Retail in Asia had the pleasure to interview Falk Haarig, the General Manager Asia-Pacific Business and the newly appointed global Chief Marketing Officer at PAUL HEWITT.
As part of PAUL HEWITT’s global executive board, Falk is heading the brand’s global marketing and sales organisations for both online and offline channels as well as its portfolio management.
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RiA: What is the story behind PH?
Falk: PAUL HEWITT is a story about setting out and arriving again. About the love for the sea and the feeling of freedom. About the bond to our origin and the people we carry in our hearts.
The symbiosis of classic elegance and sportive dynamics, rounded off with maritime details, characterizes our entire range. The anchor on each of our products symbolizes more than just our Northern German origin. It is an expression of our attitude towards life. A sign for authenticity, connection, the pursuit of self-development and the adherence to what we love.
RiA: How has the brand evolved throughout the years?
Falk: Founded in 2009, the brand started off in clothing business. Later on, in 2014, we have re-invented our business model by focusing on the fashion accessories market. The breakthrough we had achieved with the PHREP fashion bracelet that became an iconic product symbolizing the maritime lifestyle and values behind PAUL HEWITT.
Continuously, we have been widening our scope of business: from initially targeting the men consumer segment with the iconic PHREP, the fashion bracelet product category was successfully opened for women.
In 2015, we have started to widen the portfolio by the fashion watches category. Since the introduction of our sterling silver and stainless steel jewellery in 2018, we have meanwhile become a multi-category fashion accessories brand equally attracting both young and mid-aged ladies and gents with our maritime lifestyle.
The evolution of PAUL HEWITT’s portfolio has been accompanied by the rapid expansion of our sales footprint. From starting with pure online sales, since 2015 we have been pushing the offline expansion. Meanwhile, we are able to bring our spirit to consumers globally from more than 4,000 POS.
RiA: As the brand reaches its 10th anniversary, what are the main key learnings?
Falk: Especially in recent years, we have seen that for a brand as ours it is crucial to manage the challenge of connecting online marketing with offline sales. Online channels have become the most cost-effective way for reaching our target audience for the benefit of both online and offline sales. Combined with our sales partners’ local offline marketing efforts, jointly we have been able to set up a very powerful marketing network. At the same time, the effects of the different means of online marketing have changed in recent years which requires us to re-think the role those means should play in the marketing mix.
Competition has become more and more fierce with market entry barriers becoming lower and lower. Therefore, it is key that a brand stays true to itself. Competitive differentiators need to be kept in sharp branding, differentiated design as well as some solid facts making products standing out of the mass.
Technologies, market structures, consumer behaviour, just every aspect to consider in running our business, all has been changing super fast and may change even faster in future.
That is why we have learned to be flexible in all aspects of our “Go-to-Market” approach: portfolio, sales & distribution set-up, pricing, and marketing budget allocation.
The best way for our brand in penetrating new markets offline is a stepwise approach with committed partners jointly balancing opportunity and risk in line with local brand awareness. Early establishing a solid local offline POS network in new markets and continuously expanding said network is crucial for effective marketing.
Markets are very different, especially in Asia, and listening to our target audience is key for our success. Said differences concern various aspects such as consumers’ preferences, the relevance of online vs. offline business as well as retail and distribution structures.
Last but not least: operational excellence. While I believe that a good strategy can balance out some operational gaps, in today’s competitive environments it is often the details that make the difference. This is why the ambition of our operational teams and global family of partners is to 100% satisfy our customers by top-quality products and services, from easy-buying over perfect fulfillment and last-mile services, up to consumer-centric customer care and after-sales services.
RiA: You have just re-focused the image of the brand, can you explain to us what is the message behind?
Falk: The journey from a men-focused single-product company toward a multi-category unisex brand had brought various challenges in finding the right way of positioning and marketing PAUL HEWITT in the world as well as within the landscape of fashion accessories brands.
