Luxury Institute News

December 10, 2015

Announcing Luxury FirstLook: Strategy 2016 New York Jan. 20

Luxury Daily
December 6, 2015

Join senior executives and decision-makers at the 4th annual Luxury FirstLook: Strategy 2016, the nation’s premier conference organized by Luxury Daily discussing luxury advertising, marketing, retail, media, Internet and mobile issues and opportunities expected in 2016. Speakers from the Boston Consulting Group, Four Seasons Hotels & Resorts, Van Cleef & Arpels, Breguet, Luxury Institute, Shullman Research Center, Kantar Media Ad Intelligence, Travel + Leisure, Modern Luxury, Neuehouse, Base New York, KBS, Lloyd&Co., Parlux Fragrances, Matouk, Fluid Inc., iProspect, Monaco Lange, Envirosell, Engel & Volkers North America, Bloomberg Pursuits and Driscoll Advisors

Focus: What luxury marketers can expect in a market, while showing strong pockets of growth, is rife with uncertainty in 2016 and what it means for luxury retailers, luxury brands, ad agencies, publishers, market researchers, technology platforms and service providers

Why you should attend: Hear a cross-section of the nation’s leading expects discuss strategy, tactics, execution, results and analysis for gaining or maintaining market share in a rapidly evolving luxury market where the consumer is leading the change as much as brands. Also network with fellow attendees who are senior executives and decision-makers at leading marketers in this 11-hour serious transfer of knowledge

Venue: 10 on the Park at Time Warner Center, 60 Columbus Circle, 10th floor, New York, NY 10019 (entrance is on 60th Street across from Columbus Circle, between Equinox gym and the Mandarin Oriental Hotel)

Price: Only $695, which includes breakfast, lunch and cocktails

Sponsorship: For lunch roundtables and keynotes, tables, breakfast, cocktails and other sponsorships, please email ads@napean.com

Please click here to register for 4th annual Luxury FirstLook: Strategy 2016 in New York on Wednesday, Jan. 20

AGENDA

Luxury FirstLook: Strategy 2016
New York
Jan. 20, 2016

7:30 a.m. – 8:45 a.m.
Breakfast and Registration

8:45 a.m.
Welcome Remarks
Mickey Alam Khan, editor in chief, Luxury Daily
Milton Pedraza, CEO, The Luxury Institute, and Master of Ceremonies

9 a.m.
Opening Keynote
Selected Key Trends In the Luxury Industry In 2016
Boston Consulting Group has a finger on the pulse of luxury given that it works with the world’s leading luxury brands and retailers, advising them on strategy, tactics and execution. The world of luxury is set to undergo several changes in 2016, forcing marketers to rethink marketing, retailing, media, Internet and mobile approaches. This talk will specifically focus on four key trends:

• A changing world: New growth drivers in the luxury industry
• Intro values such as quality, craftsmanship and exclusivity continue to roar as consumers increasingly looking for experiences
• Word of mouth increasingly a driver of purchase decisions
• Winning in the rising digital world

Speaker:
Luke Pototschnik, partner and managing director, Boston Consulting Group

9:30 a.m.
Research Keynote
Van Cleef & Arpels: Examining the Jeweler’s Digital Strategy
Speaker:
Kristina Buckley Kayel, vice president of communications, Van Cleef & Arpels

10 a.m.
How Luxury Brands and Retailers Should Consider Reaching and Communicating with Luxury Buyers in 2016
As the United States economy continues to expand ever so slowly, how much has that ongoing expansion increased the size of the U.S. luxury markets such as the prospects for designer apparel and accessories, premium cosmetics and fragrances, luxury automobiles, luxury travel and luxury home goods? Plus, with the ever-growing number of advertising and communication mediums and channels now reaching the luxury consumer, which channels make the most sense for luxury marketers to communicate with these luxury shoppers? These and other critical questions will be answered from the consumer’s perspective as the Shullman Research Center presents its in-depth analysis of what luxury buyers are now buying and the most effective ways to reach this valuable audience.

Speaker
Bob Shullman, founder/CEO, The Shullman Research Center

10:30 a.m.
Break

11 a.m.
2015 Holiday Advertising Wrap-Up: The Luxury Market
Media advertising was an important marketing channel for luxury brands during the just-completed holiday shopping season. What strategies and tactics did luxury marketers use to break through the competitive noise and connect with their targeted audience? What can be learned from their approaches? Drawing on its comprehensive ad monitoring database, Kantar Media has examined luxury brands and will share insights on holiday campaign ad spending levels, budget allocations across media platforms, digital media initiatives, timing of ad spend during the period, ad message content and more.

Speaker:
Jon Swallen, chief research officer, Kantar Media Ad Intelligence

11:30 a.m.
Going Beyond the Product: Creating Physical Experiences for Luxury Consumers
The way to reach luxury consumers is not just through their shopping habits, but also through the elegant and tangible elements of their environment. How can brands use smart design and user experience to lure luxury consumers back to the exclusivity of white-glove services that are only offered in exclusive memberships and high-end bricks-and-mortar stores? Hear from branding and design leaders on how to create and position a state of mind and experience that goes beyond the price point of upscale products and instead focuses on physical spaces and tangible experiences that exude affluence.

