Luxury Institute News

August 30, 2016

Lamborghini Pivots to Target Women and Families

Bloomberg.com
By: Hannah Elliott
August 30, 2016

Forget what you know about raging bulls.

Lamborghini wants to show you a softer side of Italian supercars.

So says Chief Executive Officer Stefano Domenicali, who moved to the company’s top spot in March. Since then, he’s been calling for a change in tone at the Volkswagen Group-owned house. Where the sharp-edged V12 and V10 aggression of the Murcielago, Gallardo, and Aventador reigned supreme for years, Domenicali said, buyers can expect to see something different in the next few years.

“A bull is always aggressive, but I would like to give us a new philosophy toward the future: A bull can be gentle,” he said.

Urus Is Key

Domenicali’s image efforts hinge on the new Urus SUV, due out by late 2018. He said the vehicle will double the company’s annual global output but will remain on limited production at Lamborghini’s new Sant’Agata factory. The brand sold a purposefully few 3,245 units worldwide in 2015.

“The SUV will be a game changer,” he said. “It will make Lamborghini different.”

The goal will be to make Urus immediately identifiable as a Lamborghini, both in how it looks and in how it drives, and to make it immensely “personalizeable” for a young (30-45) target audience whose members view themselves as the “protagonists” of their own lives, Domenicali said. The engine is anticipated to be a 600-horsepower, turbocharged V8 engine, rather than Lamborghini’s signature V12.

What Women Want

Even more notable, Domenicali is hoping that a big share of the SUV’s buyers will be women. This will be no small feat, considering that only 5 percent of the company’s global buyers last year were female. That’s roughly the same percentage it held even a decade ago, according to a Lamborghini spokesman. What’s more, most of those vehicles were sold to women in the U.S. and Europe; the first woman to buy a Lamborghini in India did so just three months ago.

“I don’t think anybody has captured the heart and soul of the female luxury buyer” in the supercar arena, said Milton Pedraza, CEO of the Luxury Institute, a Manhattan-based research firm. “It’s not a question of money for women in that segment. The money is not going to be the issue. It’s going to be: ‘Show me you know me.’”

There is plenty of space for Lamborghini to claim. Nationwide, women buy 53 percent of all small SUVs and 48 percent of small premium SUVs, according to J.D. Power & Associates, compared to roughly 40 percent of all new cars.

The Power of Singles

Single women in particular are coveted potential buyers: From 2010 to 2015, premium small SUVs saw a 177-percent jump in sales to single women, according to MaritzCX, a customer-experience research company. More than two-thirds of female buyers reported their 2015 vehicle purchase decision as “entirely up to me,” according to the report. Additional storage and passenger space, a high ride height, and improved fuel economy in new premium SUVs have fed their growing appeal to women buyers.

“Lamborghini is going in the right direction here,” Pedraza said, noting the success of Porsche and its wildly popular Cayenne SUV. “Anybody can be convinced, as long as there is substance to the argument. If Lamborghini puts out a product that is female-friendly, women will definitely flock to it and will change their minds.”

The key to success in this new segment for Lamborghini, Pedraza said, will be to produce a product that women can use comfortably and often. (“If you are going to do an SUV, you better understand that there will likely be children in the back; women transport kids, whether they are working mothers or not.”) The brand will have to get women into the showroom and then communicate the quality of the product: “When women get to the showroom, the people who are ambassadors to the brand and the experience have to be impeccable,” he said. “It all has to be seamless and honest and relevant—and by the way, human. If it can do that, I believe Lamborghini has a great shot.”

Hiring and promoting more women to lead the drive will be essential. Representatives from Lamborghini said on Tuesday that they were unaware of how many, if any, women the company employs in top leadership positions; a quick survey of head executives on the company’s press website offered no female names apart from that of the new American public relations executive.

This will entail revolutionary thinking at the 53-year-old brand, which started out making tractors in an industrial center in rural Italy. Domenicali said he’s more than up to the challenge.

“We have a small company, but we know we can do a good job,” he said. “And we are humble—it’s a different customer, a different car, a different network. We are top with regard to the super sports car, but this will be a different business.”

Keep the Good Stuff

Lamborghini does have some non-negotiable stipulations, even with the new, softer-side efforts. It will always make its signature V12 engine, Domenicali said. And while it will eventually introduce a hybrid Urus, it will never move toward producing vehicles that run on diesel. A totally electric Urus is a “maybe,” Domeniali said, depending on how technology and regulations develop over the coming years.

After all, a bull is still a bull, even if it’s a gentle one.

“Our customers want to feel the car, they want to hear it, they want to feel the vibration of the engine,” Domenicali said. “They are expecting from us to be current with our cars and yes, to invest in technology, but at the right moment—not before and not after.”

Success at Lamborghini will have much to do with having the flexibility to change and grow, he added: “A bull can recognize people with a glimpse of the eye and be smart. He is not always aggressive in a negative way. He’s aggressive because he is very strong animal, but the Lamborghini of the future is an animal that can recognize the beauty of people, can recognize the fact that we are going to a family-oriented business with an SUV.”

Source: http://www.bloomberg.com/news/articles/2016-08-30/lamborghini-pivots-to-target-women-and-families?cmpid=yhoo.hosted

August 29, 2016

Bijan property on Rodeo Drive sells for $19,000 a square foot

Los Angeles Times
August 26, 2016
By: Andrew Khouri

The demand for $5,000 handbags and $25,000 suits is slipping amid global turmoil.

But enthusiasm for real estate on Rodeo Drive, where such high-end goods are sold, isn’t hurting. Instead it’s setting records.

The parent company of Louis Vuitton recently paid $122 million, or $19,405 a square foot, for the yellow House of Bijan building at 420 N. Rodeo, long home to a boutique known as “the most expensive store in the world.” The deal, revealed in public records, was the second time in seven months that a record fell on Rodeo.

Late last year, Chanel paid $13,217 a square foot for a store it was leasing nearby at 400 N. Rodeo, the high-water mark for California retail until last month’s Bijan sale.

The eye-popping amounts reflect how few properties there are on the Beverly Hills street, as well as how infrequently they go on sale. And in a struggling market for luxury goods, the deals underscore that high-profile streets such as Rodeo or Manhattan’s upper Fifth Avenue are far more than a place to sell a $10,000 timepiece.

“They are billboards in some places for the brand,” said Milton Pedraza, chief executive of consulting firm Luxury Institute. “The companies can demonstrate power, and their staying power, by buying up these properties.”

Indeed, Marc Schillinger, a director with commercial real estate company HFF who represented the seller Bijan Properties, said “everyone came out of the woodwork when we announced the opportunity to buy this asset.”

“There are only 2½ blocks on Rodeo Drive,” said Schillinger, who declined to confirm the price or buyer. uEvery luxury retailer wants to anchor their brand on Rodeo.”

That’s proving true even as the luxury retail market takes a breather. Sales of luxury goods in the U.S. have fallen around 10% on average over the last year, while traffic in luxury stores is down 20%, Pedraza said.

The downbeat numbers are due to several reasons — similar to ones that have softened ultra-high-end residential real estate markets in places such as Los Angeles, New York and London.

Slowing global economies and a strong U.S. dollar have sapped the buying power of foreigners and dampened tourism. Meanwhile, uncertainty over the economy in the U.S., along with the upcoming presidential election, has caused some wealthy Americans to hit pause on big purchases.

On Friday, Italian retailer Prada said its retail sales in the Americas fell 15% in the first half of the year, explaining that the U.S. market “remains tough.”

“So many factors have converged — unfortunately in a negative way,” Pedraza said.

LVMH Moët Hennessy Louis Vuitton has done better than many retailers though. The Paris-based luxury goods conglomerate reported that U.S. sales climbed 7% during the first half of the year.

