The pylon wears Prada

 

I’ve been known to come back from ski holidays with an Extrawurst or two hidden in my bag along with the smelly socks, and this year is no exception.

For 2023, it’s a very striking campaign spotted on ski lift pylons, of all things. For Prada, no less - and there’s something rather splendidly unexpected about the combination of high fashion glitz and heavy industrial utilitarianism. Like Gucci and trainspotters. The campaign for Prada Linea Rossa may already be in its second year, as the case study from the agency responsible is dated 21/22. alpdest position themselves as “the alpine media experts”, offering out of home advertising in ski resorts throughout Europe. Media opportunities include ski racks, branded gondolas and, yes, 150 lift pylons across Switzerland’s swankiest ski resorts.

Sadly, though, I don’t think I’ll be splashing out on any of the Prada gear, gorgeous though it is. A €4,250 ski jacket is a swank too far for me.

RETROWURST: Armani meets Aldi February 2005 Mark 2

 

Sometimes trends become - quite simply - part of the accepted fabric of life and you wonder what on earth the fuss was about, or why such a phenomenon was ever considered worthy of comment. Apart from giving journalists and trend forecasters a chance to exercise their creativity in coming up with a silly name.

But back in 2005, a younger me was excited as anyone about the mind-blowingly amazing news that Karl Lagerfeld was putting out a collection for H&M. Imagine that!

Was this a taste of things to come? Could we maybe expect the much-maligned “middle” to disappear in a puff of mediocrity by 2020?

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This month, I’m going to write about a general trend that I’m sure is prevalent in other markets too, but I thought you might like to hear how this is affecting the German market in particular. It’s the trend variously called “Armani meets Aldi” or “Prada and Zara”, which is best symbolized by legendary designer Karl Lagerfeld putting out a collection for H&M last summer. Now, the collection will probably never be repeated (apparently Lagerfeld was upset that H&M produced his designs in sizes a little bit bigger than those to fit the average stick insect, which is rich coming from him as he used to be quite a porker himself!) but what the whole action represented was an important milestone in the development of this trend.

 

The trend itself is characterized by the growth of the luxury and discount sectors of many markets and the consequent shrinking of the middle. It’s estimated that in 1980, the middle-price segment represented 49% of sales but it is predicted that this will fall to 20% by 2010 at the expense of growth from the luxury and discount sectors. In contrast, discounters are estimated to have accounted for 38% of sales in 2003. Companies such as Porsche and Gucci on the one hand and Aldi and Lidl on the other are enjoying growth, while the traditional middle segment, such as retailer Karstadt-Quelle or car manufacturer Opel is suffering here in Germany.

 

The consumer behaviour that is fuelling this trend can be variously described as “trading up/trading down” or “mixing”. Instead of spending our cash on the ‘safe’ middle, we are ploughing what we’ve saved at the discounter into the new luxury segment. This behaviour can be traced back to a number of factors in Germany; shopping at the discounter was a necessity for many, including new groups of people hit by the last recession from which we’re just beginning to emerge. Another factor is the new responsibility that people are beginning to take for themselves; instead of relying on the tried and trusted ‘safe’ brand names, I’ll decide for myself in which areas I save and in which I splurge! This feeling has now translated into a perception across all bands of society that it’s no longer prestige just to buy expensive things; those who are really clever and ‘in the know’ can tell you exactly which manufacturer produces which Aldi goods! The discounters have not been slow to pick up on this trend and are broadening their offer accordingly. Aldi, for example, makes €1bn from clothing alone and is the 7^th largest textile retailer in Germany.

 

Within areas other than retail, brands are picking up on the trend. A good example is the Korean car manufacturers Hyundai and Kia. These brands are deliberately attacking the value end of the car market with emphasis on quality and design. Hyundai recently ran advertising under the headline “Es gibt wieder richtige Volkswagen” (“Now there are real Volkswagens (peoples’ cars) again”). Both these Korean brands are enjoying double-figure growth in a stagnating market. In all branches, those that offer design at a good price are winning, from H&M to IKEA.

