AUGUST BERG - Highlighted

SMU963
AUGUST BERG: PROMOTING AN ACCESSIBLE LUXURY WATCH

VIA SOCIAL MEDIA
Anders Peter Juel Sauerberg, CEO of Norbreeze Group, was excited about the launch of an exclusive
collection of his accessible luxury watch brand ‘August Berg’ in September 2020. The collection
featured a handful of timeless Morris & Co. design prints created more than a century ago by the
renowned designer and co-founder of the British Arts & Crafts Movement, William Morris.
Sauerberg hoped that this collection would help lift the limited sales of his watch brand in affluent
Singapore – a market dominated by well-renowned high-end luxury watches like Rolex and Patek
Philippe.
As a distribution company, Norbreeze, had successfully launched many jewelry and watch brands in
Asia, including Skagen, Berring, Olivia Burton, Philip Stein, Rosendahl, Cath Kidston, Timex
Timberland, Daniel Wellington, and Pandora. As part of its 2025 plan, the company had decided to
set a target launch of 12 to 15 brands and foray into launching products under its own brand name.
This led to the birth of August Berg, a Danish design watch in the ‘accessible luxury’ segment – a
market that had yet to be tapped thoroughly in Singapore. Other watch brands like Bering and Skagen
had made entry into the market already, but Sauerberg felt that there was still an opportunity in this
segment for newer brands. August Berg targeted a niche market in terms of the consumer segment,
focusing on working parents and young working professionals instead of the generalised Millennial
or Generation Z market segments.
However, the launch of August Berg had met with many challenges. With limited funds, distributing
the watch through a swanky retail store in the expensive downtown area of Singapore was not
possible. Instead, Sauerberg had chosen to set up a kiosk-style store at Takashimaya, an iconic luxury
mall in the heart of downtown Singapore. Over time, he also collaborated with various online retail
platforms specialising in accessible luxury. However, consumers in Singapore had a preference for
bold and bling luxury items, while August Berg represented the minimalistic ethos of Danish design.
Moreover, while the Singapore consumers were active on digital platforms and social media, they
used digital channels primarily for everyday purchases; luxury items were still meant to be ‘touched
and felt’ in brick-and-mortar retail stores. Besides, luxury purchases were still driven mainly by the
name behind the brand and influencer marketing and other digital promotions had successfully driven
sales largely in the non-luxury product segments. As August Berg was a completely new brand, it
would require significant brand-building efforts to stand out amongst a plethora of watch labels.
On a separate note, the Covid-19 pandemic had negatively impacted the sales of luxury products both
in brick-and-mortar as well as online retail stores. Amidst such constraints and lukewarm sales,
Sauerberg wondered if a powerful and targeted social media strategy could propel August Berg’s
growth in the market. How could Sauerberg drive demand for his affordable luxury watch using
social media? What engagement strategies could he implement?
This case was written by Dr. Patricia Lui and Lipika Bhattacharya at the Singapore Management University. The case was
prepared solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective
handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect
confidentiality. This case was developed with the support of Retail Centre of Excellence (RCoE).
Copyright © 2021, Singapore Management University Version: 2021-07-09
This document is authorized for use only in Dr. Brajesh Bolia's MBA A / MKTG MGMT-II 06.10.2021 at Somaiya Vidyavihar from Oct 2021 to Apr 2022.
SMU-21-0012 August Berg: Promoting an Accessible Luxury Watch
Accessible Luxury Market
Accessible luxury had emerged as a market in the mid-2000s when the bargaining power of the
middle-class consumer had catapulted, driven by the rise of the Asian economies. 1 Traditionally, the
luxury market space had been a select market where only the most exclusive brands competed, and
target consumers by default were wealthy. However, by 2001, the global luxury market had expanded
to span a wide range of prices and product categories, some of which could be afforded by middle-
class consumers. The notion of luxury was effectively redefined to stretch through an entire realm of
products from a limited edition crocodile handbag to a line of spa bath products or even a cup of
speciality espresso coffee.
The so-called extended luxury pyramid was driven by rising disposable incomes and demographic
changes of consumers allowing more people to afford luxury.2 There were two sides to this new coin
of luxury. One represented the traditional image of luxury, which was driven by exclusivity and
symbolism. The other side represented luxury products that were lower-priced and hence more
accessible, but still of high quality and priced at a premium compared to other products in their
category. Thus, traditional luxury markets had evolved from a narrow band of products and brands,
serving a select group of consumers to a ‘luxury triangle,’ spanning traditional and new luxury
products and consumer groups.3
Well-known, established high-end luxury brands had observed the opportunity in this accessible
luxury market segment and were increasingly trying to target the whole spectrum of consumer
segments in the triangle with a variety of products. For example, Chanel had used a strategy of
maintaining high-end exclusivity for some products while making some products more affordable.
So while the Chanel suit was still beyond the reach of many, Chanel makeup offered a sense of luxury
at an affordable price. On the other hand, some luxury brands tried to have differently priced products
in each product category. Swiss watch manufacturer Swatch, for example, offered a range of over 15
watch brands spanning high-end luxury brands like Omega and affordable luxury brands like Swatch,
CK, and Balmain.45
However, losing brand value when targeting the mass market was a common concern amongst luxury
brands. Gucci, for example, had lost its brand value in the 90s due to a proliferation of its licenses to
products that were not necessarily identified as ‘luxury’. But the brand managed to earn back its
brand attractiveness by repurchasing its distributed licenses a few years later. However, Pierre Cardin,
a high fashion design house, had no such luck, and the brand became devalued due to extensive
