Luxury Institute News

January 22, 2017

Luxury Executives Talk About How To Get More Of Your Money

Forbes
Doug Gollan
January 18, 2017

Global luxury from autos to jets to watches, jewelry, home, arts, beauty, and travel is a trillion dollar industry. What will it take for luxury brands to successfully sell and serve you? Top executives gathered in New York today at Luxury Daily’s annual Luxury FirstLook 2017 to discuss best practices in getting you to open your wallet. Below are some highlights.

1. It takes impeccable service. Luxury providers need to give front-line staff more decision-making authority. Mehdi Eftekari, the general manager of Four Seasons Hotel New York, says the group allows its employees to resolve complaints. As an example, he says a customer checking out complains his room service coffee was cold. The typical hotel rulebook would have the clerk get a manager. Instead, Four Seasons’ employees can take the charge off the bill on their own. He says removed charges actually decreased. Hotels and airlines are often concerned about travelers who try to game the system. Eftekari told the audience, “That’s 1/10th of 1 percent. I tell my team to focus on the 99.9%.”

2. Look to Jeff. Amazon is already a powerhouse in luxury sales, according to Bob Shullman, CEO of The Shullman Research Center. He said 74% of the top 1% bought luxury from Amazon in the past year. Moreover, as luxury brands try to figure out how to better sell their wares in an omnichannel world, he says Amazon customers rate the retailer better than other retailers by an 110-to-1 margin. He says top luxury brands typically score a 2- or 3-to-1 margin. “(Amazon CEO and Founder) Jeff Bezos doesn’t see any limitations,” Shullman told the group, noting it has launched its own private label fashion line after many top luxury brands eschewed the sales platform. What’s more, Amazon has a power database of both customer emails and home addresses. Moderator Milton Pedraza, CEO of The Luxury Institute, noted the online retailer needs to fix its reputation that it doesn’t treat its employees well. “It matters,” he says.

3. Shopping needs to be memorable. Retail stores have to move “from nicely furnished stock rooms with well-dressed stock people” to centers of experience, says Ken Nisch, chairman of JGA.. He notes with retail leases running 10 years or more, retailers are under pressure to figure out how you will shop not next month but five years from now. He says malls have increased “experiential” retail space that includes things like restaurants, exhibits and hair styling to 25% from 8%. He quoted Walt Disney, telling the executives, “A picture is worth a thousand words but an experience is worth a million.”

4. Sustainability needs to be relatable. Luxury companies haven’t done a good job communicating what they are doing let alone making it inspirational to you the consumer. Charles Stanley, US CEO for De Beers’ Forevermark said there are a multitude of statistics about how the diamond industry supports sustainability, however, to make an impact his company created short films to show consumers real examples. One vignette shows a single mother who was able to launch a successful business creating more jobs based on funding from Forevermark. Kane Sarhan, marketing boss for 1 Hotels, a new group based on the core value of sustainability (They know where everything from carpets to bathroom fixtures were made and how.) wants guests to go away understanding how they can bring sustainability back into their regular lives. He says a survey of over 50,000 guests found “49% said staying at our hotel made them change life at home.” The hotel has meters in its showers so you can moderate your water use. He says in the future the hotel may reward guests who consume less water or electricity.

5. Brands need to rethink their approach to events you get invited to. David Friedman, co-founder of research firm Wealth-X says most event marketing is based on trying to one-up other events and the guest list isn’t well targeted. He coined the phrase “Hope Marketing.” In other words, hold and party and hope the right people show up and then buy. Friedman says when targeting Super Rich/UHNW consumers, marketers need to turn it around and focus on what the customer is interested in, be it fishing, football, collecting stamps or the opera. Shamin Abas, who owns a PR company that works with jet and yacht companies told the audience to think small. For a client that makes $3.5 million submarines, an event meant bringing an Ultra High Net Worth prospect and his family to the Bahamas for a test dive. For another client that manages private jets, but was worried about what will happen as fathers grew older and turned over operations of their empires to their children, she helped orchestrate a father/son event so the jet company could get to know the next generation.

