Luxury Institute News

February 9, 2016

Using digital to connect luxury shoppers with luxury brands

Luxury Daily
By: James Green
February 9, 2016

Every industry has been disrupted by technology and pushed to evolve their marketing strategy. In some ways, luxury advertisers have embraced the digital revolution and found new methods of improving the customer and user experience. But a large number of luxury marketing spend is still happening offline, despite the brand opportunities that are now available online.

There seems to be a common understanding among luxury brands that high-priced items are not going to thrive online and that using an ecommerce platform may even devalue products. True or not, direct sales are not the only way to get value out of the digital world.

Net net
Most luxury brands have a very specific target audience, typically affluent individuals. Therefore, luxury brands have traditionally bought digital media within specific owners such as The New York Times, Bloomberg and The Wall Street Journal because they feel that it is the best way they can safely find their audience online.

But what about all the people signaling their intent to buy luxury items across the Greater Internet? How do brands effectively reach out them?

Research from Epsilon and The Luxury Institute shows that 98 percent of luxury shoppers use the Internet regularly.

In addition, more than 50 percent of the time they are online, they are researching products and comparing prices on their mobile devices.

Throughout the years, studies from Google and McKinsey have shown that people spend a good amount of time researching luxury or high cost goods online before making their purchase.

And most likely, the number of times people visit a store to browse and conduct research has diminished because of the availability of information online.

With all this data about people, including demographic and information about brand affinity, along with precise data related to what people are searching for or what items they have recently purchased, there is a tremendous opportunity to use digital to identify luxury shoppers, provide them with immersive experiences and forge stronger customer relationships.

Researching signals purchase intent
Data offers established brands the opportunity to get in front of in-market buyers, including new customers and previous buyers.

Consider the amount of research that takes place before making a luxury purchase, whether that is a new car, piece of jewelry, handbag or high-end vacation.

According to WBR Digital, 45 percent of luxury purchases are influenced by what consumers find online.

The benefit of digital is that you can depict who is actually looking for information about your product and use that trail of data to determine intent to purchase.

For the luxury category, these insights will help brands determine who is ready to make a purchase and allow you to predict which people to keep informed about brand updates, such as new products, sales and seasonal marketing promotions.

Intent-based targeting is a strong complement to more traditional brand-centric media buying and helps luxury brands zero in on the people who are more likely to buy their products. It is also a great way to help them move through the buying journey, either in-store or online.

Enticing luxury buyers with digital creative
Luxury shoppers are very much part of the digital nation. They are using laptops, tablets and smartphones to follow trends, connect with brands, research products and make purchases.

Digital creative is critical to the luxury shopper – it needs to drive awareness without jeopardizing brand integrity and exclusivity.

Digital platforms have transformed their environments into creative canvasses for luxury brands. We have seen this through beautifully produced digital videos, immersive creative experiences and native advertising taking place across mobile devices and platforms such as Instagram and Facebook.

There is enough creative stability in digital for luxury buyers to bring their brand to life and to do so amongst the people who are most likely to buy. The dynamic characteristics of digital also allow brands to feature more products and change up creative more easily than television or print ads.

Forging lasting relationships online
People do not have to visit a store for you to know when and how interact to with them.

Online interactions between consumers and brands inform content, marketing frequency and promotions at the individual level, which can help increase customer loyalty and brand awareness.

Loyalty can be accelerated through social, email and digital display advertising at any point within the customer’s lifetime, and data can help predict these optimal moments.

This means that you need to be constantly learning and adapting to what people want so that your brand remains relevant and generates the engagement and desired response. There is simply way too much insight and value rooted in the digital medium for brands not to invest in it.

DIGITAL MARKETING may appear to be about data and targeting, but it is more about customer interaction, immersive experiences and interactive communication.

The luxury experience is more likely to stay very much in-store focused in the next few years. But this might be able to change once luxury advertisers find a way to prolong the experience that they are providing in-store across digital channels.

Data, adaptability and device versatility makes digital a strong brand vehicle for the luxury category.

 Source: https://www.luxurydaily.com/using-digital-to-connect-luxury-shoppers-with-luxury-brands/

February 1, 2016

Analysis: + Mobile Internet Trend, from the Following Aspects of Tourism Enterprises to Build Brands

Research Papers Center
By: Hui Wen and Xu Liyang
January 31, 2016

REVIEW: After entering APP era, the development of service interactions between tourism brand and customer communication and service must keep pace with changes in the nature of, the traditional means of communication with customers and business relations to do to maintain the cold, in mobile Internet era, companies can solve the information service again reshape the strong association with customers.

