What Actions Did Chanel Take To Attract The Millennials?

"We will not change for the younger generation.

Strategy.

If you want to use

The way to live is good. If you don't want to, we certainly respect this choice. "

Bruno Pavlovsky, President of Chanel global boutique, said in an interview in April 2016.

According to the world clothing shoes and hats net, there is no one.

Brands will be opposed to young people who are becoming the main consumers.

And Chanel's brand marketing strategy, fashion show style, and even change the fashion design itself.

Look at the ads and blockbusters featured in Chanel 2016: from 15 year old Willow Smith, 16 year old Lily-Rose Depp to 17 year old Ouyang Nana, these new generation stars are helping Chanel establish contacts with the new generation.

"This is rare in the past," said fashion blogger Chrison.

In the early March in Paris, Chanel hosted the 2017/18 autumn and winter series. The creative director Karl Lagerfeld moved the virtual rocket into the show ground, turned the show into a space station, and injected a sense of technology into the dress design. The incredible space show attracted many media reports.

Along with the new fashions, there is also Chanel's brand expression package - the full pink facial expression pack is designed to promote the new Chanel Lip Glaze.

This is not new. Nike, who is good at marketing, has launched emojis to attract millennials who are active in social networking.

(Chanel's 2017/18 autumn and winter series, moving the virtual rocket into the show.

Together with the new fashion, there are Chanel's iMessage expressions for the promotion of the new Lip Glaze.

)

In addition to the space show and expression pack, Chanel opened a flash shop Coco Caf E in Tokyo early in the early March. By March 15th, the American rapper Frank Ocean suddenly released a single named Chanel, and Chanel immediately echoed the Instagram drawing and looked like a plot.

In March, this kind of news about Chanel has been exposed on various websites.

These messages give the impression that the classic Chanel is starting to be curious.

(Chanel sends a picture on official Instagram, echoing the rap singer Frank Ocean's single "Chanel".

)

With the growth of younger marketing, luxury brands are fading away from past mystique and more and more chasing media exposure. Nowadays, luxury brands seem to be starting to "lay down". At least, before a series of cooperation between LV, Gucci and Chanel 2016, you may find it difficult to link luxury with tide brands, street graffiti and rap singers.

However, the younger marketing seems to be lively, but it can not touch the fundamental business.

Chanel is facing more than just the problem of brand aging.

Unlike Gucci and Coach, which change designers, Chanel does not seem to want to reshape the brand. They just want to find new ways of pmission and deliver the original brand value more effectively.

However, from the price reduction, the change of designer to the electricity supplier, the major luxury brands constantly break their boundaries. This is also a real puzzle: is it really so bad?

Chanel what's wrong?

In August 2016, Chanel disclosed the performance of Chanel 2015 in a document submitted to the regulatory authorities in Amsterdam, Holland.

As of December 31, 2015, the group's sales volume was $6 billion 240 million, down 17% compared to the same period last year, operating profit of $1 billion 600 million, down 23% from the same period last year.

As a non-listed company, Chanel declined to comment on the disclosure.

In the first two years of the luxury market downturn, many luxury brand sales and profits have shown a downward trend.

A slight comparison will show that sales of Chanel have declined considerably, and operating income and net profit have dropped to varying degrees, and their performance is close to the weakest listed brand Prada in the previous two years.

In 2014, Chanel also led the global luxury market with a 38% increase in profits.

The decline of Chanel's performance is bound to be economic weakness and the global luxury market downturn.

Single product design style and intensified competition of pillar products may be the reason that hinders the growth of Chanel performance.

The 83 year old creative director, Karl Lagerfeld, has joined Chanel since 1983 and has yet to retire.

The fashion world's evaluation of Karl Lagerfeld is not as high as his own prestige.

Robin Givhan, author of News Week, thinks that Karl Lagerfeld repeatedly interprets the classic elements of Chanel, but does not produce its own design. Its overexposure and personal label of Lord Buddha obscure the shortcomings of her works.

Karl Lagerfeld, the creative director of sunglasses and white hairs, is often called "Lord Buddha".

"Design is not fashionable enough," said Xiao Jie, a 33 year old entrepreneur in the fashion industry. "Marketing is one aspect, and the most important thing is the product itself.