6. Traditional advertising no longer works. Pam Danziger, president of Unity Marketing, said the average consumer gets 362 ad messages a day, but few of them resonate or stand out because they are in the wrong platforms. Greg Licciardi, chief revenue officer of Elite Traveler (Disclaimer: I co-founded the magazine in 2001 before selling my interest in 2014) said niche media is the key. For companies that want to reach the Super Rich, the publication is distributed on private jets and terminals. Shullman says digital media such as e-mail is effective in driving recall with luxury buyers. Tracy Doyle, creative director for fashion and luxury at The New York Times T Studio says more and more marketers want customized “native content” messages. Licciardi noted that with over 80% of UHNWs having made their money in the past 15 years, luxury marketers can’t assume you know about their heritage or what uniquely sets them apart. “Luxury marketers need to tell the story and educate,” he says.

Doug Gollan is Founder and Editor-in-Chief of DG Amazing Experiences, an e-newsletter for private jet owners.

Source: http://www.forbes.com/sites/douggollan/2017/01/18/luxury-executives-talk-about-how-to-get-more-of-your-money/#66f92d6c4549

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

Should luxury retail move away from discounting?

Luxury Daily
Sarah Jones
January 12, 2017

Discounting is on the rise in the luxury sector, as retailers strive to make up for slowed spending by cutting prices.

The annual post-holiday sales are currently on, promising price cuts of up to 80 percent. While discounting may drive traffic and sales, is the hit to retailers’ positioning and profits worthwhile?

 “Luxury brands require strong leadership and vision to manage soft periods,” he said. “Weak brands discount when sales are weak. The trick is getting clients back without discounting.”

Reduced retail

A number of factors are making success in the luxury industry more difficult, and financial results are showing the challenging climate. From reduced tourist traffic to the slowdown in China, retailers are finding themselves needing to recoup sales.

According to a recent report from Bain, off-price retail is now 11 percent of the luxury market. While this segment of the sector grew less rapidly in 2016, it was still up by double digits.

Additionally, 37 percent of luxury sales today come from marked down merchandise (see story).

Luxury retailers including Nordstrom and Saks Fifth Avenue have aggressively expanded their off-price chains. Nordstrom Rack’s 215 stores far outnumber its 123 full-line stores, and Saks Off 5th similarly has 118 locations compared to the brand’s 41 full-line outposts.

 

Nordstrom ecommerce

Image courtesy of Nordstrom

“In the luxury boom of the mid-2000s, there was a lot of ‘aspirational luxury shopping,’ fueled by mass affluent and upper middle class consumers, rather than a traditional wealthy consumer,” said Steve Kraus, chief insights officer at Ipsos. “The attitude at the time was ‘I’m going to buy luxury, it’s going to be expensive and it’s going to be worth it.’

“With the recession, and continuing on afterwards, this aspirational luxury shopping has dried up, and the consumer mindset has become ‘I’m going to buy luxury, and I expect a deal,’” he said. “It’s the great paradox of the recession – it didn’t lower consumer expectations, it raised them.

“Value expectations are now a part of luxury in a way that they weren’t in the mid-2000s. Discounting is now widespread, in luxury and in mass markets, particularly as more and more shopping is done online.”

While many retailers limit their sales to specific times of the year, such as after the holidays, when they do cut prices it becomes the main event.

For the opening of the Harrods Sale on Boxing Day, the retailer traditionally pulls out the stops for the crowds gathering in line, passing around hors d’oeuvres and putting on a show.

Selfridges saw 1 million visits to its ecommerce site as its winter sale kicked off, and its stores pulled in $2.5 million in sales within the first hour of business on Dec. 26 (see story).

 

Harrods Sale promo

Promotion for Harrods sale

While the blowout sale at the end of a season is common practice among multi-brand retailers, some particularly tightly distributed labels avoid this strategy.

Louis Vuitton reportedly destroys merchandise that is unsold at the end of a season rather than selling it at a reduced price.