Panelists:
James O’Reilly, partner, Neuehouse
Geoff Cook, founder/partner of Base New York
Matt Powell, Co-president, KBS
Neil Powell, designer, Smart Space

Noon
The New Travel + Leisure: Aligning Platforms to Audience Behavior
One of the leading travel publications nationwide, Travel + Leisure is part of the Time Inc. family of magazines that is straddling both the print and digital worlds. The evolution of this brand mirrors the changing reading habits of consumers. This session will discuss the magazine brand’s approach to:

• Print versus digital versus social
• Defining the brand for cross-platform publishing, growing digital and engaging via new products
• Destination guides
• Video: Serving the audience in new ways
• Utilities
• Commerce
• State of the market: The affluent and travel spending; the Travel + Leisure audience and the year ahead; emerging destinations; and luxury travel trends

Speaker:
Nathan Lump, editor in chief, Travel + Leisure

12:30 p.m. – 1:30 p.m.
Sponsored Lunch Break

1:30 p.m.
Four Seasons: How Luxury Brands Should Focus on the New Principles of Content Marketing
The Four Seasons hotels chain is the byword in luxury hospitality, with a sharp emphasis on customer service. Part of that mission is to involve its customers to share via content their experiences across properties that intersect with life’s key moments. This session will shed insights on the next evolution of content marketing for luxury brands, with a specific focus on user-generated content and the power of harnessing consumer content to drive brand leadership. The Four Seasons has long advocated that luxury brands should become publishers. The next step in that process is to understand how the consumer fits into content creation, both from a creation and an engagement perspective. In essence, what are the new principles of content marketing and how should luxury brands be thinking about that as they look forward to the year ahead.

Speaker:
Elizabeth Pizzinato, senior vice president of marketing and communications, Four Seasons Hotels & Resorts

2 p.m.
A Customer Journey Through the Sense of Smell
There is nothing more personal than one’s’ choice of scent, which makes it even more imperative for fragrances to differentiate themselves when positioned directly next to their competitors in-store. The journey a consumer takes surely does not begin and end with a woman spraying shoppers along the beauty counter. How can you market and sustain a sensory experience for a fragrance brand across all channels to ensure continuity from packing to print? This session will focus on the strategy behind the marketing of luxury fragrances for today’s modern consumer and how the speakers partnered to remaster the iconic Norell fragrance.

Speakers:
Jodi Sweetbaum, president and managing director, Lloyd&Co
Pat Werblin, vice president of advertising, Parlux Fragrances

2:30 p.m.
Breguet: State of the Luxury Watches Market and Outlook for the Year Ahead
Speaker:
Mike Nelson, president, Breguet

3 p.m.
Break

3:30 p.m.
Modern Luxury, Modern Marketing: A Localized Approach to Connecting with the Luxury Consumer
Media houses continue to struggle to find their footing in the modern marketing landscape. One of the few publishers that has maintained continued growth and success despite these changes is Modern Luxury, the country’s largest local luxury media company. With the recent launch of its 67th title (Silicon Valley) and significant year-over-year revenue growth, Modern Luxury has separated from the pack with a unique strategy of building community with highly engaged, high-net-worth individuals in key markets across the United States. Modern Luxury’s presentation will highlight the publisher’s unique approach, specifically the importance of experiential marketing and of targeted engagement specific to each market. Other highlights include:

• Geographical and regional nuances to approaching luxury: How the definition of “luxury” differs not only from state-to-state but from city-to-city, even just within miles (e.g. Silicon Valley vs. San Francisco, Manhattan vs. The Hamptons, Los Angeles vs. Orange County)
• Regional luxury trends and insights, taken from Modern Luxury’s own survey of its readers in each of their markets;
• Learn the cultural habits of these luxury consumers city by city: shopping patterns, attitudes towards brands and experiential programming and more (e.g. Resort towns are often a missed opportunity for beauty brands as purchase intent in those pockets scores off the charts or did you know that Houston in-store events see a bump in sales from attendees after the event? The culture there is one of discreet spending as opposed to conspicuous consumption)
• Modern Luxury’s view on the year ahead and strategies on how to continue to engage with local luxury consumers

Speaker:
Marcy Bloom, senior vice president and group publisher, Modern Luxury

4 p.m.
Personalizing Luxury Household Goods Through Technology
The benefit of in-store shopping for household goods such as bedding and furniture is that it enables one to visualize how the product would look in one’s own home. But with 98 percent of affluent consumers using the Internet on a daily basis, it is imperative that luxury home-good makers explore ways to digitally engage with consumers to ensure that they are staying relevant. Attendees will learn how the speakers partnered to create uMatouk. The tool allows both retailers and consumers to mix and match bedding to create their own combinations that appear on a photorealistic 3D bed. The speakers to how the tool’s success has led to increased traffic back to Matouk’s site and why digital personalization tools should be an essential marketing tactic for luxury brands across categories.

Speakers:
Stuart Kiely, senior director of technology and marketing, Matouk
Chris Haines, director of strategy, Fluid Inc.