Now the ‘Internet + wave’ has swept all walks of life, the focus of enterprise development are inclined to the mobile terminal, after entering APP era, the development of service interactions between tourism brand and customer communication and service must keep pace with changes in the nature. Although tourism brand want to speak with one voice, but the challenge in practice the flow of information so that each employee interaction with customers need to re-start. For consumers, the same requirements to be transferred back and forth between different departments, but also with a number of service personnel to communicate is unreasonable. For a long time, the industry’s customer service representative sounds like automated robots, reading scripted answers and impersonal.

Now people authenticity and demand for personalized, interactive model that is very problematic. Fortunately, the messaging service App era become the travel company to provide true and effective personalized communication tool.

What values will resonate with today’s consumers?

With the development of consumer preferences, service brands are increasingly based on the need to strengthen the values of customer contact. In some iconic brand service, authenticity and one on one personalized recognition emerged as the leading brand attributes.

Truth

According to their geographical location, local ingredients from a farm to table moved from the hotel the moment, ‘authenticity’ has become today’s traveler compass. Quote a travel writer David Sze’s words, ‘for the 21st century traveler, its authenticity has become a journey of objectives and measures.’ The traditional hotel brand based local culinary experience to realize the promise of authenticity.

However, although tourism brand and strive to create ‘real’ feeling, but to become more than just buy one of the new consumer brand needs convincing. Authenticity is difficult to define, but it can not be fake. As more hotel brands want to pursue the truth, it is difficult to ignore its existence. Airbnb’s CMO Jonathan Mildenhall believes that the brand experience is based on different approaches to millions of user generated. So how can we establish a set of standardized practices the traditional brands to revitalize it?

One relationship

Remember, each greeted by name, each a unique individual for the brand consolidate the relationship between them and the passengers are influential. Although the interaction between people has been a sign of good service, but consumers now see that these interactions will be an important cornerstone of the brand consolidation. In the luxury summit last October, CEO Milton Pedraza, the Luxury Institute, said, ‘As consumers become increasingly sophisticated, increasingly commoditized product, cross-channel interactive experiences and people will be to distinguish between brands key. ‘and recognized by customers and guests personalized communication brand will stand out. 

How will these consumption values associated with the mobile Internet era?

As we said, ‘Welcome to the mobile Internet (after APP) era’, consumers increasingly want to interact with companies through the information platform, while commercial traffic is also growing rapidly. However, the information platform is not just a communication channel, the interaction of information makes us totally different customer experience, it shows that consumers desire is real, one to one relationship, the following instructions to do so three a bonus:

It helps create intelligent brand. In a voice or face to face interactive virtual world, or cross-sectoral team to share information is very difficult, especially in Transition. Adverse exchange of information so that consumers just keep repeating, it makes them feel worthless and not taken seriously. In contrast, information platform to create a communication path between each employee and each customer, with the historical data of these interactions, as referred to work when employees will no longer need to take over from scratch to talk with customers.

Treat each consumer as a unique individual. When customer-facing employees about customer information or interaction history, customer will be able to as a unique individual treatment was 11. Staff know the customer’s name, you can refer to past experiences have occurred, rather than to allow customers to repeat the same question. They do not need to be rebuilt from scratch every customer interaction. In order to prove to the customer’s perception, brands need to establish one to one relationship and long-term loyalty.

Human interactions with employees and achieve real butt. In their personal lives, consumers have learned how to use social media and the use of carefully chosen profile picture to express their identity. Facebook and LinkedIn allows people to meet in the absence of knowledge of each other. Information platform for employees and the brand provides a canvas to express their identity. Behind the tourism brand, the real understanding of the customer is to establish a true relationship with customers more powerful ways.

In short, the information platform enables brands to offer a unique experience of large-scale, resonate with today’s consumers.

Source: http://eng.hi138.com/computer-papers/internet-research-papers/201601/466565_analysis-mobile-internet-trend-from-the-following-aspects-of-tourism-enterprises-to-build-brands.asp#.Vq9yqCS4l-U

January 22, 2016

Events crucial at defining brand community: Neuehouse founding partner

Luxury Daily
By: Sarah Jones
January 21, 2016

NEW YORK – Luxury brands can work relentlessly to develop a quality product, but without creating a controlled experience and consistent message around their merchandise and identity, there may be a disconnect between reality and public perception.

