Luxury Institute News

July 21, 2016

Global Tourism Takes Massive Hit After Spike in Terror Attacks

NBC News
By: Ben Popken
July 21, 2016

When a Tunisian truck driver launched an ISIS-inspired attack on July 14th in Nice on the French Riveria, he didn’t just mow down 84 people, he widened a wound in the global economy.

Now, no tourist destination appears safe after the attack on the boardwalk in Nice, a glamorous and family-friendly seaside city popular with tourists from all over the world. While full of “soft targets,” it broke from the recent pattern of terror attacks in Europe.

“It was a watershed moment,” said luxury consultant Milton Pedraza. “You thought it was just capitals and where those guys live and congregate, now it’s everywhere.”

As ISIS has lost its physical territory, there have been an uptick in attacks in Western Europe for which the group has later claimed responsibility said Alex Kassirer, a senior counterterrorism analyst at the global security firm Flashpoint Intelligence and an NBC News consultant.

“This is a strategy they’re honing, and one we’ll see more often, with little attention paid to city of attack, as long as it’s in the West,” said Kassirer. “No city is immune to attacks.”

The increased cadence in terror attacks targeting European tourist destinations both major and minor has dealt double-digit blows to travel, with global tourism spending down 14 percent in June, according to a recent report by UBS.

Image: Minute of silence the Promenade des Anglais
An aerial view of the Promenade des Anglais boulevard where thousands gathered to observe a minute of silence in tribute to the victims of the Nice truck attack, in Nice, France. VILLE DE NICE / HANDOUT / EPA

In the immediate aftermath of the Nice attack, cruise lines canceled trips and ports of call to the city. Rihanna canceled a concert scheduled for the day after the attack, and the prestigious annual Nice Jazz Festival canceled its four-day event.

A spokesman for the Provence-Alpes-Côte d’Azur regional council, which includes Nice, declined to comment.

“Economic consequences, though important, are meaningless compared to the tragedy many families and the nation are experiencing,” said spokesman Eric Lorrain. “The Regional Council is assessing the economic consequences and trying to figure out how to help the professionals that are to face losses in their activity.”

But it’s clear that in Nice, as seen in other targets of terror, tourism will suffer. Across the board, fearful tourists are canceling or changing travel plans to avoid attacked cities and countries.

Fearful Tourists Change Itineraries

Egypt, France, Tunisia, and Turkey have all seen drops in visitors from 11 to 20 percent following terror attacks, some of which specifically targeted tourists.

31-year-old travel entrepreneur Jared Kamrowski said that he initially stuck with his plans to visit Turkey following a terror bombing there in January 2016.

Image: People walk away from Istanbul Ataturk airport, Turkey
People walk away from Istanbul Ataturk airport, Turkey, following a blast June 28, 2016. Goran Tomasevic / Reuters

“We told ourselves we weren’t going to let the terrorists win by canceling our plans,” he said. But, after another bombing there in March, he did cancel his plans, opting to visit Dubai and Spain instead.

“After the first bombing….we weren’t going to let the terrorists win…after the second bombing…we decided to cancel our plans”

Many travelers are avoiding mainland Western Europe entirely, switching to places seen as safe, like Scotland, or Latin America.

Esther Roskam, a 31-year-old law student from Baltimore, Maryland, was discussing with her friend whether to take a trip to Amsterdam because of terror concerns. Besides the general miasma overhanging Europe, there had been an attack on the Amsterdam to Paris high-speed train in August 2015.

“As we were debating, there was another attack,” said Roskam. Instead, they opted for Cancun. She couldn’t recall which attack specifically changed her mind. “Possibly France? It’s incredibly depressing that I’m having trouble keeping track.”

Some travelers even prefer what they say is the relative safety of Western Africa.

Valerie Bowden, a 28-year-old American who regularly backpacks and hitchhikes through Ethiopia said she was in the Istanbul airport shortly before the attack June 29 that killed 45 and injured more than 200.