licensing in unrelated product categories like baseball caps and cigarettes in the late 1980s.6
Despite expanding across a wider net of customers and product ranges at various price points, the
luxury market had continued to thrive and was expected to keep growing globally in the near future.
The global luxury goods market was expected to increase from US$285.1 billion in 2020 to US$388
billion in 2025, at a CAGR of 6.4%. A market research study had reported that the market for personal
1 Claudia D’Arpizio, Federica Levato, Filippo Prete and Constance Gault, “Eight Themes That Are Rewriting the Future of Luxury
Goods”, Bain & Company, Luxury Goods Worldwide Market Study, 2019,
https://www.bain.com/globalassets/noindex/2020/bain_digest_eight_themes_that_are_rewriting_the_future_of_luxury-goods.pdf ,
accessed January 2021.
2 Ibid.
3 Ibid.
4 While most design houses refer to products in the affordable category as ‘accessible luxury’, this case uses the terms ‘accessible luxury’
and ‘affordable luxury’ interchangeably.
5 Gabriela Alvarez, Victoria Kemanian, and Thomas Malnight, “Keeping the Strategic Balance in the New Luxury Market”, Critical
EYE, September-November 2004, http://www.latitudeglobal.com/documents/ceye-sep04-malnight.pdf , accessed January 2021.
6 Ibid.
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luxury goods (the “core of the core” in luxury segments) had reached a record high of US$365 billion
in 2019 - reporting a 4% growth from its previous year. 7 Apparel and beauty products were the most
popular luxury categories, followed by leather goods and watches. However, watches had
demonstrated a slightly sluggish performance in 2019, declining by 2% from the previous year.
Chinese customers had accounted for 90% of the global luxury market growth in 2019, contributing
to 35% of luxury goods sold in the world.8 Mainland China was the key growth driver for the luxury
industry, reporting a growth of 26% and revenues amounting to US$39 billion. Chinese consumers
were expected to account for 46% of the global market by 2025 (up from 35% in 2019).9 Chinese
customers also increasingly shopped “at home” through the online channel. The online, off-price,
and airport channels were also key growth drivers, expanding respectively at 22%, 11%, and 11%
respectively in 2019. Globally, online channels only accounted for 12% of the market share but were
said to drive 75% of luxury transactions. Asia was considered as the growth engine for online luxury,
ahead of Europe and America (North and South America combined). 10
By 2025, the luxury customer base was expected to expand to 450 million, up from 390 million in
2019, mainly attributed to the growing middle class, especially from Asia.11 The growing middle
class was expected to drive the luxury market mainly in entry-price segments. As of 2019, the entry
segment already represented a sizable part of the market (35% within leather goods and 30% in
jewellery and watches). Millennial customers, also referred to as Generation Y (born between 1981
and 1996), were steady buyers of luxury and accounted for 35% of consumption in 2019 and were
expected to make up 45% of the market by 2025. Generation Z (born between 1997 and 2012) only
contributed to 4% of the consumption in 2019 but were expected to make up 40% of luxury purchases
by 2035. In 2019, Generations Y and Z had contributed to 100% of the market’s growth. The second-
hand market for luxury goods had also expanded to US$42 billion in 2019, propelled by strong
growth in Europe, as well as growth among specialised online platforms. Watches and jewellery were
the primary categories in the second-hand market, accounting for over 75% of all purchases. 12
By 2025, the global luxury customer base was expected to grow through mainly two sources. The
first source was an increasing number of ultra-high-net-worth individuals, primarily based in
America and Asia, who were looking for “what money cannot buy”. Secondly, a new base of luxury
customers had started to emerge, primarily stemming from the growing Asian, middle class, who
hunted for “entry-to-luxury” products that were not just “mini” versions of core luxury products, but
innovative products flourishing with stylistic content in their own right. 13 A Bain & Co. research
had evaluated that luxury customers would likely be influenced by a few key traits in the immediate
future. Firstly, they would be open and highly receptive to new value propositions and business
models. Secondly, they would be responsible shoppers who valued the social commitment of a brand.
Thirdly, they would be more emotional, and their purchase decisions would be based on experiences,
ideas, feelings and emotions, which would become an important ingredient in delivering value to
post aspirational customers. 14 In the past, the luxury industry had been associated with excessive
consumerism and a general lack of respect for the environment. However, with the growing influence
7 Claudia D’Arpizio, Federica Levato, Filippo Prete and Constance Gault, “Eight Themes That Are Rewriting the Future of Luxury
Goods”, Bain & Company, Luxury Goods Worldwide Market Study, 2019,
https://www.bain.com/globalassets/noindex/2020/bain_digest_eight_themes_that_are_rewriting_the_future_of_luxury-goods.pdf ,
accessed January 2021.
8 Ibid.
9 Ibid.
10 Ibid.
11 Ibid.
12 Ibid.
13 Ibid.
14 Ibid.
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of Millennials and Generation Z, who deeply considered the social impact of their luxury purchase,
the industry was gradually shifting towards ethical and sustainable products and experiences. 15
Luxury Market in Singapore
Singapore was at the forefront of the luxury market in Asia. In 2018, the luxury goods market in
Singapore had reported a revenue of over US$ 4 billion, and the market was estimated to grow
annually by 1.1% over 2018-2022. The largest segment within the market was the luxury watches
and jewellery segment, which had reported a revenue of around US$ 3 billion in 2018.16 Singapore
was ranked fifth in a list of destination countries for luxury shopping after France, Italy, U.K., and
Germany. The city had seen a significant rise in the ‘affordable luxury’ segment, which had
accounted for about 44.9% of all luxury store openings in 2018. However, the ‘ultra-luxury’ segment
continued to dominate in terms of market share, with revenue from the luxury watch segment
amounting to US$ 272 million for the first three quarters of 2020. The luxury watch segment was
expected to grow annually by 2.82% between 2021 and 2025.17
Consumers of luxury goods products in Singapore were relatively flexible and open to squandering