“In the long-term, I think success has come more to luxury brands who have not discounted–for example, Louis Vuitton, Hermès, etc.,” Mr. Kraus said. “They build their value equation around quality and heritage, rather than discounts.”

In general, luxury brands are trying to pull back and become more strategic in how they approach off-price.

For instance, U.S. fashion label Michael Kors has pulled back its inventory in department stores mainly to avoid its merchandise being placed on sale by its retail partners, protecting both its profits and image (see story).

 

Michael Kors

Image courtesy of Michael Kors

“Many brands are moving away from department stores due to their addiction to discounting,” Mr. Ramey said. “Discounting exists outside the ‘luxury code.’

“Luxury is about fantasy; price is about reality. Discounting price diminishes brand value,” he said. “Consumers demand value. Too many retailers define value as price.

“Successful luxury brands are disciplined. They must reinforce the brand narrative and create desire. No luxury brand has ever been built on price.”

Consumer behavior

Luxury brands often believe that their clientele will not be swayed by a deal, but this may not always be the case.

According to a report from Unity Marketing, the majority of affluent consumers employ a number of shopping and saving tactics to manage their money, with 52 percent of ultra-affluents regularly comparison shopping.

Luxury marketers often think that affluent consumers want to spend their money as fast as they earn it, but the affluent are actually invested in saving their money. These strategic spending habits call for a revised marketing plan that recognizes that consumers care more than previously thought about what they purchase (see story).

 

bloomingdales.athletic wear 400

Image courtesy of Bloomingdale’s

“Discounting illustrates the schism between a luxury buyer and an affluent buyer,” Mr. Ramey said. “The one commonality amongst the affluent is they save money.”

Similarly, the Luxury Institute’s Milton Pedraza noted in an interview with Luxury Daily that consumers are less loyal today, and they can be wooed by a better offer from a competitor (see story).

Keeping up with competitors is often the motivation behind retailer pricing strategies.

Upstream Commerce noted in a holiday report last year that high-end retailers were trying to cut back on promotions, but the industry at large puts pressure on them to follow trends. For instance, a brand may be sold at both a promotion-heavy chain such as Macy’s and a luxury department store, requiring the upscale retailer to match Macy’s or be passed over (see story).

“I think the problem is that luxury brands, like so many others, remain fixed on the old 4Ps model of marketing – product, price, promotion, placement – when where they need to focus is on the 4Es – experience, exchange, everyplace and evangelism,” said Pam Danziger, president of Unity Marketing, Stephens, PA.

“Luxury brands shouldn’t and shouldn’t need to rely upon discounting to sell their stuff,” she said. “The fact that they do only testifies how out of touch they are with the consumers and how badly they have failed at marketing in new luxury style.”

Source: https://www.luxurydaily.com/should-luxury-retail-move-away-from-discounting/

 

 

January 3, 2017

What luxury marketers should expect in 2017

Luxury Daily
January 3, 2017
By: Brielle Jaekel

Affluent consumers leveraging digital 

In 2016, luxury brands had a less-than-stellar year with many sectors seeing stagnant sales and decrease in growth.

Research among the luxury sectors and affluent consumer behavior is leading experts to believe that while next year may still remain slow, there is still growth to be had by appealing to millennials. Experiences and focus on digital will make or break brands next year.

Here are the outlook views of some researchers featured in Luxury Daily last year, in alphabetical order.

Leave.EU played a key role in the British public’s historic vote on June 23, 2016 to leave the European Union. Image courtesy of Leave. EULeave.EU played a key role in the British public’s historic vote on June 23, 2016 to leave the European Union. Image courtesy of Leave. EU

Euromonitor International

“An important trend in 2017 is the increased political uncertainty the world is facing,” said Sarah Boumphrey, global lead of economies and consumers at Euromonitor International. “Consumers enter 2017 to a backdrop of uncertainty – especially in advanced economies with the arrival of Donald Trump in the White House and the United Kingdom government moving to trigger Article 50 to begin negotiations to leave the European Union.

