Place of distribution

price of the product range. In fact, the price of a luxury brand should always increase. A good idea is too set the price “low” and then little by little raise the price while upgrading the product until the right balance is found between volume and margin³¹⁶. However, prices cannot be raised markedly without adding value. Adding value does not necessarily means adding costs to the product³¹⁷. A higher price cannot be justified by adding some extra gold and diamonds- the clients dreams must be further satisfied to allow for this augmentation in price³¹⁸. This is what ECCO has done with their Premium shoe collection introduced this year. Here ECCO has added more value in terms of special materials and a very classic and luxurious look which adds to the consumers dream by making them feels special when wearing these shoes, since these are shoes that will definitively be noticed. Hereby augmenting the price on these shoes compared to a normal pair of ECCO shoes does not seem like cheating the consumer and it is still in line with ECCOs philosophy about offering value for money – these shoes just have that extra value. In the same way the new clothing line could reach a much higher price point than ECCO’s normal products, but it would require that the clothing line had something special to offer and that it could be part of the consumers’ dreams.

competitors’ products and focus on the shopping malls with own retail and flagship stores. Selling only through your own stores is a good distribution strategy if ECCO wants to enhance their image to become a more luxurious brand. According to Michael Hauge Sørensen ECCO’s plan is to set up more stores in the Chinese shopping malls as these allow ECCO to give the ECCO brand its own profile and identity, which is harder in department stores where ECCO is next to other brands.

Though ECCO wants to open new stores within malls, ECCO should emphasize the premium store concept which they started in 2008. What is important here and what is also what ECCO has done is to stress the interior design. What ECCO has done in Hong Kong was making a store consisting of a cube structure made in wood, around which the shoes are exhibited in an artistic and innovative way, so that it looks like the shoes are almost hanging in the air. The experience of the space is very distinctive and is supposed to stress ECCO’s innovativeness. In the store you find a shoe collections picked especially for the Asian market which comprises ECCO’s Premium Collections and Limited Editions. What ECCO and its competitors in the premium and the luxury business have realized is the importance of giving the consumer an experience. Goods can be forgotten, but an experience is less likely to do so. What nowadays consumers wants is experiences and to try something new, which is exactly what the young Chinese are looking for. Therefore, ECCO should give the whole experience dimension as much attention as the development of products.

However, ECCO has chosen to use several store concepts; ECCO Premium Store, ECCO Signature store and ECCO Flagship Store, ECCO sees its range of store concepts as complete, covering everything from the global ECCO stores to the exclusive Signature Store. The different store concepts cover all of ECCO’s consumer segments and collections. Nevertheless, with the new Premium stores and a sustained improvement of the retail concepts ECCO seeks to elevate the brand. We believe that, ECCO with its introduction of more luxurious and expensive goods needs at store format that matches these new more exclusive goods. Therefore ECCO should make more ECCO Premium Stores and cut back on the less exclusive store concepts.

Moreover, ECCO should be more selective when choosing where to situate their stores. ECCOs’

stores should only be situated in the expensive parts of the various Chinese cities so that the placement does not conflict with the people perceptions about ECCO being a premium brand.

However ECCO could, as a way to capture the second-two and more rural cities start to place more stores here thereby capturing first-mover advantages and creating more awareness about their brand.

Moreover when ECCO introduces their clothing collection is has to be available across China and

94

not only in a few stores such as ECCO’s Premium shoe collection which was only available in Hong Kong³²².

10.4.1 Internet selling:

Besides of using its own stores to sell the ECCO products ECCO can also make use of the internet selling products from their ECCO home page. ECCO should, if they want to position themselves as an upper-premium brand, put greater effort into their homepage and how they present their products as this could be done in a more luxurious looking way.

ECCO could also sell some of their products from a few acknowledged online luxury fashion retailers such as www.net-a-porter.com and www.mytheresa.com, who do not compromise with the luxury brand equity. These online retailers supply several high end fashion brands such as Italian Tods and Bottega Veneta, American Marc Jacobs, French Celine and Chloe, English Matthew Williamson, Danish By Malene Birger and Designers Remix, etc. When receiving a purchased product from the mentioned online shops it is wrapped in exclusive gift paper providing the consumer a luxurious feeling when unwrapping it. Furthermore, if the product does not fit it can be returned free of charge.

95

The webpage of Net-a-Porter is viewed by over 1.8 million people each month”³²³. However, according to Kapferer luxury brands put their foot in it when “going online”, because 'luxury' is an experience - it is something that you need to feel, taste, and touch. Moreover, the internet – when it is used for selling the brands product does not allow the brand to keep their prices secret, which is a great part of the creation of the consumers’ dreams about luxury products. Though selling on the internet could damage the dream value of a luxury brand, not using it could be a competitive dangerous decision for the luxury brands as more and more luxury brands such as Louis Vuitton, Lacoste and Ralph Lauren uses this channel. Moreover, the Chinese spend a lot of time surfing the internet, reading about fashion and looking at their favourite brands’ homepages³²⁴. However, a luxury brand could choose not to sell through the internet, but only show their products there.

ECCO has chosen this approach for their Danish and the Chinese market, but not for the British and the American one, which seems confusing and might be a sign that they might also start selling through the internet in Denmark and China. It would be strategically wise to make an online store for the Chinese consumers as it could lead to additional sales and as it could be a means to reach the young consumers who are the ones most likely to purchase products on the internet. Furthermore, ECCO should use online retailers, but only the ones that can be characterised as luxury retailers

322ECCO launches Premium Collection 2009

323 Keller 2008, p. 214

324 Cocoran 2001

such as “Net-a-Porter”. However, it is difficult to enter the Net-a-Porter site if your products are not

“fashionable” enough and ECCO might need to persuade Net-a-Porter to take on their products (which should only be the most premium ones). Net-a-Porter will help boost the ECCO brand by signalling that it is a premium brand as it is sold among other premium and luxury brands.