Luxury Institute News

July 18, 2018

NORDSTROM RATED THE MOST EMOTIONALLY INTELLIGENT BRAND IN THE US

The CEO Magazine
July 18, 2018

The American department store topped the Luxury Institute’s 2018 Emotionally Intelligent Brand Index.

The Luxury Institute released its results for the 2018 Emotionally Intelligent Brand Index (EIBI) this month and, according to the affluent consumers surveyed, Nordstrom is the most emotionally intelligent multi-brand in the US.

The key factors that the Seattle-based company outperformed on included empathy, trustworthiness, and generosity.

Amazon in contrast ranked low among affluent consumers, with some rating it the worst in terms of these attributes, even though the brand is easily one of the most well-known multi-brands across the world.

The other brands included in the survey included Barneys New York, Bergdorf Goodman, Bloomingdale’s, Neiman Marcus, Net-A-Porter, Saks Fifth Avenue, Sephora and Ulta.

According to the Luxury Institute, the EIBI survey is an extension of the “high-performance client relationship system pioneered by Luxury Institute 10 years ago”.

“Delivering great products and quality today are merely a cost of entry, even if you deliver them instantly. Even having great customer service is insufficient to be sustainable today. Many will only see the short-term impact, yet Nordstrom, while having its challenges lately, looks more adaptable and agile for the long-term functional and emotional needs of consumers than Amazon,” explained Milton Pedraza, Luxury Institute CEO.

“This analysis makes it crystal clear that while Amazon is the current product category killer, it has a long way to go to be an admired and beloved brand. Amazon, to many affluents, even those who buy from it frequently for convenience, is a soulless utility. While Amazon is the current product category killer, it has a long way to go to be an admired and beloved brand.”

“Jeff Bezos needs to lead this brand to establish emotional connections with the human beings who work for the brand, and purchase products through the brand. Sooner or later, just as with humans, your brand’s deep lack of emotional intelligence will catch up to you, with negative results,” Milton continued.

The Luxury Institute surveyed a nationally representative sample of over 1,200 responders with a minimum of US$150,000 annual household income across several brand categories most consumed by affluent consumers.

Nordstrom has 373 stores in the US, Canada and Puerto Rico, 239 of which are Nordstrom Rack stores. Los Angeles makes up US$1 billion of Nordstrom’s market and provides for more than four million customers.

According to Retail Leader, “Nordstrom executives said 2018 will be a big year for the company, as it continues to adjust to a changing retail landscape.”

Source: https://news.theceomagazine.com/news/nordstrom-named-most-emotionally-brand-us-brand/

July 2, 2018

Fast fashion, furious controversy: Why retailers like Zara and H&M keep making headlines for offensive clothing

The Washington Post
June 29, 2018
By: Abha Bhattarai


(Kevin Lamarque/Reuters)

Fast-fashion retailer Zara found itself in the headlines last week after first lady Melania Trump wore one of the company’s designs — a two-year-old olive green jacket emblazoned with the words “I really don’t care, do u?” — on her way to visit immigrant children who had been forcibly separated from their parents.

The backlash was immediate. Although the incident may have been more about the first lady’s sartorial message than the actual garment, the world’s largest clothing company was once again in the middle of a firestorm, raising questions about why certain fast-fashion retailers — H&M, Topshop and Urban Outfitters among them — repeatedly end up in the hot seat.

Fashion professors say the constant pressure to churn out new clothing makes it difficult to ensure proper oversight. Zara alone produces 20,000 designs a year, while its parent company, Inditex, manufactures roughly 1 billion items annually.

Sometimes, that leads to controversy. Zara last year faced criticism for selling a miniskirt printed with a cartoon character that resembled Pepe the Frog, a symbol used by white supremacists.

The Spanish chain has also apologized for selling striped pajamas for children with a yellow star on the breast that some said resembled concentration camp uniforms, and an embroidered handbag that included a swastika design. The retailer later pulled all three items from its shelves.

“Everything just has to happen so quickly,” said Abigail Glaum-Lathbury, an assistant professor of fashion design at the School of the Art Institute of Chicago. “It’s like an assembly line — we hear a lot about the strenuous working conditions at factories, but design teams are under similar pressure. It’s not likely that anyone is saying, ‘Hey, guys, let’s stop and consider the context and meaning of each item we put out.’ ”

And, she added, “without context, without history, you are bound to make really epic failures.”

Zara has a three-part process for vetting its products, according to Zara spokeswoman Amaya Guillermo. The company uses an algorithm to scan each design for insensitive or offensive elements or language. Each piece of clothing is then reviewed by a global committee in Spain, where the company is headquartered, and later by local committees in each market where the item will be sold.

Zara declined to say when it initially put the review process in place. It made changes to the process after the skirt that resembled Pepe, according to a person familiar with the situation. Zara said the skirt had been designed by an independent artist, Mario de Santiago, and that there was “absolutely no link” to Pepe or the alt-right.

But even with those processes in place, experts say it can be difficult to tell how certain text or symbols will be construed by local shoppers. Part of the problem, Glaum-Lathbury said, is that retailers tend to use text and simple images as an inexpensive way to set their items apart from those of competitors. Much of fast fashion requires taking ideas from the runway and quickly adapting them for mainstream shoppers, which often means making a few tweaks and sending them to production, she said. (In Zara’s case, much of this process takes place at the company’s headquarters in Arteixo, Spain.) Within weeks, garments are shipped to 2,200 Zara stores in 96 countries.

“These are huge, lumbering, out-of-touch multinational corporations,” said Elizabeth L. Cline, author of “Overdressed: The Shockingly High Cost of Cheap Fashion.”

Earlier this year, H&M faced backlash for an ad that featured a black child wearing a sweatshirt that said “Coolest monkey in the jungle.” The company apologized, pulled the shirt from its shelves and said it has created a new team devoted to diversity and inclusiveness. H&M did not respond to requests for comment.

