Luxury Institute News

October 21, 2016

This Is Probably The Most Ostentatious Christmas Catalogue You’ll Ever Flip Through
By Abha Bhattara
Thursday, October 20

What do you get the man or woman who has everything?

Neiman Marcus has a few suggestions, starting with a $1.5 million Cobalt Valkyrie-X private plane in rose gold. There’s also a $93,000 ruby-and-diamond-encrusted Chanel watch or a $100,000 collection of classic children’s books. Or you could buy yourself a walk-on role in the Broadway show “Waitress” (price tag: $30,000).

The newly released Neiman Marcus Christmas Book, an annual exercise in all things excessive, includes more than 700 items, ranging in price from $10 (for a package of six snowflake-shaped marshmallows) to the $1.5 million private plane.

In the mood for a vacation? There’s a weeklong stay at three estates in the English countryside — which also comes with a helicopter trip to a castle — for $700,000. Or a slumber party for 12 at the company’s flagship store in Dallas for $120,000.

Or perhaps you’re feeling a bit distrustful. The luxury retailer says it has you covered, with a $25,000 mattress with a built-in fireproof lockbox.

Extravagances aside, the company says about 40 percent of the catalogue’s offerings are priced under $250. There’s a bracelet made of paper beads for $25 and a stainless steel beer growler for $60.

Milton Pedraza, chief executive of the Luxury Institute, says those lower-priced items are particularly important this year as high-end retailers struggle to stay afloat. Neiman Marcus has battled slipping sales for four quarters in a row. In September, the Dallas-based company posted a quarterly loss of $407.2 million.

“This is the most democratic Neiman Marcus catalogue I’ve ever seen,” Pedraza said, citing a $35 tube of Dior lipstick. “They know they need to appeal to millennials if they’re going to survive two decades from now.”

The uncertainty of the upcoming presidential election, combined with fears about the effect of Brexit on the European economy, are contributing to general unease, he said.

“Luxury is in a very challenging spot right now,” Pedraza said. “The world economy is flat and young customers are struggling. When millennials as a group have $1.3 trillion in student debt, it’s hard to splurge.”

But that doesn’t mean Neiman Marcus is completely holding back.

The company — which sifts through thousands of submissions in the spring — is offering 12 “fantasy gifts” in all, including “quarterback fundamentals” lessons with four-time Super Bowl winner Joe Montana ($65,000), his-and-hers island cars designed by Lilly Pulitzer ($130,000) and a trip to the Grammy Awards ($500,000).

The Christmas Book began in 1926, when the retailer released a 16-page Christmas booklet to its most loyal customers. Neiman Marcus offered its first “fantasy gift” in 1959: a black angus steer, either on the hoof ($1,925) or cut into steaks ($2,230). It was purchased by a customer in South Africa.

In the years since, Neiman Marcus has served up a steady — if jaw-dropping — selection of offerings, including his-and-hers mummy cases (one with an actual mummy), and his-and-hers camels (a customer in Texas bought the female camel, which boarded an American Airlines flight on Christmas Eve to arrive in Fort Worth on Christmas morning).

The most expensive item offered to date: A $33 million Boeing Business Jet. It didn’t sell. A $6.7 million helicopter with built-in entertainment system, however, did.

For the majority of Americans, though, Neiman Marcus’s “fantasy gifts” will be just that. Americans on average last year spent $800 on all of their holiday shopping, according to the National Retail Federation. That’s enough to buy an orange hippo figurine from the Neiman Marcus Christmas Book.

Or if that seems too pricey, you could just buy a copy of the catalogue — for $15.


October 19, 2016

Why Did Lamborghini Give Marvel a Huracán to Destroy in Dr. Strange?
By Brett Berk
Wednesday, October 19

The brand let Marvel use six of its flagship supercars while filming, and at least one was wrecked in a key scene. With a mostly young audience watching these movies, is this smart product placement?

In the latest Marvel Comics film, Doctor Strange, the titular character is a wealthy neurosurgeon who loses the use of his hands in a car crash and who, in his quest to regain their function, gains the mystical powers that make him a superhero. The crash is therefore a key plot point. And thus an important product placement opportunity.

The Agents of S.H.I.E.L.D. have their Acuras, Iron Man has his Audi R8. So what does Steven Vincent Strange (Benedict Cumberbatch) drive during his harrowing and life-altering wreck? A 10-cylinder, wedge-shaped, screaming hunk of menace: the $237,250 Lamborghini Huracán LP610-4.

This makes perfect sense for the character. “I do believe that there are a lot of characteristics of Doctor Strange that are connected with the Lamborghini philosophy,” says Lamborghini’s chief executive officer, Stefano Domenicali. “Doctor Strange is a special guy, because he discovers when he was so young that he had a super power. He’s a leading guy in the world of technology. He is of course very ambitious—he wants to be seen as a top performer. He’s basically pure, and cutting edge, and visionary. These are the values that we have at Lamborghini.”

It’s thus seemingly logical to see Doctor Strange in a Lamborghini. But is it similarly sensible to see a Lamborghini in Doctor Strange? Especially since the car’s crash is such a key moment in the film?

Short answer: yes.

Supercar Marketing

In an increasingly segmented marketplace, contemporary ultra-luxury and super-performance marques such as Bugatti, Aston Martin, Bentley, and McLaren have been turning away from attending mass-market events, placing their emphasis on more elite and focused opportunities where they’re more likely to encounter actual buyers. To this end, all these brands—Lamborghini included—forwent hosting a display stand at the September Paris Motor Show, the kickoff to the annual globetrotting car convention circuit, but they were all immensely present at the August Pebble Beach Concours d’Elegance, one of the premier gatherings of high-net-worth/automotive-immersed consumers in the world.

