Valerie Rice on why high street department stores should no longer regard innovations as a luxury
Last year proved difficult for retailers as many with established high street pedigrees wavered, often losing direction as ‘new kids’ on the blocks staked their claims. Consumers drift into newer online brands like Asos or Prettylittlethