Less than 1% of global luxury market goods are the extremely richIn fact, 20% of shoppers account for 80% of revenues in upscale market; in some cities, the ration is 10:90Consumers want an “all things luxury haute lifestyle” and will budget to attain and be connected with it



Consumers look to luxury for differentiation, innovation, & customization to satisfy their desire to be perceived as inventive & uniqueLuxe purchases justified as “investments”Luxury consumer is found across all ethnic, age, cultural, socio-economic, and class groups for both genders around the globeThe luxe life is no longer reserved just for celebrities & the über-wealthy



Luxury consumers are increasingly more savvy, smarter, fickle, decisive, & product educated90% of them come from middle class, not trust fund families; common denominator is psychographicsIn the usual “serious” luxury categories, the rare quotients of “pleasure” embedded in branding & marketing can lure and retain consumers greater sales & profitabilityDon’t confuse “fun” with “fads”; luxury consumer expects consistent, consummate execution in all areas (product quality, service, overall value, customer relationships)


moda360°Market Statistics - continued:

Today’s luxury is tomorrow’s necessity; markets are always in motion & becoming more luxuriousVital to remain fresh, current in luxecategory; amplify & inflate qualitiesRemain stagnant & constant, you will become obsolete, left behind, forgotten



Number of global millionaires & wealthy elite continue to increase, with an expected rate of 7% in the next 3-5 yearsAccording to the 2005 U.S. census, 15.1 million HH earned $100K+ USD; analysts estimate 24.6 million HH for 2007Increasing number empty nest, baby boomers households w/ discretionary moniesPrevalence of aging singles; postponement of marriage & children


moda360°Market Statistics – continued

Emerging markets (Asia, India, Russia, Australia, & Middle East) are expected to have the fastest gains in demand for luxury goods, with China dominating the lead with estimates of a 10-fold rise over the next 5 yearsDemand for luxury grows despite economic concerns (downturns) & political uncertainties on a global scale


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II. DENIM MARKET“The Facts”


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Denim Facts$49 billion USD industry worldwide according to 2004 figures, estimated to increase by 8.9% over the next 7 years

Projected retail market value by 2014? $52.2 billion USD


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Denim Facts – continuedWorldwide phenomenon worn by both sexes of all ages across all cultures and socio-economic demographics

Redefined as a wardrobe staple & fashion statement; readily acceptable at the workplace, evening functions, special events, & assorted “dressy” occasions


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Denim Facts – continuedHigh profit, low-overhead, easy-entry industry with literally hundreds of brands in the global marketplaceYouth-driven business, largely tweens, teens, and 20-year oldsProfessional & middle-age audiences are responding rapidly to new lifestyle


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Denim Facts – continuedDenim can be divided into 3 buyer categories from POV of today’s savvy consumer:

Utilitarian (eg. workmen's uniform)Wardrobe staple (eg. khakis, cargo, camo)Luxury statement (eg. haute couture, designer RTW, haute lifestyle)


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Denim Facts - continuedGraphically, the denim market is divided as follows:

MassMidrangePremium


moda360°Denim Facts – continued

Premium denim (defined as jeans with prices of at least $70 USD wholesale) is fueling the denim & cotton categories; quality, fit, styling keeps improving drives the market

With exponential growth in popularity (hence, sales) each year, denim is the new “blue chip”stock of the 21st century with no signs of market slow down or decline


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Denim Facts – continuedPremium denim sub-category has ballooned from $14 billion USD in 2004 to $15.8 billion USD in 2006Since the launch of the modern premium jean category in 2000, worldwide denim sales has steadily climbed to 3.5% in 2004, and is predicted to reflect double that ratio by year’s end 2007



Though only accountable for a tiny fraction of denim sales worldwide, premium denim has ushered in the most significant fashion movement in historyEconomic forecasters predict longevity of this specialty market, entrenched in today’s lifestyle-oriented consumer



So what of the “Denim Bubble” theory??Competitive shake-up already evidencedContinuous stream of new brands vying for market share, status, influence, retail spaceLifespan of a premium denim brand is short lived for the vast majority due to over-whelming market saturationIncreasingly challenging to “sell” to the modern, intelligent consumer



