Which is your favourite 2015 Christmas ad?

According to a recent Nielsen report, 9 out of 10 Malaysians believe the country is currently in a state of recession and are tightening their belts as a consequence.

This has led the Malaysia Retailers Association to lower their retail growth forecast to 4% with quarterly growth rates at their lowest since the Asian financial crisis of 1998.

Some sectors, such as supermarkets and department stores have seen quarterly slumps of 18% and with the end of the year sales and Christmas period unlikely to lift revenue, are bracing themselves for a terrible 2015.

No such issues for the UK retail industry as the Barclays Christmas survey 2015 reports 79% of UK retailers expect an increase in sales over 2014.

A far cry from 2013 when Company Watch predicted over 5,000 UK retailers would fail to make it to the ‘killing season’ the post festive months from the end of December to mid February.

With over 25% of retail sales generated in the next 6 weeks, the big retailers will be fighting tooth and nail over more than £40 billion in sales with Christmas advertising campaigns signalling the start of the contest.

Here’s a look at the first Christmas 2015 advertisements to be launched.

John Lewis – The Man on the moon
What happens – A little girl on earth looks through a telescope and spots an old man on the moon. As the seasons change, she watches him sitting on a park bench staring wistfully at earth. Christmas arrives and presents are opened while the old man sits alone. Out of nowhere arrives a gift of a telescope.
Tagline – Show someone they are loved this Christmas.
Anything else – A reminder that many people will be alone at Christmas. Aurora sings ‘Half the World Away’ originally by Oasis. A Twitter feed to keep the story going and an app.
Youtube views – 13,014,000 in the first week and 69,000 Likes.
Facebook – Only the John Lewis page.

Sainsbury’s – Mog’s Christmas Calamity
What happens – It’s Christmas Eve and the Thomas family are all dreaming except Mog the cat who is having a nightmare. In the nightmare he wreaks havoc and practically destroys the house and any chance of a joyous Christmas.
Tagline – Christmas is for sharing.
Anything else – Based on a character made famous by children’s author Judith Kerr. An illustrated book is available and profits go to Save the Children.
Youtube views – 3,526,000 in the first day and 19,200 Likes.
Facebook – Nothing yet.

Harvey Nichols – Avoid Giftface
What happens – It’s Christmas Day and a large, middle class family are giving presents. Lizzy darling has a look of concern on her face but manages to remain gracious as she’s given a series of predictably bad gifts.
Tagline – Avoid Giftface.
Anything else – A bit more cynical, goes against the grain of the other ‘feel good’ Christmas commercials. Nothing on Facebook, Twitter or anywhere else as far as I can tell.
Youtube views – 672 in the first 3 days and 2 Likes.
Facebook – Nope.

Marks & Spencer – The Art of Christmas
What happens – Everything happens! Christmas isn’t just about Christmas Day, it’s about the build up, the parties, the anticipation, the surprises and excitement and finally the big day, the meal and the nap. This series of ads aims to take the viewer on a blockbuster ride through all of those emotions.
Tagline – The Art of Christmas.
Anything else – There isn’t anything else! Links to Facebook, Twitter, Instagram, Pinterest and just about every other social media channel.
Youtube views – 1,828,000 in the first week and 695 Likes.
Facebook – Only the official M&S page.


Luxury brands look to digital to attract generation AAA

Luxury brands, especially those with significant exposure to China have had a tough 2015. Swatch group annouced a 20% drop in 1H2015 profit whilst Prada saw a 25% drop in its 1st half profits, citing a slump in demand from China and Hong Kong. Jaguar Land Rover sales in China have fallen 20% in 2015 and Maserati closed its Beijing financial street showroom.

Growth in Asia was essentially driven by opening more stores, filling them with a lot of stock and mass advertising. On the whole, luxury brands ignored or at best paid lip service to digital.

This was a huge mistake as Asia’s e-commerce market is now worth US$525bn in online sales and is growing at 25% per annum. This article in CMO magazine that I contributed to, explores what went wrong and what luxury brands need to do to engage Asian consumers online.


Great advertising should help build a relationship

Some TV commercials are remembered for the commercial and some for the product and others for the brand. Although they will never admit it, a lot of agencies want you to remember the commercial whilst the brand wants you to remember the brand so you will go out and look for it and then buy it.

Of course from a branding perspective, it is then that you need to build the relationship with the customer to try and cross sell and/or upsell them, either then or at a later date or to get them to become brand influencers. This is marketing 101 yet it never ceases to amaze me how much money firms spend on marketing (which includes advertising) to acquire a customers yet very little on retaining a customer. In fact it amazes me how much they spend on marketing what is obviously a great product but very little on training retail staff to match the product attributes to a customer’s requirements for value.

Anyway, I came across this fantastic TV commercial for LG TVs. It really grabbed my attention and made me think of buying a TV. Unfortunately I’m not in the market for a TV so I won’t be going to check out the LG TVs. But if any of you are looking to buy a TV and this generates some interest, let me know how you get on at the point of sale. Assuming of course that this model is available here.