A high-profile store, however, isn’t just about selling goods. Even in the age of e-commerce, high-end digs have worth as a place to hold flashy events and market a brand’s cachet across the globe.

Fashion houses are willing to pay a premium to buy such an opportunity. They’d rather do so than rent and risk losing the location if their lease is not renewed, said Robert Cohen, vice chairman of real estate firm RKF.

That’s especially true as fast-fashion companies with far lower prices increasingly compete for such locations, including an H&M that opened on a pricey stretch of Fifth Avenue in Manhattan in 2014.

The highest price per square foot for a U.S. retail space came two years ago when Chanel purchased a shop it was leasing in New York on Madison Avenue for $31,329 a square foot, according to Real Capital Analytics.

“They are protecting their position on the street and in the market,” Cohen said of such purchases.

It’s unclear what LVMH’s plans are for the Bijan building, where the iconic store has operated for 40 years.

The Paris retailer with 70 brands already has multiple stores on Rodeo including Louis Vuitton and Dior locations that it leases and a Celine store that it owns.

A spokesperson for LVMH declined to comment, as did a manager at Bijan.

Iranian American designer Bijan Pakzad opened his appointment-only boutique on Rodeo Drive in 1976. It became known for its ultra luxury goods such as $6,000 suits and $19,000 ostrich vests.

Through the years, House of Bijan counted many high-profile names among his clients, including Michael Eisner, King Juan Carlos of Spain and Presidents Carter, George H.W. Bush, Clinton, George W. Bush and Obama. Pakzad had success to match, with homes across the world he flew to on his own jet.

Pakzad died in 2011 but left a lasting imprint on Rodeo Drive, helping to make it a world-class destination. The store’s manager, who declined to give his name, said the store is now owned by Pakzad’s family.

“Long before Tom Ford and Karl Lagerfeld, Bijan had a keen understanding of the cult of personality in fashion, starring in his own ads and billboards, name-checking countless celebrities and parking exotic cars outside his store, all to stoke his fame,” former Times fashion critic Booth Moore said following Pakzad’s death.

But throughout the decades, as rents soared along with the cachet, Rodeo has lost many of its local boutiques, including Fred Hayman’s famed Giorgio Beverly Hills, with its distinctive white-and-yellow striped awning, which closed in 1998.

The Bijan store is operating under a lease; its expiration has not been disclosed.

Given the sky-high sale to LVMH, the pricey but small House of Bijan is likely to go as well, real estate broker Cohen said.

The French firm may want to bring in a deep-pocketed tenant who would pay more in rent, or give yet another of its brands a foothold on Rodeo.

“It’s one of the greatest luxury streets in the world,” he said. “It’s global branding and global domination.”

Source: http://www.latimes.com/business/la-fi-bijan-sale-20160825-snap-story.html

July 20, 2016

How Leveling Up Your Offering Can Help Or Hinder Your Brand

MediaPost
By: Rachel Spiegelman
July 20, 2016

Uber Select. Soothe. Onefinestay. Now, even the pink mustache is getting fancy.

When Lyft announced it was launching its Premier service earlier this month, allowing its users to get picked up by a high-end luxury vehicle, it caught literally no one by surprise. With 70% of consumers demanding a more personalized shopping experience, brands are responding by providing “menus” of options. But only 26% of consumers feel it’s working, according to the Luxury Institute.

Back in the day, there was the haves and the have-nots. Rodeo or JC Penney. Chanel or Osh Kosh. Brands and businesses were all-in on a specific target and made sure those chosen ones felt special, taken care of, often making outsiders know they were exactly that.

Lyft was originally launched as an innovative way to connect drivers to riders in a world where young city dwellers were forgoing car purchases as part of everyday life. The whimsical pink mustache. The guessing game of what kind of car and driver you would get. “A ride whenever you need one.” It was all part of the lifestyle of Lyft and its every-day, mainstream users. But at the same time, the company was also (basically) telling my 65-year-old New Englander mother that if her Mercedes was ever in the shop, Lyft was not for her.

But now, with most of these services offering a “high-end” option, the lines are blurring around the types of consumers a brand can effectively reach.

So what’s changed?

First, it’s our definition of luxury. My mother’s generation thinks of luxury as a status symbol. This is not true for younger consumers. Millennials and Gen X — my generation — consider it a reward. A reward for dealing with work stress and life stress and family stress and so on. It’s something we deserve because of our effort, not something that defines our place in life.

Secondly, with the amount of exposure we now have on a daily basis — war, politics, hardship — our generation has adopted a “why wait” strategy. This is a primary reason experiences are becoming more important than savings accounts. We place the highest value on our own time, not on a logo.

This combination of immediate gratification for high-end rewards has redefined the luxury market. It’s what I often refer to as “expedited exclusivity.” We expect more, at a faster pace, than we ever have before. People are demanding higher-end treatment younger, and on a more regular basis.

Naturally, brands have adapted to it, or in the case of Lyft, adopted it. By taking it’s quirky, innovative service brand and slapping a “premium” next to it, they are going after a bigger-wallet consumer or more likely one who seeks expedited exclusivity and had not previously thought of Lyft as a brand that could offer that.

The lesson here is that making higher-end goods accessible to the mainstream needs discipline, but it can be done. With the right guardrails, most brands can do what Tiffany and Mercedes and Burberry successfully did: create lower-cost product lines, or mass awareness and appeal, without diminishing the true iconic value of the brand.

But can it go in reverse? Can brands that start out appealing to the masses create a truly leveled-up experience that will last?

Our history says it may be too far a bridge to cross. Walmart famously failed a decade ago when they launched Metro &, an upscale fashion line that intended to show they were on the cutting edge only to experience a disastrous launch that crippled national sales that year. And we all saw the public backlash that almost shuttered 114-year-old JCPenney when they decided to forgo coupons.

Have times changed enough to allow for brands to level up? I guess we’ll know the answer to that if you see my Mom riding sidecar with a pink mustache in the wind.

Source: http://www.mediapost.com/publications/article/280681/how-leveling-up-your-offering-can-help-or-hinder-y.html

June 3, 2016

Retailers’ personalization efforts fall short of consumer expectations

Luxury Daily
By: Sarah Jones
June 2, 2016

When it comes to personalization, retailers’ ideas of their own capabilities are often inflated when compared to consumers’ assessments.

A TimeTrade report found that while 69 percent of retailers say they are delivering an individualized shopping experience to customers all of the time, only 26 percent of consumers agree that the retailers are successfully providing a consistent experience across all channels. This divide shows definite room for improvement among retailers as they seek to provide a positive, personalized customer experience.

“This disconnect stems from how retailers define ‘personalization’–as providing a consistent experience across all channels–and how they deliver that personalized experience,” said Lauren Mead, vice president of marketing at TimeTrade.

“Let’s say a customer who has loyalty rewards enters a store–great chance to personalize the customer experience,” she said. “Unfortunately, that customer will likely remain anonymous until point of purchase. By then it’s too late for personalization.”

TimeTrade’s “Personalization in Retail: A Reality Check” is based on a survey of 10 C-level retail executives and 2,064 consumers.

Expectation vs. reality
For 93 percent of retailers, personalization is part of their organization’s strategy.

The most widespread definition of personalization among respondents was having a consistent customer experience across channels, with the interaction between a sales associate and a consumer coming in a close second. Less common definitions include being able to make personalized offers by having a 360 degree view of the consumer and delivering personalized messaging through digital channels.

