Innovation & Design

Volkswagen Goes Cashmere


Forget logoed key chains and baseball caps. For its new Eos convertible, VW is launching a line of high-end lifestyle products

Think of traditional car merchandise and chances are you'll picture a baseball cap, a mug, or perhaps a logo-bedecked key fob. Well, now Volkswagen (VLKAY) is aiming to offer something a little different—like, say, a cashmere wrap or a pair of slip-on driving shoes—for women. That's right. Despite earlier concerns that the VW brand was becoming too feminized (see BusinessWeek.com, 5/22/06, "The Craziest Ad Guys in America") and in the wake of Nissan's announcement that it's set to increase its marketing budget by 20% this year to focus on female consumers, manufacturers increasingly are focusing on women in their dialogue.

Auto companies long have sought to leverage customer loyalty into free advertising by slapping their brand logos on just about any possible product. Generally sold directly through dealerships, these lifestyle pieces have been seen as an ideal way to turn the customer into a walking, talking, free advertisement.

In recent years, marketing departments conceived ever more sophisticated accessories that can reach into every part of a driver's life—everything from golf bags to luggage to chairs, watches, and pens. These products are more elegantly designed and, perhaps more surprisingly, less overtly branded. Most significantly, they're no longer freebie giveaways, but products for which customers are willing to fork out often-substantial amounts of cash.

Wake-Up Call for Carmakers

Hummer exemplifies an auto brand that has taken the lifestyle ball and run with it. The General Motors (GM) division currently produces more than 800 products through 190 licensees. More than half of this business comes from children's toys, remote-control cars, and diecast Hummer replicas. "Licensed product is unlimited in terms of possibilities. And though it is profitable, we look at it less from a profit standpoint, more as an extension of marketing and communications," says Hummer General Manager Martin Walsh. "We look for things that are relevant and that fit in with what the brand stands for— ruggedness, durability, and dependability."

In a way, the efforts of Hummer, BMW, Mercedes, Audi, and the like, reflect the general escalation of product marketing into lifestyle branding. "If you look outside of auto, we've been seeing this trend for about a decade now, with brands moving well beyond what they've historically been known for," says Wesley Brown, partner at Los Angeles-based consumer-experience design agency, Iceology. "Take Armani and Armani Casa, for instance. It does quite well, and you can be sure it's not selling its furniture at Ikea prices. Companies like that have made this push and seen tremendous success, and that's made the auto brands sit up and pay attention."

While none of the manufacturers was prepared to release specific sales figures or a breakdown of the accessories market, all the major upscale car brands now have some kind of lifestyle program. "The lifestyle business is extremely important to the BMW Group," says business communications manager, Martha McKinley. "And it's growing in importance, too. We bring out fresh products for sale at our dealerships while in the past couple of years BMW dealers have invested $2 million in boutiques to display the merchandise. It complements the driver's lifestyle, and it's intended to help the BMW dealer remain profitable."

"Feminine Aesthetic"

And it's not just the luxury brands that have leapt into the fray. To accompany the reintroduction of the Mini, BMW Mini introduced a successful, widely acclaimed line of high-end designer products called Mini Motion. Now Volkswagen is getting in on the act with its luxury line promoting the new Eos convertible; both car and accessories are targeting women.

"Most cars are designed around the egos of men, and we felt that the Eos had a quality that would appeal to successful women," says Andrew Keller, executive creative director at ad agency, Crispin Porter + Bogusky. "There's a feminine aesthetic to the design of the car, and we wanted to create something for that audience which showed that VW had thought about them."

The New York design and branding consultancy, Aruliden, created the product line. Aruliden was founded last summer by two of the key players behind the Mini Motion project—Rinat Aruh, who had been global strategy manager for Mini Lifestyle, and Johan Liden, previously a partner at fuseproject, the San Francisco-based studio run by award-winning designer Yves Béhar. "We immediately thought to call Rinat," says Keller. "Mini had a different vibe, but this was perfect for her. After all, she's the audience—she's a successful woman with a honed design aesthetic, she's modern and independent, and she brought with her designers of the same cloth."

Blanket, or Coat for Two?

The Eos line is decidedly upscale, with creations by tony shoemaker Sigerson Morrison and cashmere experts, Lutz & Patmos. The range will initially feature four items: a cashmere wrap, a silk scarf, a pair of upscale driving shoes, and a rather bizarre coat-cum-two-person-blanket, complete with two head holes for back-seat passengers. All the items are unbranded—not even a hidden VW logo. Instead, a "goddess" graphic was developed to riff off the name Eos, the Greek goddess of the dawn.