a little more than their estimated budget to purchase popular and exclusive items. Luxury stores based
in Europe and the United States were the major importers of luxury goods to Singapore. The popular
luxury brands were Chanel, Louis Vuitton, Ralph Lauren, Prada, Burberry, Jimmy Choo, Salvatore
Ferragamo, Estee Lauder, Clinique, Lancôme, Rolex, Cartier, Omega, Panerai, TAG Heuer, and a
few others. Singaporeans were the third-highest spenders on luxury products globally after Qatar and
Luxembourg.18 The city also attracted many foreign tourists and visitors, including weekenders from
neighbouring countries such as China, Indonesia and Malaysia, who were the highest contributors of
duty-free shopping in the city. The tourism sector of Singapore drove most of the sale of premium
goods, such as apparel, jewellery, watches, wines, and cigars, in the country.19
Norbreeze
Sauerberg had relocated to Singapore from his homeland Denmark in 1998 for a cross-cultural study
programme between the Copenhagen Business School and Singapore Institute of Management (SIM).
His wife, Anne Trads Hansen, had studied at La Salle-SIA College of the Arts, Singapore, and set
up a graphic design company in the city. Both had a deep passion for Danish designs and decided to
establish the Norbreeze Group in 2004 in Singapore, to distribute, market, and build international
accessible luxury brands in Asia. The company aimed to promote and build international lifestyle
brands that represented the Danish design philosophy of “timeless allure and consistent pursuit of
functionalism and quality”. The Sauerbergs aimed to create a unique business proposition by
introducing the Danish design ethos to the vibrant cities of Asia. The name Norbreeze represented
the company’s roots. “Nor” referred to the Nordic region, while “Breeze” referred to movement,
prosperity, transport, and communication.
Finding Demand for Simplicity
15 Esther Shaulova and Lodovica Biagi, “In-depth: Luxury Goods 2020”, Statista, https://www.statista.com/study/61582/in-depth-
luxury/, accessed January 2021.
16 “Singapore is the Hottest Destination for Luxury Goods Shopping”, Craft Driven Market Research,
https://www.craftdrivenresearch.com/singapore-luxury-goods/ , accessed January 2021.
17 “Luxury Watches”, Singapore, Statista, https://www.statista.com/outlook/cmo/luxury-goods/luxury-watches-jewelry/luxury-
watches/singapore , accessed January 2021.
18 Ibid.
19 Ibid.
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While the Sauerbergs were convinced that their idea would work, retailers in Singapore were less
enthusiastic about the clean and simple Danish designs and preferred big, bold, and bling luxury
items. During the initial research phase, the Saurebergs observed that the marketing of watches in
Singapore was targeted primarily at the teens and 20-somethings. There was nothing for parents and
working professionals in the early years of their careers. Such consumers typically juggled their time
between young children and demanding jobs and did not have the motivation to spend on expensive
high-end luxury products despite aspiring for them. After several brainstorming sessions and further
research, the Sauerbergs realised that this was their target market. “It was literally a Eureka moment
for us”, recalled Sauerberg.
One of the first brands Norbreeze ventured into distributing was the Danish watch brand, Skagen.20
However, finding a retail store for launching the product proved to be quite a trial. Most department
stores felt that their clientele were looking for well-known brands and preferred showy designs over
simplistic styles. Sauerberg kept approaching the stores, educating them about Danish designs.
Finally, when department store Tangs agreed to stock the watch, Skagen was an instant success,
outselling brands that had been on the display counters for years. Sauerberg had used an all-white
counter for displaying Skagen among the more traditional black and brown colours in the watch and
accessories floor. The brand reported a sale of 150-200 watches every month at Tangs, which
exceeded the expectations of the store as well as the company.
The real tipping point, however, came a year later. Sauerberg had felt that airline passengers could
be a target consumer of his products, as a significant percentage of the travellers on board were
working professionals – their key customer segment. Moreover, airline brochures mostly listed goods
that fell in the affordable luxury category. In 2005, Singapore Airlines put the watch in its in-flight
catalogue, and Skagen became the first Scandinavian-designed watch to be sold in an Asian flight.
Once Singapore Airlines agreed, collaborating with other airlines became much easier, and Skagen
went on to be listed in more than 13 other airlines across the Asia Pacific, such as Cathay Pacific,
Thai Airways and Dragon Airlines. “That was the point at which our garage entrepreneurship became
a full-fledged business”, recalled Sauerberg.
Overcoming Cultural Barriers
The next major brand that Norbreeze took on was Pandora Jewelry in 2009. Once again, the
department stores didn’t believe the jewelry brand would be successful. The notion of a charm
bracelet – Pandora’s design concept, was unknown in Asia, but Saureberg decided to persist, and
finally, department stores and malls agreed, and Pandora soon became a success. Norbreeze also
expanded Pandora’s distribution to Southeast Asian countries like the Philippines and Thailand. For
all the brands it distributed, Norbreeze also collaborated with online stores like Zalora. By the end of
2009, the company had spread its operations to more than 40 physical stores in Singapore and over
300 stores across Southeast Asia (refer to Exhibit 1 for a list of brands distributed by Norbreeze).
Norbreeze tried to become a bridge between the East and West, helping western designers cross the
divide by helping them understand how they could promote their designs in the region based on local
cultural tastes. The focus was mainly on watches and jewelry in the accessible luxury segment. The
persistent efforts to change the mind-set of retailers also paid off, and more and more retailers agreed
to display accessible luxury products distributed by Norbreeze in their stores. Sauerberg recalled,
We had to respect local culture and trends. We had to work really hard to make things grow. For
instance, a blue-faced watch will sell well in Europe. But cultural preferences mean that no one
will buy it in Singapore.
20 The company was acquired by American design company Fossil Inc. in 2012.
