A recent McKinsey report declared that, for businesses, “The age of experimentation with digital is over“. That may be for most B2B and B2C private sector companies, but not for the luxury goods industry. Bemoaning the woeful development and investment in strategic initiatives for luxury brands online is something this blog has done once or twice before. There are understandable reasons why the industry has been reticent to commit to online retail, based on customer insight (the assumption that HNWIs don’t like to shop for something without being able to see and touch it for themselves) and conflicting priorities (physical store expansion into China and more experiential events has been the name of the game in recent years). But with a China slowdown mooted, particularly in the area of luxury gifting, and no real concrete research to show that HNWIs aren’t just as digitally savvy as their less liquid counterparts, there becomes less and less justification for what are, across the industry, woeful examples of digital strategy and innovation.
It can’t be easy for profitable businesses like LVMH, with an eye on quarterly earnings, to make drastic investments in the online space. Luxury’s brand equity often comes from provenance and tradition; a company’s roots are in its founding stores, the connotations of Milan, Florence, Paris, etc. They also worry about their neighbours; a flash-sale site or, worse, one full of counterfeit knock-offs, is always just a click away. From a logistical point of view, there is also the issue of back-end infrastructure to contend with. For several years, PPR (now Kering) ran much of its e-commerce business through Yoox, as we’ve talked about before. It would be wrong to single out those in luxury. L2 Thinktank recently tweeted with much excitement about Bacardi’s “cocktail discovery site” that worked seamlessly across web, mobile and tablet. Well, forgive us if we don’t leap for joy in an ecstasy of delirium, but this is 2014, that should be the minimum deliverable. Still, luxury is a sector in blatant need of redirection.
Burberry is lauded by many as an outlier in this world of luxury goods, a company that has truly embraced digital. For all the talk of such innovation though, the website itself is utterly dominated by a rote e-commerce site, as are its social networks such as Google+. It is the physical stores where technological innovation has been injected. And this is supposedly the company pushing the rest of its peers forward. It comes as little surprise then that eConsultancy published a superb piece at the end of April excoriating the sector, leaving no brand unscathed. Headlines included, “painfully slow load times“, “awful UX” and “not making much effort“. But the worst and most perplexing atrocity had to be the above screengrab on the purposeful hiding away of an e-commerce platform, one that was presumably quite expensive to source and implement in the first place. We can’t overestimate the necessity of having a clear user journey through to purchase, just as it would be difficult to overestimate the amount of luxury good companies that are guilty of this sin for which Dolce & Gabbana have been singled out for here.
On this note, Gucci’s recently relaunched mobile site – replacing among other things a tablet site that had been left to wither since 2010 – was welcome news to us, as it seemed to be also (logically) to those wishing to actually part with their money on Gucci wares. L2 in May reported the news, saying that the new site now accounts for 27% of all traffic, a 150% YoY increase. Sounds good, except that means traffic through the mobile site in 2013 was a miniscule 0.18%, right? Terrible.
There are signs of hope. Gucci’s move to invest in a new mobile site, though monumentally belated, is a welcome one. As more brands cotton on to the importance of online, the Financial Times recently reported on the moves many are making to secure ‘.luxury’ suffixes, in the wake of IPv6, if only to avoid the complications of cybersquatting. And Michael Kors, which seems only to be going from strength to strength every quarter, has praised its own social media presence for “driving international sales”. We’ve almost entirely focused on fashion brands here, but other companies within the luxury sector are getting the message loud and clear. Take the auction house Christie’s, a legacy company if ever there was one, having been founded in 1766. Not only have they dedicated time and energy to investing in major online auctions, they have also recently created a new sector vertical of ‘luxury’ within the house itself. New thinking might well take new talent, it will also take C-suite buy-in, as well an acceptance that digital commerce is an integral part of business now, no matter how exclusive your product is.
