Luxury Institute News

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/

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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

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Why Sarah Jessica Parker is opening her first stand-alone store in a casino

After years of selling shoes and accessories at department stores, Sarah Jessica Parker announced this week that she is opening her first stand-alone boutique, a shoe-centric shop with $240 heels and $695 handbags.

But the location — inside a casino in Prince George’s County, on the outskirts of Washington — has left some, like market researcher Pam Danziger, stumped.

“It doesn’t make sense to me,” said Danziger, whose work focuses on affluent consumers.

Why not New York? she wondered. The city has become synonymous with Parker since her run as the star of “Sex and the City.” Even a dozen years after its airing, the show remains so popular that people still line up to take tours of the characters’ hot spots around town. Parker herself lives in the West Village.

“It is a bit surprising,” said Michael Isen, senior vice president at NAI Michael, a commercial real estate brokerage in Lanham. “That someone like Sarah Jessica Parker wants to open their first store in Prince George’s County speaks volumes.”

 The SJP by Sarah Jessica Parker store, which debuts next week at the MGM National Harbor, will open alongside a Louis Vuitton store and restaurants by prominent chefs including José Andrés and Marcus Samuelsson. The property will also have a 125,000-square-foot casino, a spa and salon, and 308 hotel rooms.

“I’m sure it boils down to: MGM just made an incredibly good deal,” Danziger said. “She’s getting prime real estate with the potential for a lot of traffic, likely for very little money.”

To understand why Parker might have ended up in Prince George’s County, Milton Pedraza of the Luxury Institute says it makes sense to look at the state of the retail industry. Luxury retailers, from Burberry to Prada, are struggling to get people into their stores. Spending is down, and traffic to high-end shops has slipped 20 percent.

“In short, there is a crisis sweeping the premium and luxury retail market today,” Pedraza said. “So why not go out on a limb and do something paradoxical? Consumers are tired of the same old, same old.”

There are, he said, a number of factors in Parker’s favor: The Washington suburbs are home to six of the country’s 10 wealthiest counties (although Prince George’s County isn’t one of them). And the casino, which opens Thursday, is likely to draw large crowds of locals, as well as tourists, looking for glitz and glamour.

“She will have a high-end, captive audience that is looking to splurge,” Isen said.

To be sure, Parker isn’t the first to open an inaugural store in the outskirts of Washington. A number of big-name companies, including Apple and Spanx, opened their first local retail stores outside of the District. (Both chose locations at the Tysons Corner Center shopping mall.)

[Spanx opens first retail store in Tysons Corner]

It isn’t uncommon for retailers to test the waters in a lesser-known suburban market before opening up in a more-visible location such as New York or Los Angeles, says Marshal Cohen, a retail analyst for market research firm NPD Group.

“If it doesn’t work, very few people will notice,” he said. “You can just close up and move on and nobody is the wiser.”

Source: https://www.washingtonpost.com/news/business/wp/2016/12/08/why-sarah-jessica-parker-is-opening-her-first-retail-store-in-a-casino/?utm_term=.1a32d584f6ff

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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/

 

 

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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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December 2, 2016

Most powerful luxury branding strategy? Customer-facing retail sales staff

Luxury Daily
By: Pam Danzinger
December 2, 2016

Given its diverse and discerning customer base, London department store Harrods hires sales associates from around the world who align with the brand’s core values 

“Pay no attention to that man behind the curtain,” says the Wizard in an iconic scene from the classic movie, “Wizard of Oz.” As Dorothy, Scarecrow, Tin Man and Cowardly Lion stand in awe of the wizard’s image projected on the big screen, complete with pyrotechnic special effects of flashing lights, booming thunder, fire and smoke, Toto pulls back the curtain to reveal the real man pulling the levers.

That reminds me of the current state of luxury marketing today.

New sense
Luxury brands are focused on high-tech smoke-and-mirrors to create even more dazzling and awe-inspiring impressions of their brands that flash up on the screen of consumers’ computers, tablets and mobile phones.

