The apparel brand's marketing and commercial director is applying an FMCG approach to fashion as it embarks on an ambitious plan for growth, writes Rachel Barnes.
The FMCG sector is about as far removed from fashion as one can get. Laundry powder and detergents are hardly the stuff of inspiration for a mainstream clothing brand aspiring to a premium positioning.
For Diesel, however, the Procter & Gamble approach is the bedrock of its strategy. After its 90s heyday, the brand lost its footing by targeting too-young consumers who couldn't really afford its products. As such, Diesel struggled to compete with emerging, cheaper, fast-fashion retailers.
This is where FMCG came in. The 35-year-old Italian brand's key management personnel are P&G alumni, including outgoing chief executive Daniela Riccardi and Jonny Hewlett, managing director for the UK and Northern Europe. They knew a repositioning was needed, requiring fresh thinking of the sort not usually found in fashion.
Although marketing and commercial director Scott Morrison does not hail from the corridors of P&G, he first got to grips with the FMCG sector while at Saatchi & Saatchi, working on brands from Benecol to Oil of Olay, followed by a stint as marketing director at gaming firm Activision. It is at the latter, he says, where he honed this valued FMCG approach, which he and Hewlett have now bedded in to Diesel's UK business.
'At first, when you say we're bringing people in from P&G, there is a culture shock,' says Morrison, who is meeting Marketing at Diesel's concrete, warehouse-style office in London's King's Cross. 'People think, "Oh my god, they're not like us." But the reality is that the people who have come from P&G have slotted in seamlessly.'
Bringing some of that P&G framework to Diesel has added 'more commerciality, slightly more structure, helped shape the business more for growth and given it more direction', explains Morrison, although he is quick to add that all this hasn't been at the expense of the Diesel culture.
'It's not about being robots or brainwashed; you want the entrepreneurial spirit and the passion from people,' he says. 'The world of fashion can be seen by some as fluffy. However, there are a lot of very astute business people in this world - Renzo (Rosso, Diesel's founder and owner) being one of them. But Renzo's entrepreneurial brilliance can take the business only so far: the business gets huge, you're in so many countries around the world, you have loads of stores, it becomes a very difficult thing to manage. That's when you need a disciplined, structured, focused framework.'
Morrison believes that Diesel is one of the first fashion brands to adopt this approach. At the centre of the model is a long-term view of the brand, and 'collaborative growth' - a complex process for a company that, although it has direct control of its brand through 400 stores in 80 countries, as well as its websites, also has the more unpredictable side of thousands of retail stockists to contend with.
Many of the latter, seeking to control costs, are no longer willing to buy big quantities of stock at the beginning of a season, preferring to wait to see how sales pan out before replenishing popular lines as demand dictates.
This shifting of risk from the retailers to the brand has compelled Diesel to reconsider its partnerships. 'You have to be looking at where the business is moving to in the next three to five years. We need to deliver long-term growth that is both profitable and sustainable, rather than a short-term gain with a (retailer) that might then sell out of the brand the following season,' says Morrison. 'I'm from an agency background, and about 70% of an agency's new business comes from existing customers. With a lifestyle brand such as Diesel, it's so important that you maintain and grow the customers that you have.'
Like FMCG companies, Diesel now has key account managers who work directly with retailers on joint business plans.
As part of the company's transformation, Morrison's role was expanded last year from a pure marketing remit to one that oversees the wholesale team; he believes linking the sales and the marketing departments is vital to the brand's future, and as the head of this 30-strong dual department, his brief is to build 'both the brand and the business'.
Morrison explains: 'If you have a strong brand then you will drive strong business; that's an incredibly important and empowering philosophy. The challenge in the market at the moment, however, is that there are a lot of (retailers) that are happy to discount, and many brands that are happy to be constantly discounted.'
‘If you have a strong brand then clearly you will drive strong business; that’s an incredibly important and empowering philosophy. The challenge in the market at the moment, however, is that there are a lot of customers who are happy to discount and many brands that are happy to be constantly discounted. The short-term tactics are at the expense of the brand and long-term business.’