In recent years, Urban Outfitters has come under fire for selling red-stained Kent State sweatshirts, a reference to the Ohio university where four students were killed for protesting the Vietnam War in 1970. Topman has apologized for selling T-shirts with sexist messages that included “Nice new girlfriend — what breed is she?’ and “I’m so sorry, but . . . You provoked me; I was drunk; I was having a bad day; I hate you; I didn’t mean it; I couldn’t help it.” Neither company responded to requests for comment.

Analysts say retailers are also increasingly relying on algorithms and sales data to determine what shoppers want. The fact that Americans are spending less on clothing than they once did, even as the number of retailers continues to grow, is also leading some to cross the line between edgy and offensive.

“There’s such a need today to stand out — there is so much competition in the marketplace — that companies, designers, advertisers are all desperate to get attention,” said Milton Pedraza, chief executive of the Luxury Institute, a consulting firm in New York. “And one way to do that is to say, ‘Let me see how far I can take this.’ ”

Source: https://www.washingtonpost.com/news/business/wp/2018/06/29/fast-fashion-furious-controversy-why-retailers-like-zara-and-hm-keep-making-headlines-for-offensive-clothing/?noredirect=on&utm_term=.7fc7f91e5667 

April 12, 2018

When Marketing Luxury Vehicles, ‘Electric’ Is No Longer a Bad Word

Bloomberg Pursuits
By: Hannah Elliott
Thursday, April 11, 2018

Feeling good about your car is the new feeling cool about your car.


Inside the 2019 Bentley Bentayga Hybrid SUV at the Geneva Motor Show. By 2025, all Bentley cars will offer some version of an electric drivetrain, executives say. Photographer: Chris Ratcliffe/Bloomberg

Many Bentley customers believe they have obtained their wealth because of luck.

So says Bentley Motors Ltd.’s new chairman and chief executive officer, Adrian Hallmark, during an interview in Geneva.

“I have recognized that a lot of our customers follow a similar thing: They are super-successful. And a lot of them think it’s because they’re lucky,” he says. “That’s really important, because they don’t think they’re above human weakness and frailty.”

Such perceived (and believed) good fortune is spurring the world’s millionaires and billionaires to make luxury purchases, based on a system of values such as reduced carbon footprints and sustainability, he adds. According to Hallmark, hybrid and electric cars allow them to express in a novel way, he says.

“There is a new dimension long-term in the purchase decision—the ethical value,” Hallmark says, referring to gleanings from a 2008 internal study Bentley did of the world’s wealthiest people. “Electrification is part of it, and electrification isn’t going away.”

In fact, this new addition to the traditional considerations for buying a luxury car—performance, quality materials, and craftsmanship—is manifesting so strongly among the world’s top 1 percent that it is influencing Bentley’s product planning for the next two decades.

The company debuted its Bentayga Hybrid, a mid-six-figure SUV that can run 31 miles on purely electric power, last month at the Geneva Auto Show. (The 5,400-pound SUV isn’t exactly an econobox, but the hybrid badge certainly adds a feeling of green-tinged do-goodery—both for drivers and for onlookers who know what it means.) By 2025, all Bentley cars will offer some version of an electric drivetrain, Hallmark says. That includes its growling 12-cylinder Continental GT line, the latest generation of which is due out early next year.

It may take up to a decade to make an electric version of such a car, but the way Hallmark sees it, Bentley has no choice.

“We already know that the [next version] will be a battery electric vehicle,” he says. “It will have all of those moral and ethical benefits with it. By not going that way, even if we don’t have to, we would be massively under-performing in terms of customer potential.”

Successful—and Enlightened

Of course, the Crewe, England-based brand isn’t the only one to reckon that, in addition to being more efficient, electric power bestows a mark of honor upon its best clients. Top luxury automakers have been producing hybrid and electric vehicles for years, such as Bayerische Motoren Werke AG’s i8, Porsche AG’s 918 Spyder Hybrid, and Mercedes-Benz AG’s sold-out Project 1.

We take it for granted that a fair number of wealthy car buyers admire electric power, thanks to the cool cachet of Tesla Inc. But not long ago, electrics were viewed as anathema by serious car people, who favored traditional air-cooled engines with their guttural roars and grit. Then Toyota Motor Corp.’s Prius introduced the modern electric car to a broad audience. That one, with its awkward angles and gutless drive train, made electric cars feel like medicine we took with eyes closed and a quick swallow.

The few electrics that did get car fanatics excited were rather fragile, million-dollar hypercar one-offs that spent more time in the garage than on the road. These days, well-heeled buyers consider a hybrid or plug-in vehicle a crucial part of a well-rounded garage.

“It is definitely high-performance with sustainability that resonates on a values and ethics level … with affluent and wealthy automotive buyers,” says Milton Pedraza, founder of the Manhattan-based Luxury Institute, which studies trends of the world’s rich.

Witness Porsche’s upcoming Mission E, an electric-powered sedan that the automaker has hyped for years and plans to unveil on the eve of its also much-hyped 70th anniversary. It will probably cost more than the $90,000-plus Panamera, and while its driving range and battery power remains obscured, it will undoubtedly be a car to impress with next year. Among Porsche’s notoriously rabid fans, it will be the only new model that could divert attention from the usual adulation attending icons such as the brand’s GT3, 911R, or 930. More crucial on a broader scale, if Porsche delivers on its promise, it’ll be the first sedan to challenge Tesla’s Model S in terms of sales volume.

Or take Aston Martin Lagonda Ltd., which has announced it’s turning an entire heritage brand, Lagonda, into an electric powerhouse. The wedge-shaped Lagonda Vision Concept that debuted in Geneva is an all-electric sedan that marks how Aston expects the long-extinct brand to look when it returns.