“Ultra-auto brands taking the super exclusive approach and going where the real customers are,” explains Milton Pedraza, CEO of market research and consulting group Luxury Institute.

So why would a recherché and exotic brand such as Lamborghini, with limited marketing budget and footprint, choose to invest its energies in a blockbuster superhero movie aimed mostly at kids?


“In a world where young people are not so interested in buying cars, they are very interested in, and indeed attracted by, our cars. Because they are different,” says Domenicali. “They see our cars to be super, which is a key differentiator in terms of being seen as special.”

A Bigger Lamborghini

To reach these aspirational consumers better, the boutique brand is planning for significant growth. With the release of the forthcoming Urus SUV in 2018, the automaker is hoping to double its global sales. “Remember that Lamborghini is trying to expand its volume base with an SUV so it may be that they desire significant brand awareness right now,” Pedraza says. “The Huracán can create a design-plus-performance halo for the entire brand, and the movie route is a great fit for communicating that message.” (Lest you think this expansion is going to turn Lamborghini into Ford, know that total annual global production is projected to increase from just 3,500 to 7,000 vehicles each year, or about the number of F-150 pickups sold every few days in the U.S.)

Also, it turns out action movies and entertainments like them are a pretty good means to reach high net-worth individuals. According to the massive emotional and lifestyle survey data set assembled by automotive research firm Strategic Vision, while elite car buyers may enjoy hosting parties and world travel twice as much as mainstream (BMW, Mercedes) luxury buyers, they enjoy going to the movies at rates similar to those who end up in mass-market vehicles, and they’re almost three times more likely to enjoy playing an action video game on a PS4 or Xbox. “In short, please don’t discriminate against the supercar customer simply because they have money,” says Strategic Vision’s president, Alexander Edwards. “They want to be a superhero too.”

How Movies Speak to Us

Some of the deeper reasoning behind this desire is revealed more deeply in Edwards’s data. “When we escape into the stories of movies, we look for versions of our ‘Ideal Self,’” he says. “Although it doesn’t usually happen at a conscious level, we often compare our self-perception to that of our ideal self. The gaps that emerge, we try to fill with things that can help us obtain the ideal. A vehicle often fills that gap. So while I may not be a superhero, when I drive my Audi, I can be Tony Stark. In essence, these vehicles are more than a sidekick, but something that completes the hero.”

Of course, this doesn’t exactly explain the desirability, from a marketing perspective, of the seemingly disastrous correlation between the Huracán and its key plot point in the film, which involves the vehicle being totaled in a wreck. Lamborghini CEO Domenicali has an interesting spin on that. “Despite the fact that the crash was so massive, two main things: First, Doctor Strange was able to be alive after—certainly we don’t forget the safety of the car. And secondly, it was able, for him, to be the turning point of his life. So therefore we can connect to the fact that we are also on his side in a life-changing moment.”

The seemingly infinite nature of the Marvel franchises suggest that this life-altering relationship could potentially continue beyond this one appearance. When asked if Dr. Strange might drive another Lambo in a sequel, Domenicali responds enthusiastically.

“He’s a visionary man, he has to drive a Lamborghini in the future,” he says. “Maybe an Urus?”


Urgency for Luxury Brands to Adopt Mobile Clienteling
Wednesday, October 19
By Kevin Nix

Luxury brands all know that maintaining a high level of personalized service for their discriminating and well-heeled clients is an imperative.

Often referred to as “clienteling,” high-end retailers rely on data about customer preferences, behavior and purchases to establish long-term relationships with their top customers.

But, according to Bain & Company (2016), there is declining growth in the United States luxury market and slower overall global growth. So, luxury retailers are under pressure to up their game and take every measure to meet the high expectations of its top customers.

Making A Point

If you are a Gucci, Chanel, Louis Vuitton or Rolex, to name a few, your customers want and expect a VIP buying experience. And no wonder – if someone is spending thousands of dollars, even tens of thousands, on designer watches, haute handbags and bespoke suits, they want to be treated accordingly.

Purchase frequency varies as well, so how can luxury brands engage with their high valued customers to keep brand loyalty and increase their share of wallet?

It is not through traditional methods of discount coupons and loyalty points.

In fact, Michael Kors and Coach both announced in August that they will be limiting distribution of their products and not participating in department store couponing or friends/family discounts – a practice they believe could be eroding their brand’s cachet.

During the company’s quarterly earnings call in August, Michael Kors CEO John D. Idol explained the brand’s decision, saying “We think that this is critical for us … to protect our brand image.”

Enter clienteling, a masterful way for luxury brands to demonstrate their brand image with a first-class customer experience.

Hold A Mobile Tablet With That White Glove

Capturing and leveraging knowledge about your top customers and their preferences is key to providing the kind of white-glove experience that luxury consumers expect.

To deliver meaningful 1:1 personalized service, high-end salespeople need to know not only birthdays and anniversaries, but color and style preference, size, past purchases, wish lists and maybe even the names of their customers’ children or pets.

Some customers want Champagne served as they browse, while others do not care to imbibe.

Successful salespeople recognize opportunities to recommend purchases for key events – a husband’s birthday, perhaps – and also highlight the new handbag in a color/style that fits their client’s preferences.

Traditionally, this kind of information was kept in the salesperson’s “little black book” or customer log.

Fast forward to today and that little black book can be digitized on desktops – and even more accessibly on mobile devices – with easy access to a wealth of information to complement and supplement every customer profile.

Of course, it is not just luxury retail brands who should be getting in the mobile clienteling game.

Luxury hotel chains strive to master this 1:1 VIP experience by maintaining key facts about their top customers so that they can anticipate needs and recreate preferred experiences.

If they like classical music playing in their room on arrival, and a current copy of The Wall Street Journal or the Financial Times with their breakfast, that is what they will get.