Asking consumers about the most frequent definition of personalization, TimeTrade found that 55 percent believe that retailers somewhat deliver across channels, while 20 percent say great improvement is needed.

luxury shoppers
Shoppers have a different opinion on personalization than retailers

Consumers’ opinions of a need for improvement do not match up with retailers’ ideas of their own prowess. Only 25 percent have any plans for new personalization initiatives within the next year and a half, while 69 percent believe they are already at peak personalization performance.

For those who are planning upgrades, training in-store associates tops their priority list, with 74 percent intending to do so in the coming 18 months. Targeted marketing campaigns, social selling and clienteling are also goals for at least 40 percent of respondents.

The in-store environment is the top concern for retailers looking to boost their customer experience, with 45 percent agreeing it is their number one priority. The next closest channel is social media, at 19 percent.

When consumers were asked to share which channel they believe provides the worst customer service, call centers came in first for half of respondents, followed by in-store, with 26 percent agreeing it could use improvement.

Bloomingdale's Palo Alto store
Bloomingdale’s Palo Alto store

Despite the rise in digital and mobile marketing in recent years, consumers still rely heavily on in-store sales associates to assist them in making purchases, according to a recent report by the Luxury Institute.

The majority of consumers surveyed reported making most of their purchasing decisions in-store without researching online beforehand. Luxury brands looking to improve consumer relations should focus more attention on improving the in-store retail experience and providing consumers with ready assistance (see story).

“Top luxury brands can personalize better by emphasizing the physical store as an opportunity to tailor the shopping experience to each consumer and training in-store associates to use relevant technology and data to improve the customer experience,” Ms. Mead said.

“Execution here is critical- there are many proven technologies that retailers can use that will help automate processes for store associates and also the consumer,” she said. “Simple automation and self-service can enable consumers to have a seamless experience and help them engage sooner with associates for more prompt service.”

Mobile mindset
One key area that could assist retailers in delivering a positive in-store experience is the incorporation of technology.

Only 42 percent of retailers say their associates use a mobile device or tablet on the sales floor, while 15 percent of employees use their own phones for business within the retail environment. Rather than dissolving consumers’ trust in an associate, more than half of respondents say they would be more confident about their prospects of having prompt, personal service if their contact is using a mobile device to communicate with other employees.

Technology could also facilitate luxury services, such as in-store appointments. When asked if they would schedule an appointment with an associate on a device of their choosing, 59 percent of respondents said they would.

When asked about touchpoints they would like to offer for hypothetical appointments, retailers said that text notifications would be most helpful. This was followed by enabling associates to coordinate with each other via mobile devices to handle traffic in the lobby.

“Tools like online appointment booking can help retailers anticipate which customers will be coming into their store, why they are coming and make sure there is a knowledgeable associate ready to serve them,” Ms. Mead said. “This enables personalization from the start.

“To make this to happen, retailers need to also invest in putting more technology in the hands of store associates: 43 percent of retailers report not currently having their store associates using mobile devices,” she said. “Considering that more than half of consumers feel confident of receiving prompt and knowledgeable help if they see associates using mobile devices to help customers, this is a missed opportunity on retailers’ part.”

Rather than harming the luxury shopping experience, technology can allow retailers to speak to consumers on an individual level.

Department store chain Barneys New York is furthering its omnichannel capabilities through the use of integrated iBeacon technology and a personalization platform.

Powered by RichRelevance’s Relevance Cloud, Barneys is emphasising its dedication to creating an in-store experience enhanced by digital touchpoints. The initiative has created a first-of-its-kind digital customer experience at Barneys’ recently opened downtown flagship in Manhattan’s Chelsea neighborhood (see story).

“The key is selecting technology that enables in store associates to better assist customers rather than replace human to human interaction,” Ms. Mead said.

“With this type of technology training is critical,” she said. “Retailers must invest the time and resources to ensure that in-store associates are fluent in the relevant technology and can utilize it on the fly, enabling and not distracting the associate from from serving the customer and proving the best possible experience.”

Source: https://www.luxurydaily.com/retailers-personalization-efforts-fall-short-of-consumer-expectations/

May 24, 2016

NYC’s New Cadillac House is More than a Brand-Experience Experiment

It’s an incubator for what the brick-and-mortar economy does that the internet can’t.
The Drive
By: Brett Berk
May 24, 2016

Accompanied by the kind of fanfare usually reserved for a visiting R&B star—champagne, models, exclusive parties, and the launching of helicopters over the Hudson—Cadillac opened a New York headquarters late last year. Mostly used to house its communications departments, the grand offices on the top two floors of a West SoHo tower are meant to imbue the rejuvenated Detroit luxury brand with the trendy vitality of New York City, as well as the cosmopolitan east coast talent that lives here.

“We have great product. Our challenge is relevance,” says Melody Lee, Cadillac’s brand manager, as we walk the halls of the space. Those halls are lined in chevron-embossed leather meant to evoke, but also update, the marque’s vehicular heritage. According to Lee, consumers have a false familiarity with Cadillac; the brand may have positive and luxurious connotations, but they’re dated. “In order to change perceptions, we need to build connections between Cadillac and current luxury consumers’ interests,” she says.

The brand is taking an almost Mormon approach to this conversion mission, seeking not only new audiences, but new partners in the far-flung worlds of fashion, art, food, and culture. But in order to truly fortify a new identity, a contemporary brand must build a fort—a temple that embodies these projections, a dream board made real. Red Bull has its Studios, filled with extreme video and other disruptive lifestyle bullshit. Apple has its Apple Stores, filled with austerity and smugly superior Geniuses. Mars has M&M’s World, filled with candy colored candy and pre-diabetic tourists.

Into this fray Cadillac has opened Cadillac House, a showroom—but not sales room—for contemporary and vintage automobiles, as well as an art gallery, a retail fashion incubator, a coffee bar, and an event space on the corner of Charlton and Hudson. If Cadillac had an actual brand Ambassador, this would be her Embassy.

“We want to bring people into the Cadillac world. Our interpretation of what luxury means to us, which is warm, inviting, funky, and emotional, not austere,” says Eneuri Acosta from Cadillac’s department for lifestyle-, influencer-, and partnership communications.

The space, designed by the San Francisco architecture and design firm Gensler, reflects these notions, with surprisingly human materials like pebbled leather, cork, jute, and wool, along with an audacious use of neon and mirrors. Reclaimed wood, Edison bulbs, and polished concrete are the familiar icing on this cupcake, but the space still manages to transcend the de rigueur global upscale urban style I like to call “unique sameness.”

I live around the corner, so I look forward to visititing—Cadillac House will be open to the public daily—to drink Joe’s coffee, attend lectures and openings, and maintain my aversion to recherché loungewear. But does any of this brand experience misheggas move the needle with actual luxury consumers?

“It’s interesting because it’s very commonplace for brands to think that if they just create a place to hang out, that people are going to hang out. And I think that’s a little naïve,” says Milton Pedraza, head of premium sector research and consulting firm The Luxury Institute. “I think it’s probably not going to do anything significant for the brand.”

If this is the case, then why do so many luxury makes chart this flashy retail route? “Well, I think there are two fundamental reasons,” Pedraza says. “First, because brands and their agencies mistake gimmicks for effective action. And second because the really hard thing to do—to create a brand experience—are beyond their imagination.”

According to Pedraza and his surveys of luxury consumers, the enlightened path to retail engagement requires the imbuing of three characteristics: empathy, trustworthiness, and generosity. “People want to make personal, emotional connections,” Pedraza says. The difficulties that luxe brands have in this sphere comes mainly from failing to adopt a brand culture—and retail employee training program—that privileges these interactions. “They don’t know how to scale the humanity of their associates,” Pedraza says.