“Over the course of the year, we are expecting consumer expenditure to rise by 2.3 percent with every household saving $3,609 on average,” she said. “With the United States still accounting for almost one-in-three dollars spent globally, consumer behavior in the Trump era matters to the world.

“Despite its slowing economy, Chinese consumers will continue to see amongst the largest increase in spending, and spending in emerging and developing economies overall will grow by more than twice that of developed markets. Authenticity, convenience and experience will continue to be watch words for the 2017 consumer. The New Consumerism, with consumers reassessing their priorities and values, will continue to permeate consumer behavior.”

Travel & Leisure May 2015

 

Euromonitor International Travel

“2017 promises to be the year of automation and personalization in travel,” said Wouter Geerts, travel analyst at Euromonitor International. “Travelers will interact more with robots and artificial intelligence through virtual assistance and chat boxes as the first point of contact with travel brands.

“Striking the balance between tech and life will become more important to consumers, so simplifying booking processes through automation is becoming more important though we are not expecting to see robots in airplanes any time soon.”

Image courtesy of Neiman MarcusImage courtesy of Neiman Marcus

The Luxury Institute
“I think we’ll definitely have single digit growth in the coming year because we’ve had such a bad year,” said said Milton Pedraza, CEO of the Luxury Institute. “Some categories such as watches will continue to suffer but jewelry and apparel might have a better chance.

“Sectors that have experiences such as hospitality, wine, food and tech are all very experiential will likely see growth,” he said. “Retail will continue to be good, we’ve seen numbers slow down, but likely will increase in the next year under the trump economy.”

“We will likely see a lot of government spending, which will help luxury recover in the United States but also have a positive impact on the global market as well.”

Donald Trump's economic and trade policies may create challenges for luxury activitiesDonald Trump’s economic and trade policies may create challenges for luxury activities

 

Unity Marketing

“I believe 2017 will be a good year for the luxury market, after struggling so over the last several years,” said Pam Danziger author, speaker, consultant of Unity Marketing. “In the recent past environment, the affluent consumers went undercover, withholding their spending on high-end products that looked too showy and conspicuous in order not to be identified as one of the demonized one percenters.

“But the Trump presidency looks to be very good for economy in general, and the affluent consumers in particular,” she said. “The luxury market has faced many headwinds in the recent past — luxury goods brands, in particular.

“But for the luxury industry in 2017, what is best for the top 20 percent income earners – the rich and wealthy – will also be best for the industry. And it looks like that the top earners will grow wealth (recent stock market boom) and feel more prosperous in 2017, resulting in a renewed confidence toward spending on personal indulgences. Like the Reagan presidency before, with the Trump’s in the White House, luxury may look cool again.”

“That said, however, the luxury consumer continues to prefer indulging in experiences, rather than goods. And the luxury goods market, in particular, is chock a block full of product, so much so that the luxury goods sector of the luxury industry is going to have to continue to focus on how to deliver true, meaningful and memorable experiences to their customers, both in the things they sell and the way they sell them. That is, the customer service experience is going to become even more important in 2017 and the years ahead.”

Source: https://www.luxurydaily.com/what-luxury-marketers-should-expect-in-2017/

January 1, 2017

2017 U.S. Luxury Market: Will We See a Rebound?

The Wall Street Journal: Video
December 30, 2016

Spending on luxury goods and services were generally down in 2016. Luxury Institute CEO Milton Pedraza joins Lunch Break with predictions for 2017 and whether a continued luxury spending downturn would mean trouble for the broader economy.

To see Milton Pedraza’s WSJ Lunch Break Interview, click the link here (source): http://www.wsj.com/video/2017-us-luxury-market-will-we-see-a-rebound/5AC3E7BE-F8F2-4AC0-A115-7ECF4FE086BA.html

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/

December 15, 2016

Net-A-Porter is 2016 Luxury Retailer of the Year

Luxury Daily
December 15, 2016
By: Staff

 

Net-A-Porter ad campaign 

Online retailer Net-A-Porter Group is Luxury Daily’s 2016 Luxury Retailer of the Year for its introduction of traditionally ecommerce-averse brands to an online audience.

