Gucci Launches The Ultimate Online Shopping Experience - 31/08/10

Luxury brands are paving the way of the future, with the launch this week of Gucci’s new digital online space. The site was under 18 months of direction before launch and it was well worth the wait. The site integrates rich content, social media platforms and a unique shopping experience, (not to mention the experience of travelling through a real life Gucci store and exclusive online accessories collection.)

Luxury fashion brands are constantly updating their methods of sale and performance, as we saw earlier this year with Burberry (and also Armani) live streaming their runway shows for loyal followers. Burberry also launched their unique online interactive collection under the creative direction of Christopher Bailey.

Image credit: gucci.com

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Can You Spot The Super Rich? Debate In Luxury Consumer Market - 30/07/10

It’s a matter of ‘don’t judge a book by its cover’ in the Chinese luxury market, as many luxury brands are finding it hard to understand the Chinese consumers status-motivated shopping. The luxury goods market in China is estimated to come in at $9 billion this year, with a vast range of shoppers adding to the mix. China Market Research have revealed that 60-70 percent of this market is driven by young shoppers in their 20’s who save up to buy luxury goods, rather than make a small fortune, and other consumers including wealthy business men over 40 who may not dress to impress, are adding to the equation of shoppers that many luxury brands are choosing to underestimate.

As passionate supporters of the ‘consumer experience’, it’s disappointing to see consumers disregarded and to see distinctions drawn between what shoppers wear and what they can afford. By metering out consistent service to everyone, loyal relationships are formed, and it is a shame on any brand that can not practice equality with each consumer that comes to their store. We stand by a somewhat old but very appropriate quote from NIKE - “Just Do It!”

Image credit: shtimessquare.com

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Luxury Brands Embracing 'New Tourists' - 23/07/10

Brazilians are being encouraged to purchase luxury goods in New York, and Prada is hitting the mark, with their Soho store hosting at least three Portuguese speaking staff members. Although companies like Prada are catering for these ‘new tourists’, luxury brands need to be pro-active and not reactive when it comes to building a better customer experience. Whilst a slow inclusion of staff who understand different cultures and languages is important, it is also paramount to ensure that these staff are fluent in the native language of the country where they are working, in order to make local clients also feel valued.

On the home front Australia has seen this mistake made in the 80’s and 90’s, when businesses didn’t anticipate just how strong the Japanese would be as a tourist group. In addition, stores would cater for the clientele, and would overreact by sometimes hiring entire stores of Japanese speaking staff, when in the end local clients would feel isolated. With the current ‘hot’ PRC inbound tourists, all countries should be mindful of this fine line between catering for tourists, yet also managing those vital and long standing relationships with local customers.

Image credit: starsinfashion

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Wealthy Indian Shoppers Look Abroad For Luxury Goods - 23/07/10

Luxury spending in India is at a low, as consumers are looking abroad for their high end designer fix. Instead wealthy Indian shoppers are looking to the fashion capitals of London, Milan and Paris, which is a challenge for luxury companies such as LVMH who have set up shop in India.

Mohan Murjani, who attempted to sell Gucci and Jimmy Choo in Mumbai, but quickly gave up, has stated of this shopping trend in India, “I don’t see luxury taking off for at least another decade.” It appears for now, the ambience and sophistication of luxury shopping abroad is too tempting for wealthy Indian’s.

Image credit: businessoffashion.com

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Coach Look To The Male Market - 28/06/10

Coach have announced ambitious plans to increase their market share from 3% to 14% in a few years. The company are aiming to capture share of the men’s luxury accessories market. Although men’s collections in general sell far less than women’s in brands that offer both, it is important that the product offer is adapted to their needs with both accessories and clothing.

Men tend to shop sporadically, and when purchasing they will buy several things at once so it is important for brands to know their male customers well, and recognise that male shoppers are generally low fuss and practical. To be successful, brands need to be effective in these areas whilst always offering exceptional service. The key? Make it easy, professional and efficient and they will be back.

Image credit: coach.com

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The Ritz Paris Catering For A New Luxury Consumer - 23/06/10

The Ritz are creating a luxury heaven for an increasing flood of Chinese tourists, heading to stay at the famous Paris hotel. Omer Acar, general manager of the hotel has spent time researching the Chinese tourism sector to deliver their exclusive customers the ultimate hotel experience; and it seems they have gone above and beyond expectations.

Visitors to the hotel have the chance to sleep where Mademoiselle Coco Chanel once slept, as they indulge in the highest luxury shopping and fine dining. This new consumer, is after luxury and European heritage with a creature comforts from home, it’s all about the mix really, and the Ritz Paris are more than willing to provide.