Perhaps counter-intuitively, all of this is more, not less, important given the ubiquity of online shopping. According to Pedraza’s research, 80 percent of luxury consumers do significant virtual Internet research prior to entering a store. They come into the store looking for more than what they can find online. “I don’t expect you to be my hotel concierge and make reservations for me at a restaurant. I mean, it’s nice, but that’s not the expectations I have when I enter an apparel, or a watch, or a jewelry shop,” Pedraza says. “I expect them to be experts on what they sell, and the competition, so that they can inform me more than I would inform myself with my friends, my peers, and going online. I don’t need that again. I need more information, or better information. Or affirmation.”

John Bricker, creative director at Gensler and lead on the Cadillac House project, concurs. “Product is product,” he says as he gives me a tour. “The reason people go to a bricks and mortar space is about experience. I can buy just about everything I need online.”

Just about everything, of course, except a car. Due to of our anachronistic, if purposeful, automotive retail system, in most places you can’t just click over to Cadillac.com and purchase a new CT6, as much as you might like to. You have to go to a dealership. Herein lies the big discovery of my visit to Cadillac House.

Cadillac has very publicly announced an emphasis on improving its retail experience—the last mile in the brand’s $12 billion investment in product and positioning, but the first point of contact for consumers. To this end, Caddy will be requiring its 900 dealers to make significant capital improvements in facilities, technology, and training. (In exchange, it will offer upgraded incentives, compensation, and profit sharing.) Certainly this new NYC space is about showcasing aspirational and urbane partnerships. But in addition to being an incubator for a hipper Cadillac brand, it’s also an incubator for the real world physicality of Cadillac’s new retail outlets.

When I ask about this directly, Melody Lee confirms my hypothesis. “Experimentation here will find its way into our facilities, our next generation dealerships,” she says. “That could include things like design and mood and layout, but also technologies like holographic imaging, which we’re working on.”

All of this is further borne out when I enter the small conference room behind Cadillac House’s main showroom. Here, attractive and elegant New York-based product specialists are being trained to offer Cadillac House visitors information on the XT5, CT6, CTS-V, and other new Cadillacs that will line this new showroom.

“The one thing that a computer can’t do, that coffee can’t do, that freebies can’t do, is have great people that are engaging you in a relevant experience within the context of what you sell,” says Pedraza. If Cadillac’s broad plans are to come to fruition, Pedraza-style, these brand-imbued specialists will need to fan out across the country, conducting trainings, and replicating themselves in hundreds of newly renovated dealerships—all of which will resemble Cadillac House, at least in tone. Their practiced scripts and gestures, with an air of New York sophistication, and emotion, will become the human face of a changing brand, on the road to changing minds.

Source: http://www.thedrive.com/travel/3651/nycs-new-cadillac-house-is-more-than-a-brand-experience-experiment

May 6, 2016

Stella McCartney celebrates individuality to woo next-generation

Luxury Daily
By: Sarah Jones
May 6, 2016

Kering-owned fashion label Stella McCartney is communicating its brand values through a handful of millennial spokesmodels.

To launch its latest scent, Pop, the brand has brought together a posse of personalities who have similar feelings about issues such as sustainability and the treatment of animals, asking them to share their views in a social media campaign. Through this “celebration of individuality, authenticity and adventure,” Stella McCartney opens up its brand to a younger audience whose ideologies may align.

“This campaign feels like it’s taking away the filtered, glossy effect of other social media campaigns on Facebook and Instagram and focusing on providing a real connection with this ‘girl gang,’” said Lauren Klostermann, director of digital marketing at Blue Moon Digital, Denver, CO.

“It targets a younger audience that is interested in issues they share with Stella, including animal rights and sustainability,” she said. “It also emphasizes individuality and acceptance.”

Ms. Klostermann is not affiliated with Stella McCartney, but agreed to comment as an industry expert.

Stella McCartney was unable to comment directly before press deadline.

Personal appeal
Stella McCartney’s #PopNow campaign stars Lourdes “Lola” Leon, the daughter of pop star Madonna and a performing arts student; musician, writer and director Grimes, reach name Claire Boucher; actress and campaigner Amandla Stenberg and animal activist Kenya Kinski-Jones.

When first revealing the campaign faces, the brand’s eponymous founder took to social media, sharing why each of the women inspire her personally. This adds a layer of genuineness to the choice of spokesmodels.

Still campaign imagery shared on Instagram and across other social media channels depicts the young women in natural settings, whether playing an electric guitar sitting on a bed or palling around with each other.

Photographer Glen Luchford, who has previously worked with the brand and worked with Ms. McCartney’s mother Linda Eastman, shot the still campaign.

While the brand began teasing the campaign around the time that the perfume became available in late March, additional video elements of the campaign did not roll out until a month later.

The campaign features the women in separate short social videos, as they talk about their beliefs.

Grimes shares that sustainability is very important to her, saying that an ecological focus is what draws her to Stella McCartney as a brand. She also speaks about her friends, who are not afraid to tell her when her music is not good.

These statements are spoken in voiceover to vintage-tinged footage of the pink-haired Grimes on the California desert.

A second film released May 5 takes a closer look at Ms. Kinski-Jones’ feelings on animals.

As she twirls with pink balloons or hangs with her fellow campaign faces, she talks about how Pop as a fragrance represents the idea of being in the moment and unapologetic.

The animal activist also talks about how people should be thinking of all creatures and not just themselves. This is paired with a picture of a polar bear with the words “Not tested on animals” superimposed.

As a sustainably-focused business that does not use leather, having spokesmodels that reflect not just the brand image but also the ethos will help to reinforce its position. This campaign gives Stella McCartney the opportunity to reach out to younger, cause-minded consumers.

A yet-to-be-released campaign film by Melina Matsoukas follows the foursome on a road trip, a representation of their drive in their own lives. The concept centered on friendship is meant as a departure from the typical fragrance film.

“Pop is a spirit,” said Stella McCartney in a statement. “It is about capturing and celebrating that very special and exciting time when you are finding yourself and coming into your own.

“It is about freedom, and starting your life away from judgments or labels,” she said. “Together as one, these strong young women are a force to be reckoned with.”

Ms. McCartney believes that beauty should enhance natural beauty rather than covering it.

Pop Eau de Parfum, developed under the brand’s licensing deal with Procter & Gamble Prestige, combines tuberose and sandalwood to create a vibrant, contemporary scent. The fragrance is produced using biomimicry technology, extracting oil from a blooming flower rather than processed ones, helping to save a sandalwood tree per every 2,500 bottles.

Taking the concept of flipping tradition, the bottle is an inverted version of the brand’s Stella fragrance bottle, topped with the Stella McCartney coin in metallic hot pink.

Continuing its commitment to the environment, Pop’s packaging was made using technology that limits its ecological impact. The boxes come from sustainably managed forests and the bottles are 100 percent recycled plastic, allowing consumers to support a brand they can trust.

Ms. McCartney approaches her business with an innate sustainability mindset, which she explained to the audience at the 2014 FT Business of Luxury Summit.

From using wind power for a store to foregoing leather and PVC, Ms. McCartney considers environmental friendliness so automatically that she forgets she is doing it. This has become part of her namesake label’s story, even if it is one that it does not overtly promote.

Accompanying the Pop perfume is an accessories collection that includes a Pop Falabella handbag in punchy colors and vegan leather, keychains, scarves and shoes.

“Stella McCartney is looking to connect with a younger, edgier audience with these spokesmodels,” Ms. Klostermann said. “These girls are a down-to-earth version of other Instagram stars like Kylie Jenner.

“The Stella girl cares about specific issues and wants to use her disposable income to support causes that matter to her.”

Next generation
As millennials gain disposable income, marketers are appealing to them with focused campaigns.

Beauty marketer Estée Lauder is appealing to the next generation of consumers with a collection designed specifically for a social media-savvy clientele.