Later, watching on TV screens the aftermath she avoided by only a few hours, “was eerie and scary,” she said.

She finds African countries to be safer than the U.S. and Europe. In fact her biggest concern is pickpockets.

“While Africa isn’t immune to terrorism, most violence occurs in small villages that a tourist would never visit. Thanks to ISIS, terrorism across Europe takes place exactly where tourists would end up,” said Bowden.

Travel Industry Scrambles to Coax Back Customers

Sentiments like that have helped send down stock in companies that sell packaged vacations to major cities in Europe, with Thomas Cook down 47 percent and TUI down 32 percent since the beginning of the year.

The travel and lodging industries have been forced to make steep discounts in an attempt to coax back customers.

Experts note that the price wars started after a 14 percent drop in Chinese demand following stricter rules in the country on “gifting,” or bribing officials with foreign-bought luxury items. But tourists frightened by terrorism have exacerbated the downturn.

Image: French police officers at Charles de Gaulle Airport on May 19, 2016
French police officers stand guard at Charles de Gaulle Airport near Paris on Thursday, May 19. ETIENNE LAURENT / EPA

Across Europe, hotels are offering discounts of up to 20 percent. Airfare to Europe from the U.S. is near record lows for recent decades. The cost of a ticket to Paris is down 15 percent from a month ago compared to being up 10 percent last year, according to deals surveyed by

For some travelers, like company CTO Mike Catania, who is heading to the Bordeaux region of France next month, the savings are worth the risk.

“Fear isn’t a great enough motivator to deprive our families of cultural experience beyond our borders,” said Catania. “And the deals were too good to pass up.”

But nothing lasts forever, especially when it comes to airline ticket prices. Later this year some airfare deals will evaporate as airlines begin removing capacity after the start of their winter schedule on October 26.

History Repeats Itself, But the 70′s Were Worse

The recent spate of terror is a decided spike for events in recent memory. But it pales in comparison to the thousands of terror attacks seen in the 70′s, 80′s and 90′s, which saw an average of 10 attacks per week.

Terror attacks Western Europe chart
Terror attacks in Western Europe from 1970 to 2015.

There have been over 16,000 attacks in Western Europe since 1971, according to the Global Terrorism Database. That’s an average of 350 per year. The highest number of deaths came in 1988, a total of 440, largely due to the Pan Am flight 103 bombing over Lockerbie, Scotland. And 2004 saw the highest number of wounded, 1,853, after the attacks in Madrid, Spain.

So, if history is a guide, tourism will come back, said Yeganeh Morakabati, an associate professor at Bournemouth University in the U.K., who studies the relationship between tourism and terrorism.

Her data shows predictable dips in annual arrivals following attacks in years past in Egypt, the U.K., and Spain. Numbers there eventually recovered to what they were before, then surpassed them.

“Tourists have short memories and people tend to forget,” said Morakabati. “As long as there is no other attack.”


September 23, 2014

Luxury Institute Survey Of High-Income Travelers from Europe, China and Japan Reveals Brand Status Ranking Of World’s Top Luxury Hotels

NEW YORK) September 23, 2014 – The New York-based Luxury Institute has released findings of its 2014 Luxury Hotels Brand Status Index (LBSI) survey of affluent overseas travelers who shared detailed impressions and evaluations of 37 global luxury hotel brands.

LBSI scores (1-10) are based on each brand’s perceived quality, exclusivity, social status and overall guest experience. In addition, affluent consumers weigh in on whether a hotel deserves premium pricing, if they would recommend it to people close to them and how likely they are to stay at a brand’s property on their next trip.

Here are the top five brands as rated by wealthy consumers from each region, with Europe including the U.K., Germany, France and Italy.

