Ben Gilbert: belief

Transcript context

…Especially in America. I'm less familiar with the rest of the world, but the straight up retailer has been decimated. If you're not a Walmart, Target, or Amazon, you're basically dead if you're just a pure play retailer in America. Or if you're a specialty retailer in America in which case in certain cases, you might be doing extremely well. See, for example, Home Depot. I think that one of the biggest things for me as he just really figured out how to make sure that he owned not only the locations of the value chain, like brands that they were going to accrue to, but the brands in particular that all the profits were going to accrue to. I think another big one is realizing where to realize synergies and where not to. As Alexandria puts it, we have light synergies. Specifically around media buying, real estate, retaining talent, there's also something that we really didn't talk about that much, which I think this is a good place to bring up, which is around advertising. Before the 70s, luxury brands didn't really advertise. If you think about why, it's who their clients were, it's that there was a benefit to their clients finding them, there were fewer of their clients. global wealth was frankly just smaller, and globalization hadn't happened as much yet. There weren't the stores in Japan and China. The Internet didn't exist, so you didn't need to make a big splash everywhere all at once. Literally, these companies would spend $0 on advertising. Whereas now, LVMH spends over a third of their revenue on marketing broadly. LVMH is the largest luxury advertiser in the world, and they spend over $20 billion a year on marketing. It's astonishing. This creeping trend from the 70s to today of realizing that, oh, we do need to advertise, or at least it massively benefits us if we advertise. It begs the question, what do they advertise? What they're advertising is interestingly not the products. That is differentiated in luxury. Everyone else advertises their products. The dream, it's always the dream.…

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