Whilst I was on holiday, the Walpole 2021 Yearbooks - fresh off the press - arrived at the office. ‘Ad Astra, Per Aspera’ promises the Latin tag on Sabina Savage’s beautiful cover and ‘through adversity to the stars’ has become something of a mantra here in the Walpole office. Everyone has had to trudge doggedly through the difficulties of the last 18 months, carefully guarding the spark of hope that soon things will not only improve, they will take flight.The best way to make sense of this strangest of times is to harness our ambitions to achieving better, more spectacular things on the other side.
The publication of the Yearbook has taken on a symbolic significance this year, not least because the party to celebrate it, on 1st September, will be Walpole’s first live event since the 2020 Yearbook party 18 months ago. Gathering members together in a spirit of celebration and community brings things full circle, and will mark the end of such a difficult chapter. Just writing those words makes me worry I am tempting fate, yet the auguries are good, and we are all more than ready to turn the page on the pandemic and begin the next chapter for British luxury. The Yearbook party is quickly followed on 6th September by the Walpole Summit, designed to fill everyone full of new, clever thinking and inspiring ideas to get your synapses snapping with ways to reach for those stars. It also promises to be a brilliant and effective way to reacquaint oneself with old friends and make new connections and the day has been put together with a view to helping you reboot your network as well as to fire up your mind.
Although largely confined to barracks, like the rest of the UK, Walpole has not been idle since that 2020 Yearbook Party. Last month, as I prepared the Annual Report, covering the working period April 1st 2020 to March 31st 2021 and the calendar financial year, it reminded me that whilst it was a financially challenging year for Walpole, and one in which we switched rapidly from a primarily face-to-face organisation to one that was digital only, it was a period in which the power of the British luxury community came into its own and our ability to support that community was strengthened and clarified. The collegiate spirit, the strength of the network, the commitment of each member to support one another and to share and learn meant the Walpole principle that the whole is greater than the sum of its parts has never been stronger. I was also profoundly grateful to Michael Ward, Walpole’s Chair, for his support of Walpole and his expert, hands-on advice throughout such a challenging year, and to the Walpole board and the Luxury Strategy Council, a new body of member CEOs who have committed their time and knowledge to help us serve our members and represent the sector.
Walpole had four priorities as the pandemic hit: to secure the long-term future of Walpole, to protect team roles, preserve the reserve, and maximise the support we give to members. 2019 had seen the completion of phase one of Walpole’s strategy - the main priority of the preceding three years had been to build the foundations of Walpole’s long term financial security by committing sufficient funds to the reserves and building cash in the bank. The wisdom of this strategy was underlined on 23rd March last year when the UK first went into lockdown: Walpole had built both stability and resilience as an organisation and was in a position to withstand the shock of the global crisis. This put us in a strong position to be able to deliver a different but equally valuable service to member brands, supporting them through the heavy impact of the crisis on the luxury sector, and although there were some deep financial challenges during quarters 2 and 3 of 2020, a strong start and finish to the year coupled with prudent housekeeping meant we were able to increase the value of Walpole’s reserve, giving us a strong platform on which to launch phase 2 of Walpole’s evolution.
Like many of our members, the context of the pandemic created a good opportunity to re-examine and refine what we do for our customers, and to clarify our position as a business association. Our three pillars are:
Representation: what we do on behalf of members with government, and the messages we communicate to media
Community: how we bring people together to share insights, challenges and best practice, maximising the power of the British luxury ecosystem
Knowledge: the insight, guidance and support we provide for our members.
Making this clearer was a very helpful exercise, and combined with the increased impact we had through our Daily Digest, our website and other content channels meant that in the Autumn of last year we were joined by a roster of new members. We were delighted to welcome The Balvenie; Biscuiteers; Chanel; Glenfiddich; Hendricks Gin; Mandarin Oriental; McLaren Automotive and The Peninsula to the Walpole fold in the second half of the AGM reporting period.
Serving our members is at the heart of everything Walpole does: against a backdrop of challenges - the pandemic with its impact on workforce, on finances and on travel; Brexit; the abolition of Tax Free Shopping (VAT RES); an increasingly complex international trade environment; trade tariffs; the drive to sustainability; and a very accelerated digital transformation of the luxury sector - we were able to pivot rapidly to digital only, and quickly deliver thoughtful, highly curated roundtables, webinars and think tanks. We hosted 72 digital events from the end of March 2020 to the beginning of April 2021 over a wide range of topics - for example, CBI Chief Economist Rain Newton-Smith talking to Estée Lauder UK & Ireland President, Sue Fox about the economic outlook and recovery roadmap for high-end retail; Bain and Farfetch about luxury’s digital pivot; Ewan Venters, then of Fortnum & Mason, and Mishcon de Reya about how to build back better; plus sessions on influencer marketing, ecommerce, branding, furlough, funding, communicating in a crisis, the evolution of the HNWI luxury customer, and lots more. We also hosted a week-long Festival of Luxury Marketing in September 2020, attended by 500 luxury marketeers. As members have come to expect from Walpole, we had a first-class line-up of speakers, the latest insight and exciting research with actionable insights for marketeers. Key highlights included;
The Love Letters project has been such an important one for Walpole: it allows us to promote British luxury in key overseas markets with digital content, produced with all the exceptional quality and soft power of the BBC. With 80% of British luxury destined for overseas markets, supporting our members’ export ambitions is a priority for Walpole, and without the annual trade and media mission to New York, it was key to replace it with something compelling and beautiful that would touch as many consumers as possible. The project was initiated in the early summer of 2020, announced at the Festival of Luxury Marketing in September 2020, and the first series of short films can now be viewed on the Walpole website in the UK, and on BBC.com in key luxury territories worldwide.