Whither the sage of a shop assistant? At a time when we as consumers have access to all the information we could want about a brand and its products via our smartphones, of what use is it to have someone tell me something that I am unlikely to take at face value, working as they are for said brand? Why even bother being in the store at all when I can be buying my item at home? The luxury goods company PPR (owners of Gucci, Saint Laurent Paris, Balenciaga et al.) could be said to have recently adopted a similar mindset. A new joint venture with e-tailer Yoox is sure to shake things up. Honcho Francois-Henri Pinault said recently, “While the whole industry has been resisting e-commerce for the last 15 years it’s now realising it’s inescapable”.
Not everyone believes such a move is inevitable. Chanel is steadfastly refusing to sell its principle collections – from ready to wear to handbags – online for the foreseeable future, according to a recent interview with the CEO. While this might strike some as akin to sticking one’s head in the sand, the reasoning the company gives centres around the unique experience of going into a store to buy a product, rather than sitting at home in one’s pajamas. From a strategic point of view, the idea is sound. Reducing avenues of purchase encourages a scarcity factor that high-end fashion must rely on. It also ensures that the products are seen in the best light possible, incredibly important when justifying such a premium. It’s interesting to note that though the thinking may be sound, it is certainly not appropriate for every luxury brand to be resisting the lures of online shopping in such a dramatic way. Chanel is – and always will be, in multiple ways – a very special company, an exceptional brand, in the literal sense. Like Apple though, it’s practices are to be emulated with caution, as a great paper by McKinsey Quarterly highlights. “Outliers are exactly that…”, the report states.
But what is the state of stores, and how important is service in these places? For luxury, we can assume a high priority of the physical shopping experience is connected to the person assisting you. Recent experiences at two different luxury goods stores highlighted jarring differences, monumentally affecting the way Zetigeist felt about the brand. Last month in New York, Zeitgeist visited Tiffany & Co. to find a Christening present. Without turning this article into a rambling letter of complaint, the section Zeitgeist found itself in was woefully understaffed, and when help was available, information turned out to be incorrect and, most importantly, not dispensed as if it were important to them. Zeitgeist left without buying anything. The experience was deflating enough to mention to the manager en route to leaving the store. Returning at the weekend to try again, the experience had not much improved. The item needed to be engraved. Taking it into one of the London stores upon returning home meant being greeted with the same mediocre level of service. No passion, no interest. This would be perfectly acceptable for somewhere such as Ernest Jones, but Tiffany is a massively, massively powerful brand. For many it is incredibly evocative, and speaks to nostalgia and deep-seated emotions with very personal connections. There is a dream that is Tiffany, that is replicated extremely well in their above-the-line marketing. It is completely absent in its physical embodiment, the store. Cartier, by comparison, manage to present a fantastical vision of their brand, while also maintaining a consistently excellent level of service in-store that brings cohesion to the image it evinces.
Louis Vuitton could not have presented a starker contrast to Tiffany. The brand had one brief flirtation with TV ads about four years ago. While also a powerful brand, it perhaps could not be said to elicit such powerful emotions as Tiffany, purely on the basis that Tiffany purchases might often be assumed to be gifts. Purchasing what is surely one of the cheapest things in the store, Zeitgeist was delighted to be led through the purchase process by an exceedingly-well trained woman, who was happy to go over the minutiae of the purchase, and knew answers to arcane questions when asked. It made the experience extremely pleasurable. Remarkably, the store went a step further, sending Zeitgeist a random act of kindness and imploring to get in touch if further assistance was required.
That kind of experience simply cannot be replicated online. If Amazon were to start selling Prada clothing anytime soon, the dissonance would be powerful. So while the luxury industry, and many in the retail sector at large, struggle with the idea of the shopper journey online, moreover how and where that connects with the physical journey, we cannot forget basics. The importance of good training, especially for demanding customer who are expecting a premium experience, cannot be overstated. Though smartphones and tablets may hold the data, it must be remembered that the purchase of a luxury product is often an irrational experience. The service and assistance received during purchase consideration may be an irrational influence, but it is an immensely powerful one. If a brand talks the talk, it must walk the walk, or face the consequences of failing to live up to its own promises.
There’s not much to say about this really as the picture speaks for itself. Just remember that everything you do, particularly on the front door of the Sloane Street incarnation of your company, reflects on the equity of your brand. Scrawling a misspelled, hastily-written message couldn’t be more offensive to the elegance that Chanel claims to represent. Very poor indeed.