Respectively, during the last 2 years, we have been trying various approaches in how we can bring the respective complexity together under one roof, and how we can position us right for keeping track with fast-paced developments in diverse markets and evolving consumers’ preferences.
In the end, the conclusion was clear and simple: our Northern German maritime roots, the timeless values behind the maritime lifestyle, and the continuous evolution in how we present our maritime soul, these are the keys to successfully making our unique statement to the world and touching our audience’s hearts. Basically, back to our roots in a modern and evolving way, and getting anchored to the things we love.
RiA: Many fashion accessory brands start from watches and then move into jewelry, PH did vice versa, what are the main challenges and opportunities?
Falk: Our ambition has always been to serve our customers with high-quality products. Respectively, starting with fashion watches requires a relatively high investment for pre-financing business growth within a highly competitive landscape. Moreover, with retail pricing between a hundred-fourty and two-hundred dollars, high-quality fashion watches do require a certain brand awareness and brand desire for achieving exponential sell-out growth curves.
With PAUL HEWITT, we had started from zero brand awareness. By going for fashion anchor bracelets first, we had been in a position to enter the market with, compared to watches, relatively low-priced but high-quality products. Thereby generated cash flows, we could re-invest in our extensive social media marketing efforts, and focus on the development of the PAUL HEWITT brand instead of binding capital in expensive inventory.
Once we had achieved a certain standing in the market, we could then think of diversification of our portfolio. It was not a fixed plan from the beginning to move into fashion watches one day but at the time of making the decision we had seen the right brand-fit in the watch industry. Later on, we have detected empty spots in the jewellery segment as well providing promising opportunities for profitable growth and diversification.
Although we have been a well-established brand for already many years, it is certainly challenging to establish new product categories. Market dynamics and consumer requirements are different between the categories. Respectively, fast self-critical and reflective learning might have been the main challenge to master.
RiA: What is your customer profile and how is it different across countries if it is?
Falk: It is people from the late-teeny age to the early-fourties who share our feeling of freedom to devote oneself to one’s wishes and dreams. It is those people who love to explore new limits same as centuries ago the sailors did who discovered the world across the oceans. It is people who feel the power of friendship and community rooted in their origins, and who value the beauty of simplicity as we see it in the sunset over the sea.
This lifestyle united in the symbolism of the PAUL HEWITT anchor, we can find all over the globe. Those values are timeless over generations and make one of the keys why our brand has been successful in many diverse markets.
Of course, we need to address local differences in income levels and income distribution especially in under-developed and emerging markets as well as local preferences for specific product designs. Moreover, country-specific differences in consumer preferences, cultures and lifestyles do have certain implications on market dynamics as well as media usage.
RiA: How do you reach out to them in terms of strategies?
Falk: While we link everything back to the values manifested in our maritime spirit, we localize and continuously evolve in the way how we present ourselves in visual design as well as the language we speak, the platforms we are active on, and the themes we choose.
By frequently launching new products and designs, while always sticking to our maritime heritage, we continuously keep track with trends and potential changes in people’s preferences. This way, we ensure that the brand and what we do never goes out of fashion.
Online media and social media platforms are the best channels how we can precisely reach our target audience for pushing both our online as well as offline businesses. Especially in Asia, the landscape in communication technology, online marketing and sales channels, and social media platforms has been developing extraordinarily fast. This trend of continuous change, we forecast to even accelerate. Accordingly, we apply flexible ways of managing our budgets and are intensely watching out the developments around us.
Openly learning about local differences and taking them in to account is of utmost importance. With our diverse portfolio addressing both women and men, and our multi-category approach, we are in a good position for adjusting to local preferences and can flexibly set our marketing focus.
A challenge remain the retail structures which in many Asian countries still pursue a single-category focus with watch stores selling watches only, jewellers selling jewellery only, and fashion bracelets still trying to find their spot. However, we have been seeing changes in those structures already happening: fashion accessories concept stores are on the rise, which are perfectly addressing the changing habits of consumers in the region.