Those grille is very old, but young people don't like it. "

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But consumers also pay for classics.

"In recent years, the LE BOY series and the 2.55 series, which are relatively popular, are designed according to Chanel's most basic genes," an anonymous luxury goods industry said.

He didn't think Chanel wanted to make a bomb.

Chanel has a mature approach to the production and distribution of products to limit the so-called explosion. "Chanel only has the so called" classic money. "

Lagerfeld has recently revealed that Lego elements will be added to shoes and accessories, which is also a continuation of Lego package a few years ago.

(Chanel's "Lego bag".

)

From nearly two fashion shows, the classic sense of Chanel design is gradually giving way to modern sense and technology sense.

From the opening robot of 2017/18 spring summer series to the space show of 2017/18 autumn and winter series, Chanel is looking for a contemporary way to interpret classics.

But Fashion Critic Ana Andjelic has sharply criticized the space show and thinks the show stunt has covered the design itself.

You can find many criticisms about Karl Lagerfeld design, but maybe Chanel needs the personal value of Karl Lagerfeld.

Not every luxury brand has a creative director who deeply participates in brand history and looks forward to keeping pace with the times. Such a person can better represent brand history and more rarity.

The brand may cost more if you replace old Buddha.

This is only part of the fashion design.

Pavlovsky calls high fashion Chanel DNA, but high fashion is not the main driver of Chanel business growth.

Chanel's high performance growth depended on beauty and perfume business.

Previously, David Wu, a luxury analyst at Telsey Advisory in New York, estimated that beauty and perfume business accounted for about 55% of the Chanel business, while Chanel No.5 perfume has been a great achievement for this category to maintain high growth.

But in 2015, Chanel reported in France that its beauty and perfume business revenues fell by 21% to 2 billion 910 million dollars.

(Chanel's high performance before growth depended on cosmetics and perfume business, Chanel No.5 perfume has been a meritorious service).

Behind the crash is the increasingly fierce competition between these two businesses.

Prada's sub line brand Miu Miu launched the first perfume product in 2015 with the world's largest perfume company Cody group, and LVMH launched a new perfume series last year.

Besides luxury brands, beauty brands such as Estee Lauder, L'OREAL and Shiseido are also catching up with the high growth market of cosmetics and perfume.

In 2015, the global price adjustment and fashion design plagiarism caused the brand image of Chanel to be damaged. With the late layout of Chanel in the electricity supplier, the local electricity supplier began to test in 2015.

What actions did Chanel do?

Chanel CEO Maureen Chiquet, still in office in 2015, made a global price adjustment decision in 2015, raising the price of some European products and lowering the price in the mainland of China, controlling the global market price difference to 5%.

After Chanel took the lead in price adjustment, other luxury brands including Dior and Cartier followed suit.

In an interview last year, Bruno Pavlovsky affirmed the price adjustment policy several times. He said Chanel had ushered in the two digit sales growth after the panic in the first two months.

But in January 2016, the former CEO Maureen Chiquet, who made the price decision, left, and the boss Alain Wertheimer took over the operation.

Maureen Chiquet has worked in Chanel for more than 20 years. The reason for leaving is a vague "strategic divergence".

After the departure of Maureen Chiquet, the Chanel business structure gradually started. Following the 2015 cooperation with luxury electric business Net-a-Porter to release capsule series jewelry and sell glasses online, Chanel expanded the online business of its handcrafts one by one, and in September last year, Chanel made a bold move in China: selling its new perfume at WeChat.

In December last year, Chanel opened online shopping platforms for beauty and perfume in China's official website.

(Chanel started from luxury electronics Net-a-Porter in 2015, selling jewelry, glasses and other products on its platform).

"The electricity supplier can never replace people's feelings in the fitting room," Bruno Pavlovsky's attitude towards the electricity supplier still seems to be tempered. But the actual Chanel's electricity supplier is very bold: even when WeChat sells No.5's new perfume, Chanel has not limited the time limit to maintain the rarity of luxury products.

"There is no doubt that this is the trend of global development. We also want to find a good way to do business," Bruno Pavlovsky said in an interview with Vogue in October last year.

The problem of electricity providers is that it is difficult to bring additional experience to consumers.