Europe:Small Luxury Hotels of the World (7.96), The Ritz-Carlton (7.95),Armani Hotels (7.88), Mandarin Oriental (7.86), Leading Hotels of the World (7.77)

China: Leading Hotels of the World (8.62), Oberoi (8.57), The Luxury Collection (8.54), Firmdale Hotels (8.53), Raffles Hotels and Resorts (8.50)

Japan:Aman Resorts (8.19), Oberoi (7.83), Waldorf Astoria Hotels and Resorts (7.80), The Ritz-Carlton (7.73), Orient-Express Hotels (7.68)

“The luxury hotel industry is growing in potential, but also in the dramatic number of brands that have top tier offerings,” says Luxury Institute CEO Milton Pedraza. “The winners are those who can consistently provide remarkable guest experiences, as rated by the clients.”

Respondents reviewed the following hotel brands: Aman Resorts, Armani Hotels, Banyan Tree, Club Med, Como Hotels and Resorts, Conrad Hotels and Resorts, Fairmont Hotels and Resorts, Firmdale Hotels, Four Seasons, Grand Hyatt, InterContinental, Jumeirah, JW Marriott, Kempinski Hotels, Le Meridien, Langham, Leading Hotels of the World, Loews Hotels, The Luxury Collection, Mandarin Oriental, Oberoi, Orient-Express Hotels, Pan Pacific, Park Hyatt, The Peninsula Hotels, Raffles Hotels and Resorts, Regent, The Ritz-Carlton, The Rocco Forte Collection, Rosewood, Shangri-La Hotels & Resorts, Small Luxury Hotels of the World, Sofitel, St. Regis, Taj Hotels Resorts and Palaces, W Hotels and Resorts, and Waldorf Astoria Hotels and Resorts.

Contact the Luxury Institute for more details and complete rankings.

Visit us at and contact us with any questions or for more information.

February 21, 2014

Lamborghini gains top employer award, continues improvement efforts

By Joe McCarthy
Luxury Daily
February 21, 2013

Italian automaker Lamborghini is continuing efforts to expand its work force and improve the labor environment following its reception of the Top Employers Italia 2014 Certification.

After a year-long evaluation process, the Top Employers Institute awarded Lamborghini the award for its “excellent workplace environments and advanced policies for human resource management.” Recognition as a generous employer may endear the brand to new consumers who appreciate sound business models.

“It’s an award much like quality certification that they had to work for,” said Charles Hughes, founder of Brand Rules, Snowmass, CO. “They really put you through the hoops. It shows an effort and an interest.

“Teams that keep winning awards in all different places feel very good about themselves,” he said.

“Also, if you are working at Lamborghini and you know that this car is someone’s dream, you want to believe that you’re part of that dream, not part of a sweatshop, and that changes everyone’s attitude about working there.”

Mr. Hughes is not affiliated with Lamborghini, but agreed to comment as an industry expert.

Lamborghini did not respond by press deadline.

Sound model
The institute looked at five criteria during its evaluation: salary policies, working conditions and benefits, training and professional growth, career opportunities and corporate culture.

Lamborghini has built a welfare system that encompasses employee life both inside and outside the work environment to ensure well-being and motivation.

Attractive salaries and increases linked to tangible measures are available. An apprenticeship program helps to guide citizens into the workforce with compensation that exceeds Italian requirements.

The institute commended the brand’s training practices that continue to develop individual skill with culminating programs and international job rotation.

Labor unions receive respect and engage in “transparent” dialogue with management, according to the award statement.

Some welfare programs include health insurance, free check-ups and vaccinations and special terms at local nursery schools. Employees are given special access to sports facilities, businesses and cultural activities and discounts on VW Group vehicles. New parents are also provided with extensive paid leave.

Food service at the headquarters meets dietary restrictions and sources local fruit and vegetables.

The brand was the first Italian company to receive the Italian president’s award during the National Forum on Health and Safety in the Workplace.

Work stations are regularly updated to meet safety and health standards and new technologies for preventing risks have been incorporated.

The automaker has hired 300 employees since 2011 to reach a total of 1,029 at its Sant’Agata Bolognese headquarters. The majority of the posts have been in the industrial and research and development fields and 30 percent of new hires during this period have been women.