Last but not least, in close collaboration and by continuous exchange with our offline partners, we do our best in helping them to combine online marketing with offline sales. So we accompany their local marketing efforts with our means and expertise in running online marketing campaigns that drive traffic to their stores.
RiA: What exactly do you mean by “changing habits of consumers”?
Falk: It seems that young consumers’ traditional shopping behaviour has been changing from having concrete ideas what kind of products they want to look for when going to shopping malls or browsing through online shops. More and more, malls are becoming places for the young generations just to “hang out.” Many people may go out with the intend to look for something nice for their outfit rather than specifically wish to find a watch, bracelet, jewellery piece, bag, leather accessory or clothes.
As a multi-brand retailer, one needs to trigger people’s desire to really make a purchase. That is why we believe that the future of our industry’s multi-brand retail assortments is in fashion accessories concept stores rather than single-product-category approaches. Such multi-category concept stores provide much more opportunities for consumers to make real experiences rather than just a purchase transaction. Said concept stores also widen options for the stores’ staff and layout to emotionally engage the customers, and to attract the crowd of people that enters the mall without knowing yet what exactly they are looking for. Not at last, such concept approaches are amongst the keys of PAUL HEWITT’s success in markets like Japan, Taiwan and Hong Kong.
RiA: What is your best seller?
Falk: Well, it is hard to tell what is THE bestseller. We are happy that we are progressing well with the goal of globally balancing out the relevance of our three product categories.
On a global level amongst the fashion bracelets, the PHREP and its more filigree version PHREP Lite are dominating the category. Provenly addressing aspects of sustainability, the recently launched RE/BRACE has exceeded our expectations by far. The MISS OCEAN Line watches are attracting a broad base of young ladies’ preferences and the EVERPULSE has become one of our star products. Within the gents’ audience, the CHRONO Line maintains its growth pace with the new BREAKWATER gaining share in the men-watches segment. While still being a young category, certainly our anchor jewellery is a great success.
As addressed earlier, consumers’ preferences in the markets are different requiring to find the right approach for each specific country, especially in Asia. Meanwhile, our extensive footprint in the Asia-Pacific region provides us with valuable experience as well as a variety of reference cases to successfully enter new territories with the right product focus.
This year’s second quarter is going to be a very exciting one. As in previous years, the market is going to see some really promising new product launches by PAUL HEWITT. Just recently, at the INHORGENTA trade show in Munich, we had presented our Q2 novelties to our distribution and retail partners who gave very promising feedback. So, stay tuned and be excited!
RiA: What is the current status of your Asian expansion?
Falk: While Taiwan and Japan have been among our first foreign markets, especially during the last 3 years, we have been accelerating our growth in the Asia-Pacific regions. To date, we are delighted to have great partners in Japan, Taiwan, Hong Kong, Mainland China, Singapore, the Philippines, Malaysia, Thailand, and even in Australia.
RiA: What are the key markets and which ones you are going to focus next?
Falk: Outstanding success we have been achieving in Japan, Taiwan and Hong Kong. Mainland China, Singapore, Australia, and the Philippines are on a solid track with our greatly committed local partners supporting us decisively. Having just started in Malaysia and Thailand, those markets are going to get attention for setting the course of bringing the PAUL HEWITT spirit to those countries.
On the map of Asia-Pacific, there are still some interesting spots open for PAUL HEWITT to get anchored. Accordingly, we have been continuously assessing opportunities for further expansion in the region and will enter new markets as soon as we strategically see the right time and opportunity to do so.
At the moment with the Coronavirus confronting many of the world’s countries with the biggest challenge that people have been facing for decades, during the next weeks our focus will be on ensuring that our employees and our partners’ employees as well as all their loved ones stay healthy. We are working hand in hand with all of them to overcome all the difficulties, and prepare ourselves as well as our global network of business partners for fruitful and prosperous times after we will have beaten the pandemic.