Bruno Pavlovsky believes that this kind of additional experience should be a customized experience. Chanel must make an electronic business plan according to the buying habits and needs of customers in different regions.

In 2016, Chanel brand from design to marketing means in the direction of light industry.

Chrison, a fashion blogger, sees that Chanel is gradually shifting from its previous position as "ladies and gentlemen" and "middle class" to the younger generation. "This is mainly reflected in the fashion line, and the design is becoming younger and younger in the street." Tee, the 2016 spring and summer series of embroidered sweaters, can be found in the pictures of the fashionable girls' wardrobe, street pads, and even repeatedly purchased screen, "Chrison said." in the past, the fashion of Chanel was definitely tweed soft coat and lady's suit, but now many fashion items are more casual and suitable for everyday wear. "

When the younger generation moved from offline to online, luxury brands also need to pfer brand value in a new way.

Digital marketing is pretty good at Chanel.

In May last year, Chanel held a press conference on 2015/2016's "Paris in Rome" Handbook Series in Beijing. Chanel made use of this opportunity to provide an online participation experience with WeChat: from invitation letters, route design, scanning yards, preview of classic styles to shared clothing, all based on WeChat platform, while Pavlovsky acknowledged that the original intention of the attempt is "really based on the younger generation".

Chanel's advertising in WeChat's circle of friends is also targeted by big data, helping Chanel cut into different segments with different features.

Flash shop is another way to convey brand value.

The Coco CAF flash store, which was mentioned earlier, is actually an experience -- look at the facilities of coffee paradise in Coco caf, and the new experience of trying makeup.

Flash stores make luxury brands create topics in the short term at a low cost, attracting young people to return to the offline experience, while ensuring their "rarity" image.

This is a good way for luxury brands.

(in March of this year, Chanel set up its 10 day flash shop in Japan.

In April 12th, Shanghai's flash shop will also open for guests.

In addition to delivering the brand value in these fresh ways, Chanel is also increasing its input into important businesses. In order to revive the sales of Chanel No.5, Chanel launched a new version of the No. 5 perfume No.5 L 'Eau in 2016, and invested more in perfume advertising.

In China, you see the spokesperson of the 4 new perfume 5: Hu Ge, Victoria Song, Liu Haoran, Ouyang Nana, who have covered the idols of different young groups.

Three days after the release of Hu Ge's perfume video, micro-blog's forwarding volume reached 110 thousand, exceeding the influence of Lily-Rose Depp commercials.

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Chanel is also upgrading its supply chain.

Last year, Chanel invested four professional silk suppliers in the upstream layout of the supply chain to enhance the production process of their own silk fabrics.

Pavlovsky mentioned that high capacity fabric manufacturers are the key factors to ensure the delivery of garments on time.

Did these methods work?

In an interview with FT in October last year, Pavlovsky said, "2016 is the best year for Chanel."

Pavlovsky declined to disclose specific financial data.

According to FT, the price adjustment policy of Chanel began to play an active role in 2016.

Chrison sees that the younger generation's attention to Chanel is on the rise.

He saw that Chanel was gradually getting rid of the past "Lady" image, while more young girls and boys were concerned about the new trend of Chanel - Chanel's recently launched Gabrille handbag has also been sold out in China.

(British model Cara Delevingne shot ads for Gabrille handbags.

)

At present, the luxury market is getting warmer, but competition is still fierce.

Boston consulting firm predicts that the average growth rate of luxury goods market will remain at 4%~5% between 2017 and 2023, and if the brand wants to ensure that the growth rate reaches the average market level, investment and innovation must be increased.

We can believe that Chanel represents Gucci, Coach and Dior for designers. Another development path of luxury brands is to maintain their brand icon (old Buddha), renovate classic products, expand sales channels, strengthen supply chains, and find a better way of communication.

Perhaps not every brand needs a thorough battle.

Perhaps the brand can continue to develop on the basis of its innovation.

Chrison visited the handicraft workshop under Chanel, the handicraft workshop inherited the traditional clothing technology, and retained the traditional characteristics of Chanel.

This is also interesting: Chanel is still keeping its traditional brand core behind its young market and more avant-garde.

An anonymous luxury goods industry seems to say that Chanel chose the way: "Chanel is a family business after all. If it wants to change, it will not depend on professional managers to change, but the change of brand owners themselves."

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