Net-A-Porter and its brother site Mr Porter placed ahead of first runner’s-up Nordstrom and second runner’s-up Barneys New York thanks to their coveted exclusives and innovations in service and selling. These three retailers demonstrated a willingness to integrate digital touchpoints into the shopping experience, additions that luxury stores are facing increasing pressure to implement.

The Luxury Retailer of the Year award was decided based on luxury marketing efforts with impeccable strategy, tactics, creative, executive and results. All candidates selected by the Luxury Daily editorial team and from reader nominations had to have appeared in Luxury Daily coverage this year. Judging was based purely on merit.

Nothing but net

Net-A-Porter has carved a niche in luxury ecommerce, convincing brands that previously did not sell online to give it a try.

In 2016, Net-A-Porter and Mr Porter became the first solely online outlet to retail IWC Schaffhausen’s timepieces. Similarly, Tiffany chose Net-A-Porter as its exclusive ecommerce partner, making the retailer the only place to buy its jewelry online aside from the brand’s own Web site (see story).

tiffany.NAP east west tiff blue

Tiffany’s collaboration has expanded to watches

Other highlights included an exclusive capsule of Gucci merchandise and the debut of Prada’s ready-to-wear collections online (see story).

Net-A-Porter also showed a willingness to adopt new forms of retail, teaming up with digital fashion rental service Armarium to bridge the gap between borrowing and investing. Net-A-Porter enabled Armarium users to purchase full-price apparel and accessories directly to complete their look (see story).

Reflecting this idea of the luxury shopper who buys at multiple price points, the retailer also launched a collaboration with retailer J. Crew and established a demi-fine jewelry category on its site, with pieces that start at around $30 (see story).

Aside from its product selection, Net-A-Porter also branched out in its advertising efforts. In a break from its tradition of a single campaign face, Net-A-Porter recruited five up-and-coming models of different races and looks for its fall/winter seasonal ad effort, which includes still imagery and a video component (see story).

Net-A-Porter. PRINT DRESS fw2016

Net-A-Porter’s advertising campaign

Net-A-Porter Group also beefed up its content, upping its posting frequency on both its namesake site and Mr Porter from weekly magazines to daily updates. Looking to be a resource for more than just fashion, Mr Porter brought back its Style Council recommendation column (see story).

Mr Porter also found a new way to deliver content, creating a two-screen shopping experience for the Apple TV centered on its videos (see story).

 

Mr-Porter-Apple-TV-400

Mr Porter’s Apple TV app

Service strategy

In 2016, Net-A-Porter built on its existing customer service by making its extremely important people, or “EIPs,” into a formal loyalty program. This included giving these high-spending clientele the ability to preview select merchandise before it became live.

“In 2016 Net-A-Porter has demonstrated strong growth by showcasing our unparalleled product offering, customer retention rate and service, and our unique content offering as not only an online luxury retailer but a media company,” said Marilyn Webber, global director of marketing at Net-A-Porter. “Our product offering in 2016 championed hero brands such as Gucci and Prada as well as a variety of new contemporary lines to appeal to a new customer base.

“We have continued to strengthen customer relationships through our EIP programs, tech advances such as upload previews and SMS shopping updates, and by creating intimate events for customers, friends of the brand and press in new and existing key markets,” she said. “We strive to pursue custom content through our customer emails, push notifications, editorial content and comprehensive campaigns highlighting Net-A-Porter’s seasonal direction.”

Continuing its focus on delivery and 24/7 availability, during the summer months, Net-A-Porter struck up a partnership with Blade to deliver packages to the Hamptons and other hamlets on Long Island’s East End. Net-A-Porter’s same-day delivery service is offered year-round for consumers in the Greater New York area, with an extended practice to the Hamptons available in the summer months (see story).

net-a-porter.blade helicopters

Net-A-Porter’s Blade helicopters

“Our efforts to connect with our customer on a personal level and appeal to their everyday lives is integral for the growth of our business,” Ms. Webber said. “We continue to offer a vast variety of product across categories with exclusive collections, brand collaborations and a ‘wear-now, buy-now’ edit that meets our customers’ needs year round. 

