Michael Kors Success Is Social
Global luxury lifestyle brand Michael Kors Holdings Limited had an exceptional fiscal 2014 first quarter ended June 29 with a total revenue of $641 million, a 54.5% increase from $414.9 million in the first quarter of fiscal 2013.
Retail net sales increased 51.5% to $325.7 million driven by a 27.3% increase in comparable store sales and 75 net new store openings since the end of the first quarter of fiscal 2013. Wholesale net sales increased 59.3% to $290.6 million and licensing revenue increased 40.7% to $24.6 million.
Gross profit increased 58.3% to $397.3 million, and as a percentage of total revenue increased to 62% compared to 60.5% in the first quarter of fiscal 2013.
Exceptional numbers indeed! Digging a bit deeper MKH is hitting on all cylinders.
- Comp store sales were up 25%
- North America wholesale sales were up 50%
- European sales grew 144% leading to a 56% comp store jump
- Licensed products, led by watches, grew 41%
So what’s driving the numbers?
MKH has a solid social plan. So solid, in fact, it humbles the social strategies of other luxury brands like Ralph Lauren, Burberry and Armani. Whether it is cause or effect but the social strength of MKH is logical considering the younger demographic the brand is favored by compared to the other brands mentioned.
How does MKH drive social?
Facebook Exclusives Are Outstanding – Most brands offer their loyal Facebook fans an exclusive coupon here and there, but Michael Kors downright spoils their Fans with some of the most highly articulated exclusives around. Just this month they launched a campaign in honor of reaching 500M Facebook fans. Michael Kors released 500 limited-edition pairs of shoes for Facebook Fans only. Building an exclusive product line devoted to a single Social channel, is one of the many things that sets this company apart.
Social Campaigns Span All Platforms – Some brands know Twitter, other’s are Instagram Rockstars. Michael Kors knows them all. For example, their February #FallingInLoveWith Campaign was a tribute to Valentine’s day and all that the their customers’ love. The campaign was centered around uploading photos of what they love to either Twitter, Facebook, or Instagram. In addition to the contest, the company featured tips in the company’s lookbook #FallingInLove page, specials on their destinationkors.com blog, and collaborated with Marie Claire and Neiman Marcus to produce a live Twitter Chat Series leading up to Valentine’s day. Multi-faceted and successful, this campaign saw almost 3,000 new followers per day.
They Know Where Their Fans Are – And Go There – Last year, Michael Kors launched a campaign called #MKTimeless targeting Instagram Fan Growth. While Twitter and Facebook reign supreme for Social campaigns, Instagram and Pinterest are gaining strong attention from Fashion brands due to their visual nature and strong female following (Instagram user base 70% female). Customers were challenged to take a photo of their favorite watch and post to Instagram. This two week contest saw major success, giving them a 50% increase in their Instagram fan base.
Going Mobile – For Mother’s Day last year, Michael Kors released their first mobile-friendly Social campaign through a Facebook app. This campaign was advertised in part on window displays at select stores, emails, and other Social networks. While many brands are seeing mobile as an opportunity to sell, Michael Kors has positioned it as an opportunity for increased engagement.
It’s easy to see in hindsight how this social strategy comes together. But the key is in building to this plan. MKH knows who its customer is, defines itself in the within the aspirational context of that customer and finally connects with that customer in ways appealing to that customer. That part is not so easy, but completely doable by any brand.
ThoughtTech On The Horizon 