DCA Luxottica's Monopoly

Luxottica Sees Itself As King, Raising Questions About Brand Authenticity

Can A Monopoly Provide Consumer Choice? By Dean Crutchfield Associates

Dean Crutchfield Associates

Are we being robbed blind? Whether you plan to worship the sun or can’t find the door without them you’ll likely need to fork out over $350 for luxury eyewear - a price that’s framed through one lens of an $8.5B public company majestically shielded in the mountains of Italy, Luxottica. Eyewear was invented in Italy around 1284. Today over 80% of major eyewear brands, including the world’s number 1 seller, Ray Ban, are designed and retailed (over 7,000 stores US alone) by Luxottica, raising questions about brand authenticity, price and customer choice.

Products exist in the mind and brands live in the heart

Products exist in the mind and brands live in the heart: luxury brands conjure up lifestyle interpretations we want to

buy into. Over 500M people don Luxottica’s products and CEO, Andrea Guerra, insists that “customers have

the brand choice for their lifestyle,” and it’s prevalent in their offering: "Luxottica

has been able to deliver eyewear collections faster, enriched with more

sophisticated decorations and innovative materials, to stores.” If you

owned 80% of the high-end eyewear market and were doing what any CMO

desires – achieving brand growth, relevance and revenue, one would likely

say that.? Dean Crutchfield Associates

That pair…

That maybe the ‘business’ of brands, but if the product itself has had zero design input from the name on the frame what of authenticity and brand promise? Is brand authenticity an issue – the tension point between the poles of charlatan and the real thing? Last week the Economist quoted Rodney Collins, a Director at the advertising agency, McCann, saying, “above all else brands must appear to be ‘authentic” if they want to succeed.”


“Appear” is the crux of the issue: authentic brands truly live and breathe their story, it’s reflected in their core purpose of who they are, what they stand for and why we believe. We trust their story because we experience it through the living of their values and brand personality with the brand narrative embedded in their standards of detail and the consistency in the delivery of the promise they make and keep. Many of us assume that it’s highly unlikely the name on the frame designed the product - teams of gifted designers design them, but Luxottica have they’re own designers translating their brand sense into successful eyewear designs.


Eyewear is a fashion purchase that doesn’t bust the bank. If consumers knew, however, would they feel that Luxottica had a monopoly? Their empire straddles house brands, Persol, Ray-Ban and Oakley and licensed brands including Chanel, Prada and Versace. Given their premium pricing are these brands presenting who they really are, what they really believe or stand for? If the customer identifies with a luxury lifestyle brand and connects with its values that guide her behaviors and standards does that make it an authentic luxury brand? Perhaps the principles of luxury marketing can provide guardrails:

The Opposite Of Emotion Is Not Irrational


Principles of Luxury Luxury brands are elevated to a higher standard - that perception is paramount. Protecting it affords Luxottica a very strong margin along with the ability to focus on flexibility and efficiency delivering the products that will reflect positively into future shareholder value In luxury, less is more. Brand equity is preserved by controlling unit sales and by owning retail Luxottica achieves that and simultaneously has decreased time to market for new designs by 44% and its revenue’s were up 15% this summer Brand equity is the metric. Luxottica has played a superlative role enhancing partner brands by extending their franchise into eyewear: a category that’s estimated to be nearly $2B in the US according to ABC News. Sub-luxury association with the brand dilutes brand equity. Clearly making the case for Luxottica being a best kept secret. As management guru, Peter Drucker, pointed out in his Power 5 theory, supplier power can deplete standout and competitiveness


Principles of Luxury If it’s been done before, don’t do it. Like, running a monopoly, but knowing and

doing are two different things and this category has clearly not been tough to have a monopoly on

Detail is a key differentiator for authentic luxury brands and Luxottica have

promised more sophisticated decorations and innovative materials

Luxury brands are ‘seen’ by the company they keep. If the public acknowledged that virtually all high-end eyewear is designed and manufactured by one firm it

would likely destroy franchise value and erode the ‘authentic’ brand message to consumers

Don’t look where you don’t want to go. Luxury brands align goals and rewards

with luxury principles, revealed in Luxottica’s exponential growth and bolstered share price performance.



If these are the hallmarks of authentic luxury brands, theoretically Luxottica accomplished it with a determination, self-confidence and degree of success that deserves bright lights, but is the logo on the side enough?

Empowered Consumers CMOs know they’re tasked to build lasting relationships so they must understand and deliver real value to empowered customers. People wear eyewear up to 14 hours a day, representing a tiny piece of terrific real estate for a brand to live! Especially luxury where the brand idea as opposed to the product is the foundation of perceived brand value. At its core authenticity to most of us is about being legitimate: being true to who we are and our addiction to do what we do best. Alter that incorrectly or allow your rhetoric to step out of alignment with customers’ actual experiences and you’ll end up in rude financial health.