But while so many luxury brands are investing huge amounts of time and money to make those special effects, a few brands such as Intermix, Porsche, Bottega Veneta and Gucci are putting their efforts to where the real power of luxury branding resides: on the people side of the marketing equation.

Milton Pedraza, CEO of the Luxury Institute, and I recently sat down to discuss how our independent research has led us both to a similar conclusion: that person-to-person retail is the most powerful way to bring the luxury value of a brand to the attention of discerning, affluent customers with money to spend.

 

Milton Pedraza, CEO of The Luxury InstituteMilton Pedraza is CEO of the Luxury Institute

So we decided to share as we pull back the curtain of the most underused, yet most powerful marketing strategy available for luxury brands today: the personal relationships made by the customer-facing retail sales staff.

Mr. Pedraza asserts that in their marketing and advertising mix, luxury brands have been focused primarily on the spectacular, new and shiny opportunities offered by technology.

“Retail technology, social media and ecommerce are the hot topics,” he says. “And those are very important.”

But their infatuation with technology is distracting them from focusing on the human element.

Ironically, Mr. Pedraza points to how digitally native, non-luxury brands such as Bonobos and Warby Parker, which have mastered all the high-tech marketing techniques, are now opening stores and bringing their virtual experience into the real world.

“They’re beginning to understand that high-performance customer relationship building is, and will be, the true differentiator, especially as robots and artificial intelligence take over the mundane tasks that retail front-line people are forced to do today,” he says.

 

Effective retail management is essential to Harrods' customer focusEffective retail management is essential to Harrods’ customer focus

Floor customers
Like the Internet disruptors now establishing footholds in traditional retail, established retail brands are waking to the importance of developing their personal relationships with customers.

That too many retailers are underperforming on the shop floor is without question.

“The top 20 percent of sales associates account for 80 percent of the sales,” Mr. Pedraza said. “They are critical to the business. And yet, there is another 80 percent of sales associates who are under-trained, under-utilized and under-performing.

“The high turnover in associates leads to customer turnover and massive amounts of lost potential and revenues,” he said.

The value for brands to realize and develop the potential of their human capital is clear.

“By consistently delivering expertise, empathy, trustworthiness and generosity, sales associates who develop and demonstrate high emotional intelligence deliver extraordinary human experiences, make clients feel special, and create personal emotional connections that drive long-term loyalty,” Mr. Pedraza pointed out.

Indeed, he understands the difficulties for brands to select, train and retain the best sales staff, but knows the competitive advantage when they rise to the challenge.

“’Difficult’ is where you find true and sustainable competitive advantage because no one will follow you there,” Mr. Pedraza says.

The need to develop the person-to-person potential at retail is clear and both the brands as employer and the career sales professionals will benefit.

“Great retail brands in apparel, accessories, automotive and dozens of other retail categories are desperate to find qualified people where you can earn $60,000 to $120,000 in three to seven years as an associate, or manager,” Mr. Pedraza says.

“In specialty retail and luxury, the job of a high performance relationship builder will become far more important, and the individual will be far more skilled,” he says.

“Human relationship-based client conversion and retention will be recognized as the critical drivers of revenues and profits in retail.”

 

The Saks Downtown store in New York's Brookfield Place across from the World Trade CenterThe Saks Downtown store in New York’s Brookfield Place across from the World Trade Center

AS THE ADAGE goes, ‘What is old is new again,’ the heritage luxury brands and the great retailers reached their pinnacle by building extraordinary personal relationships with their customers, day-in, day-out, face-to-face and hand-to-hand. That never should have gone out of style, but unfortunately, too many brands and too many retailers have been seduced by the attractions that technology promises.

Mr. Pedraza and I call on those brands and retailers to get back to what made them great in the first place: the personal relationships built on the sales floor.

Pam DanzigerPam Danziger

 Pam Danziger is Stevens, PA-based president of Unity Marketing and a luxury marketing expert. Reach her at pam@unitymarketingonline.com.

