What Québec Wants™

The Royals’ brand in Québec

Charles, The Prince of Whales, and his wife Camilla, The Duchess of Cornwall, are visiting. So here’s a post about the royals.

Royal Warrants – the ultimate brand endorsement

In 1841, Carr’s Table Water Crackers were granted Queen Victoria’s Royal Warrant, an award that has been granted to Carr’s by British royalty continuously since that time. Carr’s have been on the shelves of grocery stores in Québec for many years with the Royal Warrant prominently displayed on its packaging. I have to say I had never paid much attention to it but it’s obviously a prestigious mark and a sign that the product’s quality meets the Royals’ high standard.

If you care to learn more about Royal Warrants, there’s a well-researched article in brandchannel. Here’s an excerpt:

The warrants have existed for over a hundred years. And unlike traditional celebrity endorsements, brands that are warrant holders are associated less with the Queen or other royalty to which the crests belong (there are four royal warrants belonging to the Queen, the Duke of Edinburgh, the Prince of Wales and the now deceased Queen Mum) but to the traditional way of life and luxury of the British Royal household. Consequently, Royal Warrants are an unfaltering sign of prestige and quality.

“People apply for the warrant because it is a mark of excellence," said Pippa Dutton of the Royal Warrants association. "It's very helpful for trade because people say, well if the Queen shops there, then it must be good. It's very good for trade abroad.”

Do Quebeckers care about what brands the Queen likes?

It’s hard to say.

The same brandchannel article quotes Peter Fisk, Group Managing Director of Brand Finance. He believes a royal connection isn't always a positive endorsement. Fisk says that, compared with other celebrity brands, it is much harder for royal brands to attract consumers for the following reasons:

• Celebrities gain their attributes through achievement and behavior; royalty mainly through position.
• Consumers seek brands that match them or their aspirations. Therefore they can identify with celebrities better than they can identify with royalty.

As you would expect, Quebeckers aren’t as fond of the Royals as Canadians in the rest of the country.

Survey results released last week by Ipsos Reid reveal that Quebeckers are significantly more likely to believe that Canada’s head of state should live in Canada and that when Queen Elizabeth’s reign ends, Canada should end its formal ties to the British monarchy. They’re also more likely to believe that Canada’s head of state should be the Governor General, not the Queen.

And they are more likely to agree with the statement ‘the Queen and the Royal Family should not have any formal role in Canadian society, the royal are simply celebrities and nothing more’.

Which leads me to conclude that the real celebrity endorser here should be Her Excellency the Right Honourable Michaëlle Jean. There are plenty of Canadian products waiting for her warrant.

Top 2 box agreement with the statement (Ipsos Reid survey for Canwest News Service and Global Television, October 31, 2009)

Show the fashion. Talk the price. (To members only)

This is how David Margolis, the founder of WINNERS stores, used to define his advertising philosophy for the off-price retailer whenever we debated the merits of a particular ad. It worked wonders. And that was in good times.

It seems it still does even in less favourable times for luxury goods.

Rob Walker, in his NYT Magazine column Consumed, tells us that online discounters of luxury brands are flourishing.

“These e-tailers — like RueLaLa.com, Gilt.com, HauteLook.com and others — position themselves as more than mere sources of heavily discounted high-end goods. For starters, they aim for an image of exclusivity, with “invitation only” setups and a strategy of preventing their wares from showing up in search-engine results (unlike established high-end e-tailers like BlueFly.com). And they amplify those elements of bargain-focused shopping that some people find fun and exciting (like time limits and unpredictable and quickly rotating supplies). The idea is an online version of the so-called sample sales that designer brands have conducted for years.”

For more on how the luxury sector was affected by the recession, an adman’s belief that it wouldn’t be and data on Quebeckers and prestige brands, read this previous post.

Getting it wrong

In a post published last December, I wrote about De Beers’ belief that the idea of an enduring item that retains value will persuade consumers to buy diamonds despite the financial crisis.

Now Ad Age is publishing ten case studies about five brands doing it right in the recession, and five doing it wrong.