The Estée Edit is retailing exclusively through Sephora in the United States and Canada on March 15, with a coinciding launch campaign featuring influencers and models Kendall Jenner and Irene Kim. When developing the line, Estée Lauder envisioned what its eponymous founder would do to disrupt the beauty market today, keeping heritage at the heart of this new brand extension.

Consumers are split on their willingness to download luxury brand applications, but when dispersed into generations, 72 percent of millennials are inclined to download a branded app, according to a report from The Luxury Institute.

Digitization of the luxury world is slowly evolving as younger generations grow into being affluent consumers. Luxury clients differ across more than just generations, but understanding the prime and upcoming consumer can prepare marketing teams for the future.

“By using video & bios in a magazine-type layout, this will engage the younger audience to hear from spokesmodels that they relate to,” Ms. Klosterman said. “Via the use of Facebook advertising, they will also hit a younger demographic that appreciates the individualistic message.

“Finally, via the use of the #PopNow hashtag, their audience can feel engaged in the mission of the campaign outside of the perfume itself, creating a greater affinity with the overall brand.”

Source: https://www.luxurydaily.com/stella-mccartney-celebrates-individuality-to-woo-next-generation/

April 21, 2016

The Future of Luxury Is Now, as Heritage Brands Meet New Demands

Robb Report
By: Booth Moore
April 19, 2016

The world’s most exclusive brands—many of which cling to tradition—are reshaping their long-standing practices to provide smarter, more immediate, more sustainable, and healthier products and services. Yet technological advances and innovative new business models are not the only forces driving the rapid evolution of the luxury marketplace. At the heart of these changes are dramatic shifts in the values, attitudes, priorities, and expectations of you—the consumer.

It was one of the most exclusive fashion shows of all time. When Tom Ford debuted his comeback women’s collection in September 2010, he invited only 100 people to watch Lauren Hutton, Julianne Moore, Daphne Guinness, Beyoncé, and his other famous muses model sexy python-print gowns and fringed coats on the runway. The event took place months before the clothes would arrive in stores, and no photographs were allowed.

When Ford introduces his latest fall/winter collection this September, by contrast, anyone will be able to view the pieces online, and those with sufficient means will be able to purchase items as soon as they come down the runway. This is part of a new see-now-buy-now approach that Ford is testing. Burberry, Diane von Furstenberg, and several other fashion brands have launched similar programs.

“In a world that has become increasingly immediate, the current way of showing a collection four months before it is available to customers is an antiquated idea,” said Ford in a press release. “Our customers today want a collection that is immediately available.”

Ford’s about-face is telling. New technology, market trends, and changing social attitudes have brands and companies catering to customer demands in an unprecedented manner. Now you can acquire nearly any item (a new Zenith watch from Mr. Porter, for example) the same day or engage any service, even a private jet charter, immediately, with the swipe of a finger, and have practically anything customized to your preferences. Even so, we want more than that.

“People still buy luxury products,” says Claudia D’Arpizio, a partner at the management-consulting firm Bain & Company, which reports that the global luxury industry grew by 5 percent from 2014 to 2015 and surpassed $1 trillion in retail sales. “But they value the experience around them more than the products themselves, since the experience is more shareable.”

More of us, in other words, seek meaning from our means. “We have gone from ‘extra’ values to ‘intra’ values,” says Olivier Abtan, a partner and managing director at the Boston Consulting Group, another management-consulting firm. “That means spending good time, sustainability, health, and family.”

Thus, luxury could be a private meeting at the base of the Himalayas with an oracle ordained by the Dalai Lama, arranged by the travel company Cox & Kings; or waking up to sunrise yoga on the rooftop helipad of the Four Seasons Beverly Hills. It could be a Ralph Lauren necktie that warns you when your heart rate accelerates too rapidly, a Bentley whose interior is lined with a material made from non-animal protein leather, or your own mouse avatar, on which doctors can test cancer treatments to determine which would be most effective for you.

Technical Support

As Ford notes, you want immediate access to items, and digital platforms provide that. They also enable you to make informed purchases more easily and to engage conveniently with brands on a personal level. “Technology is a driver of shopping and customer experience,” says D’Arpizio.

According to Joshua Schulman, president of Bergdorf Goodman and NMG International at the Neiman Marcus Group, 75 percent of his company’s customers do research online before buying an item. Saks Fifth Avenue recently launched a service through which associates are available online around the clock, and they can curate personalized virtual boutiques for you on the company’s website.

E-commerce, once thought to be only for mass-market brands, is becoming critical to the luxury sector. “In the U.S., some fashion brands have 20 to 30 percent of their sales online,” says Abtan. He predicts that within the next year or two every luxury brand will be selling online, including such holdouts as Chanel and Harry Winston. Regardless of the nature of the purchase, it seems everyone enjoys the convenience of shopping online.

But as larger luxury brands proliferate on the web and open stores in every city, smaller boutique brands are filling a niche by providing individualized experiences and access. Human contact, when it’s on your terms, can be the height of luxury.

In February, just hours after his fall/winter-collection runway show in New York, the women’s-wear designer Joseph Altuzarra spent an entire afternoon at Bergdorf Goodman greeting clients as part of the store’s Right from the Runway initiative. He explained his inspiration for the collection (Jim Jarmusch’s vampire film Only Lovers Left Alive), described the work involved in the soutache braided embroidery on the back of a coat, and offered suggestions on how to style different looks. One woman, who was visiting from Europe, planned to buy a green ombré tie-dyed dress from the collection. After chatting with the designer, she purchased several additional pieces. “Women love having a relationship with the product they buy, and part of that is having a relationship with the designer,” says Altuzarra. “Some designers are able to do that through digital and Instagram, but usually that’s a relationship with a younger, more aspirational client. At the price point we’re selling at, with $5,000 dresses, our customers are digitally aware, but they are not influenced by it. They are not on Instagram 24/7 looking at runway shows.”

At his showroom in Manhattan, jeweler James de Givenchy works with each of his clients to create a one-of-a-kind piece. The average wait time for completion is eight weeks, and no one complains. “We have 12 manufacturers downstairs, and we serve a small market of people who want to have things made especially for them,” de Givenchy says. “It’s the experience of meeting and discussing what their needs are.”

Have It Your Way

The travel industry also recognizes the value of individual attention. Companies understand that you want to personalize trips and experience your passions. This could mean attending a sold-out baseball game in Osaka, Japan, or shopping for a Ferrari at the automaker’s headquarters in Maranello, Italy, according to Scott Wiseman, president for the Americas at Cox & Kings. “It used to be that luxury had to do with being first to a new property or destination,” he says. “Now people want to be part of something instead of watching it.” Wiseman says his clients can overnight in a Maasai mud hut, for example, and learn something of the local culture.

Neil Jacobs, CEO of Six Senses Hotels Resorts Spas, sees a demand for nontraditional travel experiences from his company’s clients. “We never talk about exclusivity,” he says, “we talk about inclusivity.” He cites the appeal of the organic free-range chicken farm at the brand’s Yao Noi property in Thailand, where you can collect your own eggs for breakfast. “It’s about experience and community engagement,” says Jacobs. “Customers who are spending north of $1,000 a night want more than just good service and a great bed.”

Community engagement can extend to guest rooms. Gone is cookie-cutter hotel design: “People are preoccupied with the personality of spaces,” says Ian Carr, co-CEO of the hospitality and residential design firm Hirsch Bedner Associates. “They don’t want generic or transient. They want curated, personal, locally connected.”

Hospitality companies also recognize guests’ desires for seamless service and freedom from awkward, time-consuming social interactions. Technology can help address those demands. “More and more, people don’t want to talk to anyone,” says Herve Humler, president and COO of the Ritz-Carlton Hotel Company, which has a GPS-enabled service in the works. It is expected to allow guests at the brand’s resorts to use their mobile devices to order lunch from the beach, for example, and have a server locate their chaise longue on the sand.