 

Part of the problem of the middle market is that the discounter products are, in many cases, as good. It is really not worth paying a little bit more for a brand name, especially when Aldi is a strong brand name in itself these days. The middle-market brands can no longer rely on their brand name; they must find a way upwards to the new luxury market and offer something worth having. The new luxury market is based on the principle of offering ‘specialness’ in fields where the basic price is not so high. In this way, Danone’s Actimel yoghurt can sell quite happily at a price premium of 100-200%. It is expensive (but jusitified, due to the L.Casei bacteria!) but affordable.

 

Some of the traditional middle-market brands are beginning to incorporate ‘luxury’ elements into their offer or communication in the hope of winning back customers. It is certainly true to say that the boundaries of what is discount, what is mass and what is luxury are becoming more and more blurred but it is questionable whether these actions which are not unique or an integral part of the brand concept will be powerful enough to buck the trend. For example, the mass-market mail-order catalogue Otto now has collections from Heidi Klum and Claudia Schiffer (have they not noticed that the old Supermodel trick has been used to much better effect by H&M for the last ten plus years?). C&A now have TV advertisements with super-high top fashion production values but at the end of the day, you can’t make a silk purse out of a sow’s ear.

 

Maybe the German middle-market brands should learn from M&S in the UK; increasingly, this is all about personalization, not about buying into a ‘blanket lifestyle’. It is about picking and choosing to suit oneself across categories, styles and price-bands. It is also about substance and attention to detail. A final example of the ‘new luxury’ is the Internet shopping site www.brot-und-butter.de .Here we see “everyday products but not everyday quality” (the cynical could add something about ‘not everyday prices’, too!).

This has all the elements of specialness, individualism, authenticity and a touch of luxury that I can afford. I imagine that it won’t be long before Aldi offer a similar selection of ‘special everyday’ products to go with the €12.99 champagne!

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It’s true to say that this “trend” has simply become a way of life - fashion designers, influencers, TikTokkers and probably activists can all have a go at doing a collection for Lidl or Aldi. It’s no shame for Gucci and The North Face to use a super-nerd in their brand communication. And grocery discounters don’t just have “everyday luxury” food ranges, but ironically branded fashion items, too. 

And, on top of that, I think that sustainability and a shift in values have led to questions: what is luxury? There are some thoughts on that here. And what is discount? Is it cheap at any price (to the environment or society?). How do people’s priorities shift in times when we’re more cash-strapped? I’m reading a lot about the “lipstick effect” in all of this year’s trend reports. But the question is not so much whether but what - maybe this time we’ll be giving something a second life rather than splashing out on something new to treat ourselves. Doing good to the conscience and the wallet.

... and, well I never! I blogged on exactly this article this time last year. “Giving something a second life."Whoops. The system is out of sync. Oh well, I’d already taken the picture, and some of the thoughts are new.

Talking of which, the “middle" is still here - especially the “spare tyre”. It’s a mark of what does change. 

Can anyone imagine Karl - should he still be alive today - having the audacity to complain about his clothes being made in sizes beyond that for a stick insect?

RETROWURST: Armani meets Aldi February 2005

 

It’s difficult to believe that the - some would say game-changing -  collaboration between Karl Lagerfeld and H&M was 18 years ago. In February 2005, I wrote about the phenomenon, variously known at the time as “Armani meets Aldi” or “Prada meets Zara” - the growth of luxury and discount at the expense of the poor squeezed middle, be it fashion, retail, cars or even yoghurts.

