The NBA, Dolce & Gabbana and China Live In A Parallel Universe

The NBA and Dolce & Gabbana find themselves in a parallel universe. Offended by their advertising, Dolce & Gabbana was also banned by the Chinese government and society. It was a news story without traction much beyond fashion industry circles.  An international luxury brand having issues in China seemed far away and not very relatable.

Now that a similar situation has hit the NBA, it is massive mainstream news.

The back story: About a year ago, Dolce & Gabbana ran three 40 second advertising spots on social media. They were designed with the intent to show their love for the Chinese consumer while being irreverent and endearing. Instead, the entire country of China took them as offensive and insensitive. Within days, founders Domenico Dolce and Stefano Gabbana issued a lengthy apology on Twitter.

Stefano Gabbana and Domenico Dolce Issue Their Profound Apology

Compare this to the reaction and response by Adam Silver, NBA Commissioner.

“The long held values of the NBA are to support freedom of expression…we hope our Chinese fans and our partners in China, they will see those remarks in the context of now and a three decade, if not longer, relationship.”

Adam Silver, NBA Commissioner October 9, 2019

Two very different apology styles.

A year from now, what will this look like for the NBA?

This is Dolce & Gabbana’s reality one year later.-

The Dolce & Gabbana punishment shows in revenue, media metrics and the always-important engine of luxury status branding: celebrity pop culture. Various reports indicate that social media reach has declined by 65% and their Asian region revenue is down by as much as 25%. Dolce & Gabbana is a significant operation at $1.5B USD. By any standard, these are very real numbers. In effort to protect their global careers, US celebrities are reportedly eschewing Dolce & Gabbana’s fashion on the red carpet and earlier this year, the model in their ads issued statements of apologies and regrets.

What’s at stake-

NBA China is worth $4B USD.

The Parallel Universe of Fashion, Sports and International Relations

The cross-dynamics of all this are quite mind-blowing. The US and China trade negotiations are carrying on and the two countries are blacklisting each other’s companies. The head of the Chinese Basketball Association is Hall of Famer Yao Ming, who had played his entire US career in Houston. Unbelievably, this the same team from which the much hated tweet originated. Tencent, the Chinese streaming video platform that hosts the NBA, recently signed their contract extension for $1.5B. Now Chinese fans want refunds due to the halt. Tencent’s Music Division trades on the NYSE and it is currently in a class action lawsuit for false and misleading statements. Then, of course there is the entire reason and motivation behind the Houston coach’s tweet- Hong Kong’s social unrest and rioting.

Global Dynamics

There is much analyses and parsing of the situation. It’s all basically moot. Dolce & Gabbana apologized profusely. Adam Silver’s apology is highly conditional. Do either really matter? Following their leader in an utterly unwavering manner is bedrock to Chinese society. So, it seems that short of a complete exoneration by President Xi Jinping himself, this status will continue for both the fashion house as well as the sports franchise.  

How long it continues is the real question.

ULTA Beauty is #1. But What is Around the Corner???

Ulta Beauty is a thing of beauty. Both the company and the stock are exceeding everyone’s expectations. But like all beautiful things, they can wither from old age and neglect. Ulta Beauty’s strategy is on the edge of doing just that. Yes this sounds crazy, but read on.1st Body Image

It is management’s job to look forward and around the corner in order to set and adjust strategy. Let’s look around the proverbial corner.

Since their 1990 launch, Ulta maintains their force fields of differentiation:

  1. The combination of high/low merchandise price points.
  2. Full-service salons are in the back of every store.

NO COMPETITOR HAS BEEN ABLE TO COPY THESE DIFFERENTIATORS

Their financial position is equally astonishing. On October 25, 2007, Ulta Beauty (NASDAQ: ULTA) went public and opened at $18. Right now, the stock is about $350. If you are counting, that is over 18x your money. They are also completely debt free.


“The Ulta Beauty team delivered excellent results in the fourth quarter,” said CEO Mary Dillon. “This performance reflects an acceleration in comparable sales in our retail stores, primarily driven by traffic.”

Mary Dillon Ulta Beauty CEO
Mary Dillon, CEO ULTA Beauty

Ulta highlights their execution in (3) segments:

Product Sales

Beauty Services

Ecommerce

Press releases reveal the reality of these (3) initiatives. Brick and Mortar Retail product sales dominate at 83% of revenue. Ecommerce is only 11% and only recently have they signed on with cutting edge digital partners. The Salon segment of their revenue is a mere 5% of their massive $6.2B in revenue, and they project the salon growth at only 3%. Remember the salon is a sustainable competitive advantage. At only 3% growth, it functions more as a cost center than a profit center.

