VIP leans in on the next gen
With celebrity endorsers and a differentiated portfolio of sub brands, the 50-year-old luggage brand is in hot pursuit of young consumers
What do consumers want from a luggage brand? Time was when they chose lifelong hardiness and ample space in their travel accessory. And VIP, the 50-year-old label owned by the Dilip Piramal’s VIP Industries, pitched sturdy solidity as a key selling point for years. But as consumers grew more discerning and travel was viewed more as a lifestyle choice, the brand has had to change too.
A slew of sub brands, aggressive promotions and celebrity endorsers have become the brand's leitmotif in recent years.
The aim for VIP has been to make the brand relevant to the “consumers of today.” Sudip Ghose, CEO, VIP Industries says that the challenge has been to leverage the brand’s longstanding experience and presence in the country without letting that become a hindrance.
VIP’s big advantage is it is a familiar brand, but that could turn into a liability too. Because consumers know what to expect, they are not excited enough by the brand anymore. Ghose explains that while there are a set of people who swear by the brand, there are many who are aware but haven’t yet considered buying it. And in getting these consumers on board, there is “always the risk of alienating the core audience from the brand.”
The brand had to find a way to grow to accommodate the new consumers, without losing its core audience. That’s precisely why, the company says, it bifurcated into five different brands — Skybags, Aristocrat, Carlton, Caprese and Alpha. Calling these five separate entities as the five pillars of the brand VIP, Ghose says, “There are two possibilities: Either the main brand will collapse under the pressure or stand taller than ever.” For the moment, however, the sub brands are helping the company step into new markets and build new labels.
The five brands are entities in themselves, the company states. They have helped bring down the dependency on brand VIP per se. Ghose regards this as a “no baggage deal” wherein neither brand is eating into others’ business and thus, catering to consumers across ages.
Celebrity led branding
To build awareness for its brands and their key values, the company has appointed celebrity endorsers. Alia Bhatt promotes the bag brand Caprese, Hrithik Roshan is ambassador for VIP while Varun Dhawan is the face of Skybags. Each label targets a different audience and product segment.
Ghose says that investing in a celebrity endorser assures a bigger return on sales than investing in any other media. “People tend to remember the brand more when there is a celebrity involved. If I invest ~50 million in a celebrity, the return on my investment is close to ~1.5 billion,” he says.
The choice of celebrity is important though. “A celebrity has to identify with your brand’s ethos. He or she should bridge the gap that’s missing in your brand,” he adds. Calling the association a “marriage”, Ghose feels that the relationship may or may not always work out, but in the end, it has to work for consumers and the category.
For VIP, celebrityassociationshave helped build recall and brand affinity. AccordingtoGhose, awareness of their brand Skybags was just about 20 per cent around five years ago; it now stands at 60 per cent. The consideration gap or the ‘leakage’ of consumers has come down to 10 per cent that once stood at 24-25 per cent. “People who are aware are now basically considering us,” says Ghose.
VIP has been cautious with its digital marketing initiatives. “Just because everyone is doing it does not mean you have to do it too,” says Ghose adding “it depends on the brand you are working for”. Simply put, a digital marketing budget for Skybags would be different from Carlton. While Aristocrat and Alpha are only promoted offline; around 50 per cent of the marketing budget is allocated for digital for Skybags and Caprese against 30 per cent for the rest. “Our spends on digital have seen a more than 100 per cent jump over FY17 and its salience in total marketing ATL spends is now around 10 per cent,” Ghose says.
A premium track
The luggage market has morphed significantly over the years, partly led by changing consumer tastes and also by proliferating global labels and designer and luxury products.
Ghose sees a big consumer shift and in fact, calls it a category movement. Earlier luggage was bought as a commodity. Today, it is more a travel gear/companion, he says. “The effort you take to align your business bag with your attire is slowly gaining momentum”, he says, adding that “As a brand, we are just trying to show there is no harm in adding colours to your business trip too.”
Does this herald an expanding footprint into luxury luggage? Not really says Ghose who does not consider the luxury segment worth consideration yet.
“Luxury is anything above $1,000. It is a niche,” he says. VIP wants to stay in the heart of the market and says its core brand and sub brands would all fit the premium tag. Luxury brands in India have a meagre turnover of ~300-400 million and Ghose is categorical that he “would rather create more brands like Carlton than luxury brands.”
With 90 per cent of its business coming from India, the brand is now eyeing the international market. “Though we have a considerable presence in the Middle East and US, we are keen on exploring the European market,” says Ghose believing that he can build a ~5-6 billion business in the next two to three years in the international market.
“People tend to remember the brand more when there is a celebrity involved. If I invest ~50 million in a celebrity, the return on my investment is close to ~1.5 billion” SUDIP GHOSE CEO, VIP Industries