“While Net-A-Porter has established itself as the ultimate destination for luxury fashion and lifestyle, we continue to push the envelope by tapping into new markets through targeted activations and events, constantly elevating our marketing campaigns through new creative direction across a myriad of platforms and by offering unprecedented customer service through our global personal shopping and customers service teams,” she said. “In 2016, we have focused on captivating new customers, enhancing our technology, and executing a strong social and editorial content strategy for our site and media platforms.”

Net-A-Porter, together with Yoox, has seen its revenues climb as other retailers struggle in a difficult climate (see story).

Nordstrom sees anew
First runner’s-up Nordstrom found creative ways of reaching out to a younger generation of shoppers.

Whether hosting a party for 2,000 undergrad students based on a Snapchat contest (see story), or popping up at music festivals with experiential pods (see story), the retailer proved it is able to communicate via millennials’ preferred channels. The retailer has also proven it does not take itself too seriously, playing into the mass confusion surrounding a leather-clad rock for sale (see story).

Nordstrom SXSW 2016 Beauty

Inside Nordstrom’s pods at South by Southwest

The Luxury Institute’s third annual Luxury Multi-Channel Engagement Index, released late in 2015, found that Nordstrom has one of the highest satisfaction levels among affluent shoppers.

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 (see story).

This focus on its customers is evident in the chain’s holiday campaign, which features letters of appreciation to real shoppers (see story).

Love, Nordstrom

Love, Nordstrom campaign

The retailer’s individualized assistance is now being delivered by more than just its associates. Aligned with the holiday season, Nordstrom launched a chatbot to provide gifting suggestions (see story).

Nordstrom is also testing out various personalization efforts through digital such as a solution that will notify store associates that a mobile application user has crossed the geofence into the store so they can ready a dressing room. The department store has seen positive adoption with its innovative technology and convenient programs such as curbside pickup (see story).

Nordstrom Anniversary Sale OOTD

Nordstrom’s Anniversary Sale leveraged social media content in-store

Nordstrom, which styled the nominees and presenters at the 70th annual Tony Awards, built upon its placement with a live shopping experience. As performers appeared wearing items from the retailer, viewers could click to buy from their couch (see story).

Along with service, a focus on product curation led to additional locations for the retailer’s Space shop-in-shop concept for emerging designers (see story) and Hermès’ first accessory-centric pop-up, which will be up for almost a year (see story).

A Los Angeles Nordstrom also paved the way for Tesla to engage with affluent shoppers through an in-store gallery (see story).

Barneys comes home
In 2016, second runner’s-up Barneys New York reopened downtown, marking the occasion with a charitable auction, an ad campaign celebrating the multifaceted makeup of New York and a steady stream of content. Included in its editorial features was the launch of a digital city guide, a feature that has since added ideas for destinations including Miami, Los Angeles, Seattle, Paris, Chicago, Boston and San Francisco.

Barneys outfitted its newly opened Chelsea store with iBeacons, using the devices combined with RichRelevance’s Relevance Cloud to deliver personalized notifications and content such as articles, videos and look books to shoppers’ mobile devices when they are within the flagship. At the time, Barneys said it was the first luxury retailer to use iBeacons in a bricks-and-mortar space (see story).

barneys.chelsea womens scott frances

Inside Barneys’ new Chelsea flagship

Aside from returning downtown, Barneys honored its heritage, by publishing its first book in its 93-year history (see story).

Unafraid to push boundaries, the window displays at Barneys’ Madison Avenue and Chelsea stores this year have included lifelike mannequins, deconstructed vintage cars and art gallery-style displays.

 

Barneys Chanel window cruise 2017

Chanel window display at Barneys

Barneys also used its position to garner attention for causes, such as gender equality (see story). The retailer’s holiday campaign invited consumers to use social media as a platform to enact Love, Peace and Joy (see story).

