As Michael Hill unveiled a brand refresh a doubtless expensive new ambassador in Miranda Kerr, the jeweller’s CMO Jo Feeney, told B&T of the driving role that marketing has played in Michael Hill continuing to grow during a cost of living crisis.
Lead image: Michael Hill’s new brand ambassador, Miranda Kerr.
While earnings before interest and tax were down for the half year ended 31 December and heightened costs and inflation saw profits tumble, overall revenue was up four per cent. Over the last four years, the jeweller took several marketing-driven actions to boost its average transaction value (ATV) by nearly a third, creating a more defensible business despite the challenging environment it operates in.
“There are many parts to delivering ATV growth, many attributed to elevating the brand, shifting our marketing efforts into a more elevated space, ensuring we engage in emotional storytelling and overall, a more sophisticated look and feel to our advertising,” explained Feeney.
“We drove this through our Brilliance members (our bespoke loyalty program), who deliver a higher ATV overall – through strategic initiatives around propensity modelling, data insights, customer lifecycle and supporting reward benefits.
“Acquiring more of our new customers as evidenced through our overall market share growth. Product elevation and an overall shift in our product mix – driven by a dedicated focus on showcasing our finest products through our core marketing communications. A refinement in our store’s visual merchandising and experience has further enabled a shift in our ATV,” she added.
This change in brand strategy, highlighting Michael Hill as an aspirational was unveiled in two parts. Last week, it revealed a change in its brandmark and a complete redesign of its Chadstone flagship store with similar rebranding to be rolled out over to its other stores over the next few years. Now, it has also revealed that Australian model Miranda Kerr will be the face of its new, aspirational brand.
Michael Hill’s rebrand has been a long time coming, too. The jeweller and creative agency CHEP have been working on a reposition for the last two years — something that the agency’s Christine Gannon, managing partner described as “essential” for the brand’s future growth.
“Repositioning was essential to guarantee future growth for the business. We always saw brand reappraisal as a journey, not a point in time,” said Gannon.
“We simply went back to the truth of the brand. The origins of the brand, and the tenets upon which the brand was born and built over decades, still hold true today. This strategy allowed for a long-term brand play that will stand the test of time.
“Of course, this is not just about looking back; done well, this is about taking what made us strong and applying it to futureproof the brand moving forward.
“This strategy became even more critical as the economy tightened. Michael Hill prepared itself to welcome the premium shoppers, who still sought beautiful pieces and a premium experience but at better value,” she added.
In fact, Feeney said that Michael Hill learned that its customers were looking for it to enter a new premium segment, rather than responding to higher gold prices and slimmed consumer wallets with simple cost savings.
“We knew through customer listening and our work on new customer segmentation that we needed our brand to reflect the premium, elevated image our new customers were looking for,” she explained.
Gannon added that while the Michael Hill customer “had not changed” there were a range of potential customers who were not considering the brand.
“Our diagnosis showed there was a profitable segment of the market that simply did not consider shopping at Michael Hill, instead preferring independent fine jewellers or the larger, more premium maisons. We had to reach these new customers,” Gannon explained, adding that this change in strategy was far from a defensive move, despite tightened economic conditions.
“As we present ourselves as a premium, sophisticated fine jeweller, the rebrand will allow Michael Hill to appeal to an elevated, premium-seeking audience, through all the touch points of the brand, including often the first landing point – the brand’s website. We will continue to elevate and evolve our product offering and store experience to ensure we are catering to both our new customers, and our current customers, and always putting our over two million Brilliance loyalty members first,” added Feeney.
At a time when marketing departments seem to be on the defensive, trying to justify their actions, Michael Hill’s approach shows the value of integrating marketing closely with overall business strategy — Gannon described the approach as an “investment” in the future health of the brand and business “not as a cost” and looks set to create distinctiveness in the market and deliver results.
Feeney, meanwhile, lauded the “responsibility” that her team and agency partners had been entrusted with to lead the transformation of the business.
“Michael Hill is a business that does realise what marketing can deliver. When businesses don’t have the ability to measure marketing impact or initiatives, it can of course become hard to understand the relationship to financial performance, so therein lies the priority. Measurement and attribution will and must unlock this,” she said.
“And of course, there is always the short and long, not valuing the impact of long-term investments, vs short-term gains. Whilst you need to manage both, the former can often take more work to uphold. Michael Hill is a prime example of a business seeing the critical importance of the long term, even in a tough environment.”