Sustainable Efforts

That lunch likely will not arrive in Styrofoam, and it could well include meat from animals that have been responsibly raised or produce that has been sustainably farmed. Cited in 2010 by the Harvard Business Review as a corporate mega-trend that would rival the impacts of mass production and electrification, sustainability is making its way into the luxury world. The luxury-industry conglomerate Kering’s first Environmental Profit and Loss report, published last year, set targets for reducing emissions and waste from its production and supply chain. Jewelry brands Chopard and Tiffany & Co. have begun using ethically mined gems and recycling gold, silver, and platinum, because an increasing number of customers demanded that they do so.

In the luxury-auto market, the SUV, with its relatively low mileage rating, has remained popular enough for Jaguar, Maserati, and Bentley to launch, or prepare to launch, their first models. However, according to a March report by Donatas Bimba of the market-research firm Euromonitor International, sales of plug-in electric vehicles are set to bounce back in 2016 and record solid growth from 2017 onward thanks to upgraded models and improved charging infrastructure. Bimba cited plug-in hybrid vehicles as “the most dynamic new car segment in the U.S.” and pointed to the BMW i8 and Mercedes-Benz S500e. He also noted the potential impact of the Model X all-electric SUV from Tesla, which is aiming to woo customers away from their Porsche Cayennes and Range Rovers.

“The electrification of the drivetrain is not a temporary phenomenon; it is the future of mobility,” says Gorden Wagener, the chief designer at Mercedes-Benz, which has plans to offer 10 plug-in hybrid models by 2017 and recently announced a new policy requiring top managers to drive electrified, as opposed to gas-powered, company cars.

In addition to offering more environmentally friendly models, luxury carmakers may begin adding sustainable materials to their vehicles’ cabins. “People on the top level of society—our customers—sooner or later won’t order a Bentley with 20 hides, because as a, say, vegan person, they will not accept it,” says Stefan Sielaff, director of design for Bentley Motors. “On the other side, they are not going to accept artificial leather, because it is oil based, so you really have to start experimenting with alternative, organic materials, such as textiles made of animal-free protein leather, silks, even stone.” Bentley is already offering stone veneers, made of rocks sourced from quarries in India, in its Mulsanne models.

The transition to autonomous-driving vehicles could have an even more profound effect on car design. “Maybe in the future, the car is a sitting room, a living room, a conference room, and you use the time in the car in a different way,” says Sielaff. “It becomes like sitting in first class of an aircraft.”

In BMW’s Vision Next 100 self-driving concept car, the steering wheel and center console retract so that the driver and front-seat passenger can turn toward each other. Another autonomous-driving vehicle, the Mercedes-Benz F 015 research car, is described as a “luxury lounge,” with chairs that can rotate to form a club-style seating arrangement.

The Balance Equation

Our own health is as important to many of us as the planet’s, and fashion and hospitality brands, along with hospitals and medical practices, are responding accordingly. Fashion labels are designing their own Fitbit devices (Tory Burch), activewear (Zegna), and connected clothing. Ralph Lauren’s PoloTech shirt works with an iPhone or Apple Watch to put real-time workout data in your hand. A smart suit or necktie that could advise the wearer on heart rate and body temperature may not be far off. “Living a luxury lifestyle isn’t just the dream of having a better life,” says David Lauren, executive vice president of global advertising, marketing, and communications at Ralph Lauren. “It’s also how technology can help you live a healthier, better life now.”

The country’s leading hospitals have long offered executive health programs that work with patients on preventive health care, nutrition, and stress management. The programs were initiated in the 1960s to protect C-level managers and board members considered valuable assets by corporations. “But now, the real growth segment has been in individuals motivated toward this kind of health-care surveillance,” says Dr. Benjamin Ansell, the director of UCLA’s Executive Health Program, which provides personalized, in-depth evaluations. Private practices offer similar programs.

Craig Venter, one of the first people to map the human genome, offers an executive physical at his latest venture, the La Jolla, Calif.–based Human Longevity. For $25,000, the company will sequence your DNA and run a full complement of tests to determine your risk for heart disease, melanoma, dementia, and other ailments. “Having the ability to control health and life outcomes is the ultimate luxury,” he says. (Some experts argue that genome sequencing alone may not be sufficient to detect health risks, and that further research is needed.)

Venter’s company is focused on advanced preventive care; others provide exclusive treatments. Champions Oncology is among the companies offering a mouse avatar to cancer patients. For a price starting at $10,000, Champions will remove a portion of the patient’s tumor, inject it into the mouse, and have the animal undergo different treatments to determine which will work best for the patient. (Doctors disagree on the efficacy of such practices when compared to human clinical trials.)

In the hospitality realm, hotels and resorts are providing health and wellness services that go far beyond facials and massages. The comforts of home on the road now include nutritious foods, fully equipped workout facilities, yoga, and spin classes. “It’s a luxury to have normalcy when you travel,” says Michael Newcombe, general manager for the Four Seasons Los Angeles at Beverly Hills. He oversees all 38 Four Seasons spas in the Americas and has partnered on services with local fitness professionals, dermatologists, and medical providers.

Health retreats offer increasingly sophisticated medical services, such as Alzheimer’s prevention through cognitive stimulation, sleep recovery programs, and couples counseling. “The old-fashioned notion of going to a health spa involves weight loss and plastic surgery,” says Alejandro Bataller, a vice president at the SHA Wellness Clinic near Alicante, Spain. “But now, it’s so much more.” The SHA experience includes classes at the clinic’s health academy, where visitors learn how to manage stress and cook healthy meals. And Bataller is working with a Spanish university to develop an app that will keep track of guests’ progress after they leave. “We are going to be able to support you through technology wherever you are,” he says.

But for all the ways luxury companies are employing new technologies to meet your demands and enhance your life—providing instant access to the latest fashions or seamless service at resorts and hotels or cutting-edge wellness programs—their ability to forge relationships with you and other clients may ultimately determine whether they succeed or fail, says Milton Pedraza, CEO of the Luxury Institute, a research organization in New York. “What wealthy people want is empathy, trustworthiness, the emotional elements of humanity,” he says. “It’s not a points program or Champagne when you walk in the store that matters. It’s doing little things that mean so much more.”

Accordingly, Pedraza says, the luxury industry is paying particular attention to women, and not just with marketing initiatives such as Bergdorf Goodman’s Right from the Runway. “[Women’s growing influence] is a big trend in luxury,” he says, citing Gucci’s Chime for Change charity campaign, supporting girls around the globe, and the LVMH-owned Champagne house Veuve Clicquot’s Business Woman Award as strategic outreach programs.

“Women have the say and the money,” he observes, “and we will see that grow as more millennial women get into higher levels of corporations. How will it manifest itself? Maybe a nicer world.”

Certainly that would be the most welcome change of all.

Source: http://robbreport.com/sports-leisure/future-luxury-now-heritage-brands-meet-new-demands#sthash.dNjDZXhF.dpuf

April 12, 2016

Travel Professionals Identify 15 Luxury Travel Trends For 2016 And Beyond

Travel Market
By: Harvey Chipkin
April 12, 2017

Luxury travel buzzwords like authentic, local, curate, and, of course, experience may be overused, but they have become buzzwords because of their phenomenal staying power. While some trends fade with time, some just seem to resound with customers from one year into the next. Here’s how a group of luxury travel professionals and other experts see the trends shaping up at the high end of the market for the rest of this year and into the next.