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In 2011, Norbreeze saw an annual revenue growth of about 41% over the preceding year. By 2015,
Norbreeze was distributing many brands, including Pandora, Philip Stein, Rosendahl, Timberland
Watches, Daniel Wellington (DW), Cath Kidston, and Timex. A key strategy for the company to
launch new brands in Asia was to gain exclusive rights to distribute the products. While Norbreeze
did not aim to gain rights for all of its distributed products, it tried to maintain this as a policy for the
products for which it had set up retail stores (like Pandora and Skagen).
Sauerberg also tried to diversify the business both through online and physical retail channels. He
had observed that there was a distinctive shift amongst the Singapore population towards healthy
diets and lifestyles and decided that a juice bar would fit in well with the consumers. In August 2015,
he launched the Danish lifestyle brand, Joe & the Juice, a contemporary café-beverage concept, and
set up two juice bars of the brand in the city. Joe & the Juice had seen phenomenal success in Europe,
and Norbreeze’s introduction of the brand in Southeast Asia was perceived to be timely.
Going Online
The motivation to setup an online store germinated from a basic need of understanding the consumer
better. While Norbreeze had a growing database of customers, Sauerberg realised that his team did
not have much data about their consumers. They did not know their preferences, who the top spenders
were, and what their behavior traits were. To know more about customers, Norbreeze implemented
a cloud-based customer relationship management (CRM) system to collect information about
customer preferences, such as their preferred brands and products. Such insights could help the firm
in figuring out a wider range of brands and promotions that it could offer to its clientele. The CRM
implementation at Norbreeze received funding from a government grant extended by Spring
Singapore (which helped small and medium-sized enterprises to develop capabilities across multiple
development areas). Experience of using a CRM system and analysis of customer data paved the way
for Norbreeze’s online store, Cocomi, which was launched in late 2015 to help the company diversify
its business beyond distribution and retail stores. The idea was to marry the best experiences from e-
commerce and brick-and-mortar retail stores for the customers. Thereafter, Norbreeze also set up
brick-and-mortar outlets of Cocomi in a few select stores in Singapore.
Norbreeze’s CRM system had built-in data analytics capabilities and was integrated with its
inventory system, allowing the company to send electronic direct mailers (EDMs) with targeted
offerings to customers based on their demographics, buying patterns and preferences. For example,
during Valentine’s Day, the system would send out EDMs to male customers to promote Pandora
jewellery as gift items for their loved ones. The CRM system also assisted in cross-selling products
to customers, attracting customers to sign-up to the Norbreeze platform as members, and sending
discount coupons to customers for their next purchases on the website. Frontline staff were also
incentivised with commissions for signing up new customers into the system. While Norbreeze’s
earlier distribution model had focused on incubating larger brands with sustainable growth returns,
the Cocomi online platform provided opportunities to list products that were of smaller distribution
budget but had similar aspirations. At the same time, Norbreeze also focused on a careful selection
of brands to ensure exclusivity on its platform – a key criterion that distinguished the luxury segment
from the mass-market segment. The new brands were selected after careful analysis for their
projected category growth, market potential, and ability to provide unique experiences to their
consumers.
In 2017, Norbreeze embarked on a new phase of business optimisation with the implementation of
its Strategy 2020, which involved doubling its growth over a period of three years. The new direction
was formulated to steer the business away from the initial start-up, family-owned structure to one
that was prepared for commercial growth and could attract future investors. To achieve its growth
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targets, Norbreeze set in place many standard operating procedures and established a social media
presence to attract more consumers.
Five Strategic Pillars
Sauerberg formulated five pillars of operational strategy, which could assist his firm in achieving
continuity and sustainable growth within the market. The pillars were designed to enable Norbreeze
to establish itself as a highly differentiated firm that stood apart from imitators. The first of the pillars
focused on the importance of selecting attractive brands and ultimately becoming a custodian for
them – promoting, living, and breathing the brands’ values. The second pillar was focused on product
affordability. Norbreeze only selected brands categorised as “accessible luxury”, to remain relevant,
distinguished and also affordable enough for the masses.
The third pillar focused on growing its reputation as a partner and complementing its partners by
helping them achieve their intended goals of expansion in Asia. Through the responsible promotion
of its partners’ values, Norbreeze tried to become a custodian of the brands it promoted. Staff
involved in a partner’s brand were directed to immerse themselves in the brand and know its story to
support this goal. Gaining the trust of the client formed the fourth pillar. Only after gaining the desired
level of trust would Norbreeze dive into managing and executing a variety of complex retail
operations for its partners. Additionally, Norbreeze also curated strategies for its partner brands,
keeping in mind local subtleties and cultural preferences, which formed the fifth pillar of its strategy.
Company Culture
Sauerberg also implemented organisational strategies that he called the ‘3 Ss’ (strong people, strong
operations, and a strong corporate culture) to foster the company’s internal growth. 21 He
implemented numerous in-house training programmes and benefits for the employees as a
mechanism to retain high-performing employees. He also established a dedicated sales training team
and service benchmarks in which the best service models were selected from a plethora of tried and
tested strategies and then applied across all brands to ensure consistency. He summarised,
The accessible luxury market in which Norbreeze specialises is fascinating. It suggests

