Michelin Lifestyle celebrates its 20th anniversary

This year Michelin Lifestyle Limited celebrates its 20^th anniversary and Managing Director, Christian Delhaye reflects on the changes, the growth and what the future holds.

 

How does Michelin Lifestyle fit into the Michelin Group’s strategy ?

Michelin Lifestyle integrates seamlessly into the group’s strategy and whilst it sits hierarchically in the Experience Business Line it has significant influence in other Business Lines. A clear example of this is with High-Tech Materials for footwear, where we bring together the Michelin’s technical tyre design and material expertise with that of the licensee in their technical shoe design. MLL has both relevance and influence throughout the pillars of organisational structure shown above.

 

MLL capitalises on Michelin’s globally renowned credibility and legitimacy to bring new products into new markets and distribution platforms attracting consumers which would previously have been difficult to access. This strategy supports the group’s ambitions and MLL’s 3 key drivers to success:

 

Creating value to the group – 2019’s retail sales value of US$ 480M shows that the licensing business resonates with our target consumers and works very well financially for the group. Despite this success we are totally focussed on our goal of extending categories and exploring new markets to reach $1BN in retail sales by 2025.

 

Engaging the consumer – Keeping Michelin “top of mind” is key, MLL products reached over 30 million touch points in 2019 extending our reach into new product categories which are more emotionally engaging for consumers. This contributes to brand loyalty and positive purchasing experiences through different channels, showing Michelin to be more than just tyres.

To keep the consumer at the heart of operations we take all consumer reviews from global retailer sites monthly. We are very proud to boast a Net Promoter Score of over 60% – we know our consumers are extremely satisfied and are likely to retain that positivity when considering tyre purchases.

 

Supporting the brand – MLL directly supports the premise that Michelin is so much more than tyres. Our products support the commercial offers of the business lines and are continually evolving to create a truly wholistic ‘Michelin Experience’ across categories of lifestyle, mobility and high-tech materials. A clear example of how MLL supports the brand is that during 2019 our licensees invested over €10M in advertising and promotion of the brand, bringing the world of Michelin closer to a previously inaccessible group of potential customers.

 

 

20 years have gone by since its creation. How would you assess the 20 year activity from Michelin Lifestyle ? How has it changed over the years?

Back in 2000 Michelin Lifestyle was conceived as an innovative communication tool, Vehicle Accessories were seen as a natural extension to tyres – a legitimate category which could open up new channels and support the tyre business.

 

After 20 years we are fully established and credible in the vehicle accessory segment, you’ll find our products in many prominent places bringing the Michelin brand firmly in front of the consumer. Today we’ve built on this solid foundation of functional products solving specific needs into more emotionally focused products providing much more diverse interactions with the brand.

 

We consider our cross-over category to be our “Soles by Michelin” programme. Consumers are very engaged when purchasing footwear, they take care around fit, style and of course technical performance – this is where we enter the story by providing custom-made technical soles to ensure that the consumer performs at the best level possible whether that be on the track, on the hillside or safely at their workplace.

 

We have grown from 1 brand partner in 1 sport (Babolat) to over 60 brand partners in many categories of sport, work and safety, leisure and fashion. With over 5 million soles sold across 60 different manufacturers we can say with confidence that there are many consumers who will “Experience the Innovation” with our Michelin soles.

 

Latterly we have evolved our offer in the “lifestyle and mobility” categories where through innovative collaborations we can complement the huge credibility and legitimacy of the Michelin travel and restaurant guides. This will open up further consumer segments and develop a brand proposition which will enhance consumer journeys and experiences further promoting positive emotional experiences with the brand. This exciting category is already creating opportunities and more which will come to market in 2021.

 

 

What is the most successful product you ever launched ? And what is the potential for the future?

 

Today, windscreen wiper blades are by far our biggest seller in volume, thanks to the comprehensive distribution network our licensees have developed strong global distribution networks in well-known outlets such as Walmart, Costco, Halfords and Lidl. Consumers absolutely understand and readily accept our proposition – Michelin technology in rubber compounds, a pedigree of engineering excellence and huge credibility in the automotive sector.  Consumers know the Michelin brand will deliver excellent product quality and technical performance.

 

However over the years one of our biggest successes was with the Altaya die cast replica car collection. With over 60 models, each presented with a booklet about the vehicle and its connection with the Michelin brand. This programme generated over half a million Euros in income and absolutely resonated with collectors of model vehicles with historical significance.

 

For the future we see our growth coming from the lifestyle and mobility categories. This is where we can evolve our connections with established and attract new consumers to make emotional connections with around dining and travel. These product offers will be developed globally but by region according to consumer acceptance and market conditions.

 

We are not at the limit for partnerships with the Michelin brand, we have identified further scope but also have recently launch apparel and footwear around the BF Goodrich brand in North America where the brand has huge credibility in outdoor and off-road applications. Whilst this is relatively new, consumer acceptance has been extremely positive and sales via our brand partners have been strong.

 

How do you see the future of MLL after the COVID-19 crisis ? How has it affected the business?

 

There is no doubt the crisis has impacted product sales with our licensees. We are encouraged however that sales of Michelin branded products have been much more resilient than those of our competitors.  We will of course keep a watchful eye on the situation but we believe that the Michelin brand delivers trust and differentiation to the consumer so demand will remain strong.

 

During global lockdowns digital sales channels have been critical to maintaining volumes and touch points with the consumers. In China for example on-line sales have doubled compared to the same period in 2019. Licensees report that the Michelin brand is extremely valuable in this channel, consumers trust our products. The presence of the Michelin brand gives instant credibility and trust, it gives a clear differentiation and peace-of-mind for consumers unsure of their online purchase.

 

Due to the global structure of the MLL team where we have 40 people in 7 different countries, we have been accustomed to using digital tools for several years – it allows us to operate remotely with a high degree of efficiency across continents. The pandemic has seen team relationships remain strong but I’m delighted and relieved to report that we have avoided any of the team becoming infected by the virus and we continued to work cohesively to keep the business going 100% and maintaining a close, but virtual contact with our licensees.