The Salon projected at only 3% growth is more a cost center than a profit driver

Further analysis reveals more. The bulk of their spend and focus on execution is actually on building new stores. They plan about 80 new locations this year. That’s it-this is the grand total of their execution.

Is this enough??? 

To recap- Ulta is a $6.2B company, debt free and the largest retailer of its kind-and their biggest growth driver is new stores in strip malls across suburban America.

Again, the question can be asked- is this enough? Is it enough to maintain the #1 status they have enjoyed for so long? Or does doing the same thing they have always done threaten their competitive advantage? Are they doing enough for shareholders, consumers and for the brands they sell?

To their credit, there has been a recent sizable coup and significant activity by signing Kylie Jenner and launching Cannuka, a CBD skincare brand.

Stakeholders and Shareholders are first with public companies
Stakeholders- Is Ulta doing enough for them?

Yet,it can be argued that despite their incredible stock performance, Ulta may not be delivering enough value to shareholders. Seems they have much more capacity to comfortably do more- much, much more.

Ulta has only 1 strategic comfort zone. Building new stores.

They basically have only 1 revenue and profit source. Selling product.

Compare this to the competition: Sephora is a part of luxury behemoth LVMH and they benefit from an internal capital market. Department stores also sell fashion goods. Digital only players are proving to not even need a brick and mortar environment.

Ulta’s very narrow growth strategy of opening new US stores is very capital intensive. Their narrow revenue model makes them very vulnerable. The competition is outspending them on digitization. Unless they become more expansionist, Ulta’s competitive edges will be dulled. They will find themselves in a financial cul-de-sac with a lot of physical stores, but no liquidity for new investment opportunities.

What are Ulta’s strategic options? What more could they be doing?

The Answers

Create additional revenue and profit streams

  1. Form an internal business acquisition team- “The A Team”.
  2. Hire a leading global consultant firm to work with The A Team.
  3. Ready corporate culture for global expansion.
  4. Generate meaningful ROI from The Salon assets.
  5. Enter into additional exclusive brand distribution agreements.
  6. Invest heavily into enterprise IoT.

Compared to their formidable capacity, Ulta can do so much more for their stakeholders. The 3 Levers described here just scratch the surface. What do you think? What else could Ulta do?

††

Madison Luxe Group is an innovative beauty, fashion and lifestyle luxury brand retail sales distributor and marketing consulting agency founder Christine C. Oddo and Madison Luxe Group
Christine C. Oddo founder Madison Luxe Group, author The Christine Report Blog

Launching 1st Truly Gender-Inclusive Clinical Skin Care

Reporting the upcoming October 2017 launch of a clinically based and incredibly exclusive skin care formula.
It is INTENTIONALLY designed for equal & effective use for both MEN & WOMEN.

“As the new Chief Marketing Officer of this amazing new brand,

I am so pleased with the opportunity to be able to share aFront Panel Showing For Men and Women

truly gender inclusive and effective skin care product.”

Christine C. Oddo
CMO, ROOT of Skin
Our new brand is named

ROOT OF Skin

ROS Logo

Gang Rendering

The product was researched and developed in our private medical grade research facility. We also manufacture the core active ingredient complex-
SourceCode Technology
and it is only available exclusively within our product.
Expect new product applications coming soon in 2018!

RootSkin_RFRSerum

 

Human to Human Marketing is The Digital Marketing Brand Promise Delivered

H2H- Are You Experienced? Human to Human – The Digital Promise Delivered

Jimi Hendrix was on the right track in many ways when he asked “Are You Experienced?”

So what exactly is H2H?  No, it is not the latest Asian flu.  Neither is it water—that is H2O.  And its definitely not the latest networking app!

H2H is “Human to Human”

H2H is About Brands & Delivering on Their Digital Promise

Your digital promise is the full delivery of your brand’s experience to your consumer.  Sure, its easy to produce slick graphics and fabulous copy on a webpage and in social media.  But brands have to really ask themselves if they are also providing the human experience vis-a-vie their digital presentation.

At first this seems a bit crazy and if nothing else completely contradictory.  Isn’t the whole point of digital is that it’s exactly just that-digital?  Not exactly.  What customers are demanding is the full range of a robust experience that a brand has to offer.  What seems to be new here really isn’t.  But with digital in the mix, the rules of execution have been forever altered.  Marketers know that consumers do not want to simply buy something, they want to fully experience it.  This means that brands now have to understand how to seamlessly deliver online and offline–with great humanness.

The rules of brand delivery and execution are forever changed.  