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This month, I’m going to write about a general trend that I’m sure is prevalent in other markets too, but I thought you might like to hear how this is affecting the German market in particular. It’s the trend variously called “Armani meets Aldi” or “Prada and Zara”, which is best symbolized by legendary designer Karl Lagerfeld putting out a collection for H&M last summer. Now, the collection will probably never be repeated (apparently Lagerfeld was upset that H&M produced his designs in sizes a little bit bigger than those to fit the average stick insect, which is rich coming from him as he used to be quite a porker himself!) but what the whole action represented was an important milestone in the development of this trend.

 

The trend itself is characterized by the growth of the luxury and discount sectors of many markets and the consequent shrinking of the middle. It’s estimated that in 1980, the middle-price segment represented 49% of sales but it is predicted that this will fall to 20% by 2010 at the expense of growth from the luxury and discount sectors. In contrast, discounters are estimated to have accounted for 38% of sales in 2003. Companies such as Porsche and Gucci on the one hand and Aldi and Lidl on the other are enjoying growth, while the traditional middle segment, such as retailer Karstadt-Quelle or car manufacturer Opel is suffering here in Germany.

 

The consumer behaviour that is fuelling this trend can be variously described as “trading up/trading down” or “mixing”. Instead of spending our cash on the ‘safe’ middle, we are ploughing what we’ve saved at the discounter into the new luxury segment. This behaviour can be traced back to a number of factors in Germany; shopping at the discounter was a necessity for many, including new groups of people hit by the last recession from which we’re just beginning to emerge. Another factor is the new responsibility that people are beginning to take for themselves; instead of relying on the tried and trusted ‘safe’ brand names, I’ll decide for myself in which areas I save and in which I splurge! This feeling has now translated into a perception across all bands of society that it’s no longer prestige just to buy expensive things; those who are really clever and ‘in the know’ can tell you exactly which manufacturer produces which Aldi goods! The discounters have not been slow to pick up on this trend and are broadening their offer accordingly. Aldi, for example, makes €1bn from clothing alone and is the 7^th largest textile retailer in Germany.

 

Within areas other than retail, brands are picking up on the trend. A good example is the Korean car manufacturers Hyundai and Kia. These brands are deliberately attacking the value end of the car market with emphasis on quality and design. Hyundai recently ran advertising under the headline “Es gibt wieder richtige Volkswagen” (“Now there are real Volkswagens (peoples’ cars) again”). Both these Korean brands are enjoying double-figure growth in a stagnating market. In all branches, those that offer design at a good price are winning, from H&M to IKEA.

 

Part of the problem of the middle market is that the discounter products are, in many cases, as good. It is really not worth paying a little bit more for a brand name, especially when Aldi is a strong brand name in itself these days. The middle-market brands can no longer rely on their brand name; they must find a way upwards to the new luxury market and offer something worth having. The new luxury market is based on the principle of offering ‘specialness’ in fields where the basic price is not so high. In this way, Danone’s Actimel yoghurt can sell quite happily at a price premium of 100-200%. It is expensive (but jusitified, due to the L.Casei bacteria!) but affordable.

 

Some of the traditional middle-market brands are beginning to incorporate ‘luxury’ elements into their offer or communication in the hope of winning back customers. It is certainly true to say that the boundaries of what is discount, what is mass and what is luxury are becoming more and more blurred but it is questionable whether these actions which are not unique or an integral part of the brand concept will be powerful enough to buck the trend. For example, the mass-market mail-order catalogue Otto now has collections from Heidi Klum and Claudia Schiffer (have they not noticed that the old Supermodel trick has been used to much better effect by H&M for the last ten plus years?). C&A now have TV advertisements with super-high top fashion production values but at the end of the day, you can’t make a silk purse out of a sow’s ear.

 

Maybe the German middle-market brands should learn from M&S in the UK; increasingly, this is all about personalization, not about buying into a ‘blanket lifestyle’. It is about picking and choosing to suit oneself across categories, styles and price-bands. It is also about substance and attention to detail. A final example of the ‘new luxury’ is the Internet shopping site www.brot-und-butter.de .Here we see “everyday products but not everyday quality” (the cynical could add something about ‘not everyday prices’, too!).