Aston Martin hasn’t divulged many details about the new car, which, after all, is only a conceptual exercise, but Andy Palmer, president and chief executive officer of Aston Martin Lagonda Ltd., says it will get 400 miles on one charge—enough to drive from Los Angeles to San Francisco in one sitting, with self-driving capability and zero emissions.

“The Lagonda Vision Concept is our plan for the rebirth of a great brand,” he says. “It’s a new kind of luxury car.”

The New Future

Some of the most prestigious brands are holding off on electric for now. McLaren’s Global Head of Sales, Jolyon Nash, recently said no way, not ever (probably). Automobili Lamborghini SpA’s chief engineer, Maurizio Reggiani, says it would take quite a lot of persuasion—maybe an act of God—for the brand to make anything electric in the near future. Bugatti Automobiles SAS’s Stephan Winkelmann, who incidentally came from Lamborghini by way of Audi Sport, said “it’s too early to talk about” electrification at Bugatti, though he recognizes the potential.

“We are not influencing this discussion, but we take this very seriously,” he says. “It’s something to look into.”

Stephanie Brinley, senior analyst for IHS Markit, takes it all with a grain of salt. Some of the “ethical value” status symbol talk is hopeful thinking and marketing, she says. After all, car companies have invested billions in electrification; they have a lot riding on their ability to sell the story that a massive, expensive hybrid SUV is cool, not just “eco-friendly.” (Because, let’s be honest, if you wanted to really reduce your carbon footprint, the answer would be to buy a cheap, tiny electric car, or ride a motorcycle—or a bike.)

Still, the automakers are on to something real, she adds, that’s not going away. Young drivers are going to care about sustainable and ethical transportation in the next decade—more than any buying group ever has, especially when it comes to aspirational brands.

“If you look at millennials or the younger generation, there does seem to be more thoughtfulness about what kind of mark you leave on the planet—more so than a decade ago,” Brinley says. “As we move forward in the luxury landscape, for this type of buyer, having one in your garage will be crucial.”

For automakers, at least, it’ll take more than luck to get them there.

 

SOURCE: https://www.bloomberg.com/news/articles/2018-04-11/when-marketing-luxury-vehicles-electric-is-no-longer-a-bad-word

 

 

March 28, 2018

Despite deep discounts, H&M can’t get people to buy its clothes

The Wall Street Journal
Abha Bhattarai
March 27, 2018


(Charles Mostoller/Bloomberg News)

Despite a series of widespread markdowns, clothing chain H&M is struggling to sell off $4 billion in extra merchandise — including months-old Halloween costumes and Christmas sweaters — as changing consumer tastes and increasing competition take their toll on the Swedish retailer.

The company, for years a fast-fashion darling, says it’s having trouble persuading customers to buy its clothes. Sales are slipping, profits are down to their lowest level in 16 years, and inventory is way up, H&M parent company Hennes & Mauritz said Tuesday. Shares of the retailer’s stock fell about 6.8 percent Tuesday, to their lowest level since 2005.

“The rapid transformation of the fashion retail sector continues,” H&M chief executive Karl-Johan Persson said in a statement. “The start of the year has been tough. Weak sales combined with substantial markdowns had a significant negative impact on results in the first quarter.”

A confluence of factors have led to H&M’s troubles, analysts say. Chief among them: Millennials are growing up and are more interested in buying well-made clothes than in buying cheap items. There is also more competition from companies like Zara, Topshop, Uniqlo and Asos — all of which customers tend to associate with higher-quality clothing and better websites, according to Milton Pedraza, chief executive of the Luxury Institute, a New York-based market research firm.

“Millennials are looking for quality over quantity, which means they no longer want throwaway products,” Pedraza said. “They care less about fashion and more about classic and quality, neither of which H&M has been able to deliver.”

The recent backlash over an H&M ad showing a black child wearing a “coolest monkey in the jungle” sweatshirt could also have hurt sales, analysts said. There were widespread calls for customer boycotts after the January incident, and musicians The Weeknd and G-Eazy, both of whom had partnerships with the retailer, announced they would cut ties with the company.

“Whether an oblivious oversight or not, it’s truly sad and disturbing that in 2018, something so racially and culturally insensitive could pass by the eyes of so many (stylist, photographer, creative and marketing teams) and be deemed acceptable,” G-Eazy wrote on Instagram. “I can’t allow for my name and brand to be associated with a company that could let this happen.”

H&M has since apologized for the ad, but some in the industry say the company could feel far-reaching effects.

“There was a huge backlash, particularly in places like South Africa, that could’ve left some customers saying: ‘You know what? I wasn’t that loyal to H&M anyway. Maybe I’ll shop somewhere else,’ ” said Tasha Lewis, a professor of fashion design management at Cornell University.

In the most recent quarter, H&M said inventory rose 7 percent to a record $4 billion. On Tuesday, the company’s website was promoting “further markdowns up to 70 percent off.” Many items were clearly months old: Halloween-themed T-shirts were selling for $3.99, while infants’ Santa outfits were discounted to $4.99.

Excess inventory has plagued a number of traditional retailers in recent years, as customers increasingly shop online and look to start-ups for more unique clothing. Several chains, including Macy’s, Kohl’s and Nordstrom, pared back on holiday inventory last year, hoping to avoid having to offer deep discounts on leftover merchandise. The plan seemed to work: Retailers posted their most successful holiday performance in years, and many said they did not have to resort to huge markdowns.

“We maintained a healthy inventory position, which meant we did not need additional discounting to clear inventory,” Jeffrey Gennette, chief executive of Macy’s, said in a recent call with analysts. “We were disciplined with our promotions.”

That, however, wasn’t the case at H&M. As the world’s second-largest clothing retailer (behind Inditex, which owns Zara), analysts say, the company is particularly susceptible to the whims of consumers. H&M’s quarterly sales began falling late last year.