Zeitgeist was asked at the end of last year to write an article on retail trends for the coming year. The following is an altered excerpt of the original article…
It’s surprising to read editorial describing us as still being in a recession. If you’re going to use economic terminology, then you have to listen to economists when they say the recession ended months ago. The trouble now is dealing with the aftermath – impending cuts and taxes. Evidently it’s not all gloom though, as new stores Dior, Mulberry and Miu Miu join the salute to capitalism that is Louis Vuitton’s Maison on London’s Bond Street.
Look for more brand collaborations. Disney’s venture with Tesco is bold and innovative… Savile Row’s Gieves and Hawkes recently installed a space for barber Gentleman’s Tonic, and vintners par excellence Berry Brothers has a concession for Lock and Co. Both instances suggest a deep insight into who their shopper is; useful for the brand, flattering for the shopper. With empty high street retail spaces, the time is right for sage collaborations, bringing brands added security.
Digital integration will become more widespread, aiding both in brand building and simplifying the customer journey. More people are expected to be surfing via phones than computers by 2015. This swing constitutes an immediate opportunity for retailers and marketers. Since helping Obama to victory, crowdsourcing has only gained in popularity. The Louvre recently fundraised through thousands of individual donations online to buy a coveted Renaissance painting. The power of many, prognosticated in “The Wisdom of Crowds”, is driving ideas like Groupon, as well as its subsequent offer for purchase by Google.
It’s going to be a make-or-break year for Foursquare et al. There have been interesting campaigns by all sorts, from Marc Jacobs to McDonald’s. What’s missing is seamless integration of these services with retail environments. ‘Checking-in’ has got to become a utility for shoppers outside London, New York and San Francisco. Currently, opportunities to create conversations are being missed.
Twitter’s retail presence will continue to grow, evinced by Best Buy’s Twelp Force and Debenham’s Twitterers flitting about stores. Multi-platform interaction can be enhanced by the physical retail environment: Diesel pulled off a fun gimmick last year with a screen outside the changing room allowing customers to upload a photo of themselves to Facebook to query friends on their clothing choice. Neiman Marcus recently merged online and in-store inventories, a great idea that others should emulate. Allowing people to browse products in-store on an LCD screen without the pressure of exasperated sighs from sales assistants can make shopping enjoyable and convenient. Chanel’s Manhattan flagship has such functionality; it could be of equal use at B&Q.
Getting someone to linger in your space and mention the experience to others is what counts. Pop-ups, if they serve a purpose rather than being a gimmick, can be a tremendously effective – not to mention fun – tool. Don’t underestimate fun. Emphasising convenience alone means most people – especially when the odd flurry of snow arrives – will shop online at home. There must be an element of excitement, innovation. This can be escapist, like Secret Cinema, or pure enjoyment like Muji’s vending machine (see top photo). Pop-ups can provide an excuse for an otherwise serious brand. They help in getting a message to new audiences (Gagosian’s pop-up), or taking the store to the customer (Natwest’s mobile truck).
So, more collaborations, more digital and more pop-ups; so what’s new? As William Gibson once said, “The future is here, it’s just not very evenly distributed yet”. Embracing digital won’t stop people price-checking and tweeting negative remarks, but it would be worse to keep it – and therefore the customer – segregated. If that happens, and you promote on convenience alone, that customer never comes to your store and never sees a physical embodiment of the brand. Last November, as Zeitgeist previously reported, Ralph Lauren was one of the latest brands making use of 4D projection mapping. People cheered at animated handbags and ties. In 2011, Mintel advises, “brands may need to get more creative to lure consumers into stores, offering more than just retail and be a venue, not just a shop.” I’ll leave you with that thought while I go and cheer at a sandwich in my local “venue”.