4 p.m.
Raffe for Dom Perignon

4:45 p.m.
Closing Panel
Outlook 2016: Key Luxury Marketing, Retail, Media and Digital Trends and What’s Next
Traditional luxury brands enter 2016 having had a mixed reception in the preceding year. While many marketers retained or grew market share, a few including department store chains had to resort to extensive discounts to retain footfall. The trend of brands opening more stores slowed, even as China and emerging market sales slackened while the United States held up. It is also obvious that the Internet and mobile have influenced shopper behavior. Among other issues, this panel will dissect:

• Holiday 2015 recap
• Outlook for the economy in 2016: What luxury marketers should anticipate
• U.S. and international markets: Where does growth lie
• Digital and the integration of online and mobile marketing and commerce with stores
• Theme for the year ahead

Speakers:
Andrea Wilson, vice president/strategy director and luxury practice lead, iProspect
Greg Monaco, founding partner, Monaco Lange
Gustavo Gomez, director of research and methodology, Envirosell
Anthony Hitt, CEO, Engel & Volkers North America
Chris Rovzar, digital head, Bloomberg Pursuits

Panelist:
Marie Driscoll, CEO and chief consultant, Driscoll Advisors

Closing Remarks
Milton Pedraza, CEO, The Luxury Institute, and Master of Ceremonies
Mickey Alam Khan, editor in chief, Luxury Daily

5:30 p.m. – 6:30 p.m.
Luxury Women to Watch 2016 Cocktails Celebration

Please click here to register for 4th annual Luxury FirstLook: Strategy 2016 in New York on Wednesday, Jan. 20

Hotels in the Midtown Manhattan neighborhood (from nearest to farthest):

Mandarin Oriental New York
80 Columbus Park at 60th Street, New York, NY 10023; tel: 212-805-8800
Please click here for the Web site

Trump Hotel Central Park
One Central Park West, New York, NY, 10023; tel: 212-299-1000
Please click here for the Web site

Hudson New York
356 W 58th Street, New York, NY 10019; tel: 212-554-6000
Please click here for the Web site

JW Marriot Essex House New York
160 Central Park South, New York, NY 10019; tel: 212-247-0300
Please click here for the Web site

The Hilton New York 
1335 Avenue of the Americas, New York, NY 10019; tel: 212-586-7000
Please click here for the Web site

The Palace Hotel
455 Madison Avenue, New York, NY 10022; tel: 212-888-7000
Please click here for the Web site

The Bryant Park Hotel
40 West 40th Street, New York, NY 10018; tel: 212-869-4446
Please click here for the Web site

New York Marriot Marquis
1535 Broadway, New York, NY 10036; tel: 212-398-1900
Please click here for the Web site

Sheraton Times Square
811 Seventh Avenue, New York, NY 10019; tel: 212-581-1000
Please click here for the Web site

Please click here to register for 4th annual Luxury FirstLook: Strategy 2016 in New York on Wednesday, Jan. 20

Source: http://www.luxurydaily.com/announcing-luxury-firstlook-strategy-2016-new-york-jan-20/

November 25, 2015

Nordstrom, Bergdorf Goodman lead retailers in overall satisfaction: report

Luxury Daily
November 25, 2015
By: Forrest Cardamenis

Department store chain Nordstrom is the top-rated luxury retailer, according to findings detailed in The Luxury Institute’s third annual Luxury Multi-Channel Engagement Index.

Consumers evaluated six luxury fashion retailers both in-store and online across a total of 31 attributes – 15 online and 16 in-store. Because the findings come from consumers, they can help each retailer determine which areas it needs to improve on and what specialties will help distinguish it from competitors.

“[We wanted] to get the voice of the client, not to have a panel of experts, not to have one individual,” said Milton Pedraza, CEO of The Luxury Institute. “This is the wealthy consumer rating their own experiences, these are all clients of the brands.”

Ahead of the pack
Barneys New York, Bergdorf Goodman, Bloomingdale’s, Neiman Marcus, Nordstrom and Saks Fifth Avenue were evaluated on the ease of 14 common criteria both online and in-store. In addition, there was one additional criterion for online shopping and two for in-store.

The common traits are: finding desired products, the perception consumers had of the retailer, product selection, customizability, customer service, policy on returns and exchanges, product displays, exclusive or limited products.

Traits also included whether selections were relevant to the consumer’s lifestyle, the availability of proper sizes, pricing, loyalty programs, confidence that the retailer would meet the consumer’s needs and how often products from that retailer receive compliments.

SAKS 5th Ave
Dior beauty counter at Saks Fifth Avenue

Respondents had a median age of 52, minimum household income of $150,000 and an average of $289,000 and $2.9 million in net worth, numbers that align with luxury retailers at large. Among the findings about consumers is that twice as much spending takes place in-store, with women and consumers under 45 years of age being more likely to spend online.

Bergdorf Goodman beat out Nordstrom in some notable categories. It is best perceived as a luxury retailer, as having the best prices and having the best personalized shopping experience.

However, Bergdorf Goodman has only two stores, one for men and the larger for women, both on Fifth Avenue in New York, whereas Nordstrom has 118, which will play into perceptions of luxury. Nevertheless, Bergdorf Goodman’s relative aversion to discounting did not stop consumers from highlighting its prices.
Nordstrom
Nordstrom

Nordstrom topped the rankings of more categories than any other retailer. Among them: its convenient refund/return policy, carrying relevant products and styles, having a navigable Web site, including helpful ratings and reviews and good shipping policies online, convenient locations and in carrying products that are complimented by others. It also beat out national retailers in prices and having good personalized shopping.

