W51 - Gucci, Watches of Switzerland, Conde Nast, Google, YNAP.. and more!
1. Gucci will open a digital store on Tmall’s luxury pavilion starting December 21. It will include both fashion and beauty.
Even though Gucci was amongst the first major fashion brands to enter China’s digital eco-system with a presence on Wechat, Little Red Book and Weibo, they had not expanded more due to concerns over counterfeiting and also a preference for direct to consumer sales. By joining more than 200 other luxury brands the Luxury Pavilion, Gucci’s strategic objective is to gain access to Alibaba’s 750 million consumers and accelerate its growth. Chinese consumers will usually research products through multiple channels and platforms before committing to a luxury purchase, which is why it makes sense for luxury brands to partner with multiple pure players. We will most likely see more and more announcements like this one in the near future.
2. The watch specialty retailer Watches of Switzerland released impressive first half results at the end of October. Despite forced store closures in Q1, first half revenues declined only by 3%. During the 2nd quarter, sales increased by +21% and this trend continues with holiday seasons early results showing an 11% increase overall while eCommerce sales doubled.
In terms of geography. The UK was resilient, especially thanks to the opening of 5 mono-brand boutiques including a Rolex store,
The US outperformed with a +11% increase in sales in H1. .
Finally, earnings also improved with Ebitda rising by 26% and debt being reduced by 76%. All these positive news encourage the retailer to raise guidance for the remainder of the year.
3. H&M launched a new brand called Singular Society which is testing a completely new business model. Inspired by Subscription based businesses like Netflix or Spotify, the brand is for members-only and products are sold at cost. There are 2 monthly membership levels: the basic one for 9.5 euro, gives access to 5 items per month. The 2nd membership called “plus” costs 19.5 euros for 25 products per month.
Price can only be seen once you become a member. The collection is made of simple and timeless staples of any wardrobe such as sweater, tshirt or sweatpants, without sacrificing the quality. More skus will be added over time, leveraging the members requests and feedback. H&M explains that selling at cost means the brand will be about service and not revenue. I’m the focus is on building long term qualitative relationships with clients, rather than focusing on growth and profit.
4. Four. In the world of media publishing, Ana Wintour received a promotion this week and became the global Chief Content Officer. Prior to this role, she was the US artistic director for Conde Nast and global editor-in-chief at Vogue, a position she will keep in addition to her new role. This new structure signals quite a change in Conde Nast’s operating model where local markets traditionally competed for marketing budgets and had a certain freedom over content. Consolidating a global content creation strategy under Ana Wintour will allow the company to improve its reach and quality, by facilitating how the creative teams create, share, translate, adapt and distribute content across all the platforms and formats. It will also help leverage advertising budgets. Conde Nast also announced that they are setting out to return to profitability by 2022.
5. Google launched an Augmented Reality cosmetics try on experience through Google search. How does it work ?
Google partnered with brands like L’Oréal, Estée Lauder, MAC or Charlotte Tilbury to allow consumers to try on makeup shades across a range of models with various skin tones or even try on themselves using their phone’s front-facing camera. This new feature was developed in partnership with external technology partners such as Modiface, Youcam Makeup and other AR Beauty tech. Some features are just like social media platform filters, where you can superimpose make up shades directly onto your live picture. The purpose of this new feature is not to go into social sharing, but rather commerce, by connecting brands with shoppers to drive sales. Brands are not paying to be a part of this new feature. Instead, google’s objective is to promote and open the Google Shopping destination to more retailers. Every week on this podcast we highlight how tech giants are investing into commerce, mainly as a way to diversify from their ad revenue business models. It’s in that spirit also that Facebook recently announced they were adding a cart checkout function to whatsapp for business.
6. In the resale economy, StockX announced a $275m Series E. It brings the total amount of money raised to $490 Million and values the company at $2.8 billion ! The resale platform launched in 2016 as a sneakers trading platform where the value of product would adjust based on supply and demand. It has now extended its product categories to include streetwear, luxury goods, collectibles and even electronics. It has experienced exponential growth especially in the past 12 months, and in markets outside of the US, where business increased 260% in the last quarter. The marketplace receives on average 25 million visitors per month. StockX will use this fresh funding to open more local authentication centers and accelerate their international expansion, especially in the Asian markets where they opened an office in Tokyo in 2019.
7. Walmart partnered with Tik Tok to host their first livestream shopping event on the app.
The Walmart show was curated by 10 Tik Tok creators who selected their favorite fashion items and promoted them through content they created. The show was hosted by Tik tok superstar Michael Le who has a 43 million follower base on the app. Users could shop by either tapping on a pin during the show to add certain products to cart or they could click on a cart button at the end of the show to browse through all the products presented and make their selection.
How is this related to luxury you might ask? Well: how to capitalize on Tik Tok for commerce has been a hot question lately, and Walmart might be showing the way !
8. Customized hair care brand Function of Beauty announced the launch of an exclusive partnership in the US with Target. Shoppers will be able to select a shampoo and conditioner base out of 4 choices (straight, wavy, curly or coily), and then select up to 3 hair goals out of 10 options. When they are back home, customers just have to open the hair goal pods and pour them into their base bottle. After a firm shake, their customized hair care product is ready to go !
This partnership marks the first time that the 4-year old start up goes into brick and mortar, as it was operating as a Direct to consumer brand until then. It’s been quite a year for Function of Beauty, which also recently announced the launch of custom skincare, the opening of a brand new manufacturing facility and a massive $150M capital raise from L Catterton.
9. Yoox Net-a-Porter launched a pilot project around Digital IDs to boost the traceability and circularity of clothing.
The products selected for this project have been embedded with a QR code, which customers can scan to get access to unique information about that specific item: from provenance, authenticity,care information as well as branded content and services. Customers can also see if and when a garment has been repaired or resold. The new Digital ID initiative has been led by the group’s sustainability and R&D teams and is part of the company’s broader sustainability strategy, Infinity, launched in November 2020. Starting with its own private labels, YNAP said they plan on sharing their learning
with brand partners to encourage adoption of that type of technology.
10. Fashion designer Raf Simons launched this week a new eCommerce platform which is separate from his brand. The website is called “History of my World” and it is described as a multi disciplinary platform where shoppers can discover the designer’s point of view, aesthetic and philosophy. The collections will span across Home, Literature and clothing, including limited items and special collaborations.
Why does it matter? Because we are entering the era of creators, micro-communities but also curators. I will release a special episode in January in which I discuss this very topic with marketing expert Ana Andjelic, so stay tuned!