Missing the H2H portion of the brand delivery equates to treating your customer like a piece of digital meat!

Human to Human Marketing is The Digital Marketing Brand Promise Delivered
Human to Human Marketing is The Digital Marketing Brand Promise Delivered

 

This is nothing new because as far back as 1998, Joseph Pine and James Gilmore published “Welcome to the Experience Economy” and the phrase was then forever coined.  They plotted The Progression of Economic Value graph.

The Progression of Economic Value Created in 1998
The Progression of Economic Value Created in 1998!

Even then in 1998, customers were demanding experiential immersion with a brand. With digital marketing, they are demanding it even more.  Its sort of a paradox.  The more brands deliver remotely, the more customers expect to be treated like a human.

“Its sort of a paradox.  

The more brands deliver remotely, the more customers expect to be treated like a human.”  

Farfetch, the digital platform featuring hundreds of impossible to find boutiques and merchandise, recently announced their “Store of the Future”.  Check out this short video from Bloomberg.

Farfetch is setting the standard for digital delivery and human experience.

Farfetch founder, Jose Neves says:

“The next stage in the evolution of the fashion industry is the connected store, which uses technology to enhance the luxury retail experience to become even more customer centric,” he said. “Farfetch is at the crossroads of luxury and technology and is well placed to understand its needs and deliver a tailored solution.”

Jose Neves on LinkedIn-the Creator of Farfetch
Jose Neves on LinkedIn-the Creator of Farfetch

In their new retail store concept, Farfetch customers will experience the full immersion of humanity wrapped in a digital brand delivery.  Farfetch has executed an admirable business benchmark for H2H.

Is your brand ready for H2H?  Are you experienced?

Christine C. Oddo is the author of The Christine Report blog and founder of
Madison Luxe Group; a beauty and luxury product retail sales & digital strategy agency.
Inquiries to christine@madisonluxegroup.com

Madison Luxe Group Where Luxury Meets Reality www.thechristinereport.com www.madisonluxegroup.com
The Christine Report

Maximalism vs. Minimalism. What Meme Is Right for Your Brand?

Maximalism versus Minimalism.  If you created a campaign using a meme, which way would you go?  Which visual style is more representative of your brand?

More than ever before, visual impact takes the lead role in brand presence.  Memes are an excellent tool for delivering incredible visuals while identifying with your target consumer.  In the not-to-distant-past campaigns relied heavily, and successfully, only on their creative and production capabilities.  Our digital media world has changed all that. Creative is no longer perceived and judged just as award-winning art-for-art’s-sake.  It now has to be conceived with the notion that it can go viral – and we all know that creating the magic of going viral is the killer hack in digital branding.  Now not only does creative have to be flawless and fitting, it must also be able to go into full viral motion.

Memes are a leading way to instantly deliver your brand message.

So, will you go with the Maximalist pow and deliver eye candy straight between the reader’s eyes?  Or, is it more fitting for your brand to play it cool and draw them in with a I-couldn’t-care-less-about-how amazing-I-look-‘tude?

Gucci’s latest Watch campaign is obviously continuing their trend in Maximalist fashion.

Check out some of their recent campaign memes.  The copy is critical too!

Gucci Meme 1Gucci Meme 2Gucci Meme 3

Want to understand how Gucci is utilizing memes into their campaign?

Read Australian Vogue’s article here.

Vogue Australia with Karlie Kloss

 

 

 

 

 

 

 

Now that you have experienced Maximalism, let’s see the difference with Minimalism. What Vetements just did is simply way too cool.

Vetememes the Vetements Meme Jacket Sold Out
Vetememes the Vetements Meme Jacket

Burberry’s Art of The Trench campaign is iconic for its minimalist imagery and impact. They further capitalized on their viral success with a flawlessly linked execution via brick & mortar and engaging user generated content.

Burberry's Art of The Trench Campaign Utilizes Memes, Brick & Mortar and User Generated Content
Burberry’s Art of The Trench Campaign Utilizes Memes, Brick & Mortar and User Generated Content

 

 

 

 

 

 

 

 

 

What Burberry’s did is extremely important.  It illustrates the opportunity for how a brand can lead an entire robust campaign with a single piece of developed creative.

We now know the importance and opportunities of memes.  So what will it be- Maximilism or Minimalism?

 

headshot-from-christmasChristine C. Oddo is the founder of Madison Luxe Group a beauty and luxury product retail sales and digital strategy agency and author of The Christine Report blog.

Inquiries to christine@madisonluxegroup.com

 

Chanel and Karl Lagerfeld's Metiers d'Art Show 2016 - 2017 The fashion and the attitude are amazing, chic fashion in the most breezy spirit. Too chic.