Capturing all these guest preferences, attributes and interests and sharing it across all hotel properties, and ensuring that employees have this information at their fingertips at the right time – this is where mobile clienting can make the VIP experience a reality.

In 2013, the Luxury Institute reported that with clienteling, “data collection rates can triple and retention double, especially for the top 20 percent of customers who drive 70 percent of sales.”

And Exane BNP Paribas reports that interactions based on mobile clienteling “are expected to equate to about 40 percent of the luxury market’s growth by 2020.”

Yet where are luxury retailers today – really and truly – on mobile clienteling?

The truth is, not nearly far enough.

There is much greater adoption that needs to happen to reach the tipping point where effective clienteling reaches mass scale.

Evaluate Your Own Mobile Clienteling Readiness

Surprising and delighting your customer is nowhere more critical than in the luxury sector.

What are the key factors for evaluating your mobile clienteling readiness?

Do you have the right underlying technology platform to deliver the right customer information at the right time to the right sales people?

Good clienteling is only as good as the data that fuels it. So, the ability to gather the right data quickly, access it and make it actionable at the point of customer is paramount.

Are you empowering your salespeople to take action that will surprise and delight, such as an on-the-spot upgrade, custom perk or VIP treatment delivered right to the customer’s mobile device?

Are you tying clienteling to loyalty? Think about strategies to empower your sales associates with the ability to recognize and reward your customers in a unique manner.

For example, set up a program with important metrics such as customer spend per year and referrals and track them internally – as an “invisible points” system.

Then when a client reaches a milestone that only the sales associate is aware of, he or she is empowered at that moment to offer the customer an experiential reward, such as VIP access to an event.

How is your clienteling strategy related to the customer’s own mobile experience?

Whether you are considering a native application or responsive Web on the smartphone, a good clienteling strategy should work hand-in-hand with the mobile experience in your customer’s hand.

Whether it is to socially promote a particular purchase or research a product, these experiences should be integrated into your clienteling approach.

Why not have the customer’s mobile phone both greet the customer as well as notify the clienteling app when your valued client enters the store?

There has never been greater urgency than now for luxury brands to adopt mobile clienteling as a way to demonstrate brand value, maintain their reputation and image, and increase customer loyalty.

Doug Stephens, aka “The Retail Prophet,” recently predicted that “a new breed of experiential retailers will use their physical stores to perfect the consumer experience across categories of products. They will define the ideal experiential journey, employ expert ‘product ambassadors’ and technology to deliver something truly unique, remarkable and memorable.”

If luxury retailers do not get on board, they will soon be eclipsed by mainstream retailers – and that is not good for appearances or the bottom line.

Luxury purchases are driven in equal parts by both the quality of the product and customer emotion about the entire buying experience.

Clienteling significantly enhances that experience. The time for mobile clienteling is right now.


October 7, 2016

The World’s Best Fashion Brands Aren’t Exactly The Ones You’re Thinking Of
October 7, 2016
By: Max Berlinger

Turns out people like really expensive things and really cheap things.

Each year the consultancy agency Interbrand releases its Best Global Brands list, a ranking of the world’s most valuable brands. And, according to their sizable data, it turns out that people like really, really fancy things and, conversely, really, really affordable things. Cool.

According to this year’s power list, French luxury label Louis Vuitton comes in at number one of the brands categorized in the luxury and retail sectors. Now here’s where things get interesting: the next two brands are mass labels that specialize in affordable versions of trendy runway pieces, H&M (no. 2) and Zara (no. 3). And then, to make it a bit of a luxury sandwich, the next brand on the list is Hermès.


Interbrand uses a three-pronged approach to ranking the brands, a mix of their financial performance, their ability to create loyalty, and the power that the brand’s name has, and gathers data from a variety of sources, including Reuters and Twitter. As Rebecca Robins, Global Director at Interbrand and co-author of Meta-luxury puts it in an article for Harper’s Bazaar: “The sweet spot is where integrity of product meets integrity of brand experience.”

When you pull back and look at all brands, Apple, naturally, ranks as number one overall, followed by Google. Interestingly, if you add the category Sporting Goods to the fashion mix, Nike actually comes out on top, beating even Louis Vuitton. “Many of the luxury brands have been going through various transitions over the past few years and the values of their brands are reflective of that,” Robins tells GQ. “In the context of the ‘luxury reset’, the growth is coming from brands who are working through those transitions with brand at the gravitational centre of the business.”

Interestingly, there’s no overlap with the findings earlier this year from the Luxury Institute of which brands men with discretionary income choose to buy. That study found Calvin Klein came out on top, followed by Ralph Lauren, Hugo Boss, Burberry, and Giorgio Armani. Our official stance is why are we rating and ranking and numbering all these brands? Each one has a special place in our hearts and our pocketbook.



India’s Oberoi Values Personalization With New Amenity Push
October 7, 2016
By: Brielle Jaekel

Oberoi Hotels & Resorts is treating guests who stay in top-tier suites to the celebrity treatment with a series of amenities representative of experiences only VIPs receive.

The Indian hospitality brand is launching a series of initiatives to make its top-tier customers feel as though they are celebrities, with programs such as a 24-hour butler service, luxury transportation to and from the airport and unique amenities at its various locations. Oberoi is hoping to see more suite reservations by creating an enticing vacation and travel experience.

“We want every guest at Oberoi Hotels & Resorts to feel like a VIP, and we’re excited to unveil these special amenities for those who stay in our top suites,” said Abhishek Panshikhar, General Manager, The Oberoi Amarvilas, Agra.

