Exploring all things Balenciaga — From Past to Present
It’s 2017 a wave of desperation has swept over the captivating thoughts of many. What was the object of this widespread obsession, you may ask? None other than a pair of Balenciaga’s.
I mean seriously these sneakers possessed a magnetic force that pulled most of the people into a world of exquisite style and boundary-pushing fashion. I couldn’t help but succumb, shamelessly drooling over Balenciaga’s awe-inspiring range. It had put the world of fashion in a blissful chaos wherein the meaning of effortless style had been redefined emerging as the epitome of cool!
But cut to today, I am here sitting giving Balenciaga a side eye wondering why their enigmatic charm has lost its mojo. Why aren’t they still setting hearts ablaze anymore, Why has this fire fizzled out?
This might seem like a jump but an interview by Phil Knight, the sneaker pioneer from Nike got me ruminating on the reasons for this fading. He said capturing the market is no more about the product, the design or the technology but about how you market the product. In fact, product marketing is now making a gradual shift to transforming the product into a simple marketing tool. The next thing I found very important from his session was about innovation being guided by consumers. Companies across the globe have been heavily investing in market pull innovation wherein product innovation is guided by what consumers aspire or need (FYI the current light version of the camera only got developed because of the market pull innovation). In summary, I extracted from Knight’s perspective, the significance of marketing strategies that are consumer-driven.
So is the reason for Balenciaga’s fade out to do with its products, its marketing or its lack of consumer driver strategies? Let’s together uncover the highs and lows of this legendary fashion powerhouse in style!
How did it start?
So now let’s talk Balenciaga! The brand has been around longer than you might think. Cristobal Balenciaga launched this iconic label in 1917 (yes, it’s that old ftfy), and it thrived until he decided to retire. But then, things took a bit of a rocky turn with multiple changes in ownership. However, there was a silver lining! The Kering group came to the rescue, bringing Balenciaga back to life with Nicolas Ghesquière and Demna Gvasalia as the creative directors.
Fast forward to 2017, and boom! The brand exploded into a hype-fueled frenzy capturing the collective imagination with the launch of the Triple S sneaker.
However, despite this initial success and fanfare, Balenciaga failed to leverage this stardom to build long-term customer loyalty, resulting in a gradual loss of market share to its competitors. A 9% decline was witnessed for Balenciaga and other houses from the Kering portfolio in the Q1 2023 revenue. To further support this a general search for Balenciaga or related sneakers/products on trend analysis portals shows a decline in the popularity amongst the audience.
Now, the burning question is: will Balenciaga make a comeback once again? What could help in this revival?
This article looks to provide insights into Balenciaga’s journey while also suggesting tweaks for the current consumer journey using Marketing Automation for enhanced customer loyalty in the future!
The Four most striking chapters from The Balenciaga Journey
The Triple S Sneaker Phenomenon
In the world of fashion, trends come and go but there are certain moments when a brand captivates the audience becoming an industry leader. Balenciaga experienced such a moment in 2017 with the launch of their Triple S sneaker. This chunky, futuristic footwear instantly became a sensation. It gained a cult-like following and became a sought-after item among sneaker enthusiasts, celebrities, and influencers alike thus creating unprecedented hype and demand.
Limited production runs and high demand led to scarcity, fueling the hype even further (That’s basic demand-supply game in action!). Thus resulting in sneakerheads and fashion enthusiasts clamoring to get their hands on a pair, facing long waiting lists and limited availability.
Balenciaga inadvertently stumbled upon a golden opportunity to cultivate a loyal customer base. It’s needless to say how important building rapport with users is however backtracking into Balenciaga’s communication reflects it to be restricted to new products.
Using personalized emails, targeted campaigns, and exclusive offers in a situation like this could’ve solidified the bond between Balenciaga & its customers. However, unfortunately, they failed to capitalize.
Coming to you, other sneakerpreneurs — Here are 3 ways you can use your product fame as your suit to ceding at building client relationships. If I were you, I would’ve harnessed the power of marketing automation in these ways:
a) Personalized Campaigns: You can create personalized campaigns tailored to individual customers’ preferences. Automated emails showcasing new releases, stock updates, exclusive offers, and personalized recommendations based on customers’ browsing history. It can help keep the brand on top of mind and foster a sense of exclusivity. For instance, Balenciaga could send updates about which celebrity wore their preferred design of sneaker-like Louis Vuitton did it for Tabour watch for Bradley Cooper.
b) Targeted Communication: You can segment your customer base to send targeted messages to different baskets of users. It ensures relevancy for the users making them more open to the communication. For instance, Balenciaga could have reached out to loyal customers with exclusive pre-orders or VIP access to limited-edition releases, making them feel valued and appreciated.
c) Loyalty Programs: Automation can power the implementation of loyalty programs, rewarding customers for their ongoing support of the brand. Using behavior tagging customer purchases can be tracked automatically offering rewards based on their spending habits, such as personalizing their product or special consultation service, to encourage repeat business, thus cultivating customer loyalty.
A Production Shift that Left Consumers in the Dark
In 2019, Balenciaga made an unexpected twist, it shifted production from its renowned Italian craftsmanship to China. This move was executed with little to no communication with their consumers. The news of the production shift trickled in with product deliveries leaving the existing customers in a state of disbelief, feeling disconnected from the brand they cherished.
I think what worsened the situation was a mismatch in consumer expectations and brand delivery. Consumers anticipated a decline in prices due to the shift in manufacturing location to a cheaper position. However, the brand did not sufficiently communicate the shift did not mean lowered quality.
Users needed to be communicated explicitly and implicitly that change in the location of production wasn’t equivalent to reduction in quality. They needed reasons to trust the process. Balenciaga’s failure to address these concerns shattered the trust they had meticulously built, leaving their customers disillusioned and searching for alternatives.
