equally aesthetic and alluring world of art and design, some luxury houses –Chanel, Hermès and Alexander McQueen, among others– have held captivating exhibitions at major galleries, while others, like Audemars Piguet and Gucci, are doing the same by investing in their own museums.
www.sezane.com | www.everlane.com
Next-level treatment
While exhibitions and museums are usually restricted to cosmopolitan cities or symbolic locations, concierge-style services targeted towards high net worth individuals have become a widespread experienceenhancing strategy among luxury maisons and premium department stores striving to remain relevant. “Customers have told us they love going into hotels, getting rid of everything as they walk in and having it all taken care of,” said Shadi Halliwell, group marketing and creative director at Harvey Nichols. The department store is trying to replicate that experience in its revamped venues with the addition of personal shoppers, valet parking, plush private shopping lounges and a concierge taking visitors’ coats and bags at the door. Louis Vuitton’s ‘VICs’ (Very Important Clients) in Beverly Hills, Paris, Singapore and Shanghai can even book lavishly-furnished penthouse-style suites for personal shopping parties, where they can get styling advice or try on shoes while getting pampered. In an era where the perks of going shopping must beat the perks of clicking away from the comfort of your hotel’s poolside lounge, Bain & Company has identified en-
hanced personalized services as a vital strategy to weather the blow of the sector’s ‘new normal’ of sluggish growth. Fewer, higher-impact locations
It’s not only customers who are getting bored of traditional rack-and-manikinfilled shops. For businesses, the expensive inefficiencies of building and running brick-and-mortar venues are getting harder to justify. Sézane claims that it can sell its shoes at one-fourth of the price they would have to charge if they had traditional offline shops. Online-only Everlane -who promises premium quality without the premium price tag- claims that its bestselling cashmere sweater, which costs US$42 to make, would sell for $210 in a traditional store. By cutting out middlemen and the overhead costs of a physical venue, Everlane can sell that sweater for $100. The streamlined supply chains of online-pure retailers sound like a win-win solution. Yet people will always want to touch things, try them on, travel to a far away country and visit a quirky boutique they saw on someone’s Instagram feed. The question, then, is how lean should distribution get? And the answer is: as lean as possible. This means replacing traditional stores with no-stock showrooms, to at least get rid of the cost and complexity of in-store inventory management. It means cutting down locations and investing instead in a few, strategically located flagship venues with a real ‘wow’ factor. And it means only opening stores that are worth the pricey hassle. Online stores, with their 24/7
opening hours and measurable performance, can take care of the rest. Last year, Gucci shut down five of its stores in China. But it also opened, in Shanghai, its first ever branded upscale restaurant, 1921 Gucci. Like its Gucci museum and café in Florence, it is the type of place that luxury buyers from around the world would want to visit, check-in at and upload a Snapchat story of. (Yes, adult luxury buyers use Snapchat too.) With tourists accounting for an increasingly large chunk of luxury sales –up to 60% in France and 50% in Italy, according to a Havas LuxHub report– it seems fitting to invest in iconic stores that can become renowned destinations in themselves. The technology race
Brands trying to prove their tech savvy-ness through clever social media and e-commerce strategies need to beware of yet another element in the innovation race: technology-enabled in-store experiences. From smart mirrors to virtual reality and augmented reality features, new technologies are already being tried and tested by forward-thinking retailers. Dior’s very own VR headset transports store visitors
Online-only Everlane -who promises premium quality without the premium price tag- claims that its bestselling cashmere sweater, which costs $42 to make, would sell for $210 in a traditional store. By cutting out middlemen and the overhead costs of a physical venue, Everlane can sell that sweater for $100.
“behind-the-scenes” of the Paris Fashion Week runway, while Audi uses the same technology to take customers on virtual test-drives. In Ralph Lauren’s interactive fitting rooms, a customer who tries on two garments and indecisively ends up buying only one of them, will receive a text message with a link in case he or she wants to order it online later on. Remember the saying: “Nothing haunts you like the things you didn’t buy?” Well, those things can track you down now. As technology zips forward at a dizzying pace, and the behaviors of discerning consumers change at a similar speed, the possible scenarios of what ‘the stores of the future’ will look like are limitless. But one thing is certain: they will not have cashiers. Although e-commerce still accounts for less than onetenth of global luxury sales, by forcing old-school retail to reinvent itself, it is overcoming Goliath.
Andreas Skorski is the founder and CEO of THE LIST, the Middle East’s leading marketplace for luxury goods. Currently based in Dubai, UAE, Andreas started his first tech company in Germany at the age of 17, and has since successfully founded and invested in several lifestyle and tech startups.
january 2017 Entrepreneur
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