International trade was very much under the spotlight when it came to our representation work both in the media and in government. Walpole continued to have a strong voice on Brexit, and given the sector’s export strength, we were appointed to one of the Department of International Trade’s Trade Advisory Groups to be a conduit between business and government when it came to the new trade deals Liz Truss and her team were forging. But the context for trade has become increasingly protectionist, and the luxury sector found itself caught up in and disproportionately penalised by the trade tariffs imposed as a result of the longstanding Airbus/Boeing dispute between the EU and the US, and subsequently with further tariffs threatened by the US Trade Representative as a response to the UK’s Digital Services Tax. We lobbied hard to have these tariff disputes resolved throughout the whole of last year, and spoke out in the media about them. Outside the scope of this report, the Airbus/Boeing tariffs have now been suspended for at least five years, but not without having first inflicted a great deal of unnecessary losses on Single Malt Whiskies, Scottish cashmeres, suiting, and other major British luxury exports to the US.
However, it was the Treasury’s decision to abolish Tax Free shopping that created the deepest crisis, and we had a high profile and highly coordinated lobbying and media campaign to try to persuade the Chancellor to reconsider his decision. We were unsuccessful, and the abolition of VAT RES (Tax Free shopping) went into the statute books at the end of December 2020. The subsequent Judicial Review was also unsuccessful, but the process revealed a number of key pieces of information held by the Treasury that contradicted their public position when responding to the many letters member brands sent to the Chancellor.
As part of our campaign, we secured 70 separate pieces of media coverage in broadsheets, on radio and on television, in trade papers and online, both here in the UK and overseas.
We will come back into the fray on this crucial issue in due course - though without international travel, the issue is slightly moot at present. The experience taught us valuable lessons about the government’s understanding of and attitudes to British luxury, and as a consequence we substantially increased our resource in this area, developed plans for a Corporate Communications Working Group and began to search for an agency which could help us build strong and influential relationships with No. 10, No. 11 and the Cabinet Office. Although the AGM Report only covers up until the 31st March 2021, we have recently appointed Hawthorn and held the first meeting of the Corporate Communications working groups, and have submitted responses to six government consultations in the first 8 months of 2021.
Working to make British luxury the global benchmark for luxury sustainability is one of Walpole’s most important priorities. We launched the British Luxury Sustainability Manifesto in January 2020, and one of the outcomes of the pandemic has been to help us accelerate our progress in this area. Firstly we were able to convene member brands into working groups and completed the fourth round of working groups at the end of Q1 2021. 92 brands are active in these groups over seven sector verticals, working collaboratively to drive progress towards the sustainability ambitions outlined in the manifesto. Interestingly, the pandemic has also seen a substantial increase in the consumer’s interest in sustainability, and also in brand purpose. In luxury particularly, this has become a key interest area as well as an expectation: member brands have also noticed a positive impact on consumer purchasing behaviour. In March 2021, we published the Sustainability Report, capturing the progress of the Sustainability Working groups and outlining the considerable achievements across the sector.
Pivoting to digital-only meant that Walpole’s existing website began to creak under the strain of the increased activity - our cumulative reach of 54,000 viewers across our various platforms and the success of our digital events programme and working groups meant that we wanted to come out of the pandemic match fit to be a Digital First organisation. Importantly, this anticipates a time where we are able to deftly blend the ease of access of a digital shop window for Walpole, and a pay-walled member area, with a refresh of our live events, so that we are able to offer a wider and more effective combination of content and experiences. We began the process of building a completely new website, and also a re-think of Walpole’s branding so that our identity would communicate easily the ambitious, creative, passionate dynamism of the sector. In addition, we began to produce the 2021 Yearbook, building a HNWI distribution strategy to put the book in the hands of UK consumers, alongside the book’s international HNWI distribution.
Do read the full report to see more detail on what Walpole has been doing on your behalf - and please go and explore the fruits of our labours too, not only phase one of the new website and the Love Letters from Britain films, but also join us at the Summit next month and at the Yearbook party.
It’s not only the Latin tag that offers an important message about Walpole’s ambitions on your behalf, it’s also all that Sabina Savage’s cover illustration represents: we are bold as a lion, and as loyal and companionable as man’s best friend. The incredible network, the community, the eco-system of British luxury has been amazing in 2020, and when, God willing, on the 1st of September when we come together for the Yearbook party, we will not only launch the Yearbook, but a time when all the hard-work of the last 18 months can truly start to take flight.
HELEN