Diversifying its product selection and embracing the fashion industry’s changing norms, the retailer invited vintage ecommerce site Resee.com for a pop-up and was one of the multi-brand stores that carried Burberry’s first see-now, buy-now collection right off the runway.

Source: https://www.luxurydaily.com/net-a-porter-is-2016-luxury-retailer-of-the-year/

December 8, 2016

SURVEY: AFFLUENT CUSTOMERS RATE JEWELERS AS PROVIDER OF TOP CUSTOMER SERVICE

The Israeli Diamond Industry
December 8, 2016
A new survey by the Luxury Institute, conducted among the top 10% earners in the US, the UK, France, Germany, Italy, Japan and China, has found that quality and customer service are the two most important attributes that affluent consumers use to define a product’s luxury status. According to Gem Konnect, jewelry and hospitality brands have the best customer service staff, while real estate and designer shoes were rated the worst in that regard.

In addition, customers in the UK and US are more likely to rate customer service as a necessity for luxury than customers in Japan and China. Superior design ranks third in the list of luxury attributes, and it is more important to UK and US customers than in other countries.

59% of US respondents and 33% of respondents across the other six countries ranked superior craftsmanship in fourth place.

Luxury Institute CEO Milton Pedraza said: “Half of the affluent consumers we just surveyed say that luxury sales associates deliver a personalised and relationship-oriented experience, which is encouraging, but it also suggests plenty of room for improvement when it comes to delivering a superior customer experience”.

Source: http://en.israelidiamond.co.il/News.aspx?boneId=918&objid=17706&cat=2

December 7, 2016

Affluent millennials interested in purchasing luxury goods drops 15pc: report

Luxury Daily
December 7, 2016
By: Brielle Jaekel

 

Travel & Leisure May 2015

Travel experiences are proving to be dramatically more important to affluent millennials, with most interested in hotel accommodations and flight tickets rather than luxury goods.

A recent report from Agility showed that across the globe the majority of prosperous millennials are likely to travel abroad in the next year. Percentages in China, India, Singapore, Malaysia, Hong Kong, South Korea and Taiwan are all above 71 percent for those interested in abroad travel over the next 12 months.

“Millionaires in Asia are young and many of them in our study are in the millennials age group,” said Amrita Banta, managing director at Agility Research & Strategy. “Travel is the new luxury in Asia amongst this profile of consumers and we see that the appetite for travel has increased this year from the last year but the appetite to buy luxury goods has definitely decreased in our sample.”

The study interviewed 922 affluent millennials from China, India, Singapore, Hong Kong, Malaysia, South Korea and Taiwan.

Affluent consumers
Agility’s Asian Millennial and Millionaire Research Results shows there will likely be a decline in luxury retail in Singapore in the upcoming new year, as there has been a 15 percent drop in millennial interest in spending more with luxury goods.

 

Omega.Singapore2

Singapore shoppers

Luxury hospitality brands might have an opportunity to expand into luxury lodges and winter apparel and accessories in Asia. Findings are showing an increase interest in skiing.

Other hobbies such as wine tasting and fine dining are making an impression on affluent Chinese consumers. More than 51 percent were interested in wine tasting and 48 percent in fine dining.

 

Peninsula Academy Chinese consumer

Chinese shoppers

However, while passion for spending more on luxury goods is dropping, interest in shopping in general is still strong. More than 69 percent of Chinese consumers are interested in shopping as a hobby.

Behaviors in luxury
Another study noted that millionaires from the X generation held onto traditional luxury events while millionaire millennials are straying away from happenings such as fashion shows and auto races, according to a new report from Shullman Research Center.

While there are vast differences in culture, behavior and values between lower income consumers versus millionaires, this also holds true for differing generations. For instance, family is the top priority in millionaire Gen-Xers’ lives with 89 percent believing so, but only 67 percent of millionaire millennials say the same (see more).

Also, quality tops attributes such as craftsmanship and service as the number one defining attribute affluent consumers use to discern a good’s luxury status, according to other research by the Luxury Institute.