1. Doubling down on local
“Travelers want to be with locals,” said Jack Ezon, president of Ovation Vacations in New York. “They want to be immersed in a destination. Instead of guides who know a lot of facts, they want insiders who can really give them the lowdown. Or they want a nightlife host who can take them to the coolest bars and nightspots and tell the story from their own perspective.”

At The Nines Hotel in Portland, OR, director of sales and marketing Laura Van Daal said, “Everyone in the hotel is a concierge and a local expert. They are trained to listen to the specifics of what a guest likes or is looking for, because everyone wants a different experience. We have contacts all over the city, so we can get to visit the rare books department of Powell’s Books, or we can get people into the Nike or Adidas employee store where they can get great discounts.”

Milton Pedraza, CEO of The Luxury Institute, said, “It’s not just about getting a table at the best restaurant, but it might be getting the right table. There’s a popular restaurant in Paris where all the tourists are on the second floor and the locals are on the first floor. If an agent knows a concierge, he might be able to get the client to a first-floor table.”

2. Authentic, but maybe not too authentic
Authenticity can be taken too literally. Said Ezon, “You really have to be clear with clients about what they’re getting. When they say they want a ‘sense of place,’ that really means they want to be in a hotel they can use as a springboard from which to see their surroundings. If guests get to a ranch and there’s no air conditioning, they might not be happy.”

3. Personalization: It’s the little things that count
Personalization doesn’t have to be a big deal. Ezon said he had a couple going to Africa for a honeymoon. After a long week of travel, they arrived at their camp and entered their tent to find pictures of their family on the “walls” and their wedding song playing. “They couldn’t believe it,” said Ezon. “It’s the agent’s job to provide that kind of information to the people on the ground.”

Matteo Della Grazia, owner of tour operator Fuoritinerario — Discover Your Italy, said, “We are seeing increasing demand for local and authentic experiences that allow clients to create their own local product. For instance, they can work for a day at a top Tuscany vineyard with a wine- maker to create a personalized wine, which will then be aged, bottled, and shipped to them. We call it Adopt A Barrel. We have a similar program for perfume.”

4. Hip at the high end
Hotels brands like Ace prove that travelers will spend more to be around people and things they perceive as hip. Still, said Van Daal, while “hip and real luxury can go hand in hand, being hip is not enough. You still need great service to truly be luxury.”

5. Whimsical wandering
It may be a generational thing but there are travelers who like to arrive at their destination without any plans beyond their first hotel stay. Ezon, for example, has a couple spending $100,000 on their honeymoon and doing it day by day, consulting with him continuously about what to do next.

6. Speaking meaningfully
“Access is one thing,” said Susan Farewell of Farewell Travels, “but an experience that satisfies a greater sense of purpose is the ultimate luxury.” Farewell is putting together a trip for a family of five going to southeast Asia, for example, that will include an elephant encounter, though they are not interested in anything that exploits the animals for tourism. “They are interested in a non-profit ethical elephant experience, where they see the animals but are not riding them or enabling any exploitation of them.”

7. Unexpected pairings
Travelers are combining destinations and experiences that are very different from one another. Farewell is working on one trip where the couple is spending five days doing a cooking program in Tuscany and then moving up to Lake Garda for a few days of sailing lessons.

8. Fun with food
Everybody talks about cooking lessons or meeting the local chefs, but some want to go further. Farewell notes that in Ho Chi Minh City, you can take a Foodie Tour by Vespa, where a driver takes each traveler from one food venue to the next. It’s a high level of curated street food options, coffee houses, etc. The experience is off-the-charts fun but also informative and delicious.”

Della Grazia said some clients visit local homes where they cook and eat with the residents; sometimes those hosts act as local guides to explore the neighborhood.

9. Long-term trip planning
“I work with clients long term,” said Farewell, “seeing their travel needs in terms of five-year chunks. We develop a five-year travel plan for them, which we revisit every year. So I get questions like, ‘Where are we going this summer?’ They assume I have already thought it through for them based on their past trips, their kids’ ages, and the five-year plan we designed.”
 
10. Destination roulette
While everybody tries to figure out the “hot destinations,” sometimes it’s just random or based on a magazine article or news event, or even a shift in currency. Douglas Easton, managing partner at Celestielle Travel, said, “Maybe a new hotel will open or there’ll be an article in a travel magazine and suddenly bookings will come in. We had not a single Namibia booking last year and suddenly had four separate ones. That’s why you just have to be prepared for what comes up.”

Also, it’s long been known that even the wealthy like to get the best possible value in their vacations, and one way to do that is by staying on top of exchange rates with the dollar. Said Ezon, “If your client is going to spend $40,000 on a trip and there’s a big swing in the currency, they could save a third or more on that. That is why Europe has remained popular.”

11. Exotic emerges
Pedraza noted that younger travelers are heading for more exotic places, like Cambodia and Bali. “They have already been to the more traditional destinations so there is a real opportunity here.”

And Scott Wiseman, president of Cox & Kings, said, “Whether it’s requesting tickets to a sold-out baseball game in Japan, taking a motorcycle journey through Patagonia, textile shopping in remote India, or taking a private polo lesson in Argentina, today’s travelers are limited only by their imagination.”

12. Convenience is king
Luxury clients are flocking to buy ancillary services that make their travel experience easier. He Ezon said that over the past three years Ovation has had a 37.4% increase in ancillary travel products including: luggage shipping, airport greeters (to assist with connections, arrivals, and departures), and park guides (VIP guides in amusement parks to help deal with lines, logistics, etc.)

13. The human touch
“Even young people don’t just want to be digital beings,” said Pedraza. “They want to engage with other people—whether it’s tour guides, people on the street, or other travelers. It’s like when electricity was invented. You would flick the switch on and off because of the novelty. Now the novelty of digital has faded and people want emotional connections.”

14. It’s nice to share
The quality of sharing accommodations—whether it be Airbnb or sharing options introduced by hotel companies—is improving, said Pedraza. “This might lend itself to the local trend, as well, “because your sharing host might for a small fee become your local guide.”

15. Art is the new cuisine
While food has taken a central place in luxury travel, said Ezon, so too has art. “So many properties are recruiting an artist-in-residence and turning their public spaces into evolving galleries from local artists,” he noted, with revolving art exhibits. The new Faena Hotel in Miami Beach kicks up the art theme with a whole art district, art programs for guests, and a children’s art immersion experience where local artists inspire kids to create their own masterpieces. The Ritz-Carlton Toronto has an in-house artist who designs plates for the hotel’s restaurant and works with guests to design their own.

Source: http://www.travelmarketreport.com/articles/Travel-Professionals-Identify-15-Luxury-Travel-Trends-For-2016-And-Beyond

April 1, 2016

Heritage brands must amplify tradition of innovation to reach today’s consumer

Luxury Daily
By: Forrest Cardamenis
April 1, 2016

NEW YORK – Understanding the relationship between heritage and innovation is the key to appealing to today’s new consumer, according to panelists at the FACC Luxury Symposium on March 31.

Heritage brands have been successful for decades or centuries because within the heritage is a history of innovation around a core group of principles. While touting history could suggest to younger consumers that a brand is “old and stodgy” or the brand of their grandparents, focusing on innovating with products that appeal to today’s consumers will let the puzzle pieces fall into place.

“If we are heritage and brands that means we have stood the test of time, and we have stood the test of time because we have a tradition of successfully innovating,” said Trent Fraser, vice president Dom Pérignon, LVMH Wines & Spirits.

“We don’t make things that are required to sustain life; we have to find ways to fulfill people’s dreams and make them fall in love, and this requires innovation,” he said.

“Innovative companies ought to aspire to be heritage brands, because heritage brands have a history of innovation.”

FACC Luxury Symposium was organized by the French-American Chamber of Commerce.

