After all, on paper the shop seemed like a perfect fit for Hong Kong’s hyper brand-conscious environment. Despite being stocked full of the kind of designer labels that carry tai-tai price tags, it appears that Harvey Nichols has done a less stellar job in communicating its offering to its target audience in Hong Kong.
In particular, Harvey Nichols continues to lag key rival Lane Crawford, in part because the UK brand’s fashion heritage is less well understood in Hong Kong. In its home country, Harvey Nichols stocks many of the world’s most prestigious brands; critically, though, it attracts a younger demographic in the UK, often because of a willingness to carry more edgy brands.
In addition, concerns have been raised over Harvey Nichols’ store layout in Hong Kong, where it occupies approximately 60,000 square feet over five floors of prime retail space at the Landmark shopping mall in the key Central district. Consumers, it appears, have found the store layout confusing; retail space, consequently, is perceived as being smaller than that of Lane Crawford.
The shop has moved to address these issues by hiring Bravo Asia to craft a new campaign to promote the store’s spring collection. Despite being a global brand, of course, Harvey Nichols is not exactly a stranger to Hong Kong. The shop was bought by Dickson Poon’s company Dickson Concepts in 1991, before being listed in 1996. In 2003, rather more controversially, the store was returned to private ownership under Poon.
According to one retail specialist, Harvey Nichols’ woes stem from three key sources. Firstly, the brand’s identity is still unclear. Secondly, the use of space at its store leaves much to be desired. And thirdly, it appears that Harvey Nichols has been unable to stock the kinds of brands favoured by its UK sister stores, leaving it with less well known products.
FACTBOX
Harvey Nichols opened its first Asian store in Hong Kong in September 2005.
The store shifted its advertising business to Bravo Asia in January 2007, after failing to make headway versus key rival Lane Crawford.
The store’s UK ‘Calendar’ campaign, created by DDB, was the most awarded piece of print advertising in the world, according to the 2006 Gunn Report.
DIAGNOSIS 1 - Jim Dowling, director, strategy and planning, Ogilvy PR, Asia-Pacific
Two core areas need to be looked at: the product and the brand.
You can’t change the location — but you can change the way you use it. Shopping in Hong Kong, like Fifth Avenue or Bond Street is a global event. Each experience should be contributing to that, creating its own stories, its own mystique. Shoppers aren’t looking to take home clothes — they want to feel a million dollars to justify the thousands they’ve just spent. Sort out that cluttered floor space and inject some much needed energy into the store. Elevate it beyond clothes. We want events, we want PAs, more fashion shows, exclusive showcase gigs and such like. Give me a venue, not a shop.
Second, I detect a lack of confidence in its communications. A shopper here is either energised by the global LV- or Chanel-badged powerhouses, or seduced by the confident yeomen of the city — Lane Crawford and Shanghai Tang.
The exhortation to ‘be different’ articulates uncertainty and indecision. Harvey Nichols needs to punch like a heavyweight — tell us why it deserves our attention. Right now, it’s behaving like its compatriot British sportsmen: feebly; with ideas above its station.
DIAGNOSIS 2 - Jane Perry, regional retail marketing director, Arc Worldwide
Hong Kong’s department store giant Lane Crawford has been rising through the competitive retail challenges of recent years. Its success is threatening the newly-arrived UK department store, Harvey Nichols. So, how do department stores compete among themselves?
Differentiation is the key, and in the retail arena, the shopping experience is often the most effective way to differentiate from the competition. However, the shopper experience in department store formats is routinely the same. Where does this allow Harvey Nichols to set itself apart from Lane Crawford?
Harvey Nichols needs to differentiate itself through product assortment, a strategy they exercise skilfully for its ‘Beyond beauty’ area, an area that carries niche brands including approximately 18 exclusive beauty brands. Applied to the rest of its business, this product differentiation strategy will provide Harvey Nichols with a distinct advantage.
Department stores, including Harvey Nichols, that fail to innovate sufficiently, whether through environment, product or price, to maintain their clientele, will be the biggest losers in the Hong Kong retail arena in 2007.