discernment, an appreciation of value for money, and the enjoyment of discovering a product that
is unique, beautiful, and of good quality. I sit with lawyers who could easily afford a Rolex watch,
but they have a Bering or Daniel Wellington. It’s the style. It looks like a million dollars but costs
not even close to that. Accessible luxury has to feel like luxury even if the price doesn’t. We try
to create that feeling from the first touchpoint.
Danish Design
Danish design was at the heart of Norbreeze’s business inspiration. The primary underlying
component of Danish design and a defining characteristic of the Danish culture was the art of ‘hygge’,
which exuded a feeling of contentment, well-being, calmness, serenity and comfortable
conviviality.22 ‘Hygge’ inspired Danish design laid a strong emphasis on simplicity, functionality,
minimalism, durability and quality, and was synonymous with being timeless. Most accessories and
fashion styles under this genre revolved around light colours, practicality and minimalistic clean
lines. An example of the style was an Apple store (although Apple was an American company, its
21 Norbreeze’s staff strength grew to approximately 150 by 2020.

22 Margot Cavin, What Is Scandinavian Design?, The Spruce, Jan 28, 2021, https://www.thespruce.com/what-is-scandinavian-design-
4149404, accessed January 2021.
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stores were similarly minimalistic), which was typically bright, light, and airy, and every item had a
purpose for it to be there.
Danish design was guided by Nordic influences and was similar to other Scandinavian designs. It
had risen to prominence in the 1950s led by world-renowned designers like Hans Wegner and Arne
Jacobsen, who established their names in the furniture industry with their elegant lines and signature
examples. A key identifier of Danish design was inspired by the notion that products should be
accessible for everyone. Additionally, Danish-designed brands were committed to giving back to the
community. Danish design houses had an unparalleled reputation in the watch world for stylish and
wearable watches that championed simplicity and functionalism. In contrast to the more famous
Swiss watch brands that led the luxury watch industry, Danish watch brands focused on buyers who
prized stylish designs at affordable costs. Danish watches typically ran on quartz batteries rather than
the costlier mechanical movements used by well-known Swiss brands, hence allowing them to be
placed in the affordable luxury segment. 23
August Berg
In 2019, Norbreeze ventured into creating its own brand of products in the accessible luxury segment
by establishing a watch brand, August Berg, targeting working parents and young professionals. The
brand was launched as part of the company’s strategic vision for 2025, by when it wanted to have
half of its revenue generated from owned and operated brands and the remaining from the distribution
of branded products. Sauerberg had named the brand after his son, Carl August Juel Sauerberg. He
had already tasted success in promoting Danish brands in the accessible luxury segment in Asia. He
had also gathered significant data about customers in this segment - their behaviour traits, their
background, demographics, design tastes and purchase habits over the years, and believed that a
house brand in this segment was likely to be a safe bet.
Sauerberg collaborated with the renowned Danish designer Magnus Joergensen to design the August
Berg watch. Joergensen had designed for well-known fashion labels like Fritz Hansen and Arne
Jacobsen, which were known for their unique and aesthetic furniture designs. The watches were
produced at a Danish factory, and Sauerberg took special measures to ensure that the quality and
craftsmanship was of the highest standard in the industry. Only the best materials available were used
for the construction and included sapphire crystal, high-quality steel and precision Miyota Japanese
movements. A kiosk store was set up at Takashimaya mall to retail the watches. The watches were
priced between US$ 200 and US$350 and were marketed on social media channels like Facebook
and Instagram (refer to Exhibit 2 for a snapshot of August Berg outlet in Takashimaya). The watches
were also available at the physical retail stores of Cocomi across five shopping malls in Singapore.
The watches were also sold online at its own website (www.augustberg.com) and on the Cocomi e-
commerce platform (www.cocomi.com). Additionally, they were sold on leading local online e-
commerce platforms like Zalora and KrisShop.
Sauerberg believed that while the quality of the product was a key factor in designing a brand for the
luxury sector, marketing the product to consumers was more about storytelling. He explained,
We analysed the market and tried to place our product as being modern vintage. The message to
the customer was about the lifestyle (mindfulness and time fullness), about how they could spend
their time being conscious, being in the present, and being aware and living life with passion,
purpose and confidence.
23 Ibid.
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A balanced lifestyle was in particular relevant to working parents who were juggling their time
between career responsibilities and duties at home. With time being of essence for this segment,
storytelling around a lifestyle that helped create a balance between what they wanted professionally
and personally was a key line of exploration. While collaborating with designers, August Berg tried
to maintain this key line of exploration, and sought out collaborators, industry leaders and thought
leaders who believed in similar concepts.
Collections
The debut collection of the August Berg brand was called Serenity and launched in 2019. The
collection tried to pair traditional design techniques with modern features and colours inspired by
Danish landscapes and scenery. The Serenity watches were available in 32mm and 40mm dials with
three variations of watchstraps –Milanese mesh, Italian leather and the brand’s signature Perlon
straps. The Perlon straps were crafted with high-quality intricately woven nylon, lined with Nubuck
(cowhide leather) and featured invisible belt holes for a seamless and sleek look. The boxes in which
the watches were packaged were created with eco-friendly material (bamboo) and a sustainable
design that allowed them to be re-used as pen stands and small storage after purchase.
The second collection of August Berg was launched in March 2020 and was named Reflexion and
featured a slimmer and smaller case at 38mm and a reflective mirror dial. Inspired by the importance
of making conscious choices of spending time in everyday life, the collection was a reflection of how
a career-oriented young person could choose to spend time with their loved ones. The collection was
hash tagged under #timefulness in the company’s social media posts.
In September 2020, August Berg launched its third collection - the Morris & Co. collection, which
celebrated the elegant craftsmanship of textile designer William Morris and translated his iconic
nature motifs into the dials to create a selection of elegant yet minimalistic timepieces for both men