A key pillar of Diesel's growth plan is a renewed focus on women. While they account for about 75% of the global fashion market, they represent only 25% of Diesel's UK business. The womenswear drive, which kicked off 18 months ago, is the biggest change that Morrison has been involved in since joining Diesel in 2008 - not least because of the shift in target age group, from 18-24 to 25-35, with a 'sweet spot of 28'.
After taking the measurements of 20,000 women worldwide, Diesel decided to revamp its womenswear, creating its 'fit your attitude' denim range, which aims to reflect how 'women wanted to feel in a pair of jeans'.
‘We went around the world and looked at the new female shape. We did a whole load of research with women and from that we changed the shape of our denim accordingly.’
Diesel backed the launch with a 300% increase in its marketing spend, and Morrison says that in the UK, sales growth of the range has been in the double digits.
He won't be drawn on the specifics of the company's financial targets, but Riccardi has previously said that womenswear will be vital to her goal of doubling Diesel's total sales from 2011's base by 2016.
Shrouded in the secrecy that comes with being privately owned, all Morrison will say is that, currently, Diesel is a 'EUR1bn-plus global business'. A subject he is more than keen to talk about, however, is the brand's 'brave' approach to marketing, particularly when it comes to digital.
With his hybrid marketing and commercial role, ensuring the numbers stack up is as important as its ‘test and learn’ programme.
'What's great about Diesel is our balance between magic and logic,' he says. 'Everything we do is measurable. We're always doing one of three things: testing and learning to see if it works; rolling out stuff we know is working; then there is a small percentage - and all brands should do it - where we're just doing stuff that fuels the DNA of the brand.'
While the marketing budget is largely flat, Morrison says the policy is 'fewer, bigger, better', with a focus on key projects. Naturally, more spend than ever is going into digital, and that involves more than 'just buying some ads on a website, like in the old days'.
For Morrison and his team, it spans in-store technology, such as its Tapestry app, which gives shoppers access to content and information when they scan a clothing tag; developing Diesel's ecommerce site; and the forthcoming roll-out of a CRM programme, which will be run from the UK for the global brand.
Furthermore, Diesel sees itself as a media-owner. 'No one can tell the story about my product, where we're going and what we're doing, better than Diesel,' says Morrison. 'Whether it's through choosing certain people to be creative directors, or working with great photographers or film directors, eventually most brands will become their own media hubs.'
Last year, Diesel put this thinking into practice with the marketing for its Black Gold collection. Instead of running a traditional magazine ad campaign that might not cut through, the brand hired celebrity photographer Rankin to shoot the clothing range, but under the control of various magazines, rather than Diesel itself.
'We worked with five or six magazines (from various countries) that each brought an editor, a celebrity and a stylist to Rankin's studio,' explains Morrison. 'Rankin produced a beautiful 14-page shoot. Rather than ads, the shoot was a story in itself, and in each market we got at least four pages. For a moderate spend, we got a disproportionately (high level of) noise and credibility.'
Later this year, it will be working with a major UK title, yet to be announced, to produce limited edition lines sold in one or more key retailers – an initiative that illustrates the role his marketing team is playing within the wider business, says Morrison.
‘Yes we can influence product. From a marketing point of view, it is a fantastic opportunity to do something that’s very DNA driven, such as the lines we produced for the Selfridges No Noise campaign this year.’
Keeping close to the target market and finding inspiration from emerging young talent is essential, says Morrison. Last year, Diesel helped a young team launch fashion and lifestyle magazine Dragmag, while it also has close ties to artist and film-maker Josef O’Connor, who was named by the London Evening Standard last year as one of the most inspiring people aged under 25.
In addition to occasional lecturing at the London College of Fashion, Morrison is a mentor for the Urban Synergy role-model programme to help inner-city students. 'Energy and passion come from the young,' he says. 'They're pushing you all the time; if you're looking at what they're looking at, then you understand more, keeping you on your toes. It's a bit like an ideas factory - we get a lot of young talent in and I'm a massive believer in what they can offer.'
