How Will Fashion House Chanel Adjust Its Strategy In The Future?

Perhaps no brand can be like that.

In this way, the essence of innocent girl endorsement is ingeniously obtained.

But as young consumers gradually shift their attention from traditional star artists to the opinion leaders of the Internet world, how will this most influential fashion house adjust its strategy in the future?

Lily-Rose Depp, 18, has become the ultimate symbol of "Fashion Royalty".

Her father, the American actress Johnny Depp (Johnny Depp), has no idea of the classic "Captain Jack" movie in Pirates of the Caribbean. Almost the same household name is that he has had an appointment with many fashion circles from Kate Moss to Winona Ryder; her mother, French singer Vanessa Paradeis (Vanessa Paradis), Chanel designer Karl Lagerfeld forever Mousika.

She was born to walk on the red carpet.

"We talked to her when we were Lily-Rose10 years old and 11," recalls Bruno Pavlovsky, President of Chanel fashion. "But not as a" opinion leader "because she is Vanessa's daughter. We think Chanel is also suitable for telling stories about mothers and daughters.

Such inheritance is also written.

DNA can resonate with people of different generations. "

Of course, Lily-Rose inherited mother's full lips and lightness, which is more noteworthy, because family background is not so important in the modeling industry.

After a few years, people realized that she should not stay in the so-called "fashion role" instead of assuming more important responsibilities.

The aspiring young actress, who has been in the movie industry as a director of Kevin Smith, will undoubtedly become a star in the future. She will enter the high-end custom fashion industry through Chanel: at present, it is the face of her No.5 L 'Eau'. Kevin Smith.

She has been almost exclusively in the Lagerfeld design and stepped into the red carpet, and the frequency increased with the number of films she was taking.

"Knowing something about the brand is not only because the relationship between mother and brand runs through my whole life experience, but I always feel that Chanel is the best," Lily-Rose said. "I think the charm of Chanel is totally unique. It's hard for you to explain, but there is an indescribable magic in the whole house and all the things that they create."

Chanel asks Lili-Rose to take the No.5 L 'Eau advertising star. It doesn't seem like a surprise.

The first edition of Chanel No.5 perfume is still the main driver of revenue in the fashion house economy, but the long-term customer group is also growing old.

L 'Eau is a lighter and refreshing version of the classic fragrance tone, just like Depp herself.

This is also consistent with Chanel's long-standing star strategy, chasing image ambassadors with genuine affinity for Lagerfeld, from In SDE La Fressange to Caroline de Maigret.

The legendary designer has no single taste.

For example, he likes Katy Perry and Keira Knightley.

Though young is not a prerequisite, it has become a more common Ambassador choice.

In addition to the new De Maigret, the new Gabrielle outfit and handbag, is now 42 years old. Most of the recent Chanel faces are from the millennials or even "Z generation" members.

In addition to Lily-Rose (18 years old), there are Willow Smith (16 years old) in the advertising of glasses, dressed in the same fashion model and Gabrielle handbag Cara Delevingne (25 years old), and Kristen Stewart (27 years old), a long-term partner posing for various categories in advertisements.

The word "ambassador" is very important to us.

They have to talk about the brand, understand the brand with its own point of view, and truly feel the brand.

If what we do has nothing to do with the brand, it can only be a failure, "Pavlovsky said," in order to establish such a relationship with Lily-Rose, Kristin, and Vanessa Paradis, more to find our common ground.

They have to establish contact with Mr. Lagerfeld, the image director]Eric Pfrunder, and the studio supervisor]Virginie Viard.

It's not just a contract, you can fulfill your obligations.

You can do this, but I don't know what effect it will have. "

According to the world clothing shoes and hats net, according to research company Unity Marketing, a 2015 report, the American individual

The average age of consumers is over 47 years old, and young people have always helped promote advertising strategies in the fashion industry.

According to Bain's 2014 report, more than half of the world's luxury goods consumers are over 49 years old.

No matter whether it's sensational or not, some studies show that if people fear their own death is related to the free control of money, it is normal for a person to spend more money to be attracted by the brand of youth and vitality.

Moreover, in a country where the middle class is growing, the age of luxury consumers is even younger.