and women. The Morris & Co. collection was available in both 30mm and 38mm dials with two
variations of watchstraps – the signature Perlon strap and the classic Milanese mesh.24 The collection
showcased a series of Morris & Co. prints, including the iconic Pimpernel, Strawberry Thief, Love
Is Enough, and Forest Hare etches (refer to Exhibit 3 for August Berg Collections).
Corporate Social Responsibility
With the perspective of its social motto (change the world one wrist at a time) in mind, August Berg
had implemented a social responsibility angle to enhance the brand’s objective as a business, as well
as build its reputation as a sustainable business that looked at the bigger picture. August Berg had
partnered with the Human Practice Foundation, a Danish not-for-profit organisation, offering quality
education to underprivileged children in Asia and Africa. For every watch sold, the two parties had
collaborated to make a contribution towards six months of education for one child. For every 20,000
watches sold, the company had a plan to build a school for underprivileged children. The first school
being developed under this partnership was the Akadeli Primary School in Mount Kenya, where
August Berg planned to rebuild the school, improve sanitation facilities and provide access to
portable drinking water for the children. Sauerberg shared,
I wholeheartedly believe that the starting point to make change happen is by ensuring education
for all. I believe it is time to make this happen around the world, and together, we can do that. Our
24 “What is Milanese Watch Band? A Brief History of Mesh Watch Band”, STRAPCODE, https://www.strapcode.com/pages/what-is-
milanese-mesh, accessed January 2021.
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ambition is to give everybody, especially children, the gift of time – in the form of opportunity –
to be able to live their lives with passion, confidence and purpose.
August Berg’s Social Media Strategy
The target customer segments for August Berg were a segment of the Millennials- i.e. young parents
and young working professionals who were looking for sleek designs. A study showed that
Millennials wanted authenticity and craftsmanship in products and preferred brands that engaged in
ethical business practices. They were willing to pay for an experience rather than just the product
and were concerned not only about the quality of the product but also the meaning behind the brand.25
Sauerberg therefore wanted to engage this customer segment by coming up with strategic, tactical,
and operational strategies to create an impactful online presence.
August Berg had set up accounts on Facebook and Instagram. It had also collaborated with
influencers to spread the word on social media platforms. Influencers (referred to as storytellers)
were added as part of the brand’s tribe denoted by #Tribe on the brand’s website (refer to Exhibit 4
for Influencer Profiles of August Berg). Influencers were chosen carefully after assessing their
persona and fit with the brand ethos, and whether people looking at them would be able to picture
August Berg on their wrist. They varied from micro to macro-influencers and were assigned a target
engagement benchmark of at least 3%. Despite the initial efforts, the response to influencer
campaigns for the brand had been somewhat lukewarm. August Berg had also posted regularly on its
Facebook account, but the response was not overwhelming. On average, each post had fewer than
five interactions.
In comparison, the brand had performed slightly better on Instagram. With frequent posting and new
content, the brand had managed to have an average of between 50 to 150 responses on each post.
Different media formats were adopted within Instagram, including IGTV and behind the scenes
content, to interact with the audiences. Although the audience response on Instagram had been
slightly better, it was still not the kind of response the company was hoping for (refer to Exhibit 5
for some August Berg social media posts). Sauerberg realised that he would need to implement an
overarching social media strategy that would allow August Berg to not only propagate its brand name
but also build awareness for Danish design watches in the accessible luxury segment. However,
devising social media campaigns required several key considerations.
A key constraint was that August Berg was a completely new brand (unlike most other luxury watch
brands) in an industry that relied on heritage and tradition as a cornerstone. To cope with this
constraint, August Berg would have to focus on well-curated visuals highlighting product quality to
showcase its watches, rather than just highlighting its brand identity as a whole. However, August
Berg’s target consumers were more conscientious – they made purchases as much for the brand as
for the product itself. In such a scenario, the conundrum was whether to focus more on the brand or
the product itself. Another crucial consideration was the promotion of the firm’s CSR efforts.
Consumers were increasingly analysing brands and making purchases based on their understanding
of a brand’s social and environmental impact. The CSR angle provided a great opportunity for August
Berg to demonstrate what mattered to the brand and create connections with existing and new
audiences. However, the catch here was that because it was a new business, the brand did not have
much to showcase in terms of achievements in its CSR storytelling.
25 “From Engagement to Brand Experience: Opportunities for Luxury Watch Brands in the New Digital Landscape”, LEIDAR, 2019,
https://www.leidar.com/wp-content/uploads/2019/03/LeidarStudy-LuxuryWatchBrands.pdf , accessed January 2021.
10/21
A separate consideration was ‘shoppable content’ which was any type of content that provided a
direct purchasing opportunity and allowed consumers to add products to their cart from what they
were viewing or directly get referred to the product page when clicked. The idea was to create a
meaningful relationship with customers using such content and appeal to their desire for authenticity
and craftsmanship. Showcasing authenticity in the way the company was run, the quality and skill
involved in designing and making the watches, and the integrity of the supply chain formed key parts
of such storytelling. Shoppable content could give users a seamless online experience and could be
used in any campaign with a visual element. It could be inserted into articles, videos, image carousels,
or directly onto websites. Providing this fluidity in the online shopping experience was considered
an innovative way of appealing to the Millennial generation. While August Berg had already
implemented storytelling pages for each of its brand collections, the dilemma was how to improve
on this further and expand its net wider to reach a larger audience.
As a starting point, Sauerberg wanted to create an online and social media storytelling narrative that
could help the brand gain more followers on social media and create a more concrete online identity
and voice. At the same time, the idea was to portray a consistent image across all social media