An Oberoi property in Rajvilas, Jaipur, India

An Oberoi property in Rajvilas, Jaipur, India

Celebrity treatment

Oberi locations are now equipped with various amenities fit for celebrities, but available to anyone who books their top-tier suites. The Oberoi Rajvilas, Jaipur is providing guests with to-and-from airport transportation that emphasizes luxury in an Audi Q5/Q7.

When guests arrive at the hotel, custom cocktails and beverages are provided along with a fresh flower garland. Special meals cooked by a resort chef, fruit baskets, nut boxes and flower arrangements are all available within the suites, as is Oberi’s 24-hour butler service.

Guests of the Oberoi Amarvilas, Agra are all greeted by the general manager and a warm towel, in addition to custom cocktail and garland. While personalized chef-cooked meals are not available in-room, the nut boxes, fruit bowls and cookies still are, as well as the 24-hour butler service.

The Oberoi, Mumbai provides individuals staying in its Presidential Suite with a special escort from the airport including transportation in a Mercedes S Class fitted with sparkling water and cold towels. Passengers will also be able to view the room service menu during their trip to the hotel for speedy food delivery.

Guests staying at Mumbai will also receive Oberoi’s garland, welcome beverage, warm towels and butler service upon arrival. However, the Mumbai location will offer monogrammed pillows, hand towels and bath robes for the Presidential Suite.

The Oberoi Udaivilas, Udaipur also provides a chauffeur service to and from the airport, but offers a private boat ride across Lake Pichola to the resort, equipped with chai tea, as well. Udaipur’s Oberoi resort features amenities similar to its other locations, but puts a local spin on the program for a more personal touch.

For instance, when guests arrive they will receive a traditional native welcome, which includes a rose petal shower Aartu and Tikka ceremony. The ceremony is meant to ensure good health, well-being and happiness during their stay.

Guests will also receive orchids, turndown service, prepared baths with rose petals and candles and a personalized note from the general manager to say goodbye.

Travel industry insights

Personalization and amenities similar to what Oberoi has added are important in appealing to the affluent consumer of today.

The luxury travel industry still yields high results with affluent consumes going on more than triple the number of trips average households take, according to a report prepared by Resonance.

General consumers in the United States take only an average of 4.8 trips a year, compared to the wealthiest 5 percent who take more than 14.3 trips per year. The luxury travel sector alone pulls in roughly $390 billion each year, with each trip costing $3,115 per family member (see more).

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

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

“From the moment our guests arrive, we aim to provide the most attentive, personalized service possible so that everyone feels at ease and at home while staying with us.”


September 22, 2016

Top Luxury Hotels Remain Leaders Despite Drop In Global Travel
By: Brielle Jaekel
September 22, 2016

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

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

“While the top scoring brands continue to do very well year-over-year, the Waldorf Astoria has done phenomenally well in improving international brand awareness of their properties over the last several years,” said Milton Pedraza, CEO of the Luxury Institute.

“There are no real surprises. We expected that consumers may travel less, and the research shows that affluent consumers spent two nights less on average than they did last year,” he said.

“As occurred, we expected a slight pullback in nights spent and that can be attributed to macro-economic factors that have negatively effected global tourism.”


Travel insights

As the top hotels remain in their places as the leaders, JW Marriott saw a significant increase in visitors from the United States and China. However, affluent travelers from France visited Club Med, Le Meridien and Sofitel the most, and Kempinski Hotels was frequented by German consumers.

There has been a slight drop in the nights stayed due to economic influences, which coincides with insight revealing that most affluent consumers are staying in the hotel brands for vacation and leisure. On average, total night stays dropped from 19 to 17 in one year.

However, U.S. consumers were the only demographic that has seen an increase in the number of nights in luxury hotels. Europe had the biggest impact with German consumers dropping down to an average 19 nights from 26, and French travelers from 23 to 19.

Another report from the China Outboard Tourism Research Institute revealed that international markets saw a 16 percent increase in Chinese outbound travelers, but closer to home, in Greater China, there was a 7 percent decline in tourism for the first half of 2016.

COTRI found that there were 64 million border crossings from Mainland China between January and June of 2016, resulting in a growth rate of 3.4 percent. Much of the luxury market relies on Chinese outbound travelers who visit brand stores and duty free shops to make high-end purchases as a method to avoid the high tax at home (see more).

Affluent customers traveling for leisure for one week or more make up more than 31 percent of global travelers. About 62 percent travel with their spouses, only 16 percent travel alone and 11 percent are with business companions.


Winning consumers

Hotel brands that create the ultimate luxury experience by tapping into on-site associates win out. Employees that go above and beyond for guests can make or break the brand.

However for ski resorts, the opulence and amenities available are helpful but do not protect the sector from customers’ hunting for a deal, with buyers appreciating a good value, according to a separate report by Knight Frank.

Affluent customers who enjoy homes in the mountains and ski resorts as second residences still want to be sure that they are getting a good deal, with interest in locations that offer great values such as Chamonix and Saint Gervais, France, both near the base of Mont Blanc in the Swiss Alps, strengthening. Customers want worth and appeal for their purchases and investments, making villages such as Val d’Isere Verbier, Switzerland and Chamonix best-in-class considerations (see more).

“As we see from the five top-rated hotel brands, achieving a high LBSI score strongly correlates with the ability to charge a premium price,” Mr. Pedraza said. “One thing we know from other Luxury Institute research is that while the locations, facilities and amenities are important they do not provide the ultimate competitive advantage.

“The ultimate advantage is the experience with the brand ambassadors in how well they develop a personal emotional connection with guests during their stay,” he said.


September 19, 2016

The Big Business Of Red Carpet Bling
By: Rina Raphael
September 18, 2016

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

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

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

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

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

[Photo: Flickr user Kyle Garrity]

[Photo: Flickr user Kyle Garrity]


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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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


AS SEEN ON . . .

