Beatriz Bernabeu: "Influencers play a key role in our strategy – return on investment is clearer"
The International Legal Director of Havaianas talks to us about how the company has used social media to boost its business, the issues of counterfeiting, and what she looks for in external counsel.
Leaders League: How has the nature of being an in-house counsel at Havaianas changed over the many years that you’ve been there?
Beatriz Bernabeu: Havaianas is a totally different organisation. Also, the legal function in EMEA was non-existent prior to me joining the group, and the legal support was carried out remotely by our colleagues in the legal department in São Paolo. When I first joined Havaianas in 2010, were pretty much a startup – a lot going on but scant process and procedures from a legal perspective.
Since then, the business has grown tremendously, boosted also by the digital environment which at the time was pretty much insignificant. Our retail offline presence has boomed over the last 10 years, be it through a franchise format, our own stores, or concessions in department stores and outlets. We have taken over certain markets under a direct distribution model, hence terminating distribution agreements and incorporating subsidiaries in certain territories such as Portugal, Germany and Greece.
As a result, the volume of work to be done has also grown. There’s much more multi- disciplinary work to do and perhaps a wider appreciation of the legal department role. The legal department is increasingly seen as more of a general value-add working in close cooperation with the business, having as a main focus the enablement of the business to achieve its objectives, rather than just being a legal desk. We often take on a general role in the business projects we work on, rather than being limited to providing legal advice or drafting agreements.
The in-house counsel role has become broader and more compliance-focused. In particular, the legal work relating to data protection and privacy issues has become a much bigger consideration.
My days are never repetitive and always unpredictable
Could you describe an average day at the office? (Is there such a thing as an average day for you?)
There isn’t really an average working day. The great thing about Havaianas is that it’s a very dynamic environment so we generally do not know what a steady working day is – the business never sleeps and is always in constant change, with innovative projects always in the pipeline. This makes the in-house counsel role not repetitive and rather unpredictable. I start my day proud of my neat to-do list but I rarely get that done: unexpected and urgent queries are in the nature of our role, and that’s the beauty of it!
A decade ago, social media was much less dominant than it is today. How, specifically, has Havaianas used social media successfully to boost business, and have there been any legal (or other) challenges here?
There certainly has been a radical switch from traditional advertising, such as OOH (out-ofhouse) advertisements or media clippings in glossy fashion magazines, to the digital environment, and now all our resources are focused on promoting the brand online.
Nowadays, social media isn’t only a marketing option but a mandatory part of any business. Social networks are a fantastic window to promote brand awareness, showcase our products to a larger audience and forge relationships with our users, but at the same time they make the brand more vulnerable and exposed, so we need to be extra careful to preserve the brand reputation.
Influencer marketing plays an essential role in Havaianas’ communication strategy and we regularly run influencer campaigns targeting certain regions or with a global approach. However, it entails a number of considerations and liabilities for the brand from an advertising perspective, since all endorsement should be disclosed, identified and transparent for the consumer.
In that respect investment is tangible and more measurable compared to printed media or OOH: we work with tools that help us gauge the return on investment following an action with an influencer. We also have access to statistics on influencers prior to working with them (such as engagement rates and average likes). Such traceable data allow us to make the most of our financial resources.
We also create content by running contests or sweepstakes through social media, which can be an effective means of reaching a broad audience and capturing the attention of our users through fresh, appealing, interactive marketing formats. One should bear in mind both the specific legal requirements governing the promotions in accordance with national laws and the general terms and conditions of the social media platform hosting the contest. User-generated content is also a hot topic – understood as videos, pictures or other materials featuring the brand and created by consumers, and used by the brand in its own digital channels. It’s a great way to create brand awareness and interact with our customer base. There is nonetheless a need to put in place clear and comprehensive terms and conditions to minimise legal issues in the field of privacy or copyright.
Havaianas must have had a difficult time during Covid-19. What could you do, as legal director, to ensure the company emerged in as strong a position as possible?
As Havaianas in-house lawyers are privileged enough to interact with all the company’s departments and work with massively stimulating people, we need to be on top of what’s going on in the company. Sometimes, this is something we learn from a simple chat with colleagues by the coffee machine or overhearing a conversation. Despite the social distance, isolation was not an option, so we made sure to keep regular contact with all the departments and the business counted on our ongoing support at all times.
Times were indeed difficult in terms of fulfilling contractual obligations in certain cases. All the entities that were party to an agreement had the intention to renegotiate. Sometimes it was us with the payment obligations, sometimes it was our customers. We went through a substantial renegotiation of existing agreements.