Join Milton Pedraza and Pam Danziger at Luxury Daily’s Luxury FirstLook 2017: Time for Luxury 2.0 conference in New York on Jan. 18. Visit LuxuryFirstLook.com or please click here for more details

Source: https://www.luxurydaily.com/most-powerful-luxury-branding-strategy-customer-facing-retail-sales-staff/

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55pc of affluents deem luxury prices unjustified by product value

Luxury Daily
By: Staff Reports
December 2, 2016

Image courtesy of Printemps 

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 new 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.

Luxury Institute’s survey was conducted in the United States, the United Kingdom, France, Germany, Italy, Japan and China, with respondents from about the top 10 percent of earners in their respective countries.

Divided priorities

Customers in the U.K. and the U.S. are more apt than respondents from Japan and China to mention superior customer service as a necessity for luxury. A superior design ranks third, but those in the U.K. and U.S. mention it more frequently than those from other countries.

While superior craftsmanship comes in fourth among global consumers, this attribute is mentioned by 59 percent of U.S. residents, compared to 33 percent across the other six nations.

Personalized offers, loyalty programs and value add-ons were mentioned by less than a quarter of consumers, but those who do define luxury by these points are inclined to say they are improving.

There is a disparity about the general quality of luxury goods. Those in China and Italy are more likely to report improvement in quality, while those in the U.S. are more apt to believe that luxury goods’ quality is declining.

When considering the ideal front line staff in a luxury boutique, courtesy and politeness are most important to affluent shoppers. Product expertise is a close second, with more than half saying they look for this knowledge in the associates they deal with.

 

Hugo Boss On Demand

Boss on Demand

The survey participants mentioned jewelry and hospitality brands as having the best customer service staff, while real estate and designer shoes got the least nods for their quality of service.

“From our numerous one-on-one discussions with luxury CEOs, we’ve often heard that a majority of success stems from superior products, but the rest depends on relationship-building expertise and execution of front-line teams,” says Milton Pedraza, CEO of the Luxury Institute. “Half of affluent consumers we just surveyed say that luxury sales associates deliver a personalized 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.

Even with the rise of digital channels, frontline sales staff are far from obsolete, according to results of a survey conducted by InMoment.

The bricks-and-mortar shopping experience no longer exists in a vacuum, with consumers arriving at a store armed with information from research conducted before or even during their trip. However, while shoppers spend about twice as much in-store when they navigate to a brand’s Web site while shopping, their expenditures grow to four times more if they interact with both an associate and the brand’s Web site while in-store (see story).

Source: https://www.luxurydaily.com/55pc-of-affluents-deem-luxury-prices-unjustified-by-product-value/

 

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December 1, 2016

Pokémon Goes High Fashion For Up To $1,795 A Piece

Forbes
By: Eustacia Huen
November 30, 2016

Of all the unlikely collaborations out there, the latest one that boggles my mind is the recently launched Prabal Gurung x Pokémon Capsule Collection at Jeffrey’s NYC Boutique.

Inspired by the vibrant colors, textures, silhouettes and spirit of five iconic Pokémon: Pikachu, Jigglypuff, Squirtle, Bulbasaur and Charmander, this exclusive nine-piece collection combines “the playfulness of the Pokémon brand [with] the style and sophistication of Prabal Gurung,” noted in the press release. For instance, there’s a blue knit and pencil skirt inspired by Squirtle (the water-type Pokemon), with the chiffon insert made to feel like a wave, and piping details made to look like Squirtle’s curved shape.

(Photo credit: Wendy Cassidy)

As someone raised in Nepal and grew up traveling across Asia, Gurung considers Pokémon a key part of his childhood, and the perpetually happy Jigglypuff his spirit animal. So when he was invited to design this capsule collection at Jeffrey’s, the designer thought that it was exciting to engage with the characters in this new way.

“The essence of the characters, not just their aesthetic, are captured and highlighted in the elevated details such as character-inspired zipper pulls and the Prabal Gurung signature draped back detail,” he said.