Apple’s transparent communication about its production shift to China, including public audits of its Supplier Code of Conduct, sets a commendable standard of fostering trust with the public. Here’s what can be done by you in case such shifts take place in your business cycle to lessen the impact of simple transitionary processes:
a) Transparent Communication: Use automated and targeted communication, to proactively inform your active and inactive customers about the production shift (for instance, if that’s the transition you are experiencing). Sharing the reasons behind the decision, and assuring customers of the brand’s commitment to quality and the ways it’s being implemented will help foster trust and maintain loyalty.
b) Exclusive “Behind-the-Scenes” Content: Utilize cross-channel marketing automation to share exclusive content, such as videos or blog posts, providing insights about the transitionary process. For instance: Apple recently released a video (attached for you) informing its users how they are trying to undo the impacts of their previous carbon emissions with its current commitment to being Carbon Neutral by 2030. This information about what’s underway for the brand in terms of its motivations helps prevent users from becoming entirely displeased with the brand.
https://www.youtube.com/watch?v=QNv9PRDIhes
c) Customized Offerings: Initiate different levels of custom offers based on the client’s lifetime value. For instance: Personalizing the packaging and branding of the shoes to create a memorable experience or custom accessories for the shoes contingent on the users engaging with the brand’s social media, making $x worth purchases and so on. Thus attempting to keep the users invested in the brand and its offerings. For instance, Nike launched a member’s day campaign allowing them to customize their shoes according to the NBB team they support or How Patek Phillipe announced purchasing 7 of their watches the 8th is custom made exclusively for you. (Wouldn’t we all LOVE that?)
The Missing Art of Engagement
Fast forward to the present, there is an absence of regular engagement from Balenciaga. Most e-commerce or O2O brands amass a trove of valuable customer data, including abandoned cart information, and browsing behavior, alongside other connection points. However, they fail to capitalize on it.
We are in an era where users seek personalized communication. In the case of Balenciaga competitors like Nike successfully delivered the same, making the lack thereof deafening. The lack is a missed opportunity to bridge the gap between users and the brand. Reengaging the audience, is crucial to reclaiming the position as a forerunner in the luxury sneaker industry.
If you are looking for the best time to start engaging better with your users it was yesterday, so START NOW! Here are ways in which marketing automation can be key in re-establishing engagement to win back customers:
a) Behavioural Triggers: Reiterating the extent of data brands hold about their users and can be leveraged in different ways. If you also hold this treasure box, you can implement automated behavioral triggers. These triggers as the name suggests are based on behavior cues and can be initiated through multiple channels like personalized email campaigns to re-engage customers, offering incentives to complete their purchase or showcasing related products of interest for mixing/matching or a simple we miss you when the users haven’t shown up in a while.
b) Replenishment Reminders: Ever felt the need to be reminded to buy something? Marketing automation is of utility to send timely reminders to customers who made previous purchases or had shown interest in out-of-stock products, reminding them to stock their favorite products. The mail can be automated based on the estimated product lifespan or individual usage patterns, ensuring customers never run out of their beloved items. Furthermore, these reminders can be extended to include complementary products for cross-selling (you can do all you want and be who you want with Marketing Automation) for instance, sneaker cleaner for customers who purchased shoes reminding them to keep their latest kicks clean.
c) Post-Purchase Follow-ups: Automation also facilitates post-purchase communications, such as thank-you emails or surveys, to gather feedback and gauge customer satisfaction. You can utilize this valuable data to improve products, address any concerns, and show customers that their opinions matter.
Controversy Straining Trust
The final blow to the brand came with the recent controversy involving allegations of mishandling children in unsuitable pornographic photoshoots. The handling of the same incident depicted the brand as insensitive and acted like the final straw on an already burdened camel causing it all to topple leading to the banishment of the brand by many. While I won’t delve into the specifics here, it is worth noting that incidents of this nature can have a profound impact on customer loyalty and public perception.
Not that I hope you need this but in managing such situations too marketing automation can play a role in aiding the rebuilding of trust while mitigating the impact of the controversy:
a) Crisis Communication: Chipotle is a great example of using targeted messaging to address the controversy. They accepted & acknowledged the concerns from the e-coli outbreak, thus providing transparent updates on the brand’s take to undo the negatives. Promptly responding to the situation and communicating your commitment to addressing any issues, can reassure customers while depicting accountability. Here’s more about the newsletter they shared later, alongside other communications. Implementing such communications is more effective through automated journeys ensuring time-to-time engagement.
b) Social Listening and Sentiment Analysis: Marketing automation tools can be employed to monitor social media and online platforms for mentions of the controversy. By analyzing sentiment. You can identify the areas of concern and swiftly respond to customer feedback, demonstrating your dedication to resolving the issue. For instance: doing surveys to see how the users feel about a topic or launching podcasts on a topic and tracking their response on the same. The following can be an example to sense how the users feel about an issue.
c) Personalized Apologies and Offers: Automation could have aided in delivering personalized apologies to customers who expressed disappointment or concern due to the controversy. You can offer special incentives or event invites as a gesture of goodwill, showcasing your commitment to making amends and rebuilding trust.
In summary, Balenciaga’s journey from being the industry leader in luxury sneakers to losing market share to competitors serves as a cautionary tale. The initial success of the Triple S sneaker was a moment of immense opportunity, but the brand failed to capitalize on it by neglecting the power of consumer-driven strategies for building customer loyalty.
As other brands navigate the rapidly evolving fashion landscape, they can learn from Balenciaga’s missteps. They can prioritize communicating effectively with their users as Knight also mentioned. Using marketing automation and leveraging data-driven strategies, can be one of the ways brands forge strong connections with their customers, cultivate loyalty, and ensure sustainable growth in an increasingly competitive market.
