Lessons from Luxury Leaders
These are great days to be a customer of luxury.
Transactional relationships are out of fashion and customer centricity is the new mantra. Experts say brands could live or die by how they communicate with customers around shared values and whether they have anticipated their every need.
It’s “clear that consumers still want to buy luxury goods,” according to Claudia d’Arpizio, partner and head of luxury goods at Bain. After a record slump in 2020, she predicts luxury spending could snap back to 2019 levels as early as this year. Driving that growth: “brands’ ability to adapt and innovate.”
“You need to put the person at the center and have all channels move around them,” says Alibaba’s Christina Fontana, who is fashion and luxury director, Europe at Tmall. “People want to be recognized as a consumer of that brand whether in store or online.”
So what exactly do today’s consumers want?
Personalized treatment in store comes no. 1. Consumers named it the most appreciated aspect of brand interaction, according to BCG global head of luxury Sarah Willersdorf, followed by targeted recommendations, being recognized as the same customer across channels and personal shopping.
Luxury leaders agree the in-store experience needs to be re-energised. They shared insight on how they are adapting at the FT’s recent Business of Luxury summit.
Tod’s President and CEO Diego Della Valle predicts a “mix of shops, pop up and e-commerce” and the shop of the future may have young designers who engage directly with customers each month. Renzo Rosso, chairman of OTB, parent of Diesel, Maison Margiela and Marni, says stores must showcase “the real lifestyle of the brand -- the attitude -- to improve interaction with the consumer.”
Clienteling is helping sales staff connect in a personalized way, according to Alexander McQueen chief communications and marketing director Paolo Cigognini.
“What is interesting is that (communication) is not about pushing products or novelties, it's about building relevant, meaningful dialogues on topics that can be of interest,” he said. McQueen is staging virtual exhibitions at its London Bond Street flagship, collaborating with universities and creating tutorials for customers.
Cartier now repairs watches for customers who purchased them as far back as the 1980s. Last year, Cartier carried out more than 50,000 care and repair services of customers’ watches and jewelry, according to Arnaud Carrez, marketing and communications director.
The brand now has a dedicated team working on VIP experiences with each one customized. In the past a “lot of brands, including us, were organizing events without knowing for whom we were doing them; gathering clients and journalists and not taking into consideration they have different needs,” Carrez said. Cartier is adding variety by changing up boutiques so they don’t look the same in every location.
Meanwhile, disrupters are also experimenting with new store formats. Sotheby’s which last year launched an e-commerce site has just opened a new concept store in the lobby of its NYC flagship.
“It’s really this curated mix,” according to Josh Pullan, managing director of Sotheby’s global luxury division “which range from Lynn Chadwick candlesticks to David Webb necklaces and we started with a Porsche 356 as the centerpiece which sold on the 4th day.”
New luxury brands shared advice on authenticity.
Fear of God Founder Jerry Lorenzo said “we are pouring every element of ourselves into what we are saying” which is the only way to differentiate from everyone else in the market. This translates in “every design, campaign and strategy.” LA-based Fear of God ranked for the first time in the top 20 hottest brands in 2020, behind Balmain and Moncler, according to Lyst.
“What we are putting in the market is coming from an honest place. We are not putting pieces in the world from a transactional purpose, it’s a transformational purpose. The purpose of the brand in and of itself, to me, just projects the times we are living in and allows us to continue to be who we are whether we are going through good times or tough times.”