Additional hires will be made this years as the brand gears itself for human resource investment.

From the ground up
Other luxury brands have shown a commitment to elevating employee satisfaction and productivity.

For instance, LVMH Moët Hennessy Louis Vuitton looked to better serve its Mandarin-speaking consumers traveling abroad with a new training program for Chinese Americans.

The French conglomerate teamed up with Parsons the New School for Design and the Chinese-American Planning Council to design a program to teach recently immigrated Chinese Americans luxury retail skills, which includes an internship at a LVMH brand store. Through this program, LVMH will be able to connect with Chinese tourists in their native language and deliver enhanced customer service.

Also, Rolls-Royce Motor Cars opened up its annual apprenticeship program to welcome a new group of aspiring craftsmen and women.

Selected candidates will work alongside employees skilled in leather, wood, paint, engineering and assembly roles beginning August 2014. The brand’s ability to replenish its apprenticeship program acts as a tangible verification of its strong sales numbers and paints the automaker in a favorable light amid a still straggling economy.

Lamborghini’s employment award affirms the quality of its employee culture, and may also appeal to consumers abroad who investigate the roots of what they purchase.

“Today consumers are not just looking for products, but also for great corporate social responsibility and the credentials that drive it,” said Milton Pedraza, CEO of Luxury Institute, New York.

“In a country like Italy where employees are generally treated great, the award is a big deal,” he said. “It’s a big deal to consumers around the world and particularly in the United States and Europe, where they really believe in corporate social responsibility.

“As emerging market consumers become more sophisticated and demanding, they will view this reward as extremely important while making purchasing decisions. Employees are also your customers, so they have to be treated as the brand would treat clients.”

October 10, 2013

Wealthy Travelers From China, Japan and Europe Rank Quality And Experience At Global Luxury Hotel Brands

(NEW YORK) October 10, 2013 – Wealthy travelers from Europe and Asia revealed their top luxury hotel picks in recent research conducted by the independent and objective New York-based Luxury Institute. Three new Luxury Brand Status Index (LBSI) reports examine the attitudes and preferences of affluent Chinese, Japanese, and European consumers as they relate to leading hotel brands.

On a 1-10 scale, wealthy respondents rated hotels on quality, exclusivity, social status, and self-enhancement. They also shared which brands are worth a luxury price tag, the hotels they would recommend, and their preferred brand for an upcoming stay.

New this year, the Luxury Institute asked consumers who recently visited a luxury hotel if their stay was for work, vacation, or both.

“Luxury hotels serve a dual purpose as destinations for both business and pleasure,” says Luxury Institute CEO Milton Pedraza. “Brands have an opportunity to deliver personalized experiences so guests will return for their next trip, regardless of the occasion.”

Affluent respondents ranked the following number of luxury hotel brands in the regions below:

Europe (U.K., Germany, France and Italy)

  • Brands rated: 31
  • Consumers surveyed: 1,516
  • Median annual HHI: £79,000 (U.K.), €69,000 (Germany), €63,000 (France), and €71,000 (Italy)
  • Median age: 47 (U.K.), 43 (Germany), 46 (France), and 42 (Italy)


  • Brands rated: 31
  • Consumers surveyed: 717
  • Median annual HHI: 2.5 million CNY
  • Median age: 32


  • Brands rated: 23
  • Consumers surveyed: 602
  • Median annual HHI: 20 million JPY
  • Median age: 51

To learn about the specific brands rated in each region, please contact Luxury Institute directly.

About Luxury Institute (
The Luxury Institute is the objective and independent global voice of the high net-worth consumer. The Institute conducts extensive and actionable research with wealthy consumers about their behaviors and attitudes on customer experience best practices. In addition, we work closely with top-tier luxury brands to successfully transform their organizational cultures into more profitable customer-centric enterprises. Our Luxury CRM Culture consulting process leverages our fact-based research and enables luxury brands to dramatically Outbehave as well as Outperform their competition. The Luxury Institute also operates, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.