Fittingly, Nordstrom is the most popular retailer online and leads in market-share on both channels.

Tough times

Mobile transactions do not comprise a large share of the revenue for any of the retailers. While mobile is an important part of the transaction journey for many consumers, who use it to research and in-store to compare prices and selection, it has not yet become a major source of transactions.

Retailers are missing out on significant revenue opportunities by failing to personalize consumers’ shopping experiences, thanks to the lack of adaptive pages, product recommendations and search functionalities on their mobile sites, according to a Retail Systems Research report.

In its “Personalization Across Digital Channels” report, sponsored by predictive analytics platform Reflektion, Retail Systems Research highlights the major faux paus that brands commit when it comes to mobile commerce. As consumers’ expectations for retailers’ digital offerings grow higher, marketers must deliver optimized experiences, including saved search histories, suggestions on previous purchases and responsive pages tailored to each device (see story).

neiman.hudson yards rendering
Neiman Marcus Hudson Yards rendering

Nevertheless, online shares have grown and retailers have proven themselves adaptable to new technology.

“I think what [the data] tells you is that, even though we thought that the luxury multi brand chains were going to be overrun with the likes of Amazon and others, that just hasn’t happened,” Mr. Pedraza said. “They have become very nimble and very agile at online and ecommerce. Don’t underestimate these omnichannel chains. They definitely will rise to the occasion.”

One of the major obstacles in both ecommerce and in being perceived as luxury is in discounting. Discounting is a surefire way to lure in new consumers short-term but represents longer-term risks for the brand.

As a result, many retailers have opened up discount stores, which, despite also risking perception, could become a venue to funnel discounted merchandise and leave the main store full-price.

Although this change could not be implemented suddenly without alienating some consumers, there are already signs that it is taking place and may become more visible as holiday shopping is amped up.

Bloomingdale's Ala Moana exterior
Bloomingdale’s Ala Moana exterior

Consumers should expect a reduction in holiday promotions from retailers, according to a recent report by Upstream Commerce.

Based on the past two years of holiday promotions, the report predicts that 2015 will see a decrease in both the number of products discounted and in the discount rate. Fewer sales incentives and lower discounts could indicate a new strategy based on the “right” offering rather than simply presenting more promotions (see story).

“There is a lot of discounting out there, but full-price will remain relevant,” Mr. Pedraza said. “Unfortunately I suspect there will be a lot of discounting in the fourth quarter because when you enter their store they are flushed with inventory, all of them, so I think there’s going to be a big reduction.

“Traffic is down dramatically in all of these stores — some insider estimates, people on the inside of these companies, place traffic down anywhere from 20 to 30 percent,” he said. “It’s going to be a very tough fourth quarter, at least on market.

“We may see the top line improvement because of the discounting and you’re going to sell more, but we may see that the margins erode and by the way we may see comps that are not that good. Luxury right is in a very tough place, nowhere near what it was in 2008, everybody is suffering.”

Source: http://www.luxurydaily.com/nordstrom-leads-retailers-in-overall-satisfaction-luxury-institute/?utm_referrer=https%3A%2F%2Ft.co%2FFFJxcMPESf%2Fs%2FAiXG&utm_referrer=direct%2Fnot%20provided

 

October 27, 2015

Relationship building critical to luxury retail: Luxury Institute CEO

Luxury Daily
October 27, 2015
By: Sarah Jones

LONDON – The human element is going to be the top differentiator among luxury brands going forward, according to the CEO of Luxury Institute at Luxury Interactive Europe 2015 on Oct. 26.

As consumers increasingly experience the world through screens, they will come to crave the now-rare human connection. Here is where luxury brands can help themselves stand apart by outperforming their peers at relationship building and delivering a worthwhile personal touch.

“As consumers are more sophisticated, and as products become more commoditized, it’s the delivery of an optimized experience across channels that is critical and that high performance client relationships are our differentiators,” said Milton Pedraza, CEO of Luxury Institute, New York.

Brand image
Brands are struggling to define themselves, especially as they bleed into more affordable price points. For instance, a representative from an Italian jeweler told Mr. Pedraza that his brand does not know its own identity anymore, after a move down market left it straddling premium and exclusive.

Luxury Institute client Nordstrom now makes half of its sales via outlet stores. Recognizing that the customer retains a level of mystery, Nordstrom similarly remains ambiguous. Despite this non-specific label, the retailer still scores first in customer service in surveys conducted by the consultancy.

Nordstrom Anniversary Sale
Nordstrom heavily promotes its anniversary sale on social media

Consumers are becoming more sophisticated, and brands need to optimize their user experience for their requirements.

Across channels, brands in the luxury space are struggling to connect the dots between policy, procedure and system to deliver a rewarding customer experience.

While 37 percent of men and 49 percent of women find browsing without help from a store associate to be most effective, this does not remove a brand’s place in the process. For brands to guide consumers’ exploration, they should include signage in an on-brand way or have store associates communicate with the shopper to help them find what they are looking for.