Business is booming and the trend for luxury is up as reflected in Luxottica’s increased revenues ($4.8B by July) and it’s a passion for acquisition, exchange and accumulation; it’s success they feel assured by tapping into the fast-fashion revolution by giving shoppers fresh products each time they enter a store – a strategy mastered by Zara.

Luxottica’s business model is clearly good for business – it’s booming, and so is the trend for luxury, reflected in Luxottica’s increased revenues ($4.8 billion by July). And the multitude of product designs is good for brands and in turn good for fashion-conscious consumers willing to pay the high-brow price. As for whether Luxottica’s business is good for the public’s interest, the court of public opinion should decide, if only they could see.


as

consumers search

for greater meaning and sincerity from the brands they choose –

fuelled by a desire to connect with things that feel safe, certain and

unambiguous, authentic brands are best captured by Oscar Wilde, �

“To know the price of everything �is to know the value of nothing.”


Seize More Opportunity

Brand Strategy Team Building

Personal Branding Brand Building

Business Activation

Sell More Services

Selling Presentation Skills Ambition Planning

Pitch Forum

Win More Business Sharpen Offers

New Business 101 Pitch Boot Camp Growing Clients Pitch Doctoring


Dean Crutchfield Associates Sell More, Seize More, Win More

Growth Advisors


Delivering Your Best Case & Winning Face


In the pursuit of opportunity without regard to resources held, Dean Crutchfield has

targeted and won millions in new fees from the world’s

leading brands.

By convincing senior executives at Fortune 500 companies on brand architecture, portfolio

rationalization, go-to-market brand strategies, product and

business innovation, Dean Crutchfield has directly helped clients generate billions in new

business growth.


Armed with rich content, deep

knowledge, 2x2 matrices and a white board, we rapidly

create targeted, multi-channel growth programs that generate immediate

Impact Dean Crutchfield Associates

What DCA Delivers Achieving growth

For ambitious leaders who are driven to grow fast

Creating new business Orchestrating and activating accelerated outreach programs

Building efficiencies

Rapidly sourcing the best talent for the business

Improving margins

Rallying teams behind the brand and go-to-market strategy

Boosting win rates

Delivering your best case and winning face forward


Working with DCA

Catalyzing top line growth for clients is what we thrive on: delivering your best case and winning face, encourage your people to move the needle north and sharpen the product offering. DCA (Dean Crutchfield

Associates) achieve growth for clients by tailoring brand-led techniques that are uniquely participant

centered. We guarantee results. Whether it’s a better pitch, winning new mandates, a better team or more

fees, you will find our fee in your business within weeks.

DCA programs have been thoroughly tested and

proven with start-ups and the world’s greatest brands, uniquely adding immediate value.

When you hire DCA, you get results. If you have the

right people attend the sessions and complete all of your committed decisions and pilot initiatives and are still not satisfied or seeing results by the agreed time frame, we will coach and advise you free until you do!


Working with DCA

By deploying real world strategies and hands-on collaboration to inspire teams we create content backed by actions that will assure you of seizing

every good opportunity, selling more services and winning new business.

For 20 years Dean Crutchfield has advised the

world's most iconic brands, built businesses, created new companies, opened international offices and spoken about the role of brands at Duke, Kellogg,

Wharton and the Google Speaker Series. He has made appearances on all major TV news networks, commentary in the global press, editorials in major

business publications and is a Contributor to Forbes.

With a proven ability to inspire and push the boundaries beyond the notion of what was thought possible, DCA excel with clients who are looking to

run fast, led by CEOs, CMOs, entrepreneurs and executive teams eager to capture dominant levels

of success.


If You Don’t Like Selling You’ll Enjoy Irrelevance Even Less


Global Client Experience

Aviva* BP BT*

BSkyB* Camper & Nicholson Carter’s Cellcom* CITI Comcast General Electric Kraft Fila Frito-Lay Littlewood’s* McDonald’s M50

McKinsey Metsä Serla* Nomura* PepsiCo PG&E Pitney Bowes RBS* Scanfinest* Shell Smirnoff Staples Sunglass Hut Target Tower of London* Warburg Pincus WGM Dean Crutchfield Associates

“Dean always cuts to the core of what needs to be done and said. He helps bring clarity and provides value by being an outsider with no agenda, so he can help you stand back and see things from different perspectives. Dean helped us think through solutions and then form the best way to present those solutions in a persuasive and compelling way.” *References upon request

* Overseas Project

LET’S GROW


Contact: [email protected] +1 917 239 3303 333 East 34th Street, Ste 15A/B, New York, NY 10016


DCA Luxottica's Monopoly

Business

Transcript of DCA Luxottica's Monopoly