CASE STUDY
The Client
ALÁRA is a high-end departmental store that stocks luxury and inspirational ware from all over the world. Similar in style to famous concept stores like Paris’ Colette, London’s Dover Street Market and Milan’s 10 Corso Como, it features a peculiar exhibition-style retail space, a restaurant, a terrace lounge and an art gallery. Founded in 2014 by Reni Folawiyo, a member of the BOF 500 - the definitive index of the people shaping the fashion industry, ALÁRA has gone on to redefine the luxury shopping experience in West Africa. In April 2018, it hosted supermodel Naomi Campbell’s ‘Art of Beauty’ book signing event. The store was designed and built by the internationally renowned Ghanian-British architect David Adjaye, whose design for the National Museum of African American History broke ground in 2012.
Their Business
ALÁRA is focused on high-end/luxury retailing, in goods ranging from fashion apparels to furniture. The target market here is the rich and culturally expressive consumer who pays attention to the essence of products. This business model runs contrary to most present in any sector: it rests on strict principles that maintain the uniqueness of luxury and preserve the non-comparability of those luxury brands that stick to it. The business here rests on cash-cows that provide long-term source of cash, hence why luxury loves iconic products. However, to remain iconic, demand has to outweigh supply.
The Challenge
In 2016, a combination of high inflation, accumulation of debt and high interest rates led to a recession in Nigeria. The first the country had seen in more than a decade and in ALÁRA’s lifetime. National first and second quarter growth were -0.36% and -1.5% respectively. With a slump in consumer confidence, the meaning of affordable luxury took a turn. People started to assign moral values to spending and conspicuous consumption gave way to conscientious consumption. In all of these, luxury brands struggled to keep up with the same amount of income.
ALÁRA, in this period, stocked a range of western designers including Stella McCartney, Dries Van Noten, Marni and Valentino - all of whom were sourced in foreign currency and are subject to foreign exchange risk. With perceived higher prices came a fall in demand during the recession. Costs to the retailer, however, remained the same. During a survey by Thread Digital and Analytics, we learnt that respondents faced a setback due to the loss of additional income (or bonuses) and this led to a fall in the consumption of luxury goods. We also found that consumers who traded down to cheaper products never returned to luxury even after their financial situations improved.
Our Approach
The first thing we did, after identifying the problem, was to set out innovation goals with ALÁRA based on their mission.
Their mission:
“Help Africans see who we are” - our solution had to help Africans understand the breadth of their culture.
“Help Africans appreciate who we are” - our solution would have to draw out the emotions attached to identity.
“Enable the world to see and appreciate who we are also” - our solution would have to be world class in execution to gain favourable global recognition.
We then went on to leverage unique data insight in our approach to innovative problem solving. Here we found an opportunity to cultivate a new market. Millennials.
Attracting this consumer cohort, characterised by purported entitlement and massive buying power, has been a key for many retailers. They’ve played an integral role in the luxury retail comeback and according to an external report, much of the growth in luxury sales in a broad array of industries including cars, food and wine, travel, hospitality, clothing and accessories were all thanks to Millenials.
Equipped with this information we retreated to our roof top brain-storming sessions.
The result was EMERGE ALÁRA
EMERGE ALÁRA is an annual pan African wide search for the most talented young designers and creators. The client receives applications in various categories, as well as insight into the problems they face. A shortlist is presented to a panel of esteemed judges and a winner is chosen. The winner is given a grant to produce and stock in store, whilst benefiting from the PR and coverage that comes along with the competition. After the competition, a curriculum is tailored to the top finalists and their core issues are addressed. This helps to better place ALÁRA as a beacon for other fashion retailers and a centre of gravity for global luxury brands already beginning to cluster around a nascent fashion district in Lagos
In addition, a younger crowd - millennials who previously felt ignored at ALÁRA, are invited to the various events that arise during the competition (which runs for 6 months each year) and encouraged to participate in online conversations. A way of drawing them into loop and gathering behavioural data. This market is slowly nurtured to better understand how to cater to them. Given the age range of the competing designers, the newly established market is willing to support and get involved ‘for the culture’ and while championing the ‘African movement’ through social media. A recognisable emotion resounding across the continent. The products, of the competing designers, are designed and produced in Africa - in surrounding and somewhat similar economies, reducing exchange risk exposure to ALÁRA whilst driving down sourcing costs for the designers. The prices, however, can remain premium - given the PR accompanied with the competition and award validation, and therefore still fit into the exclusive showrooms.
Our Impact
EMERGE ALÁRA has redefined the way ALÁRA does business today. Although it is still too early to outline concrete financial implications, as the first EMERGE concluded in 2018, early signs show growth in store footfall and online interaction. Their products are getting more visibility and ALÁRA is increasingly becoming top of mind with young millennials across Africa.
The client also now has access to previously undiscovered data regarding issues young entrepreneurs face in industries relevant to them. An asset in their CSR positioning.
“EMERGE was the most meaningful project we undertook in 2018”
