Swarovski's clear-cut case for quality
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SUPPLIER CASE STUDY • Swarovski October 2004
Swarovski’s By Rebecca Mann
clear-cut case for quality
Swarovski is – literally – a multi-faceted brand. Once known almost
exclusively as a supplier of chandeliers and cute crystal figurines, it
now enjoys a well-deserved reputation as a cutting edge fashion
powerhouse, thanks to innovations such as Crystal Tattoo, and a
successful diversification into jewellery, watches, leathergoods and
homeware. Vice President Travel Retail Worldwide Peter Zottl
updates The Moodie Report on progress in 2004, and talks about
Swarovski’s “next big thing”.
rologue: The old adage has it that all that glitters revved up Judy Garland’s ruby slippers in The Wizard of
is gold. But these days, in travel retail at least, it’s Oz in 1939; that put the glitz into Gentlemen Prefer
just as likely to be Swarovski. The company’s crystals Blondes in 1953 (in the sense that crystals and not dia-
adorn everything from haute couture creations to monds are a girl’s best friend); that co-designed Christ-
Kawasaki motorcycles via Adidas sneakers. In New York ian Dior’s famous Aurora Borealis stone in 1955; and
you can even get a Swarovski-studded bikini wax. helped Marilyn Monroe to bedazzle the world while
singing ‘Happy Birthday’ to JFK (her dress featured
The animal figurines aren’t exactly an afterthought (the 10,000 Swarovski crystals) in 1962, has always enjoyed
revenue from this segment is sizeable so they more than strong fashion roots. It just enjoyed them quietly.
pay their way), but they are no longer what Swarovski is
all about. That’s if they ever were. The company that All that has changed and the company has worked hard
138 The Moodie ReportOctober 2004 SUPPLIER CASE STUDY • Swarovski
to establish itself publicly as a bona fide luxury goods by at least +15% – provided of course that no force majeure
brand. That transformation has paid dividends both events take place.
domestically and in duty free, on a worldwide basis. And
if Vice President Travel Retail Worldwide Peter Zottl has Can you give me a snapshot of how you view the
his way, Swarovski is set to shine on in the channel for market in general, and in particular your strongest
some considerable time yet. He was in suitably sparking doors?
form when he spoke to Rebecca
Mann recently. Travel and tourism seem to be in full
“We do like recovery wherever you look; although
The Moodie Report: At this year’s if anything the German tourist mar-
TFWA Asia Pacific show in Singa-
pore, you said 2004 had started well
to surprise ket seems a bit morose.
for Swarovski – have you managed to
maintain those early winning ways?
customers. And Certainly, it’s been a great year in
Asia Pacific, with DFS Group back in
And how would you sum up your
aims and objectives for the remain- you can count on full swing. The most spectacular
increase there has been in the Mid
der of this year? Pacific division; and we have installed
Peter Zottl: The first aim of Swarovski
us to come up a Swarovski fixture in a prime loca-
tion at the Waikiki Galleria. Other
within the travel retail channel is a
qualitative one. We want always to
with a ‘next big key players, like King Power in
Bangkok, and all the airlines are
improve, upgrade, renew and expand
the physical presence of our brand, thing’ any time enjoying a strong year too. In partic-
ular, Japan Airlines has recovered
within more and better ‘real estate’, after a difficult year in 2003, and that
and to create the ideal target- and soon.” is most welcome.
location-specific assortments. From
these qualitative targets, quantitative ones derive naturally Within Europe, we are seeing strong business in all the hol-
and logically. iday markets, most notably in Greece (buoyed by the
Olympics), Spain and Turkey, but increasingly in markets
At the end of August, our travel retail results were +20% such as Croatia, Bulgaria and Romania too. These are being
ahead of last year, and by the end of the year we shall be up rediscovered as well-priced, good value destinations.
Animal magic:
Elements from
Swarovski’s ‘Out
of Africa’ range
The Moodie Report 139SUPPLIER CASE STUDY • Swarovski October 2004
Cherchez la femme
Inflight currently accounts for about a third of our trav-
If Peter Zottl is virtually syn-
el retail sales, although we believe that this share will con-
onymous with Swarovski and
tinue to shrink, for no other reason than the strong
travel retail, Nadja Swarovski
growth that our ground shops are showing.
has all but become its domestic
poster girl. Officially head of
international communications, It’s worth mentioning how positively our cruise ship
the Austrian heiress, whose business is developing, in line with the general growth in
great great-grandfather Daniel this sector. The Americans in particular like to go on
Swarovski founded the company, has been cruises, but not so much overseas. They prefer to stay not
instrumental in revitalising the firm’s image and too far from home, in the Caribbean or the Alaska/
product portfolio. Canada routes.