A great example of how to drive traffic to your retail outlet in a slow month

Today is a landmark day for retailing in the UK as Selfridges “The best department store in the world*” launches a “No-noise” experience at its major stores across the the country.

It’s a pretty cool concept, offering a Silence Room where customers can ‘find a moment of peace in a world where we are bombarded by a cacophony of information and stimulation’. Customers will be asked to leave their shoes, mobile phones and anything else that makes a noise at the door.

Interestingly the store also aims to reduce the visual noise and has encouraged some brands to offer ‘de-logoed’ products. Paul Smith and Heinz are already onboard with others expected to join in later.

There will also be meditation sessions, quiet music performances (that’ll be a challenge), art exhibitions and motion sensor window displays. Selfridges will also take its name off the classic yellow shopping bags.

You can see more about the Silence Room and other elements of the event on the Selfridges site.

Personally, I think this is a brilliant concept as it understands what customers are looking for and takes experiential branding to a new level. What do you think?

*Global Department Store Summit, Paris. 2012

Brand deflation in Asia

Luxury brands are working hard to keep up with a more dynamic environment with more discerning, knowledgeable customers who have different requirements for value. To retain these customers requires a greater understanding of the those requirements and less emphasis on the mass economy tools such as positioning, reach, awareness.

Loyalty is also less of a factor as consumers see their exclusivity watered down as luxury brands go mainstream and sell their product to anyone. Those brands that don’t understand customer requirements for value may lead to brand deflation, according to Michael Bleby in this article for BRW in Australia

A nice tactical campaign from Nestle

Nestle in the UK has come up with a great tactical campaign to sell some iconic chocolate bars.

The campaign, called ‘We will find you’ is simple. They’ve placed a military grade tracking device in the wrappers of six top selling chocolate bars and spread them around the UK. Posters have been put up around the country and there is a well executed advertising campaign on TV.

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If you are one of the lucky ones and you open one of the six wrappers, the tracking device is activated and sends a signal to an HQ apparently set up for the project.

The HQ will then instruct a team of ‘commandos’ in a helicopter to track you down within 24 hours and ambush you with a delivery of £10,000 (RM50,000) in cash.

Whilst it’s an original, exciting and well executed campaign, I’d like to know what happens if you throw the wrapper away before they track you down?

Be part of a new brand being built from scratch

We’ve been building brands for other people for some time now but have decided to build our own online clothing brand that will begin with a range of souvenir Tee shirts with a specific theme and target market to build traction.

But as we’re not a traditional group of people, we won’t be doing this in a traditional way!

We’re looking for designers who are interested to be part of our team and yet work with us on a commission basis that provides ongoing rewards for your efforts.

What this means is that you will receive a royalty for each Tee shirt sold instead of a one off fee at the beginning.

So if your design becomes a global best seller, you will be in a position to receive royalties for two years, thereby realising the fruits of your creative capabilities!

If you are interested to learn more, please get in touch with me directly to start a dialogue.

Asia is the darling of luxury brands

As the effects of government stimuli wear off and with the global economy heading towards a double dip recession that will impact the traditionally wealthy economies of Europe, the US and Japan more than most, luxury brands have been looking to Asia for salvation. And they’ve probably found it.

Despite the recession, the consultants, Bain & Co predicts luxury industry sales of €158bn in 2010, up 4% after a drop of 8% in 2009. And these sales will, on the whole be driven by Asian operations.

25% of worldwide sales
Shiseido, Japan’s largest cosmetics company anticipates sales of high-end cosmetics to grow 20% a year in China over the next 3 years. In fact, China is driving the luxury business and is now the second largest market for luxury goods, accounting for 25% of worldwide luxury sales. More than the US, Europe and Japan who each account for about 20%.

According to Capgemini there are more than 345,000 Chinese millionaires and many of them are keen to snap up luxury products that offer a little bit of exclusivity and heritage.

India crucial for long term success
But the Chinese market is not the only market helping luxury brand ride out the recession(s). In India, Porsche Design recently opened its first store in New Delhi, joining Prada, Louis Vuitton, Ferragamo and Mont Blanc who are all setting up operations in the capital of the republic. Louis Vuitton now has 5 stores in India.

Luxury jewelry retailer Tiffany & Co reported recently that sales at Asian stores open more than 12 months, with the exception of those in Japan, rose 21% during its most recent quarter. The Asia-Pacific region is driving expansion, with stores scheduled to open in Singapore, South Korea and Hong Kong.

China has the highest sales per square foot
Mainland China is at the heart of Tiffany’s Asian expansion, with the number of stores there due to rise from the current 12 to as many as 30 by 2015. Chinese stores have the highest sales per square foot of US$3,800 compared to US$3,000 in other stores.