platforms, brand websites and other e-commerce platforms similar to brands like Daniel Wellington
(DW) and MVMT that had successfully run social media campaigns to catapult their brand value and
business. However, Sauerberg wanted to ensure that his brand did not look like a copycat and
maintained its originality and exclusivity among a horde of accessible luxury watches in the market.
An analysis of the digital strategies implemented by successful brands like DW could be a plausible
first step.
Successful Social Media Campaigns of Watch Brands
Influencer-built label DW had launched its watch brand in 2011 and, like most start-ups, had started
on a small marketing budget. The company had taken to Instagram to build its brand awareness and
reach out to the right audience. The brand stratified on influencer marketing to superimpose
consumer preferences, drive brand awareness, and steer conversions. Between 2014 and 2015, the
brand saw a 214% increase in its profits, with the number of Instagram followers burgeoning from
850K to 2.1 million followers. After five years of operation, the firm reported US$220 million in
sales and amassed a strong community of fans, who constantly posted user-generated content (UGC),
which had a viral effect on social media. DW also excelled in community management on Instagram,
building a strong following and engagement with customers and influencers through storytelling and
shared experiences. To further motivate its community, the brand also posted caption guidelines on
its website, motivating consumers to create their own content, which could be selected as the
#DWPickoftheday, and broadcasted to its 4.6 million followers on Instagram. 26
By 2020, DW had become a staple in the fashion world (its “NATO strap” became a household name
among Millennials) by strategically leveraging both influencer marketing and UGC to develop a
favourable brand identity and reach millions of consumers. The brand tried to drive visibility by
using sensational storytelling to capture consumer attention and sales of its products by including
promotional codes in social media marketing content. It generated engagement by first developing a
sensational brand story that consumers would find attractive and inspiring. For example, one of the
initial stories had elaborated how the brand’s founder had got the idea of the new-iconic watchband
(“NATO strap”) from a James Bond-like wanderer while backpacking in Australia. It then enlisted
26 “Influencer Marketing Insights into the Watch Market”, IMA, Apr 12, 2019, https://imagency.com/news/influencer-marketing-
insights-watch-market , accessed January 2021.
11/21
thousands of influencers to promote the brand by giving out free watches and driving consumer
action by including special coupon codes with its influencer-created content.27
In another example, the watch brand MVMT watches had established its brand reputation through a
hugely successful influencer campaign on social media called the #jointhemvmt campaign. The
brand had used top influencers as well as micro-influencers and teamed up with some of the most
notable Instagram influencers in the fashion and lifestyle segments. Through its social media
campaign, the brand had managed to garner huge website traffic, mostly from mobile devices (60%
traffic from mobile). Influencers posted beautifully captured images of the watches in beautiful
settings and added the #jointhemvmt hashtag in their post caption. A unique discount code was also
offered in the posts for followers to make a purchase. 28
The Social Media Dilemma
August Berg was a relatively new brand in the market, having been launched in 2019. The onslaught
of the pandemic had throttled the brand’s chances of driving sales from its brick-and-mortar stores
due to on and off store closures and limited shopper traffic due to social distancing and travel
restrictions. Besides, its retail stores were based in Singapore, which was a small market by volume.
Moreover, the pandemic had triggered the ‘lipstick effect’ on its target consumers (niche category of
Millennials comprising of young professionals and working parents), who were experiencing
financially difficult times with increased uncertainty about the future, and restricting their purchases
to mainly less pricey items and essentials.29
After reflecting on these influences, Sauerberg realised that August Berg would have to rely mainly
on digital channels to drive sales. He wanted to carefully think through what August Berg’s social
media and digital marketing strategy could potentially be moving forward. Would the storytelling
approach of brand awareness work for August Berg? Or would it need a more focused approach like
discount codes and use of high-flying influencers to drive its influencer campaigns? What could
August Berg’s digital marketing and social media marketing strategy be? How could August Berg
design its digital marketing strategy to adjust to the new normal?
27 “Instagram Marketing Case Study: How Daniel Wellington own their Instagram Game”, Mediakix,
https://mediakix.com/blog/instagram-marketing-case-study-daniel-wellington/, accessed January 2021.
28 Shane Barker, “Top 15 Influencer Marketing Examples with Amazing Results”, Shane Barker, Feb 14, 2018,
https://shanebarker.com/blog/influencer-marketing-examples/#8_MVMT_Watches, accessed January 2021.
29 The ‘lipstick effect’ was a terminology coined by Leonard Lauder, Chairman of Estée Lauder, in 2001 after observing that lipstick
sales were inversely correlated to market economics. Refer: Audre Biciunaite, Redefining the “Lipstick Effect”– Examples of Recession-
Proof Categories, Euromonitor International, Sep 11, 2013, https://blog.euromonitor.com/redefining-the-lipstick-effect-examples-of-
recession-proof-categories/ , accessed January 2021.
12/21
EXHIBIT 1: BRANDS DISTRIBUTED BY NORBREEZE
AUGUST BERG (Watches), BERING (Watches & Jewellery), BOSS (Watches), COACH (Watches), COCOMI (e-commerce website
for watch brands), DANIEL WELLINGTON (Watches), HUGO (Watches), LACOSTE (Watches), OLIVIA BURTON (Watches &
Jewellery), PAUL HEWITT (Watches), PANDORA (Jewellery), SCUDERIA FERRARI (Watches), TOMMY HILFIGER (Watches),
TIMBERLAND (Watches) and a few others.
Brands listed on Company Website
Source: Company Data
13/21
EXHIBIT2: AUGUST BERG RETAIL OUTLET IN TAKASHIMAYA, SINGAPORE
14/21
EXHIBIT 3: AUGUST BERG COLLECTIONS
Serenity: Time is a gift - Embrace it and start living
15/21
Reflexion: Time spent consciously is time well-spent
Morris & Co Collection
16/21
EXHIBIT 4: INFLUENCER PROFILES
17/21
EXHIBIT 5: AUGUST BERG SOCIAL MEDIA ENGAGEMENTS
INSTAGRAM POSTS
18/21
INSTAGRAM ENGAGEMENTS
19/21
FACEBOOK POSTS
Note: August Berg had seen a better following on Instagram as compared to Facebook. The focus for
both forums was storytelling. The content was also presented around the product (for example,
talking about the sapphire glass or the strap and its design aesthetics and quality). Influencers talked
about the brand value, the design, and the brand universe. Facebook, on the other hand, was a
necessary platform to allow all the ads to run and be reposted and retargeted across all platforms.
20/21
FACEBOOK ENGAGEMENTS
21/21