Behind quality comes customer service, which more than half of consumers mentioned as a characteristic they associate with luxury. Despite global trends, residents of individual nations have varied priorities when it comes to luxury goods, with differing sentiments towards the value of products (see more).

“Asian millionaires are now discovering new interests like fine dining and wine tasting – this year we see activities like Skiing in the slopes of Japan becoming popular with the Singaporean millionaires for instance,” Ms. Banta said.

Source: https://www.luxurydaily.com/affluent-millennials-interested-in-purchasing-luxury-goods-drops-15pc-report/

 

 

December 6, 2016

Fashion shows prove less important to affluent millennials: Shullman

Luxury Daily
By: Brielle Jaekel
December 6, 2016

Affluent millennials

Millionaires from the X generation hold onto traditional luxury events while millionaire millennials are straying away from happenings such as fashion shows and auto races, according to a new report from Shullman Research Center.

 While there are vast differences in culture, behavior and values between lower income consumers versus millionaires, this also holds true for differing generations. For instance, family is the top priority in millionaire Gen-Xers’ lives with 89 percent believing so, but only 67 percent of millionaire millennials say the same.

“When luxury marketers and their agencies think about how to reach and potentially communicate their messages to millionaires in ways beyond the traditional and digital media channels, they need to realize that millionaires are a materially different breed of consumer— different not only from those with fewer financial resources, but also from one another generationally,” said Bob Shullman, CEO of Shullman Research Center. “Marketers of luxury products and services who are not knowledgeable about these differences do so at their own and their company’s peril.

“Notably, from our perspective, it is surprising how different millionaire Gen-Xers are in their sporting, lifestyle and cultural interests compared with millennial and boomer millionaires,” he said.

The research was conducted online that surveyed 1,690 respondents with household incomes of at least $75,000.

Differing values
The differences between millionaire millennials and Gen-Xers are also displayed in their varying interests in sports. Millennials are more interested in adventure-like sports such as snorkeling, jogging and rollerblading while Gen-Xers are interested in traditional affluent sports such as tennis and golf.

Necker Cup tennis 3

Affluent Gen-Xers value tennis

Only 19 percent of millionaire millennials plan to play tennis in the next year, whereas 45 percent of Gen-Xers are likely to play. However, 24 percent of affluent millennials claim to be planning to snorkel in the next year while only 2 percent of Gen-Xers are likely to.

Millennials who are millionaires are also more interested in painting and the arts compared to their predecessors. About 26 percent of millennials are interested in painting and drawing compared to 13 percent of Gen-Xers.

However, baby boomers are almost as interested in painting as millennials, with 24 percent.

Giorgione painting

Giorgione painting

Interest in museums is completely disconnected throughout generations. Forty-two percent of baby boomers are interested in museums, but only 9 percent of generation X and 10 percent of millennials are interested.

More insight
Quality over price is exceedingly important when it comes to millionaires and affluent Americans. For instance, 83 percent of all generations value quality over price when deciding on purchases.

This is also true for 96 percent of millennials, 81 percent of Gen-Xers and 75 percent of baby boomers.

Other research by the Luxury Institute showed that quality tops attributes such as craftsmanship and service as the number one defining attribute affluent consumers use to discern a good’s luxury status.

Behind quality comes customer service, which more than half of consumers mentioned as a characteristic they associate with luxury. Despite global trends, residents of individual nations have varied priorities when it comes to luxury goods, with differing sentiments towards the value of products (see more).

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 another 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 (see more).

“We were very surprised by how much more millionaire Gen-Xers are into attending fashion and trunk shows and auto races compared with millennial millionaires (for example, 35 percent of Gen-Xer millionaires are into attending auto races compared with 1 percent of millennials while 36 percent of the Gen-Xers attend fashion and trunk shows while only 7 percent ofmMillennials attend these shows),” Mr. Shullman said.

Source: https://www.luxurydaily.com/fashion-shows-prove-less-important-to-affluent-millennials-shullman/

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