Making sens of these turbulent times

Sustainability and Luxury

A not very interesting article on a subject though very interesting, at Havas Media Lab’s blog today.

Nevertheless, something deserves to be highlighted.

Kavita Maharaj, back from the IHT’s “Sustainable Luxury” conference held at New Delhi on March 24th and 25th 2009, explains.

“In addition to high levels of engagement with traditional luxury brand drivers like heritage and quality, consumers in emerging markets are increasingly showing extremely high levels of engagement with other issues, for example, the area of sustainability. Retailers that move quickly to capitalise on this, will be more adept at building greater brand equity and thus greater commercial succcess, both in the medium and long term”.

Ok, it’s not a scoop. But around one year ago, i read this article by Dana Thomas (author of “Deluxe: How Luxury Lost Its Luster”), in The New York Times.

“For more than a century, the luxury fashion business was made up of small family companies that produced beautiful items of the finest materials. It was a niche business for a niche clientele. But in the late 1980s, business tycoons began to buy up these companies and turn them into billion-dollar global brands producing millions of logo-covered items for the middle market. The executives labeled this rollout the “democratization” of luxury, which is now a $157-billion-a-year industry.

To help these newly titanic brands retain an air of old-world luxury, marketing executives played up the companies’ heritage and claimed that the items were still made in Europe by hand — like Geppetto hammering in his workshop by candlelight. But this sort of labor is wildly expensive, the executives routinely explain, which is why the retail prices for luxury goods keep going up and up.

In fact, many luxury-brand items today are made on assembly lines in developing nations, where labor is vastly cheaper. I saw this firsthand when I visited a leather-goods factory in China, where women 18 to 26 years old earn $120 a month sewing and gluing together luxury-brand leather handbags, knapsacks, wallets and toiletry cases. One bag I watched them put together — for a brand whose owners insist is manufactured only in Italy — cost $120 apiece to produce. That evening, I saw the same bag at a Hong Kong department store with a price tag of $1,200 — a typical markup”.

It would be very cool if some luxury brands could be a little bit more coherent (fortunately some does).

By the way, if you want good thoughts on this topic, visit the excellent John Grant’s blog, Green Normal.

Mike Arauz on "If It Doesn't Spread, It's Dead", by Henry Jenkins

Mike Arauz on “If It Doesn’t Spread, It’s Dead”, by Henry Jenkins and his team at MIT’s Convergence Culture Consortium.

“In order to start designing spreadable media, we need to start understanding the new social structures in which it spreads.

“The question now becomes, not how to reach the influencers [as defined by Malcom Gladwell], but how do individuals choose to behave in a networked society and what kinds of social structures best support the spread of content”.

Spreadable media is made possible by the new landscape for social interaction and group collaboration. As Yochai Benkler describes in The Wealth of Networks, digital technology has improved what people can do for themselves, what people can do in collaboration with others, and what people can do within independent organizations outside of commercial industry. And, as I’ve written about before, this even affects how we perceive ourselves.

Here, again, the idea of individual agency, the active role that people play in spreadable media, echoes through the discussion.

Once we welcome this role that people play, we can begin to address the important questions of what people choose to share and why?

And this last point, can’t be stressed enough:

“Although we’ve used the concept brand communities a couple of times, it’s important to reiterate that communities aren’t created, they are courted”.

I’ve said it before, and I’ll say it again: People’s lives don’t revolve around your brand, they revolve around life. This point has come up several times in discussions around Desire Path Branding. Brands do not have the ability to dictate the cultural context in which they are experienced or the ability to define their meaning in the minds of consumers. Those roles have been turned over to the networks of individuals pursuing shared interests and passions on their own terms. The sooner you accept this new reality, the sooner you can start succeeding in this new landscape”.

Two authors highly recommanded.

Renny Gleeson, Wieden + Kennedy's global director of interactive strategies, on Branding

There are some intersting things in this interview of Renny Gleeson, Wieden + Kennedy’s global director of interactive strategies:

“One of the interesting things to think about with brands in interactive media is not just how you use these media to express your brand or to talk about your brand, but to redefine what it is, and I think that’s an important distinction,” Gleeson said at the iMedia Brand Summit in Coconut Point, Fla. “Social media projects who we are, but to a lot of the folks we’re trying to market to, they look at social media as a way to create who they are.”

“When you get people holding a device up, they don’t see themselves as not participating, they see themselves as sharing. They’re creating their identity”

“Reality has become less appealing than the stories consumers can tell via social media, and the medium has greatly increased that storytelling ability and the volume of consumer opinion — taking control of the conversation out of the brand’s hands. But while brands can no longer control the conversation, they still have the ability to choose who they want to focus their efforts on, which is how brands can become part of the story being told”.

Yeah, that’s pretty cool.

But what’s bred in the bone….

“According to Gleeson, centering an online campaign on an existing demographic or built-in fan base is hardly anything new, but what brands need to do is grow the campaign out of an existing community, rather than simply drop it on top of a community. This keeps the conversation going, even after the campaign is over. That way, the brand continues to earn media share even after the portion they’ve paid for is gone.

“You build and launch a campaign, but then the conversation doesn’t stop,” Gleeson said. “The next time you’re seeding a campaign, you’re doing it with folks you already know, and you might be able to do it directly. Now you can maintain the conversation.”

The way brands can move beyond this is by focusing on critical skill sets: Your staff should understand community management, be fluent in social media, and grasp the importance of making it easy to find a campaign”

I’m sure that Renny Glesson is a very smart guy.

But i’m not sure this is the best way to redefine what is a brand..

A User's Guide to 21st Century Economics by Umair Haque

“What is the role of marketing in a world where consumption must slow?

In the 20th century, marketing was the pusher of a consumption addiction: Madison Ave’s game was to create perceived value by “differentiating” the same razors, blades, and toothpaste. At the Lab, we’ve found that companies who create perceived value are significantly less profitable and more vulnerable than companies who are rethinking marketing to create real value. Think (the awesome) Nike Plus.

What is the role of distribution in a world where consumption, savings, and investment will accelerate in volatility?

In the 20th century, advantage was attained by seizing or building distribution channels. At the Lab, we’ve found that value chains built on inert channels are significantly less profitable than value chains built on circuits - two-way channels, where context flows in one direction, and goods in the other. Think (the totally radical) Threadless”.

No excuses now ;-)