Valentino Rome store women
Valentino store in Rome

Even in the digital space, which tends to be thought of as a do-it-yourself shopping channel, the human element cannot be entirely removed. Walmart might be able to automate and take out that the personal interaction from the buying experience, but for luxury brands, the relationship is everything. It is especially important to invest in this personal approach for top tier clients.

Therefore, sales associates should be taught interpersonal skills, such as trustworthiness. While often thought of as innate, these can be learned. Ensuring that all associates are pulling their weight will also help to retain top frontline employees over time.

For best practices, Mr. Pedraza suggests looking outside of the luxury industry rather than studying peers. Those that excel at relationship building are within the military, medicine and airline industries. For instance, brands can look to the military, which has developed successful methods of empowering soldiers, to gain insights on store associate education and guidance.

Making a connection
Mr. Pedraza asked each of the tables to discuss what changes they would make to their organizational structure, front line associates and compensation to help foster strong client relationships.

Ideas from around the room included rotating employees within roles to develop empathy, looking at the company from the consumer’s perspective and empowering sales associates with access to technology and a CRM system. Other suggestions included new roles, such as a customer information officer, which would span sales and marketing.

After hearing from the room, Mr. Pedraza shared his suggestions. These include empowering employees by shifting the organizational structure from a top-down management style to one where individuals are self-managed.

Milton Lux Int Europe
Milton Pedraza

On the same note, employees should be educated rather than trained, with the focus on ideas for creative relationship building rather than delving out a strict formula to follow.

Associates should be compensated for their actions, such as messages sent and appointments booked, rather than their sales results.

Brands should also make sure that each and every member of their team fits the culture. For many companies, this would mean eliminating employees who do not want to talk to anyone.

In addition, brands should ensure that the technology they are providing their staff with is up-to-date. Ineffective systems are often a dealbreaker for associates, particularly younger employees, and they will take their talent elsewhere.

While technology can help to deliver a high-touch experience to consumers, data and automation cannot replicate the level of engagement that a salesperson can create with shoppers, according to an executive from Moda Operandi at Luxury Interactive 2015 on Oct. 13.

Moda Operandi employs stylists, who work with its most valued consumers to provide personalized recommendations and one-to-one communications, but the process being used to deliver this service was tedious. Keeping the same human touch business model, Moda Operandi built a new platform to help its stylists deliver more relevant, visually appealing messages to the most important customers (see story).

“The key is that we’ve created these great channels, but we haven’t connected the dots,” Mr. Pedraza said. “And that I think is the critical issue.

“It’s not that we’re not innovating in each of those channels. It’s that we have not connected the dots to the point where, for example, a sales associate is empowered and inspired and maybe incentivized to send the client online,” he said. “Or that when the client buys online, the sales associate reaches out with a thank you card and a follow-up.

“We haven’t figured out those little basics that really create realtionships. Today we are very digital, very technical, we’ve disempowered the people in the stores, is one of my premises. We haven’t connected the dots, as simple as they are to connect, whether it’s technologically or humanistically, we haven’t figured out the policies, the procedures, the systems yet.”

Source: http://www.luxurydaily.com/relationship-building-critical-to-luxury-retail-luxury-institute-ceo/

October 22, 2015

She Who Controls the Purse Strings

IDEX
October 22, 2015
By: Danielle Max

There’s good news from a recent survey released by the Luxury Institute, which revealed that watch and jewelry companies are more successfully marketing to affluent women these days. In fact, 62 percent of respondents said that these companies do a good job of marketing to them; up from 53 percent in 2012.

The research from the New York-based Luxury Institute ranks industries and specific brands based on their success marketing to women with a minimum household income of $150,000 per year. Respondents reported average household income of $289,000, and a $2.9 million average net worth, so these are exactly the sort of households that the diamond and jewelry industries need to be targeting.

Overall, the watch and jewelry category ranks fifth among industries trying to sell their goods to women – and, given that high-ticket items such as watches and jewelry are not exactly a spur of the moment purchase – that seems pretty good to me.

The top four industries most frequently viewed as doing a good job marketing to women from high-income households through advertising and social media are clothing (75%), shampoos and conditioners (74%), fragrances and cosmetics (72%) and shoes (72%).

And it seems that marketeers overall are doing a better job of selling to what is clearly a key demographic. The Luxury Institute says that compared to 2012, each of these categories enjoys a wider share of women who view their marketing efforts favorably.

However, lest you think the gender gap is a thing of the past, among the industries that affluent women say are doing the poorest jobs of marketing to them are insurance, liquor, electronics, banks, brokerages and private jets, each of which earns an approval rating of less than 5 percent and has fallen in approval since 2012.

In addition, the automobile industry also needs to stop thinking (and acting as if) men hold the purse strings. Apparently, only 6 percent of women are impressed by the efforts of car companies to market to them.

Of course, it’s not just money that comes into play in such issues. According to the research, affluent women in the 45-64 age bracket are much more likely than women under the age of 45 to say that companies are doing well in marketing specifically to them.

Part of the problem seems to be that companies just don’t seem to realize who they should be targeting. The Luxury Institute specifically singles out married women who, according to its research, make two-thirds of all household purchasing decisions.