During the “Going Beyond the Product: Creating Physical Experiences for Luxury Consumers” session at Luxury FirstLook: Strategy 2016 Jan. 20, panelists agreed that finding one consistent brand personality and ideology and communicating that across all touch points, whether online or in-store, is the key for effective brand positioning. From there, letting consumers engage with a brand through product, entertainment or creative experiences can further help to build a community.

“The brand has to drive the interaction, whatever it is, and then I think you have to be aware of what consumers’ expectations are,” said Matt Powell, co-president of KBS. “So digital has made it so that whether it is a luxury brand or not, people have certain expectations in terms of understanding everything from what’s going on in the supply chain to price comparison, things that normally luxury could avoid.

“And you have to think about how do you take advantage of what consumer expectations are altered by the Web when you’re creating any experience—online, offline, in-store, out of store,” he said.

Leaving a message
When trying to communicate a brand message to many different generations, brands should not let age be the primary focus, since consumers do not like being defined by this demographic. Mr. Powell said instead brands should speak to characteristics that consumers prefer to be identified by.

James O’Reilly, founding partner at Neuehouse, agreed, explaining that the private work collective tries to find common threads among its multigenerational audience rather than point out differences. Additionally, Neuehouse offers programming at different levels, allowing consumers at varying points in their lives to use its spaces and join its private community.

When designing retail spaces, brands should work to create elements of surprise. For instance, Neuehouse’s bathroom doors feature images of a pump and a mustache, fashioned out of magnets, showing more ingenuity than a painting.

In-store digitization efforts should center on creating an experience that the consumer cannot have at home on her tablet or phone. For instance, Puma took the concept of the in-store iPad and made it more memorable by creating a wall of iPads eight across.

“Physical and digital should be seen as complimentary as opposed to standalone items,” Mr. O’Reilly said. “I typically reference how much better educated people, more informed people are prior to an in-store purchase.

“I think those should feed off each other, and what I’ve seen more is people in-store are referencing digital moments, which consumers have prior to purchase,” he said.

Another way to surprise is in sensory and hospitality touch points. For instance, Dover Street Market was one of the first to include an in-store eatery, and its stores use a museum-style layout.

Prada at Dover Street Market 1
Prada at Dover Street Market

Creating a consistent experience at point of sale can become more difficult when a brand does not handle its own retail outlets.

This is true of automotive brands, which typically have a network of dealerships, but no flagship stores. Geoff Cook, founding partner of Base New York, said that he finds this lack of brand-owned store presence “bizarre.”

One option to make up for this would be hosting experiential events where consumers would be able to test drive and see the cars in person.

Similarly, Mr. Powell is working with BMW to bring its fragmented online presence together, uniting dealer, regional and corporate sites into one. The automaker’s corporate team also set up a showroom in a mall, giving itself an opportunity to reach consumers directly.

BMW South Coast Plaza
BMW Gallery at South Coast Plaza

Mr. Cook believes that brands should be more focused on creating news than on designing ads. Neuehouse employs this strategy, identifying itself as a publisher and introducing itself to potential members through editorial placements in media such as Vulture and Vanity Fair.

Face time
Having a consistent brand identity extends to personnel across facets of the business.

Mr. Cook said that the human connection is important in all channels. Ecommerce should therefore be more than just a transaction and a faceless shopping cart, particularly at luxury price points.

This starts at hiring. Neuehouse looks for an “emotional IQ” in potential new hires, searching for employees who fit into its community. Mr. O’Reilly said that it is difficult to tell who is a member and who works at Neuehouse.

When training new team members, brands should communicate not only what is done, but why it is done. For instance, a genius at the Apple store in Shanghai told Mr. Powell that when he resolves an issue, he is not just repairing a device, but he is fixing a fractured relationship between the consumer and Apple.

While luxury brands typically know the best practices in client building, most are not practicing these strategies for their own customers, according to the CEO of the Luxury Institute at Luxury Interactive 2015 Oct. 14.

The traditional training program for sales associates is out of date, as the focus should be on education that can be applied in a creative way rather than a rote set of rules and checklists that take the human element out of interactions. Additionally, these important members of a brand’s team should be rewarded more for their actions than their results, putting the emphasis on client retention and engagement, which will lead to sales over time (see story).

“I think for me, the most powerful thing is clarity and purpose for a brand,” Mr. Powell said. “So lots of people know how they do, lots of people know what they do. The best brands know why they do what they do.