Soooooo Lovely. Paris Cosmopolite 2016/17 Métiers d’Art show – CHANEL

 

Watching this Chanel show was like a mini-vacation for me. It is incredible. The models stroll, strut, dance and frolic in the Ritz hotel. Not a traditional high strut catwalk in any way. I love this. They look like they are having the best time, the music is adorable and of course the clothes are beyond. Go ahead, take a moment for yourself you totally deserve it! Watching this is my idea of mindfulness.  Enjoy.

 

Ho-Ho-Ho Yo-Yo-Yo How Did It Go-Go-Go??? How Were Your Holiday Sales?

So, how did it go?  Now that we’re getting through January, for sure you have already done your 2016 Holiday Sales review.  So, how did it go?  If you are not happy, hard to believe, but we now only have about 8 calendar months to implement change.  Can we do all that needs to be done in time, this time?

The key question for most brands and stores has become incredibly apparent-

Where did my customer shop?

Did I have a brand presence there?

Was my customer’s experience consistent?

In Other Words

ARE YOU UNIFIED???

Unified Commerce.  It’s not just Omni-Channel.

What does UNIFIED mean exactly?  It means that presence or performance is no longer about where one can buy a product or find their retailer.  As marketers, we call each of these a channel.  Do you know what your customer calls it?  NOTHING.  Sorry to be so blunt.  That’s right, they refer to it as nothing.  Why?  Because our customers really don’t care what a channel is.  They only care about where they are and if they can easily purchase something.  We also need less emphasis and planning around “channel optimization”, “tracking” the target consumer, or “omni-channel” anymore, too.  Technically these efforts will remain, but it is really all about the right marketing mind set and goals.  Its time to truly begin to understand and implement brand transaction strategies from the consumers’ viewpoint.

Unified Commerce.  It’s Technology and It’s Your Consumers’ Brand Experience.

brp-graphic
2016 projected $30B spend on commerce unification software 

 

 

It is about a product or a brand transaction being seamlessly and instantly present across every platform.

 

Why Omni-Channel is Not The Same as UNIFIED

Here is a perfect true life example of my experience with an exclusive department store-           This retailer is definitely Omni-Channel but definitely not Unified.  When I fly into this city, I always look forward to shopping at this amazing destination.  When I purchase something that won’t fit my carry-on, I have to ship it back.  The brick and mortar purchase process will not allow it to be shipped to my PO Box.  So, the sales associate has to physically release the order at the exact right time so that it meets me at my house upon return from my trip and not sit on my front porch while I am away.  Then, I have to worry about my purchase sitting at the retailer for sometimes a week or more, depending on how long I am away. But, when I order online from this store, they will ship my package anywhere- including my PO Box. 

                                                                                                                                                                                                         

Dior Tribal Earrings My Must-Have Item Ordered Via Text Unified Commerce Needed Here
Dior Tribal Earrings My Must-Have Item Ordered Via Text

Most surprising to me was when I needed some extra help buying some incredible just-had-to-have runway earrings and I wanted a couple different pair to collect all at once. 

I called the store long distance and during this experience, I was able to order these pricey earrings from the sales associate literally via texting but, get this- they were not available for order via their website.  

Very confusing.                                                                    

 

 

 

 

Unified Commerce Needed Here The ECommerce, In-Store and Phone Ordering Brand Experience Completely Different
Unified Commerce Needed Here The ECommerce, In-Store and Phone Ordering Brand Experience Completely Different

 

So, time has come where the point of sale is no longer just about technology capability, channels or physical location of the purchase.

THE NEW POINT OF SALE IS THE CONSUMER THEMSELVES

Unified commerce means that no matter where or when a consumer decides to buy, they can seamlessly, readily and easily transact their purchase AND to them, the transaction feels, looks and acts the same.  The consumer experiences little differences in their transaction options and brand interaction.  Also anyone in the organization that may be assisting in the transaction has the same information access and in real time.

Unified Commerce by National Retail Federation
Unified Commerce by National Retail Federation

 

 

 

 

 

 

 

Time flies.  Our consumer continues to expect more unity in their experience.  Can you be totally ready by the next holiday season?  Can you get Unified?

 

 

Madison Luxe Group Where Luxury Meets Reality www.thechristinereport.com www.madisonluxegroup.com

Christine C. Oddo is the author of The Christine Report blog and founder of Madison Luxe Group; a beauty and luxury retail sales, product development, brand curation and digital strategy agency.

Inquiries to christine@madisonluxegroup.com