“There is a massive clash between customers’ expectations and what companies are delivering,” said Andreas Inderst, an analyst for the Macquarie Group in London. “This is an industry-wide issue, but for H&M it has become a particularly pronounced problem.”

Company executives, meanwhile, say they’re planning further discounts in the second quarter, as they look to turn around H&M’s business. The company is also preparing to introduce an “off-price marketplace,” called Afound, that will sell discounted items by H&M, as well as other brands.

Source: https://www.washingtonpost.com/news/business/wp/2018/03/27/despite-deep-discounts-hm-cant-get-people-to-buy-its-clothes/?utm_term=.2e8294e6a60d

November 14, 2017

Facial-tracking study reveals 4 key tips for successful luxury advertising

A study of luxury ads released over the last two years by The Luxury Institute and emotion measurement firm Realeyes has revealed the four key ingredients to successful luxury brand advertising – and highlights which ads were the best.

Using facial tracking technology, the firms analysed how video ads from 24 brands were perceived by 1,200 people from $100,000+ income households (the findings are applicable to the UK).

One of the key findings was the gradual shift in luxury brands’ communications from “show and entice” to “engage and connect”, or as Realeyes CEO’ Mihkel Jäätma says, “We’re beginning to see signs that luxury advertising may be shifting away from what might be considered a more aloof and elitist past to trying harder to connect emotionally with viewers.”

The four key ingredients are:

Avoid the ‘look-book’: videos that are just lovely moving images don’t cut it – an emotional connection must be made with the viewer. Speaking has high engagement value. Films with dialogue outperformed films with monologues or no speaking at all.

Tell relatable stories: a simply story that a viewer can understand, follow and relate to yields a stronger emotional reaction compared to those that don’t.

Question celebrity: Recognisable stars may grab attention but it doesn’t ensure engagement in itself, unless the celebrity is seen to interact and engage. It’s the story that helps make the more important emotional bond.

Income matters: The highest income bracket was generally far more emotionally engaged across the videos within the study, which highlights the benefits of accurate targeting.

Milton Pedraza, the Luxury Institute’s CEO says: “The luxury industry has a very strong tradition of creating a mysterious and distant dream in its advertising but as consumers change, it’s responding by making clever use relatable truths and humor, casting celebrities in a more approachable light, and representing a broader spectrum of the human experience.”

These are the three ads that scored the highest emotional engagement with viewers:

1. Mercedes’ “Easy Driver” with Peter Fonda (scored better than 87% of all ads ever in Realeyes’ database): a strong start and a steadily increasing “happy” response ensure engagement keeps growing. The film’s nostalgia, manliness, humor and celebrity has particular appeal to a female audience, with a higher engagement score (9) and a perfect 10 in attraction.

2. Dolce & Gabanna “Light Blue Eau Intense: a new chapter” (better than 87%): sex sells but does so even better when combined with humor – the happiness curve spikes as the director interrupts at the end.

3. Kate Spade “#missadventure” with Miss Piggy (better than 83%): starts on a neutral note before introducing a story to hold attention and artfully strengthen engagement. It finishes with the highest impact score of all the films in the study.

“The key to success in luxury advertising today is in mastering the perfect balance between building the desire of the exclusive, whilst making it tangible enough to buy,” concludes Jäätma.

 

Source: http://www.netimperative.com/2017/11/facial-tracking-study-reveals-4-key-tips-successful-luxury-advertising/

January 12, 2017

Handbag makers find it hard to carry on like before

The Strait Times
January 12, 2017

They’re cutting back on styles as demand for luxury items wanes

NEW YORK • Handbag makers are busy battling waning demand and markdowns at stores, and that may have diverted their attention from what could make them successful in the long run: creativity.

Michael Kors Holdings, Prada, LVMH’s Louis Vuitton and Burberry Group all reduced the number of styles introduced last quarter, according to Edited, which provides fashion industry analysis.

Though manufacturers and retailers are worried about being saddled with too much merchandise, the lack of innovation will make it tough to recapture the excitement of shoppers, said Mr Milton Pedraza, a luxury consultant.

“There’s a feeling of doom out there in the industry – everything is defensive and not offensive,” said Mr Pedraza, who runs consulting firm Luxury Institute. “What you’re seeing is a tremendous amount of copying, less innovation and less creativity, at a time when exactly what you need is to be bold.”

Demand for US high-end products took a hit last year from a strong dollar and global economic woes. Terrorism fears also crimped tourism, a big source of luxury spending. Shares of upscale brands suffered.

Michael Kors, Coach and most other rivals underperformed the Standard & Poor’s 500 Index in last year. Ralph Lauren was down 19 per cent last year.

TIME TO BE BOLD

There’s a feeling of doom out there in the industry – everything is defensive and not offensive. What you’re seeing is a tremendous amount of copying, less innovation and less creativity, at a time when exactly what you need is to be bold.

MR MILTON PEDRAZA, a consultant who runs the Luxury Institute.

Prada was the rare exception, rising 9 per cent in Hong Kong last year to outperform the Hang Seng Index’s 0.4 per cent gain. It rose as much as 9.6 per cent to HK$30.70 yesterday, reaching the highest intra-day level since March.

At many stores, the handbag selection from several high-end labels was significantly smaller over the holidays. In the final three months of last year, the number of new styles introduced by Michael Kors dropped 24 per cent from the preceding quarter.

Prada and Louis Vuitton rolled out 35 per cent fewer new designs, while the number at Burberry dropped 8 per cent, according to Edited, whose clients include Ralph Lauren and luxury e-commerce retailer Net-A-Porter.

Michael Kors did not have an immediate comment on the reduction, while LVMH, Prada and Burberry declined to comment.