What are the main challenges Havaianas faces now, and how will it overcome them?
One of the biggest challenges remains the seasonality of our products. There is an evident and direct correlation between the weather and sales: if the weather is good, sales skyrocket, but when the weather is bad, which unfortunately is the case in many parts of Europe, we see a dramatic drop. The objective is to be less weather-dependent by launching new products connected with our “summer spirit” DNA by betting on innovation and extending the usage occasions. Our goal is to make Havaianas relevant beyond the beach environment, but also to walk around the city. This is the reason for the expansion of our city sandals category and the incorporation of new shapes and styles. The objective is to push Havaianas to become the summer lifestyle brand, expanding into new product categories around the beach universe and keep on spreading our Brazilian summer spirit all over the world.
Online business has become an important growth lever for Havaianas in 2020. However, Havaianas’ mono-brand stores still play an important role in conveying the values of the brand. We believe that the future will be hybrid with a combination of online/offline, with one interacting with the other. Omnichannel opens a wide range of options by fully integrating the shopping experience, giving the user the option to choose between the most suitable options for their brand journey. Our challenge is to keep giving a five-star customer experience.
One key challenge is how seasonal our products are. We aim to be less weather-dependent
Counterfeiting must be a major issue for Havaianas. How do you combat it?
Absolutely. The success of a brand is directly proportional to its counterfeiters’ activity, and Havaianas is not an exception. At Havaianas we bring up all our efforts and resources to protect our most precious asset: the brand. The growth of the e-commerce business and the rapidly changing online environment in the last year resulted in a significant increase of illegal activities, in particular the proliferation of fake websites and unauthorised sellers making unfair use of Havaianas assets. It has proved essential to have an effective global strategy with the right tools to monitor and gain transparency to detect the presence of any harmful activity that could damage the credibility and reputation of our brand.
It is a tricky matter because of the very nature of the internet – online counterfeiters hide behind opaque structures; the opponent is an “unknown” person, unlike in traditional litigation; when one site is shut, five more suddenly pop up... In these respects, dispute resolution mechanisms in the framework of ICANN [the Internet Corporation for Assigned Names and Numbers] have proven to be rather effective. We are in early stages of making use of technology to identify online infringements and automatize the enforcement process. Also, over the years we have built solid relations with customs authorities across Europe and are regularly alerted when fake products are seized. Fortunately, Havaianas is an affordable product and our users would rarely consciously acquire fake products.
For what kind of work do you hire external counsel, and what do you look for in the ideal external counsel?
There is a misconception that as in-house counsel we outsource most of our work. This is untrue. Most of our work is done in-house by our team and I personally believe that’s the fun part of the job! Having said that, we are a small legal team and at times we need additional hands to support us. Also, Havaianas has operations in multiple jurisdictions and require local counsel input when it comes to more technical matters regulated by local laws, including litigation.
We do have a rather loyal relation with our external counsels, and in some cases have been working with them continuously for over 10 years! They have become “adopted” members of our legal team.
It is essential that the external counsel understands and feels the business and the commercial implications. I expect my external counsels to really connect with the brand values and with the business strategy, proposing alternative solutions with a pragmatic mindset. As lawyers our mission is to play an active role in supporting the business, finding creative ways to reach the intended objective by striking the right balance between the risk to be taken and the outcome to be obtained. This mindset should be shared 100% by the external counsel.
I conceive of external and internal counsel as part of a unique team where collaboration should be predominant – the former has certainly a stronger and in-depth technical focus while the latter masters the business needs and the best strategy to follow.
Collaboration must predominate – external counsel brings the technical focus, while internal counsel masters the business needs and strategy
What steps has Havaianas taken to ensure maximum compliance with sustainability goals?
Sustainability is at the top of our agenda – not just as a response to consumers, but as an obligation for every responsible actor in the fashion industry. Sustainability is a journey and we work hard to become as sustainable as possible by re-evaluating the way we think about products, innovation and user experience. Key strategies include prioritizing and maximizing renewable or plant-based regenerative materials with an emphasis on rubber, maximizing recycled materials after use, minimizing packaging waste, and implementing new policies and playbooks to guide our local markets to new ways of thinking.
In the EMEA region we are starting a flipflop recycling initiative in the Havaianas stores: we will set up collection bins for used flip-flops that consumers want to recycle inside. We have teamed up with a specialized partner that will receive all used shoes and process the materials to give them a second life.
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