Premium brands and social media partnerships

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In the world of premium and luxury brands there are a few cases where social media partnerships are critical in today’s connected world to help build brand equity amongst those segments that really matter. The launch of ASW (A Small World) was a great first mover in the world of premium digital whitespace for brands to advertise on. Today it has been criticised for extending the network too far from its original mandate and focusing on a member base that was by ‘invitation only’ and created a virtuous circle of the select few building their gated digital community. Private Banks and Luxury consumer brands leveraged the space to create bespoke offers and provide a glimpse of a world that may otherwise be difficult to experience for some. I had some time ago managed to get an invite to the Queens club Squash ATG final through a posting made on the network (I went as a guest of one of the Saudi sponsors) and was delighted to have been able to attend. As such I remain a fan of the social network that has in my opinion delivered on the promise of providing a high end digital user experience that is able to deliver premium brand experiences to members. The article taken from the Sunday Times on niche networking sites showcases ASW as a network that builds on ‘real world’ relationships in a digital context and allows for a real community to develop around the world. I have to admit that a few years ago when in Mumbai on a business trip, myself and my referrer to ASW posted an entry introducing our arrival into South Mumbai and were delighted to have connected with other expats in the city. That evening in Mumbai truly did allow for the online to merge with digital and brought ASW to life.

https://asw-public.s3.amazonaws.com/ASW%20Sunday%20Times%20UK.pdf

My new favourite story happens to be one from across the pond with Tech Crunch recently covering a great story on how KLOUT the US StartUp has teamed up with Cathay Pacific to provide members have a high enough score (40 and over) access to the 1st class/business class lounge at San Francisco International airport. An excellent example I feel for a brand trying to understand customer potential and building loyalty through a social media partnership. This is going to drive adoption for KLOUT and undoubtably will allow nascent business class travelers an opportunity to explore how great a Cathay Pacific experience can really be when a passenger is able to upgrade or fly on a premium class.

http://techcrunch.com/2012/05/09/klout-cathay-pacific/

Insight: Social media brands provide a unique and very targeted channel to build sticky brand relationships with customers and can in the process deliver altogether new insights around prospects, customer intelligence and lead generation that may have been coming from very different traditional channels.

Insight: There is a definitive need for the digital to translate into something physical for brands to get real traction. Allows digital relationships to also cross over into real-life physical retail presence provides a real challenge for multi-channel retailing and marketing ROI tracking. There are however a number of next generation platforms, apps that are allowing for that integrated experience to come alive. Becoming the mayor of the SFO airport first class lounge using KLOUT may be where the future is headed. Now comes the hard part tracking all those moving parts together and using the big data to drive big decisions on the part of the brands.

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Innovation in education and technology has lagged

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Having just completed the Steve Jobs biography by Walter Isaacson what strikes me most is how far education is from having embraced technology to deliver wholesale transformation in a sector that could have such significant impact.

I see technology in education as enabling:

1) Content (the iPad is now a library on tablet and where previously a few rooms may have been needed to host the books one iPad could be the host of shelves upon shelves of educational material; the Khan Academy is also an excellent example of what a not-for-profit is doing to revolutionise the creation and distribution of video learning through YouTube; some have even started to translate Khan Academy lessons into other languages such as Hindi/Urdu e.g. http://www.youtube.com/user/KhanAcademyHindiUrdu)

2) Collaboration and social learning (this is most apparent when we see what is happening on educational social networks like Edmodo [http://www.edmodo.com/])

3) Delivery (a few years back organisations like the mountain trust were creating innovative learning delivery channels like ‘radio education’; there are now a number of new channels for the delivery of education ranging from smart phones to low cost tablets)

The reality is that at the bottom of the pyramid technology is often the last lever that is visited though it could have an enormous impact on the major issues surrounding acute teacher shortages and bridging the growing digital divide between those that have versus those that do not.

Jobs wanted to help condense a number of books that strained the back of students into an easy to port digital format carried on a hand held. At the current price points it seems like a pipe dream to even think about using iPads in the developing world to deliver next generation teacher training or educating the poorest of the poor. But perhaps in the future as Chinese clones drive down the price of such equipment and the coming together of public, private and third sector partnerships enables piloting and using such innovative technology we may see some remarkable outcomes within a very short period of time. Will children be able to use the Khan Academy lessons in the future to learn about Algebra in a village in Waziristan or perhaps in a slum outside of Karachi or Mumbai. Time will tell but the potential to enable the delivery of education through digital channels has never been greater.