Rolling out the right number of styles is no easy task. Brands need to strike a careful balance between creating a glut of inventory – so-called “dead stock” – while ensuring there is enough trendy, new merchandise to entice consumers, said Ms Katie Smith, a senior fashion analyst at Edited.

“Dropping newness too low could certainly threaten sales,” she added.

A few brands, including Kate Spade and Ralph Lauren, did introduce more new designs in the fourth quarter, Edited found. But many tried to ride out the holidays without breaking fresh ground.

Handbag makers have faced other challenges as well. Younger consumers are demanding faster availability of the latest trends, and some are showing preference for shoes and jewellery over bags.

Sales growth in handbags is estimated to decelerate to 3.1 per cent by 2020, from 16 per cent in 2012, according to market research firm Euromonitor.

Source: http://www.straitstimes.com/business/handbag-makers-find-it-hard-to-carry-on-like-before

December 22, 2016

What Makes Armani Hotel Dubai The World’s Most Luxurious Hotel

Forbes
By: Eustacia Huen
December 22, 2016

What does it take to become the world’s most luxurious hotel? Does it involve outrageous amenities such as in-room 24 karat gold iPads, private jet and butler services, or even pet psychics for your pooches?

According to Anton Perold, Managing Director of the World Luxury Hotel Awards, true luxury is defined by “a team of highly dedicated staff willing to go the extra mile and stop at nothing to ensure that no request goes unanswered,” he said. But since luxury can mean different things to different people, every year The World Luxury Hotel Awards takes on a new focus to select the new winner.

Armani Amal Terrace (Photo credit: Armani Hotel Dubai)

For 2016, the ten-year organization shifts the focus on supreme style and unique elegance, and named Armani Hotel Dubai the winner.

Opened since 2010, the ten-story hotel with 160 rooms and suites is the first hotel by fashion designer Giorgio Armani. Bearing all the Armani signature details in the carefully curated space with Eramose stone floors, zebrawood panels, and custom-made furnishings, it’s no surprise that everything here is tastefully designed.

Hotel Lobby (Photo credit: Armani Hotel Dubai & Max Montingelli©sip)

One of only two hotels (the other one is in Milan) launched by the legendary designer, much of Armani Hotel Dubai’s appeal is also defined by its location. Situated at Burj Khalifa—world’s tallest tower—in Downtown Dubai, the world’s most luxurious hotel boasts stunning views of the city, convenient access to the city’s best shops, restaurants and cultural attractions, plus a dedicated entrance to the tower.

Burj Khalifa (Photo credit: Armani Hotel Dubai)

With all the amenities one would normally expect—Award-winning restaurants, lounge, deluxe spa and various Armani goods, what really sets this hotel apart is the “warm, Italian-style service” noted by Mark Kirby—General Manager of Armani Hotel Dubai.

Armani Ristorante (Photo credit: Armani Hotel Dubai)

For instance, each guest is assigned a personal Lifestyle Manager who handles everything from arranging childcare to landing difficult bookings of the hottest restaurants and events out there. The idea of it is to provide guests with a “‘home-away-from-home experience,” said Kirby.

(Photo credit: Armani Hotel Dubai)

As a former guest of the Armani Hotel, Milton Pedraza—CEO of the Luxury Institute—believes that one of the most remarkable strengths of Armani is his ability in creating an understated style of luxury that’s completely serene. “It’s a paradoxical concept few could pull off. And when done properly (which Armani certainly has), it makes guests feel pampered and peaceful at the same time,” he noted.

All the books in this study at the Armani Dubai Suite are personally selected by the designer himself. (Photo credit: Armani Hotel Dubai)

This ability not only reflects on the fashion legend’s renowned aesthetics, but also his personality and values. According to the luxury expert, there’s something about the Armani Hotel experience that made him feel special. “The staff at his hotels are very well-selected and well-trained. They make you feel welcome in a way that seems more genuine and relatable than other hotels,” he added. 

Walk-in closet at the Armani Dubai Suite (Photo credit: Armani Hotel Dubai)

“Fact is, people don’t want to be treated like royals anymore,” Pedraza said. 

What this award points to—when it comes to luxury hotel trends in 2017—are well-designed spaces that aren’t excessively staged or opulent. As the world becomes more globalized, successful hotels are definitely angling for more local experiences, where guests could get intimate knowledge of each place.

(Photo credit: Armani Hotel Dubai)

Yet, for frequent travelers, don’t be surprised to find your favorite snacks or drinks from your home countries. “As hotels want to ease your transition from one place to another both physically and emotionally,” noted Pedraza, “2017’s hotel experience will focus equally on satisfying your curiosity of a new place as it is on fighting home sickness.”

(Photo credit: Armani Hotel Dubai)

Source: http://www.forbes.com/sites/eustaciahuen/2016/12/22/what-makes-armani-hotel-dubai-the-worlds-most-luxurious-hotel/print/

November 1, 2016

Affluent consumers to decrease luxury market spend, says Luxury Institute

Luxury Daily
November 1, 2016
By: Brielle Jaekel

The drastic shift in consumer behavior from the rapid evolution of technology has resulted in a 20 percent drop in customer spend with luxury brands, according to the Luxury Institute.

 Luxury Institute’s “2016 State of the Luxury Industry” report shows that consumers are spending much less in the luxury market compared to two years ago, but luxury marketers will have an uphill battle to determine how to combat this. While digital and mobile avenues are vital to success for any retailer or brand, it seems that affluent consumers are interested more in shopping with luxury brands at bricks-and-mortar locations.

The report surveyed 3,900 affluent consumers from the U.S., U.K., Europe, Japan and China, all of which made higher than $150,000 USD, £60,000, EUR50,000, 1 million CNY and Japan ¥150 million.

 Consumer habits

Luxury spending in the United States is ahead of many other countries, but the United Kingdom and Italy are leading the pack. The average spend within the luxury market in Italy is expected to be $17,660, $16,715 in the U.K. and $16,360 in the U.S.