Much as this collaboration sounds interesting, but at $325 for a White Viscose Jigglypuff Printed T-Shirt to $1,795 for a Navy/Red Silk 4-Ply Crepe Short Sleeve Colorblocked Tunic Dress with Embroidered Cording, will die-hard Pokemon fans really think, “Gotta shop ’em all?” And like Karen Eggleston, Senior Manager of Licensing at The Pokémon Company International said, “The pieces are not necessarily “timeless” so it will require a woman who has a fashion passion and the wallet to afford to buy a product that may or may not fit into her wardrobe next year.”

(Photo credit: Wendy Cassidy)

The celebrated designer certainly thinks so. He believes his clientele has an appreciation for humor and sharp wit, qualities that are cleverly represented in this collection.

Milton Pedraza, CEO of Luxury Institute agrees. “Although this collection isn’t particularly affordable for all, it can certainly appeal to affluent women on the younger side (25 to 45 years old) who like playful clothes could find the products appealing,” he said.

While it seems like forever since the Pokémon Go craze, the luxury expert still considers this collaboration to be quite timely. In his perspective, Gurung has successfully reinvigorated the Pokémon excitement and makes it wearable “in this highly cohesive and coherent collection of playful, unique and high quality, everyday outfits,” noted Pedraza.

(Photo credit: Wendy Cassidy)

Clearly, this collaboration could help the designer reach out to a younger audience while The Pokémon Company build its fashion program. But insofar as the larger implications, the luxury expert believes we are in the middle of a fashion and retail revolution.

“Creativity and innovation is a must for designers and brands. Take the unique match up of BMW and Louis Vuitton in “The Art of Travel,” or Apple and Hermes in the iWatch, I foresee this Prabal Gurung x Pokémon Capsule Collection to have a reasonable chance of success,” said Pedraza.

Who knows, maybe this could inspire future crossovers between Star Wars and some young top fashion brand, or Minecraft x Abercrombie and Fitch?

(Photo credit: Wendy Cassidy)

Source: http://www.forbes.com/sites/eustaciahuen/2016/11/30/theres-now-a-pokemon-fashion-collection-that-costs-up-to-1725/print/

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November 16, 2016

Why Millennials Will Be Signing Up for the Elite Retail Program

Apparel Magazine
November 14, 2016

Milton Pedraza, CEO of the Luxury Institute, announced the launch of a new start-up program, the Retail Performance Academy (RPA). The academy’s Elite Retail Program (ERP) will bring evidence-based, Ivy-League quality training, coaching and networking to carefully selected students who commit to mastering the high performance, relationship-building skills of retail’s top-earning experts.

Top-performers in retail can earn anywhere from $60,000 to $100,000 within three to five years, and top associates who build a client base can earn $200,000+ per year in five to seven years. A top-tier luxury retail flagship store manager in New York today can earn a package of $250,000, and an average store manager can earn $80,000.

Pedraza has helped dozens of brands such as Gucci, Bottega Veneta, Intermix and Porsche to improve performance metrics in a humanistic, measurable way. Retail Performance Academy’s core principles are based on learning how to demonstrate product expertise and building lifelong client relationships using the mastery of emotional intelligence-based behaviors and metrics.

The Retail Performance Academy was inspired by three converging trends: first, the U.S. retail industry is a $5-trillion juggernaut that continues to grow, and the top 20 percent of sales associates accounts for 80 percent of sales at top-tier brands. Second, the luxury and specialty retail brands, including apparel, jewelry, watches, automotive, technology, and dozens of other categories, are desperate for, and have open positions for, high-potential, well-trained sales associates they can reward and retain. Third, while a college education is extremely valuable, it is most valuable for the children of the wealthy who go to elite colleges.

Only 52 percent of middle-class and low-income students who enroll in college graduate within six years. Most of the rest drop out usually after their freshman year. And of those who graduate college, nearly 44 percent are underemployed (hold a job that doesn’t require a college degree) or unemployed. Many of these young people, even if they graduate, lack the skills that employers need, and yet incur massive debt that cripples their future.