This has all the elements of specialness, individualism, authenticity and a touch of luxury that I can afford. I imagine that it won’t be long before Aldi offer a similar selection of ‘special everyday’ products to go with the €12.99 champagne!

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17 years, a financial crisis or two and a pandemic later, it’s still the same story, although I’m wondering how much of the sad old middle there really is left to squeeze. One thing that’s changed is that all this mixing and matching has become the norm, with luxury and discount hardly seeming such unlikely bedfellows any more. Which makes it perfectly acceptable for Aldi and Lidl  to do their own luxury-style streetwear collections. 

Hang on. Luxury brands and streetwear? Well, maybe something has changed.

Digitalisation and the move to ecommerce and beyond has been taken up with more aplomb at the two ends of the price spectrum than the slow-moving and more traditional mid-market.

It reminds me in some ways that in the UK, it was always said that the upper and working classes had more in common with each other than with the middle class.

RETROWURST: Top Euro Brands October 2003

 

This month’s Retrowurst, from October 2003, is one of those lazy ones where I didn’t bother writing anything particularly original, but instead chose to rehash a report from someone else. In this case, Interbrand’s Best Global Brands.

Interbrand won’t be revealing their top of the pops until 20th October, so we’ll have to make do with last year’s ranking to see who’s still in and who’s definitely out. 

In 2003, 8 of the Top 10 brands were of US origin, and that’s now 7 out of 10. However, two of the three non-US brands are from Asia-Pacific, with only one European origin brand in the Top 10. Nokia is long gone, so this year it’s Germany which has that honour - with Mercedes at No. 8.

European-origin brands aren’t doing badly as far as the Top 50 goes. In 2003, there were 4 German-origin brands in the Top 50 and 2020, there are 7. The usual suspects from the auto branch, or mobility, or whatever it’s called these days, plus SAP, Allianz and adidas. 

France had 2 brands in the Top 50 in 2003, now there are 5 - from the luxury/fashion/beauty side of things (those old stereotypes live on) - oh, and AXA too. (Louis Vuitton, Chanel, Hermes, L’Oreal)

UK are no longer in the EU or the Top 50 brands, I’m sorry to say.

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I thought I’d refrain from writing anything about the Oktoberfest this month and turn my attention to something of more general European interest. While looking through Interbrand’s League table of the Top 100 Global Brands for 2003, it struck me that, despite the trend to globalisation, we in ‘Old Europe’ are actually best at doing what might be expected from the old stereotypes. Indeed, glancing at the list reminds one of all those ‘heaven and hell jokes’ which preface every other newspaper article about Europe - ‘heaven is where the police are British, the cooks French, the engineers German, the lovers Italian and the Swiss keep the time. Hell is where the police are German, the cooks British, the engineers French, the lovers Swiss and the Italians keep the time’ - or however the thing goes.

 

Before I get onto what I mean, I’ll just preface this by giving a few provisos about the Interbrand Top 100 table- first, it’s about global brands, so to get onto it, your brand must be over $1 billion, it must be global (with at least a third of sales outside your home market and good distribution across all major continents) and you must have publicly available marketing and financial data (which excludes big players like Visa, the BBC and Mars). Secondly, the brands are listed in order of Brand Value- a complex calculation in which Interbrand take a large number of difference forces and influences into account to work out how much a brand is likely to earn in the future, discounted to a present value based on risk. So we are not talking anything simple like sales or awareness here.