Brands must now focus on how to properly balance ecommerce initiatives and in-store strategy to appeal to the modern affluent U.S. consumer. Bricks-and-mortar are making a slight comeback with 54 percent of high-net-worth individuals preferring to shop in store for luxury brands, compared to only 49 percent two years ago.

Hugo Boss New York Fifth Ave store 400

Social media is now the main avenue luxury fashion brands are using to communicate with consumers for customer service, with 58 percent leveraging Facebook Messenger, according to another report from L2.

Traditional customer service communication platforms are tired and outdated, and consumers now expect a more modern method for reaching out to brands and retailers. Many brands are taking note and launching communication methods on mobile messaging platforms such as Facebook Messenger, with 71 percent of watch and jewelry brands following suit (see more).

The growth of the luxury market is slowing, with only 19 percent of high-income individuals planning to spend more within the next year, compared to the 30 percent from two years ago.

While growth will slow, many U.S. consumers are still planning to spend on luxury goods and services. For instance, 92 percent of affluent consumers in the U.S. plan to spend money on luxury brands within the next 12 months.

The average anticipated spend per consumer is estimated to be $16,360, dropping almost $4,000 from $20,085 in 2014.

Luxury sectors

Watches, fine art, handbags, home appliances and jewelry are likely to be the areas hurt the most from the cut back. About 33 percent of consumers claiming to cutback on spend with watches, 28 percent on art, 24 percent on handbags and home appliances and 23 percent on jewelry.

Michael Kors Access smartwatch

However, travel remains as the dominating sector in which U.S. consumers with high incomes will be spending with luxury brands.

Hilton-owned Waldorf Astoria Hotels & Resorts climbed the ranks in terms of international brand awareness, despite consumers spending less time traveling, according to another report from Luxury Institute.

JW Marriott, InterContinental, Four Seasons, Grand Hyatt and The Ritz-Carlton maintained their places as the most visited hotel brands, reported last year and this year in the LBSI Global Hotel study. However, affluent consumers are cutting down on hotel stays with modest decrease in number of nights stayed (see more).

“The biggest surprise is that while ecommerce is critical to success in luxury, slightly more consumers still prefer the store experience,” Mr. Pedraza said. “Additionally luxury consumers are following less, not more, luxury brands on social media.

“As millennials mature they are recognizing that they have to focus on careers and relationships, not just social media,” he said.

Source: https://www.luxurydaily.com/affluent-consumers-to-decrease-spending-in-luxury-marketers/

October 7, 2016

Coach turns 75: Brand Remains True to Its Heritage While Finding New Inspiration From American Culture — Past and Present

LA Times
October 7, 2016
By: Melissa Magsaysay

What do iconic American references like Elvis Presley, exploring the Midwest by train and Southern California’s skate and surf culture have to do with handbags, clothes and accessories from Coach?

Stuart Vevers, executive creative director at Coach, says those American staples have been key influences in his work at the fashion brand, which is celebrating its 75th anniversary this year with a new book, a revamped fragrance and a fashion collaboration with Disney.

The nostalgia isn’t completely out of left field given that the New York-based company’s founders, Miles and Lillian Cahn, were initially inspired by the supple leather and stitching of a baseball glove when they were first creating bags in 1941. But for Vevers, who was born in Yorkshire, England, and who lived and worked in Europe as a designer before taking the helm at Coach in 2013, the fascination with Americana is paramount in disrupting current ideals of luxury in fashion.

“We are living in a world where people aren’t aspiring to stereotypical images of luxury,” says Vevers, who worked at Louis Vuitton, Mulberry and Loewe. “Luxury to the next generation could mean a T-shirt or fun playful backpack, and I want Coach to stand at the forefront of the new codes of luxury that are being created right now.”

A look inside the new book “Coach, A Story of New York Cool,” written by Joel Dinerstein and designed by Fabien Baron.

A look inside the new book “Coach, A Story of New York Cool,” written by Joel Dinerstein and designed by Fabien Baron.

The designer has been implementing plenty of playful elements that still manage to feel incredibly elevated across the men’s and women’s ready-to-wear, bag, shoe and leather accessories categories offered by Coach.

This level of flexibility to adapt to the ebb and flow of fashion and luxury are part of what has kept Coach relevant for more than seven decades.

“Coach has stayed true to its core values and yet has remained flexible to the needs of not only American women but also aspirational women worldwide,” says Milton Pedraza, chief executive of Luxury Institute, a brand consulting agency based in New York that has worked with Coach and other companies. “Its designs adapt to the changing tastes of contemporary women.”

Bold color, metal rivets, floral appliqué and embellished patchwork have reinvigorated bags, which still stand on a foundation of quality leather, brass toggle hardware and detailed stitching — all hallmarks of the brand.

The fall 2016 ready-to-wear has the same unselfconscious nature and everyday appeal of the bags, seen in Western-style studding on a leather jacket, ’70s-inspired scarf print blouses and crewneck intarsia sweaters emblazoned with a dinosaur named “Rexy.”

It’s what Vevers is calling an “American take on luxury” and what Coach stands to represent through Vevers’ versions of classic staples including varsity jackets, sweatshirts and saddle bags, punctuated by the practical elements that have helped keep Coach a consistent commercial success.

“American values come through freedom and an openness,” Vevers says. “I like that our client works, and our client needs their clothing and accessories to work just as hard.”

Further illustrating this American spirit and marking the brand’s milestone anniversary is a new book out this month called “Coach, A Story of New York Cool” written by Joel Dinerstein and designed by Fabien Baron. The collage-style coffee table tome chronicles the brand from its beginning in a small SoHo workshop in New York with six employees to the 1960s when pioneering sportswear designer Bonnie Cashin took over creative duties. The book also highlights the decades of celebrity fans wearing and carrying Coach clothing and bags.