Entrepreneurs lead the UK through materials and design innovation

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There is something powerful about ‘transit magazines’ such as those you would find in the back of an AddisonLee taxi (Addlib), British Airways (High Life) magazine or even the Metro for that matter when it comes to opening our eyes to what is happening right in our back yard. British Airways was the first to profile a start-up called SUGRU (Irish for ‘Play’; reminds me of the LEGO story where I used to work in 1998 for the ‘Director of Moulding’ in the United States, Legot or ‘play well’ in Danish inspired the brand name for the family owned toys and now media company). For the generation that grew up with MacGyver and plasticine this is where the two meet each other and deliver a unique hack culture where the use of the material is not dictated by the inventor or company but rather the crowd. The material itself is nothing short of amazing as I discovered recently when the inventor sent me some to try out and is able to act as a temperature resistant, air curing rubber of sorts that is able to bond to pretty much anything and is supple and flexible enough to deliver a fix for the ubiquitous ‘breaking’ apple charging cable to helping form its own design culture around object enhancement. Jane ni Dhulchaointigh the founder of Sugru was able to secure a small pot of funding from a NESTA (£35K from a lottery funded programme for creative businesses) to prototype the product and build the idea out into a scalable business. Jane is an example of the kind of entrepreneur that we need to champion, celebrate and use as a source of inspiration as she is a ‘Made In Britain’ brand who also ‘Manufactures in Britain’.

Sugru hacks

Insight: As a trainee chemical engineer I worked at Lego’s only manufacturing plant in the US in Enfield. That plant which used to produce over 2 bn peices of LEGO remains no longer and that manufacturing has gone overseas. We need to celebrate those that choose to manufacture here in the UK and create materials that deserve all the awe that true invention inspires. These are Eureka businesses.

Insight: I refer to the recent pre-budget input that was presented earlier in the month over a breakfast event by StartUp Britain (this was chaired by Lord Young) that showcases that the programme which helped fund creative startups like SUGRU does not exist any longer. With Sugru now being exported to over 80 countries the ‘prize’ for the small investments from an entrepreneurial government is clear. For more information about the Entrepreneurs’ budget please visit:  http://www.startupbritain.org/news/2012/03/14/an-entrepreneurs-budget-launched-by-startup-britain/

Insight: Though the press gave Sugru considerable attention the fact remains that ‘culture’ in North America sees the average consumer create much greater word of mouth buzz about products and services. The UK is in some ways behind its American cousins in celebrating success and promoting products and services that create the kind of mindshare necessary even without the expert assistance of a PR company.

Another business I recently had the pleasure of getting to know is one that truly falls under the ‘growth’ category and has its roots in East London from about 1938. I had the pleasure of meeting the now owner of Alma Home, Mr. Saeed Khalique at an art gallery recently where he invited me to come to see a business that once upon a time boasted retail outlets in Harrods as a high-end leather manufacturer/retailer. Today Mr. Khalique’s business which manufactures in a facility with several thousand square feet of factory space in East London underground looks on the surface like an unassuming leather shop filled with various further pieces but one look underground and the story is entirely different. As a supplier to only the highest specs of leather usage in trade Alma home today provides leather walls, floors etc to luxury projects such as the now famous 1 Hyde Park corner luxury residential development and tends to work with leading architects and builders to provide unique leather solutions to enhance space around the world. Also having won the bid for the Qatar convention center Mr. Khalique and his business are a testament to what real ‘craft masters’ can achieve as I saw first hand his band of merry men and women (immigrants and nationals) working together in the basement to fashion perfectly crafted leather items. Mr. Khalique also surprised me with an introduction to the latest member of the team, a robot that looked like it was advanced enough to fashion even a leather replica of me. Alma is as its website states truly ‘redefining how leather is used in the 21st century’. With an ambitious and creative management team this company is one to watch over the next few years as it grows its way through differentiated design.

Insight: A number of skilled trades and businesses that produce high quality products made in the UK do not have apprenticeship programmes in place and there is a real opportunity to put these in place through the public and third sector while helping disadvantaged youth that may be NEETs (Not In Education, Employment and Training) to deliver social returns.

O2 Workshop: Brand goodwill with SMEs delivers the up-sell

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Home business, hub based, coffee store workers are all viable models for the modern entrepreneur and start-up team but who ever thought of working in the basement of a mobile phone service provider’s basement. O2 have clearly got the formula right with the launch of the O2 workshop in London (launched in 2011) and sees some regular traffic from small business in the area looking to drop-in to connect to their virtual offices, make a few business calls and perhaps even host a small seminar. The space has been incredibly well designed and feels very much like the Apple store meets hub-working concept that many small business workers find appealing. With gleaming white desktops and an O2 Guru close at hand the site is not just well design but well staffed and supported.

The idea of a brand launching a work hub is an incredibly effective way to continue to build relationships with its small business segment, an important segment judging by the ARPU (Average Revenue Per User) yardstick. I have first hand seen some customers go up stairs and ask to buy some of the data products such as internet pay-as-you-go dongles. The quiet building of good will seems to be working for the brand and the facility is genuinely delivering on a real need for professional office space where a small business or start-up can host meetings and run an effective seminar or simply touch down for some digital therapy (photo below taken from O2 News Centre).