“Women maintain huge economic power and it is a necessity for companies to step up marketing and how they connect with affluent women regardless of industry,” says Luxury Institute CEO Milton Pedraza. “Research that includes speaking directly with these women about what appeals to them and what turns them off removes much of the guesswork in making marketing decisions.”

We couldn’t agree more.

Have a fabulous weekend.

Source: http://www.idexonline.com/Memo?Id=41250

Women neglected by marketers despite making two-thirds of household purchases

Luxury Daily
October 22, 2015
By: Staff Reports

Brands in the apparel, personal care and footwear sectors are among the best at marketing to affluent women, according to research by Luxury Institute.

The best industries targeting affluent women through advertising and social media do not come as a surprise, but it does shine a light on the sectors that are not doing well at focusing their attentions on this demographic of wealthy consumers. Survey respondents felt that the industries doing the least to target affluent women include insurance, liquor, consumer electronics, banks and brokerages and transportation including automobiles and private jets.

Luxury Institute surveyed women ranging in age from 21-years-old to more than 65-years-old with a household income minimum of $150,000 per year. The respondent pool’s had a reported average household income of $289,000, and a $2.9 million average net worth.

A battle of the affluent sexes
When it comes to marketing to a female demographic, brands in apparel (75 percent), shampoos and conditioners (74 percent), fragrances and cosmetics (72 percent) and footwear (72 percent) unsurprisingly fared the best.

In regard to the industries that are failing at capitalizing on the purchasing power of affluent women, each had an approval rating of less than 5 percent. This approval rating has continued to fall since 2012.

Efforts put forth by automotive brands, for instance, have only impressed 6 percent of the female respondents. Although traditionally associated with a masculine culture, the auto industry should expand its marketing efforts to cater to the sentiments of its female consumers, especially those with families, by touting the safety of high-end vehicles.

On the corporate side, automakers have made strides in being more inclusive of females in general. For instance, British automaker Aston Martin looked to close the gender gap in engineering by teaming up the Royal Air Force to introduce female students to various career routes (see story).

Sectors improving outreach to female consumers include the jewelry and watch sector, which has seen the largest improvement over the past three years. Sixty-two percent of respondents felt that these brands do a good job marketing to their demographic, a 53 percent increase from 2012.

In addition, department stores are listed sixth, with 60 percent of affluent women appreciating the efforts put forth by retailers.

Lux institute.womens marketing graph
Graph provided by Luxury Institute 

Across the board, older affluent women aged 45-64 felt that brands across industries are doing well when marketing to their demographic. This response was much more likely from the older age group than it was for women 45-years-old and under.

But, 25 percent of women 21- to 44-years-old felt that the wine industry is not doing enough, or not marketing to them well enough. This propensity decreases with age, with 21 percent of 45- to 54-year-olds, 16 percent of those between the ages of 55 and 64 and 12 percent ages 65 or older approve of the wine category’s marketing efforts.

In a statement, Luxury Institute CEO Milton Pedraza said, “Married women tell us that they make two-thirds of all household purchasing decisions. Women maintain huge economic power and it is a necessity for companies to step up marketing and how they connect with affluent women regardless of industry. Research that includes speaking directly with these women about what appeals to them and what turns them off removes much of the guesswork in making marketing decisions.”

Source: http://www.luxurydaily.com/women-neglected-by-marketers-despite-making-two-thirds-of-household-purchases/ 

October 16, 2015

Authenticity, engagement make for stronger social media presence

Luxury Daily
October 15, 2015
By: Forrest Cardamenis

NEW YORK – Any brand can create a social media account, but using these platforms to create a natural extension of the label and leverage social clout to generate sales and loyalty is another matter, according to a speaker at Luxury Interactive 2015 on Oct. 13.

Social media has shrunk the distance between brands and consumers, but bringing these parties closer together has also destroyed traditional business/customer relationships. To be successful on social media, consumers need to be treated like equals and people, otherwise social presence could, counterproductively, push consumers to competition.

“A lot of brands think ‘We have to do this, we have to create content, we have to get out there,’” said Aliza Licht, also known as “DKNY PR Girl,” former public relations executive for DKNY. “A lot of times the need or the urgency to create content is overshadowing the importance of staying true to your brand’s DNA.”

Social engagement
Establishing your brand’s DNA is crucial to creating an authentic and admired social media presence. Brands must identify their core values and ideas and set up boundaries on what topics they will and will not get involved in online.

Tweeting and posting only about promotions and new products creates an inhuman distance from the consumer’s standpoint, but getting involved in serious sociopolitical discussions could alienate those with differing viewpoints.

DKNY Scandal tweet
DKNY PR Girl often tweeted about social happenings to build authenticity

Any active user on social media will inevitably find themselves in some sort of a crisis, but that only makes it more important to engage with consumers as equals. When communication is this direct, the traditional positioning of the brand being above the consumer no longer works, and it won’t create a network of loyal consumers and defenders when that crisis comes along.

“When you’re friends with a customer you create respect and create a situation where, when you make a mistake – and we all do – you are more easily forgiven,” Ms. Licht said.