 

Some general observations about the Top 100- it is dominated by US origin brands, as one might expect. Eight out of the Top 10 brands are US, covering categories as widespread as soft drinks (Coca Cola), software (Microsoft), entertainment (Disney) and tobacco (Marlboro). The Top 5 brands are all US (Coca Cola, Microsoft, IBM, GE and Intel), with Europe first making an entry at number 6 with Nokia. The Far East, in the form of Japan, makes its first entry at position 11 with Toyota. It’s actually surprising; perhaps, that the top brand from Europe should have the (relatively) obscure homeland (to us Brits) of Finland. In fact, without wanting to sound rather unpatriotic, Great Britain does not figure as prominently in this table as we would perhaps like. Maybe we’re not good at global brands but, as a country that prides itself on the quality of its marketing and advertising, particularly in relation to some of our European neighbours, we don’t seem to cut it in the global arena. The Germans, for example, have four brands in the Top 50, including Mercedes in the Top 10. The French have two brands in the Top 50. The only brand from GB in the Top 50 is HSBC at position 37- successful though HSBC undeniably is; it is hardly top of the wish list for ambitious marketers or advertising agencies hoping to produce stunning creative work.

 

So, onto the stereotypes. I’ll start with the Germans, as this is an Extrawurst. In the Top 100 for Germany are Mercedes, BMW, SAP, VW, Adidas and Nivea- so very heavy on the cars and technology with a bit of sport and wholesome body care in addition. Scandinavia boasts three brands in the Top 100; Nokia, Ikea and Ericsson- to be expected from thinly populated countries with huge pine forests! For France, we have the expected mixture of luxury goods, beauty, food and drink with the Louis Vuitton, L’Oreal, Chanel, Danone, Hermes, Hennessy and Moet & Chandon brands. Italy is fashion, fashion, fashion with Gucci and Prada. With Nescafe, Nestle and Rolex, the Swiss are heavy on chocolate and watches. The Netherlands have a rather mixed bag (but somehow appropriate) of electronics, oil/exploration and beer - Philips, Shell and Heineken are their brands in the Top 100. And, finally, the combination of banking, exploration/oil and journalism topped up with booze (HSBC, BP, Reuters, Shell, Smirnoff and Johnnie Walker) could only be British!

 

What is there to be learned from this? Firstly, I think it says that provenance is important, even in these days of globalisation. One way of looking at it is to use your national stereotype to your advantage in creating your brand- Lufthansa is one of the most preferred airlines in Europe for short-haul due to people’s perceptions of its absolute punctuality and reliability but loses out to the Far Eastern carriers on long haul, where service is a more important deciding factor. Or, alternately, cause disruption by creating a brand that is unexpected, given your national stereotype- who knows - maybe an Italian engineering giant or a Swiss range of ‘love toys’ could top the Top 100 yet!----------------------------------------------------

Of course, the big change is that the tech brands dominating the Top 50 were still in Kindergarten back in 2003. It’ll be interesting to see if and how the big German brands reinvent themselves over the next decade - or whether they’ll be history, like those Scandi mobile phone brands from the early days of the 21st century.

P.S. HSBC did feature in my last post with their advertising, so maybe I was a little hasty dismissing them as unlikely creative fodder - or maybe it’s a sign of the times

Past Forward

Sometime in the 1970s, inspired by Blue Peter, I buried a time capsule in the woods at the back of our garden. Well, time capsule is a bit grand: it was a biscuit tin filled with various ephemera - a newspaper, probably, a paperback book, sweet wrappers, that sort of thing.

The only problem is that 40-plus years later, I have no idea where I buried it.

One criticism of much marketing activity is that it's terribly short-term. Even for durables and long-term services, the emphasis in today's digital world is on the now and the present and the instant. OK, there are the occasional exceptions. Ads for watches that you're just keeping 'for the next generation.' Or the promise of your own share of a barrel of whisky to enjoy in a decade or two. We've got a couple of rather nice bottles of red wine, vintage 2000, sitting in the cellar to enjoy when the boy turns 18 - not too long to wait now.

I've written a post here about taking your time, which mentions the Long Now Foundation (Founded in 01996 to foster long-term thinking and responsibility.) And here's another smart piece of thinking from Remy Martin and their agency to promote their Louis XIII cognac, which takes 100 years to make.