O2 Workshop

Insight: With the recent launch of the government announcement around the use of idle government space to host entrepreneurs and small business (hosted by StartUp Britain – http://www.startupbritain.org) one can’t help but think if O2 could actually step in and play a role in setting up quality space and provide a broader range of data services.

http://www.bbc.co.uk/news/uk-politics-16671977

Insight: The branded experience delivered across most touchpoints across the workspace is a testament to a well thought out B2B and B2C strategy. There may be opportunities for other brands with synergistic goals to create co-branded work hubs to engage the SME community and utilise shared marketing pools/funds to deliver on a more comprehensive offer.

Insight: O2 needs to be able to take the Workshop community virtual. These kinds of models and the need to register while using the facility provides a great opportunity to take a community virtual and build on the positive social ripples from the growing ‘promoter’ base.

Emerging Markets Contemporary Art as an Alternative Asset Class

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Conventional wisdom dictates that when wealth accumulates to a certain threshold  there is a desire to start to find alternative ‘homes’ for deploying capital. This has very much been the case with the art market providing a destination for some of that alternative investment. As of late a number of art funds have emerged and there appears to be a renewed interest in art as the markets continue to disappoint. Art advisory is now an established offering for most wealth management boutiques and art indexes have also come of age and have started to look at emerging market art sales. The new indexes allow for a peek beyond New York and London to paint a clearer picture for those looking for insights into this alternative asset class with an eye on Mumbai and Shanghai (MumShang) markets.

Today an article in the FT highlighted that the Mei Moses All Art index outpaced stock market returns for two years running (beating out the S&P 500 returns). The index however is geared mostly on paintings sold in New York and London. So whatever happened to the emerged and emerging market art markets? Have these done just as well?

A look at the Indian art market is as good a place to start as any. Around 2 years back while hosting a panel on luxury in India, Amin Jaffer (Director of Asian Art, Christies) spoke of explosive growth in sales of Indian art in India and beyond back in 2010. As wealth generation continues in India as has the growth in art sales. To put things in perspective Bloomberg quoted the most expensive Indian lot to sell at Christies as that of Syed Haider Raza’s ‘Goddess Kali’ being sold for £2.4m in June 2010. Since then the FT’s Modern and Contemporary Indian Art Index is as good a place as any to see the impact that Art Funds and continued speculation in this market have had with 5K works sold over the last decade showing CAGRs (Compound Annual Growth Rates) of ‘25%, 23% and 17% for the ‘Top 25%, Central 50% and Bottom 25% price-brackets’ respectively. 50% of these sales were domestic. While Funds have the ability to create real waves in the market with large tracts of capital being deployed to purchase art in the local market the real challenge for most of these vehicles is reselling the art back into the market at elevated prices and delivering returns to their investors. This however may start to become a reality once the post crunch panic subsides and disappointing returns from conventional asset classes prompt some riskier investors to go hunting for alternatives. Unsurprisingly 2011 ended on a relatively disappointing note for Indian Art with ArtTactic’s report citing a dip in the overall confidence indicator which tracks some of the bigger ‘brand name artists’ driving the market. The top 5 in its confidence rank included Atul DodiyaJitish KallatBharti KherSubodh Gupta and Rashid Rana in the May 2011 Contemporary Indian Art category. The coming India Art Fair (Previously known as the India Art Summit the re-branded IAF takes place between 25-29 January, 2012) will be an event to watch with more galleries than ever going to India to capture the Indian Art collector’s share of wallet (White Cube is amongst British galleries showcasing at the fair) and brining more foreign art to the domestic Indian market in a hit back to Indian art going abroad.

http://arts-extra.ft.com/artprice/art-price-index-8-modern-and-contemporary-indian-art

http://www.arttactic.com/view-report.php?type=reports&id=37

The Indian art market success story is mirrored in that of China’s market with today’s prices still being at 200% of that in 2004. According to the FT ‘China had now overtaken the UK to become the world’s second largest art market after the US with a global share of 23 per cent’. At last count sources place the number of art funds in China as high as over 70 and growing.

http://arts-extra.ft.com/artprice/

http://www.ft.com/cms/s/2/ef3946a2-8266-11e0-8c49-00144feabdc0.html#axzz1j0EJcZYC

Insight: Governments should look to artists as valuable brand ambassadors, exporters of soft power and entrepreneurs with the ability to capture the imagination of millions. Forward looking states/governments will invest in the very infrastructure capable of refining the skills of the creative entrepreneurs and assisting them with go-to market initiatives. Much like the hoarding of certain currencies we are likely to see some states co-investing in art funds to give a boost  to their own heritage/cultural assets (watch the GCC states in particular).