August 14, 2013

21.6 Billion Reasons The Luxury Industry Needs Oprah And Her Friends

By Russ Alan Prince
August 13, 2013

The Boston Consulting Group estimates that US$130 billion is spent per year on luxury fashion and accessories including US$38,000 handbags. Of course, the vast majority of goods sold are priced considerably less, and we learned even billionaires such as Oprah Winfrey hedge at such sky-high prices. She said that had she been given the chance to buy the bag, she probably would have passed.

About 90% of private jet travelers buy some type of luxury fashion and accessories annually – leather goods such as purses, wallets, briefcases and shoes – and the average spent is about US$120,000 per household. The super-rich like Ms. Winfrey likely account for around US$21.6 billion in annual purchases of gowns, skirts, suits, totes and, of course, handbags. Milton Pedraza, the CEO of The Luxury Institute, believes as many as one billion consumers worldwide purchase some type of luxury good or service, be it staying in a five star hotel or buying a luxury brand fragrance or key chain.

If you want another way to think about the luxury product purchasing power of the ultra-high-net-worth sliver of the world’s population, get out a map: Go to the South Pacific and find the 15 strong Cook Islands chain. Single out Rarotonga, a 26 square mile microdot of land that is home to the capital. Now go to North America, a continent accounting for 16% of the world’s landmass, and you will have a good idea about the relationship between the global super rich population and how much they spend. While the jewelry market is more concentrated than fashion, London based diamond house Graff’s 2012 IPO filing, for example, revealed that just 20 customers made up 44% of their US$756 million in annual sales.

Click the link below to read the entire article

August 10, 2013

Luxury Landgrab

By Russ Banham
Washington Post
August 9, 2013

With the rise of newly affluent consumers in the Asia-Pacific capitals of Hong Kong, Seoul, Shanghai, Mumbai, and other fast-growing metropolises, ultra-luxury brands like Chanel, Louis Vuitton, Cartier, Ferrari, Hermes, BMW, Prada, and Rolex are aggressively expanding their physical footprints and shifting their marketing strategies to reach this new audience.

Most luxury brands have focused on indigenous cultural, demographic, and behavioral differences to craft regional marketing messages that inform neophyte shoppers about their brand’s value proposition, and their long heritage of fine craftsmanship, innovation, and exclusivity. “There is still some confusion regarding the identification of mid-tier brands from top-tier brands,” explains Sandilya Gopalan, vice president and Asia-Pacific practice leader at Cognizant Business Consulting. Unlike the more mature American, European, and Japanese markets, “the Chinese and Indian luxury retail markets are just getting exposed to luxury items and high-level customer service,” he says.

All luxury brands leverage a customized mix of print, television, and social media to deliver their unique message to shoppers, but chief among their marketing strategies is having a shop located on the world’s priciest retail streets. “Putting luxurious flagship stores on the high streets of Asia-Pacific is critical,” says Milton Pedraza, CEO of Luxury Institute, the New York-based research and consulting firm.

Madison Avenue in New York and Michigan Avenue in Chicago are the shopping thoroughfares of the wealthy in the United States. Overseas, their counterparts are Queen’s Road Central in Hong Kong, Tokyo’s Ginza-Chuo Street, Orchard Road in Singapore, Mumbai’s Altamont Road, and Nanjing Road West in Shanghai. “The newly affluent travel a lot, and know the luxury brands from their excursions to Europe and the U.S.,” says Pedraza. “A highend store at home demonstrates the power of the brand, and is considered the top form of marketing.”

Click the link to read the entire article which includes several quotes from Milton Pedraza, CEO of Luxury Institute:

May 28, 2013

Insight: Luxury brands position for U.S. boom

By Astrid Wendlandt & Phil Wahba
May 24, 2013

Most men might balk at spending $600 on a pair of Dior sneakers but for U.S. shoppers like Ephraim, an upbeat 30-year-old, such indulgences are becoming increasingly commonplace.