But that does not mean the old hands are not vital to the essence of the brand today. Renzo Rosso, who founded Diesel aged 23 some 35 years ago (although was making and selling jeans to friends aged 15) remains an inspirational force for the entire business.
Morrison admits they don’t see a lot of Rosso as he runs various other fashion businesses through his holding company, Only The Brave, from majority ownership of Marni to licensing deals with Marc Jacobs.
Nonetheless, the team heads to Italy four times a year, with Rosso speaking twice a year to lay out his vision.
‘It used to be more about taking and adapting what was sent from HQ, but we have gained a lot of credibility with the marketing thinking, the solutions we’ve brought to the table,' adds Morrison. 'Our Regent Street pop-up store is a great example of something that [the team at] global have become aware of.’
Morrison says his approach to business will always be guided by his marketing grounding and belief in brands, but he has his sights set on general management. 'I definitely would like to be an MD, and hopefully within Diesel; I would love that,' he admits.
'I offer a bit of balance between understanding the numbers and squeezing the bottom line, but knowing when to overinvest to fuel the power of the product and the brand. If you start with the numbers and work backwards, you'll end up making cheaper products and chasing dollar. Ultimately, that only ends one way for your brand,' he warns.
Morrisons sits on the UK board at Diesel and is adamant that having marketing recognised in this way should not be rarity for brands. ‘If you don’t have marketing around the top table then quite often you miss a whole chain of thinking. There is a real danger if a company board is too business-oriented and focused around the money, rather than building the brand.’
He believes that the score of high street brands that have failed in recent months are prime examples of companies that had ‘focused on the numbers, forgetting what made them great and what made them money in the first place’.
‘If you don’t feel you’re accountable at the top level then it becomes a perpetual thing: "I’m not really valued, so I don’t feel the need to perform, then I’m not valued from above". And so it goes around. It diminishes the discipline and that can mean lazy marketing.’
Morrison might be embracing FMCG, but he still has more than a touch of fashionista about him, politely refusing to smile for Marketing's photographer despite possessing an infectious grin off-camera.
In the notoriously fickle world of fashion, recapturing Diesel's heyday might be a denim stride too far for the global brand. Unfazed Morrison, however, is firmly focused on the future.
Case study: Retail innovation - Diesel Village, London
Diesel has opened a pop-up store on the capital's Regent Street, which will serve as retail space as well as hosting exhibitions and live performances until the end of April.
The Diesel Village, which, the company claims, opened within five weeks of its conception, revolves around 'exploratory spaces', described by Morrison as 'small, beautifully designed houses that are home to all aspects of the Diesel lifestyle and the embodiment of the brand's DNA'.
It showcases everything in the Diesel catalogue, from its main clothing collection to bikes, fragrances and spin-off apparel brand 55DSL. The store is also hosting interactive events each month. These have included London Fashion Week activity, an event celebrating the 'creative and eclectic nature of London's diverse community', and showcasing its Studio Africa range, created in collaboration with ethical fashion brand Edun.
'It's brave retailing from the brand and is the first Diesel store of its kind in the world,' says Morrison.
EUR1bn+ - Value of Diesel's global business
20,000 - Number of women whose measurements were taken in its recent denim research project
25:75 - Ratio of Diesel's womenswear to menswear in the UK
Family 'Marrying my incredible fiancee this year, and we have a beautiful one-year-old daughter.'
Passions Environmental portrait photography and comedy writing: 'I shoot the beauty of people's everyday lives ... and I write about the life of a 50-year-old, transvestite, ex-choreographer called Fu-Fu.'
Favourite brand 'Martin Margiela - I love the deconstructed simplicity of the product and the mystery of the brand.'
Little-known fact 'I spent five years as a music producer and DJ, juggling a full-time career with weekend gigs around Europe.'
- Graduate trainee, rising to account director, Saatchi & Saatchi (1995-2001)
- Account director, Wieden & Kennedy (2001-03)
- Head of marketing, Levi's (2003-05)
- Marketing director, Activision (2005-07)
- Marketing director, rising to marketing and commercial director, Diesel (2008-present).
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