In addition, when trying to reach international consumers, the same tricks that work in one country might not work elsewhere, so international partners are crucial in helping brands find effective ways to engage. That said, there are common denominators. People all around the world want to be heard.

dknyprgirl twitter
DKNY PR Girl twitter

In one case, Ms. Licht tweeted about the 100 percent humidity in New York on a summer day. “Of course it’s a hair-wash day,” she added. By doing so, she found a natural and enticing way for followers all over the world to share their thoughts with the weather, and retweeting replies from different countries showed that DKNY listened to global consumers.

Search functions also make it easy to “listen” on social media. Users talking negatively about a brand may not be tagging that brand in their posts, but they can easily be searched, and the findings can be used to make changes that will satisfy doubters before competitors steal them away.

As it is in everything else, self-reflection and self-criticism is crucial to creating a strong social presence. A brand should examine its output to ensure it is putting forth the best version possible of itself in terms of message and attitude.

Youth movement
With millennials growing into affluence and becoming a key market, social media presence will only grow in importance.

Social media has created a unique environment that allows for personal engagement between consumers and brands, according to the creative director of Loewe at the Condé Nast International Luxury Conference April 23.

Social media allows consumers to be involved with brands on an instant basis. The stories that can be told and the people that can be reached through modern mediums change the face of the luxury industry (see story).

The genuine and personal connection that social media lends itself to is more attractive to consumers who want more from businesses than constantly being sold to.

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

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

“A lot of brands still maintain that position of ‘We’re up here, you’re down here, we’ll push content to you when we feel like you need to know something, we’re not going to respond to you, but we’ll let you know what is important,’” Ms. Licht said. “I don’t agree with that approach. I think being likable and being an engaging platform makes a huge difference in growing a community.

“The anti-elitist mentality is a winning mentality,” she said.

Source: https://www.luxurydaily.com/151568/

October 15, 2015

Selling and service as terminology is dead: Luxury Institute CEO

Luxury Daily
October 15, 2015
By: Staff reports

NEW YORK – 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.

Consumer behavior
In a survey of wealthy consumers, 68 percent of men and 64 percent of women say that their spending on luxury or premium products revolves around bricks-and-mortar. The frequent conception today is that consumers have conducted such detailed research prior to their store visit that they cannot be swayed or influenced by an associate, but Luxury Institute found 45 percent of women and 30 percent of men do not do any searching before they head to the store.

With 37 percent of men and 49 percent of women noting that they find browsing without the help of a salesperson to be most effective for finding new merchandise, brands may want to rethink their store strategies. Displays with product information or signage that assists with navigation or points out new items can help aid this independent exploration.

This eschewing of a sales associate’s assistance is even more prevalent online, where only 8 percent of men and 3 percent of women say they find new products best with the help of an associate via live chat or other online communication.

The sales associate does still have a place, but ensuring that the interaction is relevant and effective now comes down to technology. Retailers should be ensuring they are giving their salespeople the best tools since associates may think of taking their talents elsewhere if technology proves a deal-breaker.

According to a new study by Yes Lifecycle Marketing, many retailers are still unwilling or unequipped to tailor customer service to the individual.

The study looks at retailers in a variety of different sectors and finds that many have not sufficiently tracked clientele and are thus unable to provide sales associates with the personalized data that will help initiate and close a transaction. With consumers navigating freely between mobile, Web and in-store shopping, and brands therefore able to gather more information than ever before about frequent shoppers, properly cataloguing clientele has emerged as a way to provide the best possible customer service and showcase a great branded experience (see story).

Other trends shaping the luxury industry are the spending power of women, who will control the majority of assets. Seventy percent of women who inherit from their spouses change their financial advisor within a year, wanting to move on from someone who has mistreated them.

The only sectors that are successfully marketing to women are beauty and skincare.

“Beyond leaning in, you have to jump into the deep end of the pool,” said Milton Pedraza, CEO of Luxury Institute.

Source: http://www.luxurydaily.com/selling-and-service-as-terminology-is-dead-luxury-institute-ceo/?utm_referrer=direct%2Fnot%20provided

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

October 3, 2015

Can a fast fashion vet steer Ralph Lauren’s ship?

Retail Wire
By: Tom Ryan
October 2, 2015

Shocking many fashion insiders, Ralph Lauren Corp. hired Stefan Larsson, a former H&M executive and president of Old Navy, to replace Ralph Lauren as CEO.

Mr. Lauren, 75, will remain active as executive chairman and chief creative officer and is expected to continue to oversee the luxury side. Mr. Larsson will report to Mr. Lauren in what’s described as a “partnership.”

Mr. Larsson, 41, is credited with reviving Old Navy after taking over in 2012 with a focus on upgrading design and bringing over some quick-turnaround supply chain tricks he learned in his 15 years at H&M. He takes over as CEO of Ralph Lauren Corp. in November.

Ralph Lauren Corp.’s revenues slid 5.3 percent in the second quarter due to a strengthening dollar that affected both overseas profits and tourist traffic at its stores in the U.S. The company has also faced heightened competition in the luxury channel this year. Shares are down around 40 percent this year.