Here’s the story about De Beers:

Last holiday season, De Beers doubled its U.S. marketing budget in the face of gloomy news reports. The diamond purveyor believed -- incorrectly, as it turned out -- that diamond sales would be robust as consumers looked for gifts with enduring value. Worldwide demand for diamonds has softened, however, and parent company LVMH saw profits decline 16% in its watches-and-jewelry division last year. Even more telling, only 1% of 434 retailers surveyed by National Jeweler said De Beers' marketing efforts helped boost sales.

An adman's certitude during economic uncertainty

In an interview published on December 1^st in the Quebec business publication Les Affaires, Patrick Beauduin, Cossette’s head of convergent creative, was asked if luxury goods would be a casualty of the economic crisis. His definitive answer surprised me.

“Not at all” said Mr. Beauduin. “The customer base for luxury goods does not change. Someone earning three million dollars annually will maintain the same lifestyle, even if he or she loses a few hundred thousand dollars.” (The translation is mine.)

A nuanced answer may have been more appropriate. Particularly since there were already many signs a  month ago that typically recession-proof luxury brands were under pressure.

Contrast Mr. Beauduin’s prediction with Globe & Mail columnist Eric Reguly’s assessment. “So much for the theory of the recession-proof industry. Luxury-goods companies had always been somewhat immune to economic downturns. Not this one.”

In his column "Bling goes from status symbol to stigma." Reguly quotes the head of Italy’s fashion industry lobby group; "The rich people do not want to spend money. They're not in the right mood." So it has little to do with earning three million dollars and losing some of it to the market meltdown. It’s about the psychology of the crisis. And it’s affecting luxury brands.

According to a survey by Bain & Co. commissioned by Altagamma, the Italian association of Italian luxury goods companies, the growth of global luxury goods sales will slow sharply, to grow 3.0 percent in 2008 to 175 billion euros (220 billion dollars). The slower growth rate stands in stark contrast to the 9.0 percent growth in 2006 and the 6.5 percent advance in 2007.

Quebeckers and prestige brands

PMB 2008 asked Canadians whether or not they agreed with the statement “It’s important to me that people admire the things I own”. 18% of French-speaking Quebeckers agreed (113 index) compared to 15% of English-Canadians in the ROC (96 index).

This is consistent with findings from the Yanklovich Monitor ten years ago;

• Agreement with the statement “I like to buy brands that make me feel I’ve made it.” – French Quebec 45%, English Canada 26%.
• Agreement with the statement “I tend to choose brands that let people know I’ve made it.” – French Quebec 23%, Englosh Canada 16%

Diamonds are forever.

In good times and in bad.

De Beers is running full-page ads in the New York Times to drum up its Christmas sales. That’s to be expected. But it’s the creative strategy that I find interesting. It’s recession talk for people who have lots and are faced with the prospect (or reality) of having less. In either case, it’s making it chic among the affluents to have less. The ad is all text with a beauty shot of diamond earrings.

HERE’S TO LESS.

Our lives are filled with things. We’re overwhelmed by possessions we own but do not treasure. Stuff we buy but never love. To be thrown away in weeks rather than passed down for generations.

Perhaps it will be different now. Perhaps now is an opportunity to reassess what really matters. After all, if everything you ever bought her disappeared overnight, what would she truly miss?

Perhaps it will be different now??? If everything you ever bought her disappeared overnight??? This is as close as it gets to a luxury marketer using the “R” word when talking to people who won’t face foreclosure but will most likely face a year-end without a bonus.

According to an article in Mining Weekly, De Beers believes the idea of an enduring item that retains value will persuade consumers to buy diamonds despite the financial crisis and economic downturn.De Beers is hoping that the notion that our lives are filled with things we don’t treasure will resonate now more than ever.

And it’s a view that Quebeckers seem to share more than Canadians in the ROC.

Data suggest that Quebeckers are more likely to seek voluntary simplicity. Ten years ago, Yankelovich asked Canadians if they agreed or disagreed with the statement: “I have a great need to get rid of some of the non-essential in my life.” 58% of Quebeckers agreed while only 45% did in the ROC.

It’s not clear however if, in reassessing what really maters, Quebec women will wish for everlasting diamonds or less expensive costume jewellery. According to PMB 2008, women in Quebec are generally more likely to buy costume jewellery than fine jewellery.

Fine jewellery personally bought in past 12 months
Quebec: 16%
ROC: 20%

Costume jewellery personally bought in past 12 months
Quebec: 25%
ROC: 22%