Past and present
Before the commencement of the “Strong Heritage Brands: Artisans, Ateliers & Métiers” panel, a poll of the luxury executives in the room revealed that 81 percent believe the millennial attitude toward heritage brands is considerably different than their predecessors.

dom perignon.atelier bottle tasting
Dom Pérignon

“It’s not that surprising, but I think one of the most important things is desirability, not just in terms of millennials but for everyone,” Mr. Fraser said. “ One of my greatest challenges when I first joined was that there was this history and tradition of the brand’s story that needs to be told, but sometimes what comes with that is ‘old and stodgy, that’s my grandfather’s drink.’

“Telling that story today is quite difficult but we really need to bring it to life,” he said.

For Dom Pérignon, that story has been revitalized for younger consumers through the “Power of Creation” platform, which partners declared vintage wines with creators in different fields, bringing a fun, edgy and modern twist on the Dom Pérignon story.

For Baccarat, the sea change came on the level of how the product itself is marketed with “Everyday Baccarat,” which encourages consumers to extend their day by drinking from the brand’s crystal for breakfast and after dinner, not just for weddings and special occasions.

Baccarat Harcourt
Baccarat tumblers

“I was walking home on my first day, and it occurred to me, ‘We all have designer shoes, we all have designer handbags that we use everyday, yet we’re afraid to chip our glass so we don’t use it,’” said Jim Shreve, president, USA at Baccarat. “But look at the bottom of my shoes. Look at my watch with all the scratches – and these cost much more than some of our products.”

Everyday Baccarat appeals to all consumers, but with millennials being particularly skeptical about buying a product they will use infrequently, the proposition of crystal for everyday use could sell them on the brand.

The focus on the product is particularly important in fashion and jewelry, where brands must not shy away from being different or departing the norms.

robb.dec2014 chanel jewelry
Chanel jewelry ad

“Chanel as a heritage brand has been supported and carried by Mademoiselle Chanel through one word, for me, which is ‘disruptive,’” said Olivier Stip, senior vice president fine jewelry & watches, Chanel USA. “We are always trying to find what is the right balance between creation for the sake of the creation and the creation for a use for the customer.

“Heritage brands are the best place to be innovative,” he said. “When creative comes first and the marketing follows just to do the orchestration, that’s how you can create the blend, the innovation, and communicate the proper way.”

When telling a heritage story, brands must remember to keep the history on the present. The goal is not to sell consumers on a past success but rather on a tradition of quality still visible today.

For Van Cleef & Arpels, a museum exhibition must build a bridge between past and present.

Van Cleef & Arpels TEFAF 2016
Van Cleef & Arpels TEFAF 2016

“We go to a museum, we organize an exhibition, but the whole point is to prove craftsmanship is a living art and it doesn’t stay stuck in time,” said Alain Bernard, president and CEO of Van Cleef & Arpels Americas. “Many people, many brands organize exhibitions in museums where they show pieces without any connection to what’s happening now.

“We need that heritage – the branches of a tree are never longer than the roots, so you need to have strong, deep, long roots before branching out – but the whole point of the exhibition is to show the evolution,” he said. “What we do today, what we do everyday, is inspired by what we have done before, and the exhibition shows that.”

Even in the service industry, where the ability to sell a consumer on an experience rather than on a product they don’t strictly need seems different, the principle is the same. Across all sectors, brands must adapt, whatever their service is – whether it is providing a place to stay or providing clothing and jewelry of a high quality that will last a lifetime – to the contemporary mindset.

“At Ritz-Carlton we absolutely believe exceptional service is timeless, it never goes out of style,” said Tina Edmundson, global officer of luxury and lifestyle brands, Marriott International. “What that actually means continues to evolve.”

Ritz-Carlton Chicago Deca Restaurant
Ritz-Carlton Chicago Deca Restaurant

Rather than fear these changes, whether it is mindset about what qualifies as a desirable product, a different purchase journey or something else entirely, brands selling either goods or services must find the proper blend of change and heritage. To that effect, 71 percent of executives in the room believe that brands should communicate CSR guidelines in an explicit manner to connect with millennials.

Shifting emphasis
In the case of personal luxury goods, another balancing act is the one between online and in-store channels. More than half of polled executives say that with new business models and a new generation of luxury consumers, the retail store is more important than before.

Despite the continued importance of the bricks-and mortar store, they are still generally operating in an out-of-date fashion, creating obstacles for sales staff, according to the Luxury Institute.

The consultancy conducted a focus group with 40 store managers who oversee multi-brand, premium and luxury stores, and found that there are a number of improvements that companies could make to help their in-store staff be more productive and effective. From updating technology and CRM systems to reallocating employee resources, there is room for improvement that needs to begin at the top (see story).

By the same token, some brands should opt to play up heritage, especially as they make a move to enter the new market. In these situations, connotations of datedness or stodginess will be displaced by curiosity about national heritage.

British brands looking to gain a foothold in the United States would do well to emphasize their “Britishness,” according to panelists at “GREAT Britain on Madison Avenue” held on Nov. 5.

British identity is wrapped up into ideas of elegance, heritage and wit. Brands venturing out of the United Kingdom into the U.S. or other countries need to find ways to inform consumers not just of the brand but also of the significance of its home country (see story).

“The challenge for our brand is the challenge for any brand – to continue to evolve based on the environment,” said Alex Bolen, CEO of Oscar de la Renta. “We need to evolve around a core set of standards and principles that should remain unchanged, but how those are expressed will change as our environment changes.”

Source: https://www.luxurydaily.com/heritage-brands-must-amplify-tradition-of-innovation-to-reach-todays-consumer/

March 7, 2016

Luxury Institute finds 7 improvements luxury retailers can make right now to improve sales

Luxsell
By: Victoria MacDonald
March 2, 2016

In the excellent article “Luxury Institute Reveals 7 Major Improvements Store Managers Recommend to Drive Sales Performance Right Now,” Milton Pedraza, CEO of Luxury Institute, LLC, shares results of an intimate focus group he conducted with  store managers of premium and luxury brands and shares their best practices and recommendations to improve sales.

“…luxury and premium retail store management today is configured for rigid Industrial Age operational efficiency, rather than highly-adaptive, relationship-building effectiveness.”

– Milton Pedraza, Luxury Institute

The seven improvements include:

  1. Store teams desire to be more relationship-centric and want to be freed from back-office tasks.
    The suggestion is to separate back-of-house and customer-facing staff. This way your sales associates can do what they do best – build relationships with your customers.
  2. Select and maintain the right-sized team to drive superior results.
    Managers shared that 40% of their employees are poor performers. Make sure you’re hiring the right people! When I worked at Tiffany & Co., we moved away from hiring associates based on their experience in the jewelry industry, to using a pre-hire assessment to find those associates who best demonstrated the personality traits and behaviors we valued.
  3. Better, smarter, and faster ways to manage inventory and client data are needed right now.
  4. Teaching fundamentals once a year is great, but what is really needed in stores is coaching on a much more frequent basis.
    Learning is a process, not an event. Managers must become part of the training process in order to support, encourage and sustain the learning. But that means managers may need help in developing their coaching skills. Take a look at a simple coach-the-coach program I outlined in an earlier post.
  5. Use social media and other tools to connect with millennials and drive them to stores.
  6. Empower local innovation since store teams know clients better than anyone else.
  7. Compensation is fair, but the goals are sometimes not.

Though luxury store results thus far for 2016 may be less than outstanding, the collected wisdom from these store managers can help you refocus, revamp and revive your store’s approach to luxury sales.

http://luxsell.me/2016/03/02/luxury-institute-finds-7-improvements-luxury-retailers-can-make-right-now-to-improve-sales/

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