The recruitment of Mr. Larsson was the latest example of the insular luxury industry looking outside for talent. LVMH recently hired an Apple executive as chief digital officer, Chanel SA’s CEO spent 15 years at Gap, and Grita Loebsack, a former VP at Unilever Plc, was recently hired as CEO of Kering’s emerging brands, which include Stella McCartney and Gucci.

Stefan Larsson
Stefan Larsson – Photo: Gap, Inc.

“You see a lot of luxury brands now recruiting from other industries,” Milton Pedraza, the CEO of the Luxury Institute, a research firm, told The Wall Street Journal. “They need executives with skills the luxury industry doesn’t necessarily have such as an expertise in global distribution or digital marketing.”

Mr. Larsson, who is Swedish, is expected to be useful in expanding Ralph Lauren’s business overseas. An outside CEO may also make aggressive calls to reduce expenses and bring more sophistication to an organization.

Odeon Capital analyst Rick Snyder told Reuters the company had grown to a size where it needed more “systems and controls.”

The New York Times said that for the legendary designer, the hiring “indicates that he, at least, feels it is still important to separate the roles and have a professional manager running the brand and reassuring Wall Street.”

Still others felt the business model may be due for a more radical change, with department store growth slowing and fast-fashion retailers like H&M, Uniqlo and Zara leading fashion’s growth.

“Larsson has a track record of expanding very well,” longtime industry analyst Walter F. Loeb told the Daily News. “His contribution to Ralph Lauren will be global expansion and, more importantly, discipline within the company.”

Source: http://www.retailwire.com/news-article/18579/can-a-fast-fashion-vet-steer-ralph-laurens-ship

September 30, 2015

Ralph Lauren hires Old Navy executive to replace him as CEO

Reuters
By: Siddharth Cavale and Kylie Gumpert
September 29, 2015

American designer Ralph Lauren, who built a fashion powerhouse on luxury designs inspired by country club chic, announced Tuesday he is stepping down as chief executive officer and named the head of Gap Inc’s populist Old Navy brand to the position.

Ralph Lauren Corp, founded by 75-year-old Lauren in 1967, appointed Stefan Larsson, the global president of Gap’s Old Navy division, as CEO effective in November. Lauren will continue to serve as executive chairman and head its design team, the company said in a statement.

Lauren, who got his start designing neckties, plans to stay active at the company and Larsson will report to him.

“When they start designing things I can’t understand, I’ll quit,” Lauren told the New York Times in an interview.

Ralph Lauren shares rose 3.79 percent to $108 in trading after the bell. Gap shares fell 3 percent to $29.30.

The company has been struggling to boost profits as a stronger dollar reduces the value of sales from overseas. Net revenue in its first quarter ended June 27 fell 5 percent, mainly due to currency fluctuations.

Odeon Capital analyst Rick Snyder said the company had grown to a size where it needed more “systems and controls.” The change in CEO “is just a natural progression,” Snyder said.

Milton Pedraza, a fashion industry analyst at the Luxury Institute, said Larsson’s appointment follows a trend of luxury brands hiring leaders from mass-market companies in recent months. He cited the appointment of Grita Loebsack, a former vice president at Unilever Plc, as CEO of Kering’s emerging brands, which include Stella McCartney and Gucci.

Larsson, 41, is credited with reviving sales at Old Navy, successfully implementing a model of offering trendy clothes at low prices.

Annual sales at the division rose 8 percent in 2014 and became Gap’s biggest business. Sales for the division were $6.62 billion, or 40.3 percent of Gap’s total.

Lauren’s fashion empire includes some 25 brands including Polo, Club Monaco and Denim & Supply, and the company makes clothing, accessories, furniture, home decor items and footwear under its labels.

Larsson, a Swede who before joining Gap was global head of sales at Hennes & Mauritz, brings experience of managing a fast fashion business with a supply chains considered to be among the most efficient within the apparel industry.

His appointment would be a good fit for Ralph Lauren which is seeking to reorganize and centralize business units and brands, Snyder said.

“If he comes from a place like H&M, he understands global supply chains and that’s one of the things that Ralph Lauren is trying to implement right now,” Snyder said. “It’s going to be very positive for them.”

Despite the aura of Anglo-Saxon elitism around his company, Lauren was born Ralph Lifshitz in the Bronx in 1939. His parents were Jewish immigrants from Belarus, and he changed his name to Lauren at age 16.

Lauren’s designs drew inspiration from elite and exotic realms including East Coast prepsters, the Wild West, colonists on African safari and czarist Russia. He designed the wardrobe for the 1974 film version of “The Great Gatsby” including a pink suit for star Robert Redford.

The Ralph Lauren Polo shirt, which debuted in 1972, became a signature item for the company with a tiny polo player embroidered on the chest.

His designs have been worn by presidential hopeful Hillary Clinton, actress Gwyneth Paltrow and actor Johnny Depp.

Lauren was also, perhaps surprisingly, influential in the hip hop world. His bright colors and bold clothing became staples for some New York gangs, and rappers such as Kanye West and Lil Wayne have mentioned Lauren and his designs in their rhymes.

The company also said that Jackwyn Nemerov, chief operating officer, would retire in November at which time she will become an adviser to the company.

Source: http://www.reuters.com/article/2015/09/30/us-ralph-lauren-ceo-idUSKCN0RT2NO20150930

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