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

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

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

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

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

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

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

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

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

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


High-End Shopping In The Sharing Economy: Now We Can All Have Couture
By: Rina Raphael
September 15, 2016

Between consignment e-tailers and luxury-label rental sites, consumers are approaching designer fashion with a whole new mentality.

The Kardashians don’t exemplify thriftiness, so it was surprising when Khloé, Kendall, and Kylie partnered with the luxury consignment site The RealReal in August. The sisters listed 200 pieces from their personal closets, ranging from Chanel purses to Christian Louboutin heels, at nearly 80% off retail value. “Now you can own pieces from my closet!” Khloé Kardashian proudly tweeted to her 21 million followers.

The entire collection sold out within 24 hours, a rep for The RealReal confirmed.

The reality TV stars’ participation confirmed the site as a destination for all incomes and demographics, including celebrities. Today, luxury rental e-retailers, consignment shops, and loan services are destigmatizing what was once considered the domain of aspirational shoppers. More than that, it’s democratizing high fashion and shifting how we buy (and keep) designer clothing.



The constant influx of celebrity news, celebrity stylists, and brand participation on social media means we know everyone’s fashion tastes. Whereas previous generations may have only been familiar with a few design houses—Chanel, Oscar de la Renta, Yves Saint Laurent, for instance—today’s woman is familiar with dozens more, ranging from big (Balmain, thanks to Kim Kardashian) to emerging (Jason Wu, thanks to the Michelle Obama).

Many women once dreamed of emulating Elizabeth Taylor’s wardrobe—and it remained just that: a dream. But today, a savvy shopper could potentially wear whatever Julia Roberts donned for the Oscars. The shopper might only rent the gown for a night, but the Cinderella moment is no longer a fairy-tale fantasy.

“Luxury is changing—and changing for the more value-centric consumers who are much greater in number than pure luxury [products],” says Marshal Cohen, chief industry analyst of the market research company The NPD Group.

“Something that used to be attainable purely for the elite is now becoming more accessible to those who are willing to splurge,” says style expert Jacqui Stafford. “It’s still a splurge, there’s no question about it. You’re still going to be spending at least $500 [to rent] a gown that you might have to pay $5,000 to buy.”

It’s not just Oscar winners who inspire the masses. Teen stars also employ celebrity stylists who deck them in Preen and Vetements. “These labels are definitely more accessible now, and we have social media to thank for that,” Stafford says. “Even Disney stars are sitting front row at Paris Fashion Week shows. You’re seeing the younger demographic really embrace couture, bringing it to a new audience.”

That means a growing percentage of teens and millennials now look way beyond what’s available at the neighborhood mall. They want Gucci, Cartier, and Chanel and they’re getting savvier when it comes to acquiring those marquee designer brands. They are not a demographic to ignore: According to a recent study, millennials spend $200 billion annually and are set to outspend baby boomers by 2017.

The Kardashians don’t exemplify thriftiness, so it was surprising when Khloé, Kendall, and Kylie partnered with the luxury consignment site The RealReal in August. The sisters listed 200 pieces from their personal closets, ranging from Chanel purses to Christian Louboutin heels, at nearly 80% off retail value. “Now you can own pieces from my closet!” Khloé Kardashian proudly tweeted to her 21 million followers.

The entire collection sold out within 24 hours, a rep for The RealReal confirmed.

The reality TV stars’ participation confirmed the site as a destination for all incomes and demographics, including celebrities. Today, luxury rental e-retailers, consignment shops, and loan services are destigmatizing what was once considered the domain of aspirational shoppers. More than that, it’s democratizing high fashion and shifting how we buy (and keep) designer clothing.

Many of The RealReal’s customers are millennials with strong brand loyalty. And they tend to adhere to a specific strategy. They start as first-time buyers, enjoying their discounted designer item until they eventually tire of it and resell it. They then take the money earned to the primary market—to, say, Neiman Marcus, where they buy a new high-end item. Once it’s been seen enough times by their social group, they sell it in the consignment space. Then the process repeats itself. In a way, they’re learning about investment, depreciation, and retaining value, but in the context of designer fashion.

“They’re saving their money for that special Celine bag, and when they’re done with it, they’re consigning it,” says Rati Sahi, chief merchant for The RealReal. “You see them think differently about their purchases. They’re calculating [whether] they can get 60% back with the resale value.”

They’re willing to pay, up to a point. “Millennials are interested in high fashion but not willing to pay those high prices,” Cohen says. “So discount sites, secondhand sites, and stores, as well as auction sites, do well for the luxe millennial.”

If Selena Gomez’s fans are wearing Chanel in greater numbers, how does that affect the label’s mystique? “Ease of access to luxe helps, but also hurts,” Cohen says. “The luxe market is also so accessible it loses some of the panache.”

Former interior designer Sallie Giordano was surrounded by professional women in New York City who complained of the increasing cost of maintaining their wardrobes. They had full social calendars: speaking engagements, conferences, galas. With designer retailer sales so frequent, consumers “felt stupid” if they purchased full price, Giordano says.

In April 2015, Giordano launched Couture Collective, a luxury clothing rental membership club. It’s like a “timeshare” of seasonal designer apparel. Members pay an annual fee of $250, then each season, they can borrow up to five dresses from, say, Valentino and Christian Dior, after they’ve purchased a one-fifth share in an item, at 20% of the retail price. “If you look at the statistics, people will wear a dress three or four times and then they consider it an old dress,” says Giordano, who says she sees lots of women who will only wear current season styles.

Couture Collective’s clientele ranges from wealthy women to upper-middle-class aspirational shoppers, all looking to showcase a well-kept designer closet.

“I think the average person is interested in wearing these [designer] styles because honestly, they’re better styles,” Giordano says, noting how high-end garments are well made with quality fabrics and flattering cuts. “When you wear these dresses, there’s a huge difference. You just feel special and confident.”