Revolution to Evolution: No longer regarded simply as a textile, denim manufacturers continue to push the envelope on technological innovations, usages, & applicationsPremium jeans have defiantly conquered the khaki, cargo, black pant, & legging →quintessential wardrobe extension of today’s style conscious global society



The capsule history of the premium denim market has aggressively evolved from “product & category defining” to “brand & lifestyle positioning”

Establishment of a new apparel genreDefining usage (the “5 W’s”)Convergence on differentiation & niche strategies



Decide & commit:Mass market (high volume @ discount)Midrange (mid-volume @ select price points)Premium (low volume @ luxury price points)

Resources & competitive advantagesHonest analysis of capital, distribution, talent, technology, market savvy, forecasting, exec management, timeliness, & commitment



So, you think you’re ready for the major leagues??Let’s take a step-step study of how one aspiring designer defied the odds to launch a successful premium denim brand – its humble beginnings as a LA cult favorite to international acclaim


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III. Case Study:“Joe’s Jeans”


moda360°Joe’s Jeans: Brief History

L.A. denim brand founded in 2000 by Joe DahanLaunched first collection of women’s premium denim in S/S 2001 @ MagicOriginal inspiration: edgy, rocker chickMarket strategy: “push effort” via independent sales showrooms


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Joe’s Jeans: Brief HistoryEarly competition: 7, Citizens, Blue Cult, Habitual, & Paper Denim & ClothDistribution focus: specialty retailers and key influential department stores Pricing: competitiveSales points: sexy, edgy alternative


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Joe’s Jeans: Brief HistoryEarly challenges:

Brand identity Niche market DifferentiationCapital Exposure



Early efforts to meet challenges:CreativePressAdvertisingPromotionSales “push-thru” strategy



Early stumbling blocks:Rapid market saturationSlow or incapable of responding to fast changing dynamics of industryEntrenched media darlingsDistribution limitationsSlumping sales; poor sell-thru resultsInconsistenciesLack of marketing or branding direction


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Joe’s Jeans: Brief HistoryInept corporate structure & culture:

Lack of strong management & leadershipUnderstaffed, underdeveloped departmentsVague areas of responsibility, duty & accountability; poor communicationsLack of team & departmental cooperationOverall dysfunction & unpreparedness



Solution …ReinventRelaunch & RevitalizeRestructureRedefineRegroupReallocate resources



Close inspection of competitionHighly identifiable productQuality construction & detailsConsistenciesPerformanceBrand & consumer focusedEmphasis on “pull strategy”



“Man in the mirror”Retail & buyer feedbackConsumer thoughtsMedia POVProduct reviewCompany organization


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Joe’s Jeans: Brief History“Do or die”

Retract outsourcing of creative & press effortsFocus on consumer needs & wantsProduct redesignDevelop market strategyBranding seminars & handbook guidelines


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Joe’s Jeans: Brief HistorySound marketing directive:

Initiate “pull strategy”Create awarenessConsumer orientationHone inconsistenciesMedia outreachThink outside the box



“Judgment day”Spring 2004 marked the re-launch of the women’s premium collection @ MagicIntroduction of new & differentiated product based on fits (first in industry to hedge on this strategy)Cohesive message establishedNew moniker “JOE’S”



“Forest from the trees”Brand emphasisNew category possibilitiesLessons from RTW & luxury empiresDesigner lifestyle vs. apparel garment focusRedefining; avoid commodizationEngage target consumers


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Joe’s Jeans: Brief History“Back to the basics”

Acquire media placementForge alliances with the tradeCreate awarenessConnect with the consumerBuild celebrity & VIP following


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Joe’s Jeans: Brief History“Clean up your act”

Damage controlRestore relations & acquire new onesNew & positive attitudeAccommodation & availability (“service!!”)Explore grass roots efforts in conjunction with big ticket expenditures (“mix & match”)


moda360°Joe’s Jeans: Milestones

“Dawn of a new era”Media blitzL.A. Fashion Week runway showPublicity!!Strategic collaborationsStrong, edited core designsPromotionsCharitable causes