Ephraim is the kind of man who gives luxury goods makers high hopes that the U.S. market can fuel future growth, as China runs out of steam and demand in Europe sags.

“There is a cultural shift,” Ephraim says while browsing at Saks Inc’s New York City flagship. “Men are becoming more fashion forward.” The growing appeal of luxury goods to men and increased confidence among affluent spenders as the U.S. economy and asset prices recover have boosted sales and encouraged luxury brands to step up their investments in the United States.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute:

May 20, 2013

Richemont’s Asia focus drives full-year sales up 14pc

By Erin Shea
Luxury Daily
May 17, 2013

Richemont is attributing its full-year sales increase to demand in China and Asia-Pacific, contributions from currencies and exchange rates and the broad growth from its brands across all regions.

Luxury conglomerate Richemont reported a 14 percent increase in annual sales to approximately $13 billion in 2012, compared to last year’s sales of $11.4 billion.

Richemont also reported that its profits for the year are up 30 percent to $2.6 billion from $2 billion in the previous year, much of which can be attributed to the sales in Asia-Pacific. The conglomerate released its results May 16 for the fiscal year that ended March 31.

“The Chinese and the Asians have a very healthy appetite for jewelry,” said Milton Pedraza, CEO of The Luxury Institute, New York.

“I think that ready-to-wear products may be oversaturated [in Asia], and handbags may be oversaturated, so watches and jewelry tend to be valuable,” he said.

“There are some companies in luxury that continue to grow, despite the global economy.”

Mr. Pedraza is not affiliated with Richemont, but agreed to comment as an industry expert.

Richemont, which was not able to comment directly, owns a number of luxury brands including Vacheron Constantin, Jaeger-LeCoultre, Baume & Mercier, A. Lange & Söhne, Cartier, IWC, Piaget, Alfred Dunhill, Van Cleef & Arpels, Montblanc, Chloé and Roger Dubuis.

Asian expansion
Richemont attributes its sales results to an increased demand in China and Asia-Pacific, contributions from currencies and exchange rates and the broad growth from its brands across all regions.

The company said that it works on a long-term basis of benefiting from the prestige and heritage of its brands, which will continue in the future.

However in the short-term, Richemont said that economic troubles may impact consumer confidence in some markets. Overall, the conglomerate is cautiously optimistic about the future.

During this past fiscal year, Richemont reported that Asia-Pacific accounted for the majority of its sales, with 41 percent of the group’s total sales coming from that area. Hong Kong and mainland China are its two largest markets.

Europe, including the Middle East and Africa, was responsible for 36 percent of Richemont’s overall sales.The conglomerate says this area’s growth was a result of demands from tourists.The Americas region had a third consecutive year of double-digit growth. This year, it accounted for 15 percent of group sales.Compared to other regions, Asia-Pacific is the area that is leading Richemont’s growth.

“Asia-Pacific is still a vibrant part of the world and there are some companies that are doing well there,” Mr. Pedraza said.

“Some brands are doing a fantastic job in that area,” he said. “Richemont is doing a fantastic job.”

Retail v. wholesale
Another aspect responsible for Richemont’s growth is its individual brands’ focus on retail over wholesale.

Cartier boutique

For the Asia Pacific and Europe, Richemont reports that its brand’s own boutiques had the highest growth rates.

In Asia, the brand boutiques had higher sales growth than the company’s wholesale partners. This is in part due to the expansion of the boutiques in the region.

“Richemont has set out over the last few years to try to keep its own distribution,” Mr. Pedraza said.

“Retail is outselling wholesale, which can help a company grow faster,” he said. “You can have faster growth when you are de-emphasizing wholesale and emphasizing retail.

“Most luxury brands want to control their own distribution. Watch brands tend to be more retail-oriented.”