Image credit: ritzparis.com

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The Youth Quake: How Young Luxury Shoppers Are Shaking Things Up – 4/5/10

A new force has emerged in the luxury industry – ‘the youth quake’ and they’re shaking things up … in a good way!

According to a WWD article, “Affluent young shoppers helped limit the damage to the luxury sector last year and set it on a course for recovery earlier than other parts of the economy.”

The article says the younger, more affluent spender is typically male and between 25 and 44. And that while “these young consumers represent a small segment of the overall luxury demographic, they were the most resilient during the downturn, rebounding the most dramatically.”

Local luxury spending
Luxury spending in Japan and Australia was up 5 percent in 2009, and jumped 18 percent in February and March, according to data collected by American Express Business Insights, the analytics and consulting organisation within American Express.

“We saw luxury fall off pretty quickly, but we thought it would be more sustained,” said Ed Jay, Senior Vice President of Business Insights. “We were surprised it did not fall more through [2009], and we were even more surprised at how quickly it came back.”

Jay attributed “the breakneck reversal in emerging markets and in Australia to the fact that credit availability and the fallout of the U.S. financial markets affected these regions less.”

Image credit: best-buy-handbagsmaster.com

The Low Down On The Shanghai Luxury Conference – 8/4/10

A luxury conference held recently at the China Europe International Business School in Shanghai has raised some interesting questions about the Asian market.

According to WWD, "One of the most debated topics at the conference was whether Chinese consumers are willing to accept homegrown luxury brands.”

This article reminded us of some of the issues we’ve previously discussed in the MO Down, such as the increase in Asian companies purchasing European luxury brands and the creation of Asian, particularly Chinese, luxury brands.

It also features key points on current European brands who have invested in China early on; Ferragamo, as an example, will continue to expand in the market. Also, Hermes is cleverly looking at producing a brand in China, Shang Xia, (perhaps this is about the "if you cannot beat them, join them" philosophy). Also, existing and notable high end Chinese Brand, Shanghai-Tang is expanding their current offer by opening a cafe and launching an iPhone application.

Click here to read our earlier report on Hermes’ Shang Xia. We’ve also discussed several mergers and acquisitions in detail.

Image credit: www.shanghaitang.com

Hermes + Pierre Hardy = “Haute Bijouterie” – 7/4/10

According to WWD, Pierre Hardy’s Hermes collection has been dubbed “Haute Bijouterie” to distinguish itself from the couture houses and other luxury players.

Hermes will be taking orders for the collection on a world tour that will stop in Tokyo, Hong Kong and Berlin. The waiting time is 5 to 7 months. Click here to read more.

Hermes’ CEO Patrick Thomas said there is rising demand for bespoke pieces. “It’s a trend which is also growing in each of our categories, but especially in jewellery,” he said. “Today, I would say it’s at least 10 percent of our business.”

Image credit: WWD. Shows one of the Haute Bijouterie pieces.

Richemont’s Being Clever By Buying Net-a-Porter – 7/4/10

As revealed yesterday, Richemont is buying the lion’s share (67 percent) of online fashion retailer Net-a-Porter.

A key article in the Financial Times (Ready For The Next Chapter In E-Tailing) explored this smart move, concluding that Richemont “became the first leading luxury conglomerate to purchase a multi-brand virtual store, taking the industry's involvement with the web to a new level.”

The article also highlighted some interesting stats, including that Net-a-Porter “has 3.3 million unique users a month, and is growing by approximately 10,000 new customers per month.”

This is impressive. If we break this down by an average from the leading 'luxury brand' flagships in Australia where the stores receive 7-10K per month of traffic arrivals, versus 3.3 million a month. It is increasingly difficult to compete in this landscape and this is why luxury brands more than ever must embrace their own online retail offer. They need to offer more products online in addition to their bricks and mortar stores, they should increase their own share of the tarte tatin ... Hence why again we reiterate Richemont's smart move in this direction to manage wholesale, retail and virtual retail.

Richemont Will Become The Majority Shareholder In Net-a-Porter – 6/4/10

It’s official: Richemont will move from owning 29 percent of internet designer clothing retailer Net-a-Porter to 67 percent, according to Reuters.

An article in the Financial Times also caught our eye, particularly this comment: "Net-a-Porter’s management team are hoping to be able to tap into Richemont’s expertise in the Asia-Pacific region, while Johann Rupert, Richemont’s executive chairman, is hoping to be able to use Net-a-Porter’s skill in selling luxury online to help Richemont develop its own internet strategy."