“And that kind of clarity affects a lot of the behavior of the people on that team that end up being some of the most important touchpoints that exist, because they really define the experience,” he said.

Source: https://www.luxurydaily.com/events-crucial-at-defining-brand-community-neuehouse-partner/

October 12, 2015

Luxury retailers facing slowing growth

Marketplace
By: Nova Safo
October 12, 2015

Luxury brand giant LVMH reports third-quarter earnings Monday, amid concerns of a slowdown in China taking its toll on luxury brands.

LVMH has had a good year. It reported 19 percent revenue growth in the first half of 2015.

The company owns 70 luxury brands ranging from wine and perfume, to clothing and watches, including Louis Vuiton, Donna Karan, Tag Heuer, Moet and Marc Jacobs. It has almost as many stores in Asia as it does in Europe. And that has exposed the company to the economic slowdown in China.

“Luxury growth trends are slowing down,” said industry consultant Milton Pedraza of the Luxury Institute.

A lot of that slowdown has been attributed to China. But, Pedraza said U.S. sanctions on Russia and Brazil’s economic slowdown are also responsible.

As for Chinese consumers, they are still buying luxury items, just not in China, said luxury retail analyst Paul Swinand of Morningstar. The Chinese are going to Europe, he said, where “prices are actually 30, 40 even 50 percent lower.”

And that has meant increases in sales in some European markets, he said, while Asian markets have seen declines. Even in the U.S., luxury brand CEOs have reported slowing traffic in stores, Pedraza said. A lot of this has to do with currency valuations, he said.

As a counter move, luxury brands have been investing in e-commerce. LVMH recently hired an Apple executive to lead its digital operation.

“If you’ve only got so many Cartier, or Omega, or Rolex watches made in the world, then it really doesn’t matter where you sell them,” Swinand said, predicting that, eventually, e-commerce sales could add up to as much as 20 percent of a luxury retailer’s revenues.

Source: http://www.marketplace.org/topics/business/luxury-retailers-facing-slowing-growth

November 5, 2014

Yoox Emphasizes Venice For Holiday Gift Guide

By: Kelsey Drain
Fashion Times
November 5, 2014

 

yoooooooox

(Photo : Instagram/Yoox)

Italian e-tailer Yoox.com will launch its holiday project today, centered on the theme of one of the country’s most romantic cities.

A Dinner Party in Venice is “an eclectic gift guide menu to suit everyone’s tastes,” and will consist of a series of videos showing personalities gathered in Venice to attend a fictitious Christmas dinner. The collection will also offer a special range of Venice-inspired products.

The videos, released weekly, will feature Arrigo Cipriani, actress Alessandra Mastronardi, artist Ivan Olita, fashion curator Lynn Yaeger, photographer Charlotte Colbert, jewelry designers Osanna and Madina Visconti di Modrone, artist Barnaba Fornasetti and stylist Tina Leung.

The new collection is shoppable on Yoox.com and on its new app, which allows users to access what products shoppers around them are buying and make purchases quickly by just scanning a credit card.

A customized selection of aprons decorated by various fashion and design labels are featured in the selection of Venice-themed products. Designed by Emilio Pucci, Fornasetti, Missoni, Toilet Paper and Vivienne Westwood, the proceeds will be donated to nonprofit organization Slow Food Foundation for Biodiversity.

The holiday shopping section also features two Venini Murano glass vases, a selection of Venice’s traditional Friulana slippers and striped T-shirts resembling those worn by gondola boatmen.

Additionally, MSGM, the Italian contemporary fashion label, designed a special-edition capsule collection for the site.

Back in August, there was speculation of Yoox being acquired by Amazon. The luxury retailer and the e-commerce conglomerate have made no advancements on the speculation.

“This might be the right time for companies to look to acquire a company like Yoox,” Milton Pedraza, CEO of the Luxury Institute, a New York-based research and consulting firm, said in August.

“The mass brands understand that luxury is far more profitable and more resilient. For a company to trade up to the luxury or the premium providers in categories, that would be wise right now.”

Source: http://www.fashiontimes.com/articles/14213/20141105/yoox-emphasizes-venice-holiday-gift-guide.htm#ixzz3IIbnGcnF

October 21, 2014

Luxury Institute Introduces Luxcelerate, an Empirically Proven Method to Drive High Performance in Building Client Relationships

Marketwired
October 21, 2014 80763_LuxcelerateLogo

NEW YORK, NY–(Marketwired – Oct 21, 2014) – Today, the New York-based Luxury Institute announced the launch of Luxcelerate, an enhanced version of its innovative successful 7-Step Customer Culture process. Luxcelerate is designed to accelerate sales performance via a proprietary methodology that focuses on empowering the customer-facing online and offline associates, helping brands to improve both client relationships and sales exponentially.