Additionally, the brand has revamped Coach the Fragrance, a perfume that originally debuted in 2007 and was reintroduced this September, as a scent that is inspired by the energy of New York City, and includes contrasting notes of raspberry, Turkish rose and musk.

From Ali MacGraw to Chloë Grace Moretz — the current face of  Coach — Hollywood has also been an integral part of the brand. “I think it has to be authentic,” says Vevers about Coach’s appeal and relationships with celebrities. “I like connecting with people I admire for their work or style, but the authenticity is crucial. It’s just like with our clients; it has to be natural.”

The diverse mix of front-row celebrities at the spring 2017 show in New York included Courtney Love, Moretz and “Stranger Things” stars Winona Ryder and Millie Bobby Brown and echoed the designer’s ethos for bringing a broad set of cultural references from music, film and art together.

“I really want, with the music and culture references, a more modern vision of America,”  Vevers says. “Diversity is modernity, and as a designer, I want to include all of America in Coach.”

From original silhouettes of the 1950s to Coach staples festooned with C logos and newer, popular styles like the “Swagger” and “Rogue” bags, the house has set out to demonstrate the breadth of its work as well as its customer service. Check out the new Craftsmanship Bar at the Rodeo Drive flagship store in Beverly Hills.

The fourth of its kind in North America, Coach’s Craftsmanship Bar is part mini museum, showcasing bags from the ’50s, ’60s and ’70s, and part personalized customer service with cleaning, customization, monogramming and product repair.

The range of design from the last 75 years is clear when canvassing the display at the Craftsmanship Bar. Look for a ’70s saddle bag that has the wear of a baseball glove and a “Swagger” bag covered in cheeky varsity patches.

The styles are all vastly different, but perhaps it’s the level of accessibility in the price point and functional design that has made Coach familiar and aspirational to buyers for the last 75 years.

For Vevers, the formula for creating a successful collection that is steeped in the brand’s seven-plus decade heritage but still appealing to a new millennial audience is completely about relatability. It’s about those iconic American references of Elvis and wide-open plains now injected with flashes of visual inspiration the designer gathers while scrolling Instagram.

“My magpie is that of a digital magpie,” Vevers says. “The world is moving fast, and to be relevant, design needs to be connected to the street.”

Source: http://www.latimes.com/fashion/la-ig-coach-anniversary-20161003-snap-story.html

September 19, 2016

The Big Business Of Red Carpet Bling

www.fastmagazine.com
By: Rina Raphael
September 18, 2016

Jewelry companies of all sizes compete to get their baubles on the right celebrities at the right time—including the Emmys.

Actress Cate Blanchett is celebrated for her unconventional, avant-garde awards-show fashion. But at the 2015 Oscars, it was her jewelry that stole the red carpet show: She paired a long, simple black Maison Margiela gown with a Tiffany & Co. turquoise and diamond necklace. It dominated fashion headlines and soon thereafter, inspired knock-offs and Etsy reimaginings. Us Weeklypromoted a $75 Blanchett-inspired jewelry giveaway.

“We didn’t plan on it,” says Blanchett’s stylist, Elizabeth Stewart. “But it worked.”

When it comes to Hollywood baubles, the motto is generally, “Go big or go home.” To compete with couture gowns and Cinderella moments, top jewelers such as Bulgari, Chopard, and Forevermark go all out to secure their celebrity endorsements. It’s a lengthy, complicated loaning process, and a chance at worldwide brand recognition.

Sometimes celebrities or stylists are paid to wear the accessories, with compensation potentially hovering in the hundreds of thousands. Sometimes the jeweler will “thank” the star by “gifting” them jewelry. Sometimes the generous one-night loan is the sum total. It varies, and those involved are historically mum on the transaction specifics.

[Photo: Flickr user Kyle Garrity]

[Photo: Flickr user Kyle Garrity]

A PRICEY PROCESS

It starts with the stylist, the unsung maestro of all Hollywood red carpets. Stewart, whose clients also include Julia Roberts, Sandra Bullock, and January Jones, starts with the dress, then moves her way to accessories. “Often, the jewelry comes last,” she says, but stresses that it is “very important” to create a full look.

The next step is the insurance companies. Jewelers might provide the insurance, but most commonly, stars already have existing relationships with insurance agents and a policy that seamlessly weaves in additional loans.

“Individuals of some level of wealth normally have some kind of jewelry coverage in place,” explains Janece White, vice president, North American underwriting and jewelry specialist of Chubb Personal Risk Services, which counts high-profile celebrities as clients. Even if it’s just for what she calls “the basics”—their engagement rings or earrings—deep-pocketed celebrities often get covered.

If the client is a “good customer” who has had a relationship with the agent for years, Chubb will offer the additional coverage, but they need the specifics of the loaned pieces and how they will be stored, transported, and secured. “It’s usually not just one piece of jewelry,” White says. “The stylist brings back a number of pieces—sometimes a couple million dollars worth.”

White and her associates are available throughout the days leading up to awards shows, waiting on frantic last-minute calls from clients who might need to insure a $5 million diamond choker. It’s a frenzy. They also act as consultants, offering recommendations on services such as security firms that can provide armored trucks and guards, which could run well over $20,000.

“Would it be acceptable to throw [the jewelry] in the back of a cab? No,” White says. “Would it be acceptable to have [the client] come with someone very secure to take the items back by personal car? Yes.” Most clients, says White, take good care of their loans, because “they want to borrow something again the next award season.”

With all that prep work, there is still no guarantee the star will wear a specific item. A stylist has multiple looks on hold in the dressing room hours prior to an event, and sometimes last-minute decisions occur.

“I can’t tell you how many times the backup dress becomes the dress,” said Stewart. “You really don’t know until it’s all put together.” And if the gown changes, so too will the accessories. Stewart cites a number of reasons why one or both might not make the final cut: hair, makeup, and even just one’s mood.