French luxury giant Hermes reported strong growth in sales in the first quarter of 2010, boosted mainly by sales in Asia but not including Japan.

LVMH, the company behind luxury brands such as Dior, Louis Vuitton and Moët Chandon recently reported a 11% increase in 1Q 2010 sales. Watches and jewellery sales rose by 33%, wines and spirits by 18% and fashion and leather goods by 8%. Sales of Dom Perignon and other LVMH owned champagnes shot up by 33% in the same period.

Watches and timepieces, there is a difference you know, have also had a bumper start to 2010 and the mood at Baselworld, the world’s largest watch and jewellery fair, was bullish after positive announcements from Bréguet, Blancpain, Omega and Longines whose sales were up 46%, 48%, 50% and 49% respectively in January and February 2010.

Mobile phones
Due partly at least to the fact that it doesn’t have many high end high margin devices, Sony Ericsson has been plagued by declining sales for years and hasn’t made a net profit since 2Q 2008.

However the firm moved quickly to develop high end phones and launched the Xperia X10 and Vivaz last year. The result, the company reported a net profit for 1Q 2010 of €21 million, compared with a €293 million net loss a year earlier. Analysts were expecting a €128 million loss.

US leather goods maker Coach has relied for years on the domestic market and Japan. However, after a slow start, it is ramping up operations in Asia and expects sales in China to rise to US$250 million by 2012, up from almost US$100 million this year.

Luxury brands will have to make significant changes to the way they operate in Asia. And they must learn to understand Asian consumers, learn how to build relationships with them, what are their influencers and how best to engage them. If they, they will find salvation not in the short term, for some time to come.

How to sustain a family retail brand

The picture below was taken in 1912 in Oxford, UK a city about 60 miles to the North West of London. It features Gill & Co, an ironmongers and a branch of J. Sainsbury, a food store.

Gill & Co was established in 1530 during Henry VIII’s reign. At the time it was the first ironmonger in the country. It has been in business ever since and has witnessed the English Civil War, two World Wars, a couple of global economic depressions, three recessions, the birth of the railway, the car, powered flight, electricity, the Internet and more.

Originally the firm supplied ironware and related products for Oxford residents however as times changed it tried to reinvent itself and also stocked equipment for chimney sweeps (think Mary Poppins), farming equipment, tools and gardening supplies. Although Gill & Co moved locations, it was always a one store operation in Oxford.

In 2010, after 480 years in business Gill & Co is closing down, beaten into submission by large DIY and home improvement suppliers like B&Q the 3rd largest DIY retailer in the world, largest in Europe and the largest in China and Homebase.

Sainsbury’s, at a mere 141 years old, a relatively new brand was established in 1869 in Drury Lane. Although now at the centre of the theatre district, this was once a very poor area of London.

Sainsbury has also witnessed much, including 2 world wars, 2 depressions, a couple of recessions, the automobile, manned flight, the moon landings and more. Sainsbury soon became an institution, offering high quality products at low prices. By 1882 Sainsbury was selling it’s own label brands.

Although lacking the heritage of Gill & Co, Sainsbury invested heavily in its staff, employing women as managers when it was unheard of in the early 20th century and developing its own training school to train managers.

Sainsbury also invested in new stores and although at times it has had a rough ride, today it employs more than 150,000 people, has 800 stores in the UK and there are on average more than 19 million customer transactions in Sainsbury’s stores every week and the company has a 16% market share.

It has diversified into non-food products and services and non-food is growing 3 times faster than food. It has a bank with operating profits of £19million and its Internet home delivery shopping service is responsible for 100,000 deliveries every week.

Asia has many small family businesses. In fact in Malaysia, Small Medium Sized Enterprises (SME’s) make up 99% of Malaysia’s total registered businesses. Hanoi in Vietnam has over 90,000 SMEs.

These organizations have a critical impact on the business of a country. In Japan, known for its heavy industry, approximately 70% of the Japanese work force is employed by small and medium-size enterprises (SMEs) and half the total value added in Japan is generated by SMEs.

Asian SMEs, many of them well established with years of heritage cannot sit by and hope that they will be safe from bigger, more aggressive retailers. They need to start planning for the future now before it’s too late.

Here are 5 recommendations for Asian SMEs to help them become a Sainsbury

1) Keep an eye on retail trends, especially in your space
2) Talk to your customers, not just about the weather/politics/sport. Ask them what their needs are, what they would like you to stock, when they would like you to open and so on
3) Build a database of customers and their preferences. If you do sell up, this will help you secure a better price for your business
4) Leverage what you have against the big retailers in your space. You can’t compete on price and probably can’t compete on choice but you can compete in other areas – convenience, personalization, customization, free alterations, returns, speed of delivery and more
5) Develop a brand strategy that includes succession planning. If you have sent your kids to university overseas, are they going to come back and work in your hardware store? If you don’t think so, look to create strategic relationships with other players in your space now before it is too late.