Presently, top brands are struggling to both expand and retain their client base. Top brands have a conversion rate of 10-15%, a data collection rate of 30-40% (approximately 25% of this data is unusable) and a first time buyer retention rate of 10%.

Luxcelerate encourages the individual sales associate to learn and execute the best practices in client relationship building. The process is designed to improve sales performance via an exclusive methodology that focuses on relationship building, while improving a brand’s conversion, data collection and retention rates.

Luxcelerate’s proprietary methodology is based on shared relationship values and standards that are designed by a brand’s front-line teams, and is therefore customized to fit the unique DNA and culture of each brand. Custom education programs use empirically proven learning principles to drive retention of critical knowledge. Measurement and reinforcement methodologies are then deployed individually to guarantee consistent daily execution. The outcome is humanistic, effective client relationship building that leads to sharp increases in sales.

Luxury Institute’s CEO Milton Pedraza developed Luxcelerate’s 7-step methodology. Mr. Pedraza established this innovative methodology after being inspired by best practices from education, medicine and aviation. Using this process, a number of top-tier luxury brands have doubled, or tripled, the accurate collection of critical client data, and have significantly increased client conversion and retention rates. Luxury Institute has worked with the top brands of major luxury groups, well-known brands owned by private equity firms, and small boutique brands, to drive sales at rates of 15-30% per annum.

“The Luxury Institute was invaluable in helping Malia Mills define and implement our clienteling process. The first quarter that we implemented our program we increased sales by a significant amount.” — Carol Mills, Co-Founder, Malia Mills

“Since embarking on this project, we have seen double digit increases in data collection, conversion and a significant acceleration in retail momentum.” — Claudia Poccia, President and CEO of Gurwitch, Owner of the Laura Mercier brand

References are available upon request. For more information please email luxinfo@luxuryinstitute.com or fill out a contact form at www.luxuryinstitute.com

Source: http://www.marketwired.com/press-release/luxury-institute-introduces-luxcelerate-empirically-proven-method-drive-high-performance-1959706.htm

June 26, 2014

Flying the Flagship

By: Simon Brooke
Sphere Magazine
June 26, 2014

Those waiting for the long-predicted explosion of luxury retailing onlines are still holding their breath. While some reports have estimated that global online retail sales have increased by as much as 17 per cent a year since 2007, growth in the effete world of luxury goods is nothing like as fast. Having viewed e-commerce with suspicion for many years, several successful brands have dipped a well-manicured toe in the digital waters-many prompted by the success of Net-a-Porter-but most have held back. Miuccia Prada summed up the sector’s attitude to web sales and e-commerce last year when she declared: “We think that, for luxury, it’s not right…Personally, I’m not interested.”

The new area for growth in luxury retailing is still not internet-based-it’s in the streets and shopping centres. Yes, bricks and mortar are back. In the luxury shopping capitals of the world-London, Paris, New York, and increasingly cities such as Shanghai and Dubai-well-established brands alongside up-and-coming names are opening new locations as well as expanding and refurbishing existing stores. Many are making significant investments: Versace, for instance, has recently sold a 20 per cent stake to private equity house Blackstone so that the brand can develop new venues.

“Luxury brands recognize the reality that only at most 10 to 15 per cent of sales are conducted online and the store, adapted for the future, will always be the main channel of customer engagement,” says Milton Pedraza, CEO of New York-based boutique research and consulting firm The Luxury Institute. “There are many cities across the world that present opportunities in growth for luxury brands and they are selectively opening stores there.”

The Italian trade body Fondazione Altagamma estimates that although online luxury shopping rose by 28 per cent last year, compared with 2012, it still only comprised 4.5 per cent of overall global luxury sales, further evidence that the luxury industry prefers “on street” to “online”. In an industry worth $300 billion, an estimated 90 per cent of luxury purchases still take place in stores.

Click the link to read the entire article which includes quotes from Milton Pedraza, CEO of Luxury Institute: http://edition.pagesuite-professional.co.uk/Launch.aspx?EID=915643ec-109b-4ba4-a154-fc2360651b30

December 25, 2013

Post-Twitter IPO: “Suddenly everyone thinks you’re Santa Claus”

By Mark Garrisson
Marketplace
December 24, 2013

Twitter may be the most famous company to go public this year, but 2013 was a monster year for IPOs in general.