It is she who has orchestrated Swarovski’s fash- Strategically speaking, how big a priority is travel
ion renaissance, not least by sponsoring the retail for Swarovski? Where do you see growth com-
Council of Fashion Designers of America (CFDA) ing from in the future, and what are the key chal-
Awards, and Alexander McQueen’s New York lenges to overcome?
shows. She has also created the CFDA Perry Ellis
Award for emerging talent, and established so- As for most luxury and lifestyle brands, the travelling
called “Creative Services Centers” where design- person is a prime marketing target for Swarovski. And
ers can acquaint themselves with Swarovski it’s an important enough market that we have a special-
crystals – and the world’s press can admire the ist department looking after it; again as do most com-
results.
parable brands. Future growth is bound to come from
the practically ‘guaranteed’ growth of travel and tour-
It is Nadja who has fostered close partnerships
ism, the service industry that is the main driving force of
with the likes of Julien MacDonald, Christian
Lacroix and Jimmy Choo; Nadja who is snapped our business.
sparkling away on the red carpet at various high-
profile events; Nadja who gives great copy in The emerging markets of China, India and Russia are
seemingly limitless press interviews. strategically important. We are aiming to get a foothold
in prime downtown retail locations, at airports and
There are whispers that her methods have ruf- onboard these countries’ national carriers. Needless to
fled certain family feathers, but if the end justi- say, it is the Chinese market that most fires our imagina-
fies the means, few would quibble that the tion, given the Chinese affinity for and positive attitude
rebranding of Swarovski into an innovative and towards crystal, as part of the feng shui tradition.
versatile ‘New Luxury’ brand has been anything
other than a sparkling success. Swarovski has diversified almost beyond recognition
within travel retail in the past say, seven years – how
much further can you take this? And
Russia – and Russian travellers – continue to be a prime how much of the change has
market, both in their home airport, their own airlines been inspired by the domes-
and last not but not least, at whatever destination they tic transformation that has
travel to. been spearheaded by
Nadja Swarovski?
How have you developed your stand-alone strat-
egy this year? We aim to become a New
Luxury brand, one that
We have recently opened stand-alone shops – allows customers from all
or shop-in-shop configurations – at Prague air- strata of society, and from all
port, Baku, in Istanbul arrivals, Valencia and Alicante. over the world, to buy into a
At all these locations, sales have sky-rocketed. The next lifestyle of aesthetics, glitz, glam-
exciting project is Domodedovo (Mooscow), in con- our, joy and happiness – personally, I like to think of us
junction with Aer Rianta. This is a 21sq m shop in the as a ‘feel-good brand’. Cut crystal will always be the
international departures area. It should be ‘live’ by the domain of Swarovski, and we will always try to literally
end of September. show the world new facets of this age-old material.
140 The Moodie ReportOctober 2004 SUPPLIER CASE STUDY • Swarovski
That means we have to manage the stretch from a €20 ourselves as something of a global and all-encompassing
pendant/earrings, to a €2,000 crystal objet d’art. We brand; and I like your question of ‘how deliberately’ we
realise that this is a challenge, and that we shall have to segment our offer.
develop a ‘design language’ that talks about more than
‘cut crystal’. This language must soon become another We know the idiosyncrasies and preferences of the col-
defining and recognisable factor of our brand. It is the lectors in our recently renamed Swarovski Crystal Society.
most important part of our marketing strategy. Just like And we do segment a good part of our assortment and
learning a ‘real’ language, you must start by learning the communication for them. Then of course, we would
vocabulary, then the grammar and always respect that the Chinese or
the syntax until you master every-
“Our owners take
thing. Since ‘cut crystal’ is still such a
Asian customer likes a different type
of fashion jewellery than, say, the
strong and unique style element in North American. So our design stu-
our offer, we have time to learn the a long-term view, dios tailor-make collections for these
design-language properly and then different markets.
make it another USP for our brand. and they do not Very recently, we discovered that one
There is no doubt that Nadia
Swarovski’s work and media profile
succumb to the of our crystal pendants (Fiorella) is
very successful in the children’s pages
have contributed most significantly
towards the ongoing metamorphosis hysterics and of inflight catalogues. Maybe we
hadn’t deliberately targeted this
of our brand. segment originally, but it has made
myopia of us aware that this could be another
To what extent does the travel lucrative segment to be further
retail channel benefit from domes-
tic events such as sponsorship of
quarterly developed.