For Couture Collective’s clientele, there’s an appealing ease to the idea of renting: No need to store or care for items they intend to wear once. “It’s not about ownership anymore,” Giordano says. “It’s about being able to do something without all the responsibilities of ownership … This allows them to wear the trends of the designers and not feel ridiculous then they’re sitting unworn in their closet the next season.”

Social media has certainly changed the amount of times we wear an article of clothing. Couture Collective’s clients don’t want to repeat an outfit, especially if their event is photographed for publication on Instagram or Facebook.

The Instagramming of outfits was a consideration for Armarium, an on-demand luxury rental site that launched in November 2015. It is a true high-fashion lover’s dream, featuring selections from the top design houses as well as emerging international labels. While the options on Rent the Runway can feel a bit sartorially safe, Armarium caters to those looking to get noticed in fashion-forward garments. Some offerings are exclusive to Armarium, which directly negotiates with fashion houses.

“Social media has drastically changed the game of how we access products, particularly with statement pieces,” Armarium cofounder and CEO Trisha Gregory says. Her business works in tandem with retail and e-commerce, with the goal of serving as a complement to full-price investment staples like black pants or a white shirt. Armarium partnered with Net-a-Porter to assist customers in putting together an ensemble that’s part rented, part purchased. For example, you can rent a statement Sonia Rykiel tunic from Armarium, then link out to Net-a-Porter to finish the look with a splurge trouser or investment stiletto.

“This is a smart way to complement [a customer's] existing wardrobe and the pieces she will buy for the season,” says Gregory, whose clientele is made up primarily of women aged 28-34. Helping customers discover new items is a big aspect of the service; the full range of offerings are visible on the site and there are also showrooms with experienced stylists on hand. “We want to give them access to shopping in an innovative way,” Gregory says.

Armarium sees two types of renters. The first is the busy, high-net-worth individual who values convenience. She’s on the move, attending multiple conferences or vacationing in St. Barts. “We’re packing her bags and getting her out the door, easing her schedule,” Gregory says. “We’re seeing the stigma [around renting] debunked with what the high-net-worth individual thought about the concept of renting…. For them, this is about access to statement pieces that aren’t in the market most times.”

Then there’s what they call the “HENRY,” the high-earner-but-not-rich-yet aspirational shopper. She’s social media-savvy and cares about brand identity. In Gregory’s words, it’s “very hard” for her to re-wear pieces. Both types are return customers, on average 28% of the time. Business is booming: Sales have tripled since Armarium launched its mobile app in April, with a 40% month-over-month growth of app downloads and site visits.

“Women are starting to shop in a different way,” Gregory says. “People want an experience, and that’s what we strive to give them. This is basically a celebrity offering.”



One thing celebrities have easy access to that the average woman does not: bling.

Flont is a jewelry loan service set to launch this fall. It plans to do for bling what Couture Collective does for fashion. Flont lets customers borrow a certain amount of designer jewelry at different membership rates. For $199 a month, you get $60,000 worth of jewelry a year. Up your monthly fee to $1,999 and you’re entitled to $100,000 worth of jewelry over 12 months. Designers include red carpet favorites like Irene Neuwirth and Paige Novick.

But why would the well-to-do woman rent when she could buy? Flont’s founder Cormac Kinney points to the private-jet industry as a comparison.

“Certainly, if you can afford a NetJets membership, you can afford a jet—but that’s not the point. The point is convenience,” he says. “It’s much more convenient to let someone maintain it and you just use it when you need it.”

The company commissioned a survey sampling U.S. women with a minimum household income of $65,000 who had purchased $2,000 or more in fine 18K gold jewelry in the last 12 months. They found that 88% said they would buy a piece they loved even if it was worn by someone else before, and 75% were interested in jewelry sharing.

Many don’t want the complications that come with owning burglar-bait. Jewelry insurance, for example, adds an extra layer of cost, which can run over $10,000 a year. With Flont, insurance is included.

Then there are those who, inspired by the cult decluttering bible The Life-Changing Magic of Tidying Up, simply want less stuff. Excess is no longer chic.

“A lot of young women out there think, ‘I want to have a great dress and great piece of jewelry and I’m willing to spend a few hundred dollars but I don’t want to own it,’” says Milton Pedraza, CEO of the consulting firm Luxury Institute. On the other end, baby boomers now see an alternative to constant consumption: “Many older women want to declutter their closets. They don’t want to be wasteful.”

This mentality inspired VillageLuxe, a community-based fashion borrowing site that connects women’s closets. It extends the age-old “can I borrow that?” philosophy across entire neighborhoods, like an Airbnb for fashion.

“There’s this sense of wastefulness and this big gap between my ability to wear more than three pieces at a time out of my 300 pieces,” says Julia Gudish Krieger, founder and CEO of VillageLuxe. “The [designer rental market] is focused on that aspirational consumer, but I think you polarize and leave out a whole big part of the market of people who don’t need the money—it’s just the sense of wastefulness.”

Krieger launched the site in July 2015 after asking herself, Which of my assets that I don’t use every single day would people want to rent? “After my house and my car, it’s my closet,” she says. (Though, in New York, one’s closet might actually top that list.)

“I’m such a believer in the sharing economy,” says Krieger, a former VC. “I think it’s where the world is heading in general, and it’s not just that people are becoming more efficient with how they monetize things when they’re not using them. The more interesting element is the social barriers between what’s mine and what’s yours have blended so much more in the last five years.”