Source: http://apparel.edgl.com/news/Why-Millennials-Will-Be-Signing-Up-for-the-Elite-Retail-Program107780

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Aston Martin Sets Its Eyes on Miami for Its First-Ever Luxury Condo

Architectural Digest
By: Brett Berk
November 15, 2016

Luxury automotive brands including MercedesPorsche, and Pininfarina (the Italian design house whose core client is Ferrari) have all announced or opened branded residential towers. Now bespoke British manufacturer Aston Martin has followed suit, announcing its participation, in partnership with G and G Business Developments and Revuelta Architecture, in a high-end high-rise tower—the Aston Martin Residences—on the last remaining waterfront site along Miami’s Biscayne Bay.

Aston Martin chief creative officer and design head Marek Reichman will be responsible for the public spaces, including two lobbies, a fitness center, and a spa, using finishes and sensibilities in line with the 104-year-old automaker’s exquisite, clubby vehicles. “And if some of the customers say, we would love for you to design our interior,” Reichman says, “we will be happy to do that, too.”

As an independent company that produces exclusive low-volume, high-reputation, high-cost cars for an international clientele, Aston Martin brings to the project a wealth of knowledge of what elite customers desire. Apparently, part of this is the striking and unconventional, like interior switch trim matched to an owner’s favorite platinum jewelry or a hood ornament made of lacquered beetle wings—both projects Aston has completed in its cars. “The materials we use are very exotic—we are living in an exotic world, even compared to a lot of luxury apartments,” Reichman says. “And you sometimes wouldn’t necessarily think about those materials in your home, but actually, they’re very applicable.”

Despite the building’s name, Reichman notes that the branding exercise is “everything but literal.” There will not be any automotive amenities such as drive-in elevators or car concierges. Neither will the apartments reflect the proportions or shape of car designs. Rather, the connection will be experiential. “What you will get is exactly what you will get sitting in an Aston Martin DB11 on a long journey, and that is a sense of involvement and comfort,” Reichman says. “The most amazing thing about the DB11 for me is that it’s an incredibly powerful sports car, but you can sit in that car for a long time and still remain motivated and enjoy your environment. Which is just how you want to feel at home.”

Why would a luxury automaker enter into a residential partnership like this? The answer is, in part, to foster a deeper connection to the brand, one that transcends the vehicular. To retain consumers long-term, brands such as Aston Martin feel they need to create a holistic lifestyle multiverse, one that brand ownership allows customers to access and inhabit fully, wherever they are.

This quest for ubiquity seems a bit at odds with the kind of exclusivity that luxury manufacturers attempt to instill, but brand extensions have become a big business for automakers. Jaguar, Bentley, Mercedes, and others offer branded leather goods, branded custom tour packages, branded yachts and cruises, and branded helicopters, allowing their customers to remain connected to their logo even while they’re away from their car. The goal is to make consumers feel like they’re part of a special club whose membership and amenities follow them everywhere.

In talking about the apartment project, Reichman reflects on this insider nature. “I think this building is for people who appreciate luxury, who love the feeling of something which is timeless, and especially those who love the fact that if you’re part of the world of Aston Martin, you get a great thumbs-up from the product you drive, and you walk away with a kind of pride in ownership and a sense that the car is beautiful, a kind of wow,” he says. “I think the customer is going to be wanting that same feeling when they come to look at an apartment.”

 

Whether the proximity of the residential projects will enhance or undermine the sense of exclusivity these automakers and developers desire remains to be seen. The Porsche, Pininfarina, and Aston Martin towers are all in Miami, a confluence that seems to approach oversaturation.

“While it is not a perfectly logical complement, luxury automotive branding on real-estate assets can create greater awareness for both brands and elevate the offerings of each,” says Milton Pedraza, CEO of lifestyle research and consulting firm the Luxury Institute. “As the luxury industry remains challenged, we will see more brand partnerships and experimentation,” he says. “Many of the experiments may not succeed, but that is the nature of innovation.” The sales office for the Aston Martin Residences is slated to open next spring, with groundbreaking expected in the summer.

 

Source: http://www.architecturaldigest.com/story/aston-martin-miami-first-ever-luxury-condo

 

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