the Council of Fashion Designers
of America (CFDA) Awards, or financial results.” Recently Swarovski has delivered
key innovations in the fields of
affiliations with designers, pop jewellery, watches, leathergoods
stars, actors and so on? How aware and homeware, alongside more
are travel retail consumers of the ‘offbeat’ items such as Crystal Tat-
metamorphosis of the company in too and mobile phone charms.
recent years, and does this aware- What do you think will be the
ness translate into sales? ‘next big thing’? Is there a con-
cern that the brand will become
Everything you do as a brand owner too ‘diluted’ or confusing if such
is interdependent and synergistic, so diversification continues?
there can be no doubt that travel
retail profits from all our many Precisely to prevent any dilution or
domestic activities, including celebri- confusion, a coherent and recognisable
ty relationships, sponsorships and so design language, as already mentioned,
on. Swarovski has become so much will be decisive. On the other hand,
more active in these fields, and recog- crystal is such a fantastically many-
nition and awareness of the brand faceted material – no pun intended –
have risen quite dramatically. All this it is [inherently] full of surprises.
is bound to have a positive impact on sales.
Swarovski is, and wants to continue to be, innovative. We
Who is your main target consumer these days, or do do like to surprise customers. And you can count on us to
you have many? How deliberately segmented is your come up with a ‘next big thing’ any time soon.
offer and your marketing?
Given the diversity of your category and product
Who is our main target consumer? Everybody! Or should range, who do you consider to be your main com-
I say, virtually every female consumer, from 17 to 71, in petitors these days? And what will keep you one step
terms of buying or gift receiving. We do like to think of ahead in the future?
The Moodie Report 141SUPPLIER CASE STUDY • Swarovski October 2004
As a brand, I think we are unique in
our own way, but then again, virtu- “The Chinese German strength and solidity, and
there are no words to praise enough
ally all other brands in travel retail the Aer Rianta International ventures
are our competitors. Just think of market most fires in Russia and Ukraine. I could go on
yourself as a traveller: you can treat and on.
yourself by buying fragrance, a scarf,
a fashion watch, chocolates, a good
our imagination, You have been with Swarovski
bottle of wine… or a piece by
Swarovski. And all of this, more or given the Chinese since 1982 – what has kept you
there so long, and what are the
less, is in the same price range. key changes (for better or for
affinity for and worse) that you have noted
Innovative and exciting products will throughout this time? What chal-
keep us in the game, and one step
ahead. At the end of the day, howev-
positive attitude lenges are left to you? What ambi-
tions, if any, have you yet to fulfil?
er, together with your ‘competitors’,
you make the travel retail market
towards crystal, What has kept me in this company
and you sit in the same boat togeth-
er. If they do well, the chances are as part of the feng for so long? That’s a good ques-
tion! Change and surprises, new
you do too. products, new markets and chal-
shui tradition.” lenges, the permanent need to
Who do you most admire in this learn new things. The years have
business? Who's getting it right flown by, and I cannot remember
and who, if anyone, can you learn one moment of being bored.
from?
When I started, the business was still
Travel retail is still, to an extent, a conducted by letters and telex, can
people-driven business. People can you imagine that now? Think how
still make a difference, people can fantastically quick you can be in
still build brands. In this industry touch with your partners around the
you are bound to meet individuals globe today.
that you can learn from and admire.
Regarding suppliers, while I repeat It is very motivating to work for a
that we want to be unique, we do of successful company and – to
course ‘benchmark’ ourselves with a small extent – to contribute
other leading players. towards this success. Swarovski as
a fifth-generation family-owned
As for retailers, we deal with high- company remains a great employ-
calibre key accounts whom it is a er. Our owners take a long-term
pleasure to partner and grow with view, and they do not succumb to
together, but very often you can the hysterics and myopia of quar-
learn a lot too from small and inde- terly financial results.
pendent operators.
We have witnessed strong growth
DFS Group is a powerhouse; they over the years. Luckily there is so
are perfectly tuned in to their cus- much entrepreneurial spirit in our
tomers and are champions of open- company that any danger of bureau-
display. Harrods remains one of the cracy and red tape is quickly nipped
world’s best retailers, doing simple in the bud.
things perfectly and in their own
inimitable style. Hellenic Duty Free What challenges are left to me? To
gets a superb performance out of its achieve my ambitious 2004 budg-
comparatively small market. Then et, for starters! And to launch the
you have Gebr Heinemann with their ‘next big thing’ in travel retail. �
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