According to consumer research firm Bomoda, the average age of luxury consumers in 2015 was 33.1 years, of which 80% of consumers were between 25 and 44 years old.

In order to survive in the future, brands like Chanel must also attract new generation of consumers.

According to Bain consultancy data, the millennial generation and the Z generation are expected to occupy 45% of the global personal luxury market by 2025.

The most important consideration of brand is the rise of "experience economy".

According to a joint survey conducted by Galorey and BoF, the US is still the largest consumer market in the world. The millennial generation of 1/4 and Z generation prefer to spend money on buying experience instead of physical objects.

Even in China, the strongest engine of global luxury consumption, there is no shortage of new wealth creation, marketing traditional mode (Star + pure brand = desire) and the country that continues to play a good momentum, the millennial generation is also spending more on travel and other experience projects.

And the rise of social media that completely rewrites people's shopping ways.

"We see the tremendous changes brought about by digitalization, that is, people are beginning to build up contact with each other so early that they can understand all the information they want to know," Pavlovsky said. "Everyone can publish opinions on a brand. Millions of comments have been made on everything we do around the world, and everyone has their own views.

This generation of young people has long known everything they want to know.

We need to bring some more to the dialogue, and we need to provide more on this. "

It can be said that Chanel chose Lily-Rose as a brand ambassador, seeing both her "fashion lineage" and her 3 million 300 thousand followers on Instagram.

"This is the only social platform I use.

I always feel that other platforms are not very attractive to me, "Lily-Rose said." I feel more interested in taking pictures.

And I am a more privacy conscious person, so it's enough for me to send photos occasionally. "

But is that enough for Chanel?

BoF invites Preen.me, a creative agency dedicated to providing new media solutions, to collect all the social media operational intelligence from January 1, 2017 to August 1, 2017, and to analyze its dialogues on Instagram, that is, all social media content, commentaries and comments that mark the brand.

The final collection includes 3 million 400 thousand independent Instagram posts, from 633547 users, and ultimately drives 363 million independent "praise" and comments.

Chanel's social media presence is strongest in Russia, occupying 32% in all dialogues, 15% in the US and 13% in the European continent.

Since the beginning of 2017, the Chanel related social content has increased by an average of 15% per month, and social media activities (that is, "point praise" and comments related to these posts) have achieved an average growth of 7.8%.

In these social media dialogues, the biggest surge of heat is not the new advertisements or opinion leaders posted by Chanel, but from the fashion show of Chanel, especially the January annual fashion show in July.

In addition, despite the fact that Lili-Rose, Stewart and Delevingne, which dislike social media, and Delevingne (46 million 600 thousand of Instagram's followers), the number of dialogues about Chanel driven by three people is roughly the same. From the beginning of this year, they are 0.23%, 0.24% and 0.22% respectively, but they can be said to be irrelevant.

48% of all social media releases and 34% of social media activities come from accounts with fewer than 10000 followers.

This means that the driving factors of conversation have become the phenomenon of minority worship around Chanel for the first time, rather than the Chanel brand itself.

"We can see that when this new generation of consumers goes into boutiques, they often have a better understanding of the brand itself than we do," Pavlovsky said. "Then, how do we rebalance this relationship and balance this dialogue? At the same time, we also want to continue to express our views.

How do we give them the right message instead of letting them have a different vision of Chanel? It's not that they like what we are doing, but that they are getting the right content. "

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In many ways, figures show that Chanel, which has been actively creating digital content since at least 2010, has done impressive public opinion guidance, or even "control".

According to Preen.me data, the official Instagram account of Chanel is still attracting the attention of the people to do the best in the way of "point praise" or commentary, followed by Delevingne, Korean actor Park Shin Hye (Park Shin-hye), Korean rap superstar Quan Zhilong (G-Drago), Australia Leah actor Phoebe Tonkin, Youtube opinion leader Jeffree Jeffree, and the cooperation of some artists paid remuneration.

What does this mean? Lily-Rose and Stewart do not really drive social media interaction, but Jeffree Star herself released more than 2 million videos of the "love goods" video in July 2017. In the video, he posed with a Chanel tennis racket and a Supreme x Louis Vuitton two series jacket.