On Friday, Zeitgeist returned (mentally) from lunch to find a message from Chanel in their inbox. The message directs the user to a microsite of sorts, Window World. The name and idea plays on the surreal notion of the models as mere mannequins (usually of course the reverse is the case, a crude verisimilitude that shoppers seem to take in their stride) and a section of the site takes the user through what feels like a labyrinthine party, filled with mannequins as models and models as mannequins. Other than aesthetic discombobulation, there is signposted a pdf download with product information for every item featured including the item code, but naturally not mentioning anything as vulgar as prices. Complementing this is a video shot by the house’s creative director – Karl Lagerfeld, whom Zeitgeist saw speak at the end of last year – emphasising the eeriness of the concept. Clicking on the video will take you to the YouTube page, where there is ample evidence – in the form of myriad comments – of dissatisfaction with the video, and what it says of the fashion industry by proxy. Fortunately for Chanel, most of those on YouTube are not the brand’s target audience.
Indeed, to elaborate, CNN recently reported that 6% of shoppers drive 70% of luxury goods purchases, so its a very targeted niche that brands like Chanel must hit, (and succeed in so doing, time and again). Zeitgeist has reported before on how important it is that brands be seen in the right places; Louis Vuitton luggage in a McDonald’s is a no-no. Chanel have done an excellent job of being seen in the right places; whether it’s hosting surfing parties for Laird Hamilton, or, more recently, opening a pop-up shop in a tony ski resort. The ‘Chalet de Pierre’ is open until April, an ‘ephemeral’ boutique in the heart of beautiful Courchevel. The Chanel website has some select imagery of the store, which is the perfect place to pick up a pair of Chanel skis. Such marketing activity is exciting and well-executed, but curious, given that any time the brand Chanel, and Lagerfeld in particular, speak publicly, they rarely acknowledge any such efforts.
Both parts of Zeitgeist may be out of the office at the moment, but that doesn’t mean we haven’t kept our nose to the grindstone, our ear to the ground, our eye on the ball, our finger on the pulse and our foot wedged in the door.
Last week, Zeitgeist was fortunate enough to attend the International Herald Tribune’s Heritage Luxury conference at the InterCon on London’s Park Lane. While the Missoni clan waxed lyrical on the importance of keeping it in the family, after such luminaries as Paul Smith and Alber Elbaz had already spoken, the real highlight was seeing the legend that is Karl Lagerfeld, designer for Fendi and Chanel, as well as his own eponymous collection. Karl spoke on a variety of subjects. He even offered his take on the LVMH / Hermes debacle, which Zeitgeist wrote about recently, suggesting that Hermes keep their earnings private, as Chanel does, so as not to encourage hungry buyers by “putting the milk out”.
Host Suzy Menkes asked Karl to talk about Coco herself, which he did with no subjectivity, criticising her knee-jerk dislike of blue jeans and miniskirts, and failing to adapt. It is this same failure to adapt that is causing many businesses – or even entire industries, such as books and music – to suffer massive losses, with Chanel itself a “dowdy dowager”, as the Wall Street Journal once described it. Indeed, when the managing director of the reputable Brown’s stores asked Karl what how important he thought the digital world was for luxury brands, Karl was unequivocal, saying Chanel the brand ignoring digital would be like Chanel the lady ignoring miniskirts and blue jeans. He was also talked about the increasing binary pull of fashion, where inexpensive and expensive rule, with no middle ground. Businesses in that middle ground – think FCUK – will not fare well in the future he intimated. If one thinks of this from a branding perspective, it is perfectly understandable. Selling your product as the best you can get, or, conversely the best you can get at the cheapest price, is a robust selling point. Anything between becomes undefinable and wishy-washy; at exactly what point has quality been sacrificed for expediancy in x product? Chanel have done a fair job so far of embracing the digital world, with an engaging iPhone app as well as an e-commerce section on their site.
Of course, some brands – especially luxury ones – revel in their heritage, and so it was on Tuesday night when Zeitgeist attended the evening preview of Dior Illustrated at Somerset House. Illustrator Rene Gruau was still drawing adverts and couture dresses for the company long after other labels had switched to photography. Of course, it is when one can combine the worlds of heritage and keep the brand contemporary that is most impressive. So it was with Ralph Lauren’s 4D presentation, also last week, shown in New York and London, recorded by a friend of Zeitgeist’s. Enjoy.