Village Luxe is currently invite only, with a heavy emphasis on influencers and fashionistas who lend as well as borrow. As of August, more than 10,000 women were on the wait list. Current members are quite active, having already listed over 7,000 pieces. (VillageLuxe intends to open the list once they’ve scaled the company.) For the moment, members include Upper East Side wives with extensive jewelry collections and edgy fashion bloggers like Leandra Medine, i.e.,The Man Repeller.

The startup emphasizes vintage styles as well as current collections. Many of their clothes are garments you can’t find anywhere else, like an Alaïa cocktail dress from the ’90s. “We actually had Vogue start borrowing from us for editorials,” Krieger says.


Like The RealReal, Village Luxe is watching customer habits shift in real time.

“Once [our members] find out that VillageLuxe exists, they buy fewer but much more expensive pieces—statement pieces—because you know you can pull value out of them between wears,” Krieger says. “Then you won’t feel bad about that McQueen blazer that you really had your eye on, which you can physically only wear once a month with different groups of people.” This buy-and-share mentality, Krieger hopes, will motivate shoppers to make smarter decisions.

These sites can also alter the calculus of hemming and hawing over a pricey outfit. A customer is more likely to swipe their credit card if they know they can make some of their money back. “Women list things as soon as they buy them—they’ll list the items sometimes before it’s even arrived.”

Krieger says that aspirational shoppers especially are changing their strategies. They’re more likely to go for a few select designer items than whatever is on the shelf at H&M or Zara. They see it will actually pay for itself and even create a revenue stream. “They can justify going higher market,” she said.

A high overlap exists between the renters and the lenders, with over 40% who lend using their earnings as credit to borrow. “There’s circuitry in the market,” Krieger says. Women now think one step ahead when it comes to their wardrobe, debating what’s worth what and where to put their next dollar.

It’s a whole new way of shopping—and experts don’t see the trend waning. As Giordano says, “Once you start wearing designer, it’s really hard to go back.”


September 16, 2016

Why ‘Basic’ Is Bad For Starbucks
By: Abha Bhattarai
September 15, 2016

With 24,000 locations across the world, Starbucks has become an everyday stop for millions.

But that ubiquity could now be its problem.

“Starbucks is now competing with chains like Dunkin’ Donuts and McDonald’s,” Business Insider proclaimed this week. “It has gotten, in a sense, too basic.”

“Basic,” according to Urban Dictionary, is a pejorative term used to describe anything “involving obscenely obvious behavior, dress, action.” Other examples of brands deemed basic: Lululemon, Michael Kors and Ugg Australia.

So what’s an overexposed company to do?

Starbucks in recent years has begun looking for ways to restore its luster. In December 2014, it opened a Roastery & Tasting Room in Seattle, where $10 cold brews are the norm. The high-end concept is soon to expand to New York and Shanghai, with nearly a dozen other locations in the works, according to Business Insider:

“The premium coffee experience of the Roasteries is intended to have the trickle-down effect. The chain plans to open roughly 500 Reserve stores, which offers premium Roastery beverages and artisanal Princi food, and 1,500 stores with Reserve bars, which will serve drinks made in a wider variety of styles such as pour-over and siphoning.”

It’s all part of an effort, analysts say, to reinvent itself as a luxury brand.

But can a brand that’s gone mainstream turn high-end again? It’s a quandary that brands like Apple, Michael Kors and Coach have also faced in recent years, as they look to balance widespread popularity with upscale cache.

“I’ll just say this: It’s much harder to go up-market than it is to do the opposite,” said Milton Pedraza, chief executive of the Luxury Institute, a New York-based market research firm. “What Starbucks has to do at a higher level is to be personal, like when you go to Hermes and the salesperson knows your name, or when you buy a Tesla and you’re in a high-street showroom.”

When it was founded in 1971, Starbucks was a premium brand, offering a higher-priced but also a better-quality cup of coffee than most Americans were used to. In the decades since, Americans have taken to it in droves, making the Seattle-based brand a commonplace staple, as ubiquitous as McDonald’s or Wal-Mart.

“They’ve set the bar high, and now they have to keep moving to an even higher level,” Pedraza said.

It’s a phenomenon Pam Danzinger calls “lux-flation”: Our ideas of what constitutes a premium product or experience are always evolving.

“A brand like Starbucks starts at the top, and as it expands, it becomes the new normal,” said Danzinger, author of “Putting the Luxe Back in Luxury.” “Now it’s got to create that mystique once again.”

Need another example? Just look to Apple, Danzinger says. A decade or two ago, the company’s iMacs and MacBooks were seen as coveted novelty items. Today, just about everybody has at least one Apple device, which, she says, is why the company is reinventing its retail locations with free Wi-Fi, ficus trees and weekend concerts.

“They’re putting the human touch back into the equation,” Danzinger said. “That’s one way to regain that luxury edge.”

It’s not always an easy proposition, Pedraza says. Coach had tried for years to win back an air of exclusivity to no avail, as have Michael Kors and Kate Spade.

But, he says, there have been some successes: In the early ’90s, Gucci was almost done for. The Italian fashion company was in financial despair and its creative director was quoted as saying “no one would dream of wearing Gucci.” Then Tom Ford took over, and revived the brand, boosting sales and restoring the company to its previous glory.

“There are examples, but it takes a lot of money and a lot of paring back,” Pedraza said. “And frankly, not every company has the courage to do that. Everything is so grow, grow, grow in today’s world. And before you know it, you have a mainstream brand that isn’t special anymore.”


September 6, 2016

The Hunt for Asia Watch Sales
By: Victoria Gomelsky 
September 6, 2016

Even as Swiss watch exports continue to decline, watchmakers are sharply focused on trying to find just the right combination of marketing and retail strategies in Hong Kong and mainland China, the industry’s No.1 and No.4 sales markets.