November 29, 2012

Wealthy Shoppers Reveal Spending Plans, Attitudes On Global Luxury Industry

(NEW YORK) November 29, 2012 – Wealthy shoppers from seven global luxury markets share opinions and observations on issues confronting providers of high-end goods and services in the new 2012 State Of The Luxury Industry Global Trends survey from the independent and objective New York-based Luxury Institute.  Respondents are among the top 10% of earners in the U.S., United Kingdom, France, Germany, Italy, China and Japan, with minimum income of $150,000 in the U.S.

Despite an economic slowdown and a crackdown on conspicuous consumption, 43% of wealthy Chinese consumers still plan to spend more on luxury products in the coming year. This varies dramatically from the 10% of Japanese and 9% of American consumers who say they’ll boost luxury spending, while in Germany and Italy, where only 5% of wealthy shoppers plan to spend more.

Indicative of strength in U.S. luxury retail, wealthy Americans plan to increase spending in all  surveyed luxury categories compared to last year. Notable areas where recoveries are underway: ready-to-wear , jewelry, and private jet travel. Yachting also has the wind at its back, with 22% of U.S. consumers planning to spend more on luxury boating in 2012.

Everywhere except for Japan, discounting has enhanced luxury goods’ appeal and stimulated spending.  Wealthy Chinese (59%) and Italian (53%) shoppers are most likely to say that discounting has improved their view of luxury and prompted greater expenditures.

“Product differentiation and exceptional service are what keep luxury relevant,” says Luxury Institute CEO Milton Pedraza. “Especially in an uncertain economy, firms need to give wealthy shoppers reasons to buy more.”

About the Luxury Institute (
The Luxury Institute is the objective and independent global voice of the high net-worth consumer. The Institute conducts extensive and actionable research with wealthy consumers about their behaviors and attitudes on customer experience best practices. In addition, we work closely with top-tier luxury brands to successfully transform their organizational cultures into more profitable customer-centric enterprises. Our Luxury CRM Culture consulting process leverages our fact-based research and enables luxury brands to dramatically Outbehave as well as Outperform their competition. The Luxury Institute also operates, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.

September 18, 2012

Luxury Institute CEO on Why You Must Empower, Educate & Mobilize Sales Forces

By Kelly Hushon
The eTail Blog
September 17, 2012

Milton Pedraza, CEO at The Luxury Institute, says we should be providing just as much information to the sales professional as we do to the customer. Makes sense. Somehow many retailers still aren’t doing that.

At a presentation he gave at eTail Europe this past June, Pedraza used Apple as an example. The company empowered its sales force by arming them with mobile devices that allowed them to interact with customers more efficiently and personally. But that’s just the beginning.

When retail stores are less full, Pedraza says there is a great opportunity for sales professionals to work on relationship building with their customers, and they can do so if they are given mobile devices with minimal functionality that allows them to reach out to the clientele they already have through email and other forms of mobile communication. Sales professionals can reach out to customers and nurture relationships in a way that scientific algorithms and data mining can’t compete with because, quite simply, they’re not as good as human beings.

It might seem radical – you might be thinking, “So you’re asking me to give my sales person in my store a mobile device and let them openly and directly email customers? NO WAY!”

According to Pedraza, it doesn’t have to be so scary. The two keys to doing this successfully are:

1. Hire the right people. Hire people who share your customer centric values. If they are selfish, they should work elsewhere.
2. Educate, educate, educate. And add to that Empower; use incentives that will empower them to build relationships with their customer base.

So why haven’t more retail operations done this already? Pedraza says it’s because it’s easier to create a technology app than it is to face the idea of finding the absolute best people, training them and paying them properly. He’s convinced though, that if we do this, it will pay off.

Customers who have admitted having a good relationship with a company and/or its sales force have been proven to spend more wallet share with said company.

Click on the link below to view the brief video of Luxury Institute CEO, Milton Pedraza, and hear more about why this idea works – and why, if you’re not already – you should be doing it:

Older Posts »