If the click rate is related to the real purchase intention, what measures can Chanel take to make full use of it? As traditional "stars" are no longer "hard currency" and "homemade stars", they will find it more and more difficult to find communicators who have the ability (and willingness) to drive numbers, and are willing to closely match the contents and modes of brand designated messages.

"A lot of things I don't want to measure," Pavlovsky said. "It's also about emotions.

I would rather reduce social media interaction and more emotional stuff than anything else except the icy big numbers.

People don't like what we do, it doesn't matter.

No one is obliged to like everything. "

Karl Lagerfeld takes Chanel advertisements for Lily-Rose and Cara palm lens.

Since 1920s, founder Gabrielle "Coco" Chanel has invented the dream of brand illusion for the first time, and the style of Chanel brand has been well predicted so far.

For such a brand, this is undoubtedly a new world.

Since the first successful revival of the fashion house in Lagerfel in 1980s (just the latest era of brand new customers), Chanel and the long-time brand owner Weiss (Wertheimer) have tried to convey all levels of information by harnessing the constantly changing luxury industry.

From the rotary opening design of Chanel nail polish to the arrangement of lamps and lanterns arranged on the ceiling of each brand shop of Peter Marino design.

The Weiss sea family has successfully established a stable and good working relationship with the brand creative director, the most styling designer of this generation of designers, so that the Chanel fashion house still has strong brand identity. Today, only leather manufacturer Herm s (and its owner family) can be on equal footing.

The consistency of brand style, coupled with the strong appetite of Lagerfel for new things, and the huge budget that it often outperforms other fashion companies in marketing, has produced admirable results over the past decades.

"No one can keep pace with Chanel in terms of celebrity endorsements," said a former chief executive of a cosmetics company.

For a long time, Chanel has always been a lighthouse for other luxury fashion houses.

In 2017, Chanel was the ultimate goal of life.

For many women, Chanel continues to represent a process and ritual similar to "adult ceremony".

According to the report of A.T.Kearney, many women regard Chanel perfume as their first fragrance after growing up: Coco Mademoiselle, Chance Eau Tendre and No.5.

Between 2010 and 2015, each of the preceding fragrances was among the top five most popular fragrance products in the United States.

"Growing up" can also mean collecting Chanel nail polish with $28 per unit price (often inspired by the brand fashion extension platform) or buying the first bag in their lives - often the first time in 1955, Lagerfeld in 1990 to improve the 2.55 handbags, and the launch of a more structured Le Boy handbag in 2011.

The Gabrielle handbag is the main package of Chanel which was invited in 2017 by Stewart, Delevingne, De Maigret and Pharrell Williams. It is the upgraded version of the brand version of the handbag.

Walking in the most fashionable blocks in Paris, you can easily see that the middle school or university girls who cross the Chanel bags are equally relaxed in the style of the plastic high street brands visible in the streets and lanes.

However, the world is changing, and the Chanel strategy must change.

Although there is no need to disclose the financial situation as a private enterprise, Chanel actually made public figures in August 2016 and August 2017, indicating that they themselves realized that the original practice might have been out of date.

Some analysts estimate that Chanel's global business valuation is over $20 billion, but the Chanel International BV registered in Holland in 1979 is part of the Chanel group. Its operating profit in the fiscal year ended December 31, 2015 was $1 billion 600 million, down 23% from the same period last year.

Revenue was $6 billion 440 million, down 17% from the same period last year.

According to the business paper on cosmetics and fragrances submitted in France, it implied that the company generated 2 billion 600 million euros in 2015, down 21% compared with the previous year.

In 2016, the holding company's revenues amounted to $5 billion 670 million, down by about 10% compared with 2015.

Net income fell from nearly $35% to $874 million from $1 billion 340 million, and revenue dropped by 20% to $1 billion 280 million, resulting in a 22.5% decline in profit margins.

The reason for the decline of Chanel International BV performance is that the brand explanation is that Chanel British subsidiary (about 11% of total sales) was sold to another entity, which is currently controlled by Chanel group.