For the first six months of this year, exports totaled $9.9 billion worldwide, a 10.6 percent slide from the same period in 2015. The steepest drop came in Hong Kong, which underwent a 26.7 percent decrease, with June the region’s 17th consecutive month of decline. Analysts attribute the slump in the city, long a favorite tax-free shopping spot for mainland Chinese and Western tourists alike, to numerous issues, including Beijing’s four-year-old anticorruption crackdown on gifts, changing consumer preferences and global currency challenges, chiefly a soaring Swiss franc and a strong dollar.

“The near term doesn’t look optimistic,” said Milton Pedraza, chief executive of the New York-based Luxury Institute. “No one is willing to bet that in the next 24 months there will be a turnaround.”

What makes this crisis considerably more daunting for the watch industry than the global recession of 2008 is that the Swiss brands now have thoroughly assessed the mainland Chinese market and no longer expect that its demand, which peaked in 2012, will propel a spectacular recovery.

Clockwise, from top left, the Roger Dubuis Excalibur Quatuor featuring the FFF team logo; Hu Ge with a Piaget Polo S; and Li Bingbing with Sascha Moeri, chief executive of the brand Carl F. Bucherer.

Clockwise, from top left, the Roger Dubuis Excalibur Quatuor featuring the FFF team logo; Hu Ge with a Piaget Polo S; and Li Bingbing with Sascha Moeri, chief executive of the brand Carl F. Bucherer.

  • In July, Swiss watch exports to Britain increased 13.4 percent compared with the previous year.
  • Watchmakers attributed the increase to the pound’s decline since the June 23 vote. “We kept our prices unchanged while the GBP went down compared to other major currencies,” said Fabien Dutriaux, vice president of sales for Arnold & Son, a watch company based in La Chaux-de-Fonds, Switzerland. “We believe that this gap attracted some customers and generated this uptick.”
  • One month, however, doesn’t tell the whole story, cautioned Jean-Daniel Pasche, president of the Federation of the Swiss Watch Industry. “The growth of July follows a substantial fall in the previous month and is explained in part by a favorable base effect,” he said. “But we cannot exclude that it is also due to the weakening of the pound and the consequent increase of sales. We will see next month if this growth is confirmed.”

Some watchmakers, however, continue to hope. “The state of the market in China is not as bad as what you read about,” said Philippe Léopold-Metzger, chief executive of Piaget.

He acknowledged that a glut in wholesale inventories had pushed many brands to buy back stock from authorized dealers in Hong Kong — an unusual occurrence in the watch world — but, he added, “retail is doing pretty well.”

In its report for the fiscal year that ended March 31, Piaget’s parent company, the Geneva-based luxury group Compagnie Financière Richemont — owner of such high-end brands as Cartier, Panerai and Jaeger-LeCoultre — indicated that its watchmakers’ sales had increased 3 percent year over year but that its operating contribution had declined 29 percent, in part because of “a difficult environment in Hong Kong, Macau and the Americas.”

Mr. Léopold-Metzger said that, with the change in focus from gifts to personal purchases, price had become more important, and the brand had responded by introducing its first collection entirely in steel. The Polo S, a casual men’s watch Piaget unveiled in July, gave it a new entry price of $9,350. “Consumers are young, and they’re going to love the look of the watch,” Mr. Léopold-Metzger said.

Of utmost importance, he added, is that the brand expands its business locally. To that end, Piaget has teamed with Hu Ge, the Chinese actor, singer and social media darling, to appear in Beijing last month for the Polo S collection. Mr. Léopold-Metzger described Mr. Hu as a “game changer” and said that his ambassadorial role would be publicized primarily through digital media.

Piaget isn’t alone in trying to connect with new consumers in new ways.

Swiss watch executives are gradually embracing the idea that to entice young buyers, a “combination of a strong social media strategy with smart celebrity endorsements becomes really powerful,” said David Sadigh, founder and chief executive of the Digital Luxury Group, a Geneva-based digital marketing agency.

The watchmaker Carl F. Bucherer is a believer. With Digital Luxury Group’s help, the brand introduced a repositioning campaign at the Baselworld fair in March featuring a new logo, “Lucerne 1888,” to highlight the brand’s Swiss hometown and its founding year. (That the logo incorporates — and repeats — the number 8, considered a sign of wealth and good fortune in China, is serendipitous, said Sascha Moeri, the brand’s chief executive.)

It also announced Li Bingbing as its ambassador. Western audiences may know her only for recent additions to the “Resident Evil” and “Transformer” franchises, but she is a star in China. “Li Bingbing had 37 million followers on China’s Weibo at the time the partnership was signed,” Mr. Sadigh said.

Alliances also are being sought beyond film and television. In May, the Geneva-based watchmaker Roger Dubuis announced its sponsorship of FFF Racing, a new GT championship automotive racing team founded by Fu Songyang, the 31-year-old Chinese tycoon. And to mark its new role at 15 races across Europe and Asia, the brand created an eight-piece limited edition of its Excalibur Quatuor model in black DLC titanium featuring the FFF logo at 12 o’clock.

Jean-Marc Pontroue, Dubuis’ chief executive, said the FFF partnership was intended to support the brand’s retail strategy in mainland China. A year ago, Roger Dubuis opened a second boutique in Beijing, in the luxury SKP mall, “and that has given visibility, credibility and access to many new customers,” he said. He also noted that moving the company’s Shanghai boutique to a busier retail location in April had “created 10 times more traffic.”

Several watchmakers say the global answer to growth lies in reducing distribution costs while maintaining sales.

“Three to four years ago we were at 500 points of sale globally, and now we’re at 300 and we continue to go down,” said Tim Saylor, chief marketing officer for the Audemars Piguet brand. “Currently we have less than 10 doors in all of China, with only two boutiques. We’re not sitting on a huge number of stores with huge stock and collapsing demand.”

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