Johann Rupert, also said in a statement: “Natalie Massenet has created a superb, customer-oriented business at Net-a-Porter in a relatively short period of time. We welcome her and her team to Richemont and look forward to working with them in the future to ensure Net-a-Porter’s continuing success.”

This seems to be a clever move for Richemont; buying into a successful high end online retailer will enhance their own online offer...

Image courtesy of the Times online. It shows Natalie Massenet.

Canadian Luxury Brands Win Points For Customer Service – 18/1/10

Customer service is always key for luxury brands. And it seems that in Canada, many brands are going to great lengths to court their customers…

An article in Canada’s The Globe And Mail, entitled Luxury Retailers Find New Ways To Woo The Well-Heeled, revealed that Hermes and Tiffany & Co. are fostering loyalty by presenting their customers with exclusive services. For example, a Hermes store in Toronto hired an engraver to personalise fragrance bottles with a customer’s initials, flowers or hearts. And Tiffany & Co. is said to be sending snail-mail notes, personalised e-mails and Facebook messages to customers.

Holt Renfrew, Canada's premier upscale retailer, also encourages repeat business with its “random acts of kindness” program, by sending flowers or theatre tickets to its top customers.

We like how Canadian luxury brands do business. We’ve always said it is essential for luxury brands to consistently convey the sincere message to their customers that ‘they are important’ and then do everything in their power to prove this fact. Click here to read more of our thoughts on this subject.

The New Luxury Gift Service With Lagerfeld’s Tick Of Approval – 11/11/09

With perfect timing for Christmas, London’s new premium luxury gift service, Bokks, has launched this week, endorsed by actor Dustin Hoffman and supermodel Veronica Webb. Karl Lagerfeld is also involved and called it “a genius idea.”

According to a report in The Independent, Bokks is the brainchild of Walter Bugno, the ex-boss of Australia's Sydney Football Club.

Items available through the service will cost from £250 (AUS$450) up to as much as £1m (AUS $1.8m). Bugno says: "There is nothing cheap. It may be expensive but not expensive for quality." He also wants to have the gifts hand-delivered, so is offering customers the option of hiring a white velvet-gloved "bellhop" porter to deliver their gifts.

We thought that the site was visually impressive, looking every inch what it promises to be: a “Portal to Luxury”. Visit it for yourself at www.bokks.com. Meanwhile, we’ll keep you posted on whether this service wins over the luxury clientele. Having Lagerfeld on board is definitely a big plus.

Important Insights On The “New Luxury Wave” – 9/11/09

Click here to read a brilliantly researched WWD article on the future of the luxury landscape. It includes interviews with major industry figures, including Karl Lagerfeld, plus C.E.Os from LVMH, Gucci, Yves Saint Laurent, Chloé, Hermes, Prada, Versace and Coach.

Many important issues are raised in the article. One point that caught our eye was that “consumer expectations are likely to be higher than ever, with craftsmanship, service, heritage, and longevity among new priorities.”

Pierre-Yves Roussel, C.E.O of the fashion division at LVMH, said customers “want it all: the quality, the creativity, the exclusivity, and the service. You tend to forget that in good years because in good years it’s easier. Being in luxury, we have to be perfect in everything we do.”

The “growth of e-commerce and social networking and eco concerns” were also mentioned as factors that will shape the luxury industry in years to come.

Will French Luxury Brands Charm The Chinese With cColbert? – 30/10/09

In our recent article on Customer Connection Is Crucial, a marketing expert suggested that European luxury brands have to woo the Asian market by educating potential customers about their brands. His exact words were, “Tell them a story, tell them the history. A watch, a bag, a pair of shoes can become so much more if you educate people."

So now it seems the French luxury brands at least are listening. This week’s release of cColbert is proof.

cColbert is a website designed by the Comite Colbert, France’s leading luxury federation, that’s targeted at Chinese consumers and designed to create “a virtual voyage through French luxury.”

According to its website - www.ccolbert.fr/, “the Comité Colbert, a group representing 70 French luxury houses, invites you to embark on an interactive journey in three dimensions to discover the world of French luxury.”

Whether or not cColbert will win Chinese customers over, we can’t predict, but we do think this is a step in the right direction for French luxury brands intent on charming the Asian market.

Shop ’Til You Drop… The Guilt – 23/10/2009

Shopping has long been described as a guilty pleasure, but according to consulting firm Bain & Co., the economic crisis has caused the guilt factor to override the pleasure for some luxury shoppers.

Bain & Co. suggested “shoppers are suffering from luxury shame.” Brand strategist Martin Lindstrom agreed, saying, “Guilt has really increased in the last year.”