And initial public offerings can bring big money to employees, on paper at least. Things can get a little awkward this time of year for the newly-rich, as certain friends and family members raise their holiday gift expectations. Strike it rich with an IPO, and suddenly everyone thinks you’re Santa Claus.

“You find you have relatives and friends you never knew you had,” says Doug Wolford, president and COO of Convergent Wealth Advisors. “I’ve known people whose friends have, you know, asked them to pay off their cars, take them on trips to the Super Bowl, you name it.”

Pressure to spend big is intense and not all external.

“The individuals themselves begin to feel guilty, feel like they do have to step in and solve a lot of the problems for the people they love. So it’s kind of a two-sided issue” says Luxury Institute CEO Milton Pedraza.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.marketplace.org/topics/tech/post-twitter-ipo-suddenly-everyone-thinks-you%E2%80%99re-santa-claus

December 5, 2013

Strong sales may result in weak profits for retailers this holiday season

Posted in E-Commerce,Fashion
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By Jonathan Berr
CBS News
December 4, 2013

So far this holiday season, it seems like economic pundits have been too pessimistic about the holiday shopping season. They worried that stagnant wages and high unemployment would dampen sales. They struggled over how consumers could pack in the same amount of shopping when there are six fewer shopping days between Thanksgiving and Christmas this year.

Yet consumers, whose confidence unexpectedly fell by one measure to seven-month low in November, showed a familiar propensity to buy as the holiday shopping season kicked off in earnest over what’s newly known as”Black Weekend” — the bonanza of discounting during and after Thanksgiving.

For example, in the hot game console category, they snapped up more than 2 million Sony PlayStation 4s in the three weeks since it debuted. Rival Microsoft sold more  than 1 million of its Xbox One units, which retail for about $100 more than the PlayStation 4.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.cbsnews.com/news/a-holiday-season-of-consumer-unease/

November 20, 2013

Are flash-sale sites a flash in the pan?

By AnnaMaria Andriotis
Wall Street Journal
November 19, 2013

When shares of Zulily (NASDAQ:ZU)  soared 71% Friday following its initial public offering, investors seemed to be betting that flash-sale sites are here to stay. Consumers, however, are having trouble sorting out whether the limited-time offers they peddle are really a good deal. Zulily, the first such startup to go public, is part of a growing industry of high-end flash-sale sites geared toward more affluent consumers. The business model is fairly simple: offer consumers a limited period of time—typically from as little as one hour to two days—to buy high-end inventory at a discount. But the process hasn’t worked out so smoothly for shoppers.

In a sign that consumers are growing wary of the industry, one study found shoppers’ complaints to be widespread: Forty-four percent of comments on flash-sale Facebook pages were negative earlier this year, according to findings released in May by Dotcom Distribution, which provides fulfillment services, including serving as a warehouse, for companies that sell products via e-commerce. Just 29% were positive. Meanwhile, a look at the unique desktop visitors of 10 popular flash sale sites (data supplied by comScore, an analytics firm that tracks consumer behavior) reveals that they declined for all but three of them in October compared with a year prior.

Part of the problem is that these sites grew popular as a response to the downturn—and those conditions are no longer in play. As store sales tanked, high-end manufacturers were stuck with excess inventory and looking for ways to unload it. That’s when many flash-sale sites popped up offering high-end luxury brands, along the lines of Gucci and Chanel, at discounts that consumers could not previously find elsewhere. Those market conditions created a new category of discount sites that have been marketing to relatively affluent consumers who are looking for a steal on what (even with a discount) is still a relatively pricey product.

But that high caliber of retail is harder to come by on these sites now, says Maria Haggerty, president of Dotcom Distribution. Manufacturers have since scaled back production so there are fewer grade-A products on these sites. While most items are still relatively high-end, they don’t inspire the same excitement and flurry of demand. “There isn’t enough inventory of the type of products these sites want to sell because it’s doing well in stores,” says Milton Pedraza, CEO of the Luxury Institute, a New York-based research and consulting firm for the luxury industry.

 Click the link to read the entire article including a quote from Luxury Institute’s CEO Milton Pedraza: http://www.marketwatch.com/story/are-flash-sale-sites-a-flash-in-the-pan-2013-11-19/print?guid=5A07C5D6-5086-11E3-AD6E-00212803FAD6

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