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SMU963

AUGUST BERG: PROMOTING AN ACCESSIBLE LUXURY WATCH

Copyright © 2021, Singapore Management University Version: 2021-07-09

Accessible Luxury Market

Luxury Market in Singapore

Finding Demand for Simplicity

Overcoming Cultural Barriers

Five Strategic Pillars

The accessible luxury market in which Norbreeze specialises is fascinating. It suggests

21 Norbreeze’s staff strength grew to approximately 150 by 2020.

Corporate Social Responsibility

August Berg’s Social Media Strategy

Successful Social Media Campaigns of Watch Brands

The Social Media Dilemma

EXHIBIT 1: BRANDS DISTRIBUTED BY NORBREEZE

Brands listed on Company Website

Source: Company Data

EXHIBIT2: AUGUST BERG RETAIL OUTLET IN TAKASHIMAYA, SINGAPORE

Source: Company Data

EXHIBIT 3: AUGUST BERG COLLECTIONS

Serenity: Time is a gift - Embrace it and start living

Reflexion: Time spent consciously is time well-spent

Morris & Co Collection

Source: Company Data

EXHIBIT 4: INFLUENCER PROFILES

Source: Company Data

EXHIBIT 5: AUGUST BERG SOCIAL MEDIA ENGAGEMENTS

Source: Company Data

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