These financial reports do not specify which areas or product categories are included or embodied in these figures, that is, they are not the full picture of brand performance.

But according to people familiar with the structure of the company, the $6 billion 240 million recorded in 2015 does reflect the Chanel's global business volume, including sales of cosmetics and fragrances, and all other brands owned by the Weiss family, such as swimsuit brand Eres and shotgun manufacturer Holland&Holland.

In April 2015, the holding company sold the make-up brand Bourjois to the Coty, so the financial report submitted to the Dutch Chamber of Commerce in Holland lacked the revenue of the business in 2015 and 2016 (Chanel group therefore holds 15 million 430 thousand shares of class a common stock of Cody group, which is equivalent to 240 million US dollars at that time).

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The company confirmed with BoF that the actual performance of Chanel in 2015 was unchanged from the same period last year, and that revenue remained stable in 2016.

But perhaps Chanel Global CEO Mareen Chiquet quit in early 2016 is not simply coincidental, Chanel concluded that she and the company "in the strategic direction of disagreement".

When announcing the resignation notice, Chanel said at the time that group chairman Alain Wertheimer (Gabrielle Coco Chanel's first business partner, the grandson of Pierre Wertheimer) would be working as CEO temporarily before finding a suitable successor.

However, according to Chanel, there is no direct succession plan.

More Alain Wertheimer, which is responsible for ensuring continuity, is now working closely with other members of the leadership team.

Despite challenges, Chanel is still the leader of the industry.

The advantage of a brand may be in the words of Lili-Rose - it is a kind of "magic power" distributed by the brand.

After all, this is a quality that is harder to find in other brands, even in the dream world of fashion.

The strong interest in Chanel fashion shows reflects this.

But Chanel also knows that brands need to evolve and evolve.

"We must be clear about what we are going to provide for this generation of young people.

"We need new strength," Pavlovsky said. "We must organize ourselves and be prepared to be precise and sharp when we deliver messages."

No.5 L 'Eau perfume and Gabrielle handbag are the key weapons for this new battle.

"We want to combine the brand's desire to do and people's recognition of the brand," we talked about why the Gabrielle fragrance advertisement has chosen many opinion leaders to appear. Pavlovsky explains: "in order to have a greater impact on the new generation, you must provide something beyond the brand's self vision.

First of all, you have to choose the opinion leaders who can respond to your vision to help you.

But this does not include the driving force that can actually turn these hits into conversion rates.

Although sunglasses, fragrances, skin care products can now be purchased at Chanel.com or other e-commerce sites, there are many jewelry co operation styles that can only be bought at Net-a-Porter and so on. Handbags, shoes, fashion and other categories are still "forbidden to touch the net" - at least for the time being.

This is not a risky step. At least consumers will eventually visit the physical stores to buy products, and they will still want to see or browse products in advance.

In a survey launched by DDT (Deloitte) to the British "millennial generation" luxury consumers, 58% of respondents said they often buy luxury goods through online channels.

More than half of them should not be underestimated, although the overall electricity business indicators of the UK often reflect a high level.

But the rest of the world also embodies the same pattern: in 2017, commissioned by Farfetch, a luxury boutique trading platform, for 2000 US shoppers, 25 to 35 year old consumers said that 9% of their first luxury purchases were through Internet channels, while only 45 of those aged 45 to 54 years old were in the Bain&Co..

Bain expects that 1/4 of all luxuries will come from the Internet before 2025. The millennial generation and Z generation will jointly contribute to 45% of global luxury consumption.

"We may be the last one to adopt the business model based on creativity, and we hope to continue to insist on it," Pavlovsky said. "It is not that we will not even do business on one day.

We just want to provide the best experience. "

Pavlovsky also said that customers who buy Chanel accessories and garments now begin to appreciate the uniqueness of shopping in Chanel only.

"You can click on whatever content you want to see. You can buy anything you like on the e-commerce website.

If you buy it at a very good retailer, you can receive it 90 minutes after payment, "he said. Frankly speaking, convenience has indeed raised the overall expectations of customers." we believe that we can go in the same direction in Chanel, but we have no obligation to do what others are doing. "

If so, history may be on the side of Chanel.

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