This Wall Street Journal article discussed how luxury brands might absolve that guilt, including: “touting a special justification for splurging—profits are channelled to a charity, for instance—or offering novel shopping experiences that can make people forget their guilt.”

Internet shopping was also promoted as a way of reducing guilt. As was the use of pop-up stores -boutiques that exist for a few weeks or months - in unexpected places that aren’t traditional luxury shopping districts. “The idea is that pop-ups may not activate the psychological barriers that prevent shoppers from entering traditional stores.”

Another strategy is that companies are putting more emphasis on the "guilt-free shopping" that is said to come with buying environmentally safe products.

This article really got us thinking. If you felt the same, click here to read more.

What The Luxury Customer Always Wants – 19/10/09

"Luxury consumers buy from brands they trust and part of that trust is authenticity. Part of the reason why consumers buy from a particular brand is because the brand's heritage and history resonates with them. These have always been important to the luxury consumer and I doubt this will change” – Desiree Tung, Executive Director, Asia Pacific and Middle East, Worldwide Business Research*.

This is a vital point from an Emirates Business 24/7 article. It is an important truth that all luxury brands should keep at the heart of their business development plans.

Tung also continued on to say: “Also what will not change is their demand for quality, value and exclusivity. For luxury brands, the importance of fostering long-term relationships with luxury consumers and continually ensuring their brand resonates with them cannot be understated." Tung is a very wise man in our eyes.

*Worldwide Business Research will host the Leaders in Luxury Middle East conference in Dubai from November 2.

Customer Connection Is Crucial – 6/10/09

Q: What could be holding luxury brands back from succeeding in Asia?
A: "Service is the weakest link in the luxury business model," according to Michel Phan, Assistant Professor of marketing at the Paris-based ESSEC Business School.

Talking in a Reuters article, Phan continues on to say, “It's not enough to say 'Our brand is expensive, or known'. You have to make customers connect with your brand, especially during this crisis, when they're more reluctant to buy on the spur of the moment. You have to give people a good reason to buy."

When wooing the Asian market, Phan also believes “luxury retailers need to educate potential customers about their wares.” In reference to the Chinese consumers, he said, “Tell them a story, tell them the history. A watch, a bag, a pair of shoes can become so much more if you educate people."

We believe Phan is a man after our own heart. Customer Relationship Management and adapting to each market is crucially important (for more of our thoughts, refer to the MO Down for August 21).

Louis Vuitton: A Clear Winner In The Value Stakes – 21/9/09

Louis Vuitton has emerged victorious in a global report by Interbrand; miles and miles ahead of their competitors: Gucci, Chanel, Hermes, Prada and Armani.

This report, entitled, ‘Best Global Brands 2009,’ saw Louis Vuitton score the top value ranking at a 16th place, with US $21.12 billion in projected annual cash flow.

Also in the top 100 were:
Gucci at 41st, with a value of US $8.12 billion
Chanel, 59th, US $6.04 billion
Hermès, 70th, US $4.59 billion
Prada, 87th, US $3.53 billion
Armani, 89th, US $3.3 billion

So Louis Vuitton was a clear winner. And the reason for that win is “trust”, according to a WWD article. Jez Frampton, Interbrand’s global CEO, stated, “The relevance of all brands at this time is that they are something you can trust, something you can believe in.”

Frampton also revealed that evoking the superior customer experience is Louis Vuitton’s strength. He said, “The environments Louis Vuitton creates are stunning,” he said. “The store on the Champs-Elysées in Paris is a knockout, and the store in Tokyo is magnificent.” We agree wholeheartedly.

To download the full Interbrand report, go to: http://www.interbrand.com/best_global_brands_intro.aspx?langid=1000

Burberry Launches Its Own Social Networking Site – 21/9/09

Not content on being the most popular luxury brand on Facebook with 671,393 fans, Burberry has just launched its own social networking site, the Art of the Trench (artofthetrench.com).

This site, which the company describes as a "social media platform", will feature users sending in pictures of themselves wearing Burberry trenchcoats. It also includes links to Burberry’s Facebook and Twitter accounts.

Chief executive Angela Ahrendts told the Financial Times the site would allow Burberry to reach new shoppers and maintain the loyalty of current consumers.

"These might not even be customers yet. Or they may be a customer for a bottle of fragrance or for eyewear. But these are the customers who need the brand experience, who need to feel the brand. That word-of-mouth spreads through their social networks and continues to be a positive conversation [about Burberry] . . . that is so powerful," said Ahrendts.

There has been mixed reactions to Burberry’s new website. Read more here. And for our take on luxury brands using social networking sites, read the MO Down for June 29 (It’s The Battle Of The Brands On Social Networking Sites).