Insight: I see an opportunity for the establishment of a Pakistani Art Index in the near future as the sophisticated art buyer looks to better understand local market nuances and find greater value in the marketplace (Rashid Rana is a Pakistani, Lahore born artist in the top 5 contemporary Indian Art confidence rank). Indian art collectors and the international art market with celebrity collectors like Charles Saatchi have raised the profile of these artists and are driving herd buying behaviour. Local markets are also mushrooming with greater publications/reportage on the local art scene with domestic printed publications like Nukta art capturing this surge in interest and allowing for the broader art ecosystem to also benefit from the ‘rising tide’.

Insight: The number of funds looking to invest in emerging markets art is likely to continue to grow as the per capita income for BRIC and N11 countries continues to grow. Regions from LATAM to the Middle east now all boast art funds however returns by the existing funds in some geographies like India have far from delivered on expectations. Despite this banks and some corporates continue to pile money into the creation of new ‘passion funds’ in the wake of weak returns from conventional asset classes and a demand driven need for greater options to diversify client portfolios. ‘Artrepreneurs’ are likely to become mainstay as smaller funds mushroom and are able to tap/exploit under-penetrated markets.

Luxury brands embrace mentoring as a CSR lever

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Challenges such as growth in customer sophistication, and the need to continue growing the non-price value aspects of a brand that luxury players have faced in recent years is driving innovation across the brand strategy spectrum allowing some horizon brands to capture greater customer and market mindshare.
 
Most brands undergo strategy reviews related to how they may be able to deliver on their brand promise through ambitious Corporate Social Responsibility (CSR) programmes. This is not an easy undertaking as there is the challenge of applying the products and services created by the company to the genuine needs of the market place. Today a healthy mix of funding external programmes delivered by third sector (NGOs, Charities and Social Enterprises) as well as in-sourced delivery programmes both remain viable options for large Multinationals to deliver on their CSR ambitions.
 
As of late the luxury market has seen some brands like Maybach and Rolex find the perfect space for bringing their brands to life through harnessing and engaging the skills of their customers. The silver bullet is Mentoring.
 
The Maybach brand has long held the imagination of the luxury market and through the Maybach Foundation the brand has started to deliver a one-on-one mentoring scheme. The scheme has strong ties to Maybach’s own history as Gottlieb Daimler himself carried those values when he met Wilhelm Maybach and decided to take the talented young engineer under his tutelage.
The programme has a strong social focus and is championing the ‘arts’ through engaging its unique customer base to mentor and nurture upcoming talent as was seen at the 2011 Venice Biennale with the entry of a vandalised test-car by mentor/mentee pair Julian Schnabel and his protégé Vahakn Arslanian. Schnabel’s piece titled “The ones you didn’t write – The Maybach Car” features Schnabel’s scribbling on the body of the car while Arslanian brings back his childhood destructive mood by shattering the glass and placing his drawings inside. The collaboration was a unique work that captured the attention of a city without cars and brought the brand to the front for many of the Bienalle’s 440000 visitors (per the organisations website – www.labiennale.org).
For more information visit:
 
The other omnipresent luxury brand at the center of a current campaign to feature the success of its own mentoring programme is Rolex.  The recent Monocle issue 39 has a number of pages of media placement by Rolex featuring the ‘Rolex Mentor and Protégé Arts Initiative’ positioned as an international philanthropic undertaking focused entirely on incubating and accelerating the potential of upcoming artists. With an exceptional advisory board featuring the likes of starchitect Frank Ghery and novelist Amitav Ghosh of Glass Palace and Sea of Poppies fame the programme is destined to engage and inspire Rolex customers as it seeks to deliver high impact mentoring through its chosen ‘masters’ to the next generation of protégés with the aim of delivering leading global artists and creatives.
For more information visit:
 
Perspective & Insight:
Luxury brands have a unique place in helping patron the arts and nurture the talent of the next generation which risks being impacted by the global downturn as sources of government funding dry up and creatives struggle to get access to resources and a platform they require to take their careers to the next level.
The next stage of evolution for many luxury brands would be to inspire and engage their customers themselves to deliver mentoring services to their local community. Needless to say this must be happening across a number of countries but a brand able to organise and track their social impact would be well positioned to gain even greater share of mind for those aspiring to ‘wear’ those values and embrace the brand even further.
This could well be extended by some brands looking to provide premium goods and services to small business with the aim of continuing to allow ‘big business to help small’. After all at one point even Rolex was a start-up.
 
Note: This article is not an advertorial and has been written by an independent consultant commenting on brand strategy as related to company CSR programmes. To contact the author please email: faridhaque1977@gmail.com