"So often car brands just bring out logoed apparel," says Aruh. "They might have a full apparel line but there's no real connection to the brand or car at all. We wanted to create things that this woman actually needs." Adds Liden, "We were very clear that a VW-branded route was not the right way to go. Our focus has been on the car, the Eos." There are also plans to introduce in-car items, such as a shoe holder for high heels.

It's an ambitious venture, which makes the most of online retail capabilities (there's a dedicated online store, the Eos Boutique) to cut back on retail or distribution expenses. The creators also hope that, as happened with the Mini products, upscale design stores like MOMA Design Store will pick up the products and introduce them to a new, non-car-focused audience.

Taking Some Risks

But in the end, the success of the product line may hinge on the success of the car. While reasonably priced and well-reviewed (see BusinessWeek.com, 11/28/06, "The Dawn of the VW Eos"), the Eos hardly has the iconic design cachet of either the Mini or even VW's own Beetle, and so it's debatable whether drivers will care to shout their allegiance from the rooftops.

Then again, the quiet, low-key branding could also attract the driver of any other car who decides she just has to have that pair of driving shoes for herself. Thus, it would create a community of like-minded, style-conscious women who can unite around a range of products that might not center on the car but might encourage them to look at VW more closely next time they're in the market for a new ride.

"This is certainly pushing it," says Brown of the unbranded approach to the Eos products. "A closer connection to Volkswagen would broaden the appeal to people who own other VWs, and by not doing that they're limiting the scope of its appeal. On the flip side, however, it might also broaden it to people who have no idea that the products have anything to do with automotive, but think it's, say, a cool blanket. They'll see the Eos name on the tag and perhaps investigate further and find out about Volkswagen."

A Connection to Their VWs

"This was a step up for us," says Clark Campbell, public relations manager of Volkswagen of North America. "We could do a $10 baseball cap but it wouldn't be an intriguing piece of the merchandise program. We wanted to make something that was more unique and upscale." VW doesn't release sales figures for its merchandise or accessory programs, but Campbell professes not to be particularly concerned with volume. "We're not looking to sell hundreds and hundreds of these items," he says. "We have to have a merchandise program, the dealers want it and our loyal fans want it, so it's definitely a piece of the business, but is it a major part? No."

They certainly wouldn't complain if the items fly off the shelves, of course. But even if they don't, as Crispin Porter + Bogusky's Keller points out, the level of investment in the product line is peanuts compared to the cost of a TV ad or brand campaign. "The reality is that VW people have a very strong relationship with their cars," he says. "We're trying to give them another reason to feel connected."

Of course, commercial pressures and realities undoubtedly play into future decisions, and all those involved must be looking on a little nervously after a series of personnel shakeups in Germany caused a ripple effect Stateside (see BusinessWeek.com, 11/8/06, " Pieschetsrieder Crashes at VW" and BusinessWeek.com, 1/12/07, "What Bernhard's Departure Means for VW").

Water-Cooler Buzz

Kerri Martin, director of innovation and a key figure behind the individual-car-as-lifestyle philosophy, was recently ousted, and Executive Vice-President Adrian Hallmark is on the record as wanting a return to the old "Drivers Wanted" ad campaigns, which highlighted the mother brand rather than individual models. Crispin Porter + Bogusky, the agency Martin hired —without a pitch—after only five months on the job must sense the ad vultures circling. Keller refused to comment on the account's status.

"While she was there, Kerri created buzz at the water cooler level," says Iceology's Brown. "But I'm not sure how some of the lifestyle programs she was heavily involved in will play out now she's gone."

"Realistically, nothing has changed," reassures VW's Campbell. "I don't know that we'll see any changes in the marketing focus. One person out of many has changed, but we still have the same agency and the same creative team. The accessories program will stay with us as planned."

For now, maybe. All those involved are maintaining brave faces. "The relationship should be more than simply 'this machine gets you from A to B,' " says Keller, neatly refocusing the conversation back to the Eos and the VW brand. "The car is a part of your life, and I think it's not only smart for Volkswagen to cultivate that relationship, it's expected."

Click here to see a slide show of lifestyle items promoted by Volkswagen and other carmakers.


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