“Luxury lies not in richness or ornateness but in the absence of vulgarity.” – Coco Chanel
If luxury is mostly defined by what it is not, then one can see how it faces an uphill battle in trying to attract the more cash-strapped among us, especially in economically turbulent times. A large part of a luxury brand’s assets are focussed on upselling to the shopper, but currently a brand has to work harder to justify its prestige (not to mention price tag). The following post looks at how some brands have responded by cultivating their image with top auteurs at the helm, while others have sought to bring the brand down to the masses.
Two of the biggest houses, Chanel and Gucci, both recently launched new ad campaigns to promote a new fragrance. Gucci first released a teaser trailer for it’s perfume, Guilty, which by all accounts went ‘viral’ before a 30-second spot went live on Facebook on August 12th, followed the next day it’s exhibition on TV. As Luxuo points out, what everyone is really waiting for though is the director’s cut of the commercial, which will be unveiled live September 12th at the MTV Video Music Awards. By the end of it, the campaign will have done a good job of building up audience anticipation and suspense. The shoot was directed by Frank Miller, the mind behind such films as “Sin City” and “300”, and the commercial’s aesthetics leave you in no doubt as to its author. The MTV VMA audience should dovetail nicely with the demographic Gucci is looking for with this particular product. As PSFK notes, the results could be mutually beneficial. Meanwhile Chanel, (recently branching out into surfing), has been mostly bombarding the cinema with its own ad for its own new brand of fragance, Bleu de Chanel. This advert was directed by the legend that is Martin Scorsese, whose crisp visuals are tinted blue and who can’t resist adding a Rolling Stones track to the background. It’s interesting to see both these powerful brands collaborating with famous / respected filmmakers in order to justify, endorse and build upon the image they are trying to perpetuate. The life shown through Miller’s and Scorsese’s lenses is an unattainable one.
Meanwhile, other brands have been seeking to do the reverse and making themselves somewhat more accessible, playfully or otherwise. Lanvin, one of the bastions of fashion, is reported by the New York Times to be doing a capsule collection for that bastion of mediocrity and crass capitalism, H&M, following similar collections by the likes of Matthew Williamson, Jimmy Choo and Karl Lagerfeld. Last year Lanvin produced a collection over a period of several months in collaboration with Acne Jeans. The latter brand helped make Lanvin more accessible (in that the synergised collection was cheaper than anything one might normally buy from Lanvin), but retained an esoteric air thanks to the jeans manufacturer’s relative anonymity (relative to H&M, anyway). What benefit does this brand dilution – for that is the only thing it can be described as – bring to the fashion house? Well it puts it on the radar of those 20-somethings who might not be able to purchase something from Lanvin outright on their current salary, but will be store it away for future consideration. Rather more cheekily, Issey Miyake recently opened a pop-up store in Tokyo, decked out not at all how you would expect. PSFK quotes,
“The overall concept derived from the Japanese convenience store, with its constant state of dynamic, fluid change… To highlight this association, the shop’s name is ‘24′, and its logo features the kind of stripes you might expect to find on the facade of a convenience store. The packaging, too, comes from food packaging.”
In this case then, Issey is taking it’s high-fashion image and poking fun at itself in its own retail environment. A dangerous move, but also an innovative one, with enough publicity to gain the attention of those fickle shoppers. It stands out from the more overt attempts at aspiration that Chanel and Gucci are creating, and perhaps this self-parody helps Miyake gains more fans than those who might otherwise be put off the more gilded edges of luxury, vulgar or no.
If you’re going to steal, it’s important “to steal with good judgment”, wrote the 19th century American humourist Josh Billings. In December of last year, the creative director for Chanel, Karl Lagerfeld, shot a video called “Vol de Jour” that shows models Lara Stone and Baptiste Giabiconi making their way to every Chanel boutique in Paris, stealing the company’s wares along the way before making off on a Chanel motorcycle.
Yesterday, Vogue magazine reported that in the early hours of the morning, the boutique in South Kensington was broken into in a “smash and grab robbery” by two people before they sped off on mopeds. Perhaps the campaign was a little too inspirational?