THE BRAND NAME GAME

For many companies, the goal is to tie themselves to the right star whose name signifies aspirational wealth and glamour.

“There’s a lot that goes on behind the scenes in terms of determining who that million-dollar actor is going to be walking down the red carpet,” says style expert Anna De Souza. “It’s not about selling that particular piece—it’s about brand recognition.” Celebrities are repeatedly asked, “Who are you wearing?” with designer names appearing in celebrity and fashion magazines for weeks thereafter.

For stars, borrowing baubles is a mark of success. And consumers understand that the bigger the star, the bigger the bauble.

“Beyond the event itself, media will cover different celebrity looks—i.e., who wore what, not to mention a huge social media audience weighing in on each celebrity look, garnering mentions for brands,” says Crosby Noricks, a fashion brand strategist and founder of PR Couture. “When a company like Tiffany’s or Bulgari does a product-placement deal with a celebrity, if they get the right star, it can certainly add a valuable spotlight to their product, image, and brand.” It can also bolster a certain campaign. Cate Blanchett’s turquoise homerun served to promote Tiffany & Co.’s Blue Book collection.

Snagging an international star is paramount. This is especially true for smaller jewelry companies trying to secure placement in bigger retailers or to enter a new market, like Dubai. Being able to approach new opportunities with the claim that “Jennifer Lopez wears our jewelry” can be the ticket in.

Labels have their own specific needs and who they want to reach. For publicly traded companies like Tiffany & Co., which boasts over 300 stores and sells high and more modestly priced collections, it makes sense for them to place their products on a wide range of stars, ranging from Oscar winners to TV actresses, at various industry events. Chopard wants to master the red carpet, so you might see their products at movie premieres, in addition to awards shows.

Anna Hu Haute Joaillerie sells colorful jewelry with whimsical, intricate imagery like flowers and butterflies. Price points range from $100,000 to $7 million. The brand was relatively unknown until Madonna wore an Anna Hu Haute Joaillerie diamond cross pendant necklace to the 2009 Met Gala. “That put Anna on the global map,” says Carineh Martin, the company’s chief marketing officer.

Today, Hu’s styles adorn A-listers such as Gwyneth Paltrow and Emily Blunt—but only at the three high-profile events: the Oscars, the Met Gala, and the Cannes Film Festival. The designer takes the rare approach of relying on a select few celebrities to foster an image of exclusivity.

“It has to be the top event, the top actress, with the top jewels, otherwise it’s just not interesting for us,” Martin says. “If that means only one or two a year, that’s all we’re interested in.”

It makes sense, considering the brand has only one store, and most sales are private custom orders. That’s precisely what a certain clientele wants—the sense that they’re wearing something rare and special. “How can you be exclusive when you have 600 stores worldwide?” Martin says.

“We are about being private jewelers to a very small echelon of clientele, so everything we do is with that in mind, including our red carpet approach,” she says. “We could dress a lot more people and have a lot more awareness, but when you’re not readily available all over the world, what’s all that awareness going to do for you? We’d rather be known by fewer people, but the type of people who respond to our jewels.”

screen-shot-2016-09-19-at-11-47-21

AS SEEN ON . . .

There are those who want exactly what the stars are wearing. Fine jewelry designer Irene Neuwirth has been contacted while celebrities were still modeling her designs on the red carpet. She sold two emerald cuffs, each at $150,000, while they were still on Julianne Moore’s wrist at the 2013 Met Gala.

Iconic moments can immediately help sell a style. Gwyneth Paltrow went down in fashion history following her 1999 Oscar win, when she clutched her gold statue in a pink Ralph Lauren gown and a 40-carat Harry Winston diamond necklace. The jewelry house immediately sold a few necklaces in the same style, reportedly at over $100,000 each. One buyer was Paltrow’s own father, who gave his daughter the jewels as a gift.

As for how this visibility affects companies’ bottom lines, that’s a complicated equation. According to Milton Pedraza, CEO of the Luxury Institute, a consulting firm serving more than 1,000 luxury and premium goods, what consumers consider the most prestigious and what consumers actually buy don’t always align. In a recent study, the Luxury Institute found that households earning over $200,000 were most familiar with the following brands, in descending order: Tiffany & Co., Cartier, Bulgari, Gucci, Chanel, Harry Winston, De Beers, Van Cleef & Arpels, Mikimoto, and David Yurman.

And here’s where they spent their money: Tiffany & Co., Cartier, Alexis Bittar, David Yurman, Gucci, Bulgari, Chanel, Boucheron, Mikimoto, and Judith Ripka. The two categories diverge, since consumers can’t always afford what they’re familiar with, but they still want designer.

Consumers with household incomes under $75,000 tend to own items from Tiffany (76%), Bulgari (32%), and David Yurman (21%).

“Millennials are very aspirational,” Pedraza says, noting their constant media intake of celebrity fashion and culture. They’re attuned to researching a product or a celebrity they want to emulate. “They are now in the know.” They might only buy a pendant necklace or bracelet, but they’re still buying.

The majority of Americans don’t have the means to even consider buying a pricey piece of jewelry that was seen on the red carpet, but there are other opportunities to partake in the luxury sector.

“The average TV viewer isn’t going to go out and purchase [the exact item], but they might pick up a pair of sunglasses, perfume, or wallet in order to align themselves with an aspirational brand worn by their favorite celebrity,” Noricks says.

Buying the jewelry isn’t necessarily the point of these celebrity endorsements. It’s to get the brand on your mind—for future purchases. They’re in this for the long haul.

As style expert Anna De Souza says, “It goes way beyond the 10-minute walk down the red carpet for these brands.”

Source: https://www.fastcompany.com/3063093/fashion-forward/the-big-business-of-red-carpet-bling

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