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Joe’s Jeans: MilestonesStrong product foundation for growth

Calculated line expansion• From 6 Fits in 2004 to 8 Fits in 2005• Introduction of capsule sportswear group

Exploration of product expansion• Men’s collection• “Gold Label” limited edition• International distribution (Japan & Europe)



Revisit the competitionTop brands: True Religion, AG, Chip & Pepper, Earnest Sewn, Rock & Republic, Hudson, Paige Premium, Rogan

Embrace the trendsDistressed to clean; plain to embellished; bootcut to skinny; exploration of proportions



Qualify & quantify success of the newly installed “pull strategy:”

Increased sales volume?Expanded distribution?Customer loyalty?Celebrity following?Brand & product recognition?Interests from foreign markets?Merchandising effect?Consistent across all customer touch points?



And who says you cannot quantifymarketing efforts?

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Strong brand foundation for growthWomen’s RTWKids expansionHandbags & other accessoriesFlagship stores & retail outletsIn-store vendor boutique R/ELicensing opportunitiesLifestyle orientation build customer base


moda360°WWD, May 2006


moda360°DNR, October 2007



Reaffirm brand image against newcomers: J Brand, Siwwy, Kasil, Rich & Skinny, …Innovate: colored jeans, new denim shapes, luxe hardware, custom handwork, classic bejeweled, coated denim, multihued dyesLow-rise to mid and high; skinny to flared and wide; 5-pocket basics to trouser styles


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IV. EXECUTIVE SUMMARY“Take Heed & Follow Thru”


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Recap: Luxurious FuturePremium (or luxury) products and services require more sophisticated marketing & branding approaches vs. mass or midrange categories“Push strategy” cannot be the long-term focus of a business; the most successful companies create a “need”that the customer finds it “wants”


moda360°Recap: Luxurious Future

Entry into the luxury industry or category requires exhaustive planning and cohesive marketing & branding plansCompany + designer + brand + products must all align as a parallel entity though distinctively separateCustomer is king in the luxury kingdom



Fostering of trade relations is vital to success & longevity of any businessNo amount of advertising can compete with third party validations & word of mouthRealize proactivity in thought & action vs. reactivity to market changesInnovate, anticipate trends, set the pace, become an industry leader Be a stylemaker vs. uninspired follower



Quality is in the detailsModern consumer is brand “emotion” oriented vs. product “category” focusStrive for perfection to maintain advantage in today’s overly competitive global marketplaceRenew, refresh, revitalize, reinvent your “company” continuously evolve or become extinct, unnecessary, irrelevant


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Recap: Luxurious FutureStrategy must be well planned & executed to take advantage of quintessential momentum & synergiesAttune to cultural & socio-political movements (eg. eco-friendly, philanthropy, global harmony)


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Recap: Luxurious FutureApply similar methodology to internal corporate functioning; departmental collaborations, foster team involvement, establish strong & effective managementEmpower employees to view their jobs as careers & vital roles in the success of the company; build team with premium salaries, benefits, & incentives; employees & outside agents must be regarded as strategic partners


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Recap: Luxurious FutureStrong, well-defined brand messages; emotionally stimulate & engage consumerFlexibility and quick responsiveness; adapt, evolve, embrace market changeStay true to brand’s POV - an incisive vision, world, lifestyle consumers can aspire and relate to


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Especially Prepared For The Cotton Inc1st Annual “Global Denim Event”

Shanghai, ChinaNovember 13 – 14, 2007

By Adriana M. Josephwww.Moda360Worldwide.com


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Resources:Trades (WWD, DNR, Sportswear Int’l)

Market Researchers (Boston Consulting, Brand Keys, Donegar Group, Luxury Institute)

Newspapers (Fortune, Entrepreneur, Business Week, WSJ, The New York Times)

Government Agencies (U.S. Census Bureau)

21 c luxury consumer

Documents

moda360 worldwide

luxury fashion market

total luxury market

global luxury market

upscale market

todays luxury

usd copyright

luxury category consumer