Original title: Business insight | Market iteration accelerates, but the brand is still betting on "super item"
Reprinted from: WWD International Fashion News
Creating a new "Hero Product" has long been an unspoken game rule for many fashion and beauty brands.
Just like Hermes platinum bag, Estee Lauder small brown bottle, Levi's 501 jeans...... These super items have been delivering unique brand image, connotation and value proposition to the audience for decades. They are neurons in the "reflection arc" of consumers' brand cognition, and are also one of the bases for the brand to stand.
In the Chinese market, the importance of super items is self-evident. Perhaps the brand does enjoy a high popularity and stable customer base in other markets. If there is no loud "ace" in the Chinese market, it may be difficult for consumers to correctly read the brand name. The brand may gain some traffic in the marketing war that costs a lot of money, but it cannot continuously create viability for the brand.
Every super single product carries the fate of the brand. It is not only a classic product that reflects the characteristics of the brand, but also a trump card to open up the market and form differentiation advantages, and can help the brand create countless performance myths.
There is a big difference between the super item and the hot "hot" item. Popular products can be flow items that consumers buy widely and eagerly in a short time, but they do not have the lasting characteristics of classic, high repurchase rate and "necessity" of "super items". But the consistency between the two lies in that they both bear the main profit sources of enterprises in different periods of time.
As the insiders concluded, the explosive products can be once owned, but the classics are the lifelong pursuit.
Doug Stephens, an expert in the retail industry, believes that the unique core products today have an "unprecedented" boost to the rapid expansion of brands and the establishment of public awareness. He took Glossier as an example to confirm that the company initially only had four simple and practical products: face cream, facial spray, moisturizer and lip balm. At the moment when many cosmetics brands frequently launched several mascara with different effects, Glossier only produces one kind: Lash Slick, which makes beauty consumers who have long felt "cut leeks" feel valued, and promotes the development of Glossier into a brand valued at $1 billion in a short time. The brand founder Emily Weiss once said in an interview that Glossier's goal is to produce "Super item" or "best in class" Products, which are easy to use, will become classic necessities.
"Creating super items" has also become the key strategic direction that Stefan Larsson plans for PVH Group. Since becoming CEO of PVH in 2021, Larsson has been talking about the importance of super items In the business practice of the company's two brands, Tommy Hilfiger and Calvin Klein, they constantly stimulated brand advantages through super single products, which made their sales in the fourth quarter of last year better than expected, increasing by 2% to $2.5 billion, while the original analyst's forecast was a decline of 2.5%.
Stefan Larsson once said to WWD: "Every product should have its own meaning. For us, super items are basic and versatile items in consumers' wardrobe. We build them from the most important core of consumers, which is also the unremitting pursuit of making the best, most relevant and most commonly used products."
Simeon Siegel, senior analyst at BMO Capital Markets, said: "The freshness is exciting, while the classics and consistency are memorable. To become a multi billion dollar enterprise, you must have super items. No company in the world can create a huge business just by limiting the quantity of new products. If the consumer demand for products is insufficient, and if the enterprise does not have the ability to maintain a stable and sustainable growth, the business will end sooner or later. "
Especially in the period when the economy was still unstable after the epidemic, consumers gradually turned their attention to necessities and classic products This has been affirmed by many professionals. Bryan Eshelman, managing director of retail business of AlixPartners, believes that in the retail world, the concept of four season and two season sales has gradually become invalid, which has given birth to a marketing methodology to build business around key symbolic goods, so that customers can closely adhere to the brand, Consumers will also try to buy other products of this brand to create their own wardrobe or skin care program.
With the increasing fragmentation of consumers' attention, the survival situation of brands with vague image and unclear positioning becomes more difficult. A super single product will become the most efficient "business card" of these brands, so that they can establish awareness among consumers and gain a firm foothold in the market. However, in the actual brand management, not only is it difficult to create super single products, but super single products themselves cannot become the only pillar of the brand.
One super product is not enough to support the long-term development of the brand business. In the competitive market, there will always be the next super product.
For brands that have succeeded in creating super items, it is the natural next step to quickly expand dividends to more product categories This is also the only way for business development. Today's emerging brands often follow this constantly verified development formula: attract a group of users with a super product, and then use this momentum to develop more products.
75% of the business growth of beauty giant Estee Lauder comes from its proven super products. Fabrizio Freda, president and CEO of the company, said to analysts in 2022: "Building super products has always been a crucial business winning strategy for us, Since the 2019 fiscal year, such products with high repurchase rate and high consumer loyalty have grown significantly in our business portfolio. Therefore, we have been constantly innovating and constantly strengthening this strategy. ”
It turns out that, Fabrizio Freda's risk consideration is necessary. According to the recent performance report of Estee Lauder for the third quarter of fiscal year 2023, in the three months ended March 31, 2023, the revenue fell by 11.7% to 3.75 billion dollars, and the net profit fell by 72% to 156 million dollars. Most media pointed out that the group was highly dependent on classic products and lacked the ability to manufacture new products, Callum Elliott, an analyst at Bernstein, a consulting company, also believes that the company's image and customer base are aging, resulting in performance pressure.
It can be seen that the continuous innovation of core products is still the key to the brand's continued vitality.
According to Bain, super items must be updated, upgraded, and kept alive in the market to adapt to new consumer demand and consumption scenarios. This is why Levi's extended the 501 series to denim jackets, shorts and T-shirts to attract new consumers; Christian Louboutin's image of red soled shoes also appears on the brand's lipstick and nail polish.
Any super single product needs a lot of energy, time and money to achieve. For example, Estee Lauder small brown bottle has gone through six iterations in its 41 years on the market. Through cutting-edge innovative technology, this classic product has always remained competitive in the changing market.
As far as super items are concerned, the compound interest brought by historical accumulation is an insurmountable advantage for luxury brands. If luxury brands can accurately grasp the consumption and cultural realities that are evolving with the times and environment, stimulate their own vitality of classic values and aesthetic styles, they can also constantly create new "trumps". For example, the Jackie 1961 launched by Gucci at the end of 2020 is the reinterpretation of the Jackie handbag born in 1961 by Alessandro Michele, the former creative director; After successfully creating a popular nylon handbag, Prada also seized the opportunity to quickly launch a replica Hobo, and strengthened the design and supply of other series of nylon handbags. It also launched a new half moon armpit bag Cleo, which was first launched in the 1990s.
Behind the successful cases, the strong strength and long-term precipitation of the brand are indispensable. However, for emerging brands, there are still many difficulties in how to create classic products from products that have a burst effect in the short term, and how to bet on super single products.
Jessica Ram í rez, senior research analyst of Jane Hali&Associates, said that fashion brands have been focusing more on their own super items to control inventory and reduce price cuts. However, new brands that have not accumulated enough experience and data are also easy to misjudge the explosive products, and eventually need to clear the inventory, which will hit the performance.
From a macro perspective, with the rapid development of social media, the cycle of creating new products has been shortened again and again, and brands can quickly occupy a place in the market through traffic dividends, However, since then, there have been many cases of "rollover" due to quality problems. The short R&D cycle and anxious consumers have made it difficult to find a truly creative and leading product in a certain market segment.
In today's marketing environment, any brand is likely to "become famous for 15 minutes", but no popular product can really save the brand. For a new brand starting from scratch, the key lesson is how to create a core product that can drive long-term business growth. For a classic brand, it needs to inherit the brand heritage, Always maintain the ability of innovation, as Eshelman said: "Now the brand is always commemorating something, but you cannot always commemorate a super item." WWD
Writing Lucy Geng
edit Lee，yalta
picture source network