Two years ago, they kicked off the 100 Years campaign by producing a film starring John Malkovich which would first be released in 2115. (They are lucky they chose Mr Malkovich and not Kevin Spacey, but no doubt there will be other worries by 2115.)

And now they have teamed up with Pharrell Williams to create a music track that won't be released for 100 years. And this time there is a 'planet positive' message built-in: the disc has been pressed on unique clay vinyl (using soil from the vineyard - whatever next!) and will be stored in a water-vulnerable safe. So if we mess up, and water levels rise, our descendants won't get to hear it in November 2117.

Of course, people in 2117 may be wondering who on earth Pharrell Williams was, but still.



Now, some people may argue that it's a bit pointless spending so much on and making such a song and dance (and film) about a product few can afford. (A bottle of Louis XIII costs over £2,000.)

But advertising Concorde never did British Airways any harm.

Bad Brands

In the old days, you could spot a bad brand miles off. They spilled oil, or invested in countries with dodgy regimes, or tested cosmetics on baby kittens. And, if you felt strongly enough, you could quite easily boycott them.

But these days, rather like James Bond villains, the bad brands have evolved. Their villainy is less about a big event - it's more subtly ingrained in their way of operation. These brands are quietly instrusive. They insinuate their way into your life through the back door, bearing gifts, posing as a friend. They do a deal with you - your info for my added value. You may go hand in hand for years, singing their praises. But occasionally, they will breach your deal. It may be something small and insignificant, like automatically posting something on your Facebook feed without you having to tick a box. It will make you wonder for a second or two. But the value you get from that brand will probably outweigh the bother of closing the account.

But if it gets more serious? What if a series of articles and documentaries about dodgy practices combined with bad personal experiences pushes you to want to boycott that brand? Unfortunately, these days, it is almost impossible to extricate yourself. I used to love amazon - as someone living abroad, they were a godsend. I started giving something back by writing reviews and, of course, when the time came, Kindle was the obvious choice for my ebook reader.

Amazon, I see, are currently looking for a European agency to help them with their image problem. I expect I could delete all my reviews and my account, and buy another e-reader and all the books I have on my Kindle but, well, life's too short. So I grudgingly continue with amazon, and feel a pang of conscience when I read yet another article about how they treat their staff.

Would it be possible to boycott Google? I doubt it. Even if you did, as from today, your traces remain. Once it's out, it's out.

Privacy is one of the biggest issues for brands today. There's a good report from Flamingo research here which shows how privacy is a pact.

I just hope that privacy, as the new luxury, will not end up being something that can be bought at a price.

The new luxury

Showing off used to be about conspicuous consumption of luxury brands and articles - my car, my house, my yacht. But these days it's more about the conspicuous experience and the sharing thereof on Facebook - my perfect family diving in the Maldives. And the luxury brands are being appropriated by the movers and shakers in the developing markets. It just takes a ski holiday in one of the classic resorts of Old Europe to see how times are changing.

But a new form of luxury is emerging - discreet luxury. Actually, I am sure that this has been there all along - people who furnish their homes with family heirlooms or one-off antiques rather than the latest bling-bling. And much of this is, like the antiques, previously-owned.

A perfect example is Byronesque, conceived by ex-M&C Saatchi planner Gill Linton (we do have our uses!). Described as "Designer vintage fashion for the subversive and androgynously chic", this has nothing to do with twee floral frocks or polka-dot blouses. Most of the pieces offered on sale are from the 90s (which is worrying for an oldie like me!) and can set you back - like the Vivienne Westwood coat above - thousands of pounds.

But for someone looking for exclusivity, this has it all: it's democratic and accessible in terms of not having to make your way to a snooty shop in Bond Street, but the prices naturally count most mere mortals out. Uniqueness and style are there by the metre, sustainability is built-in.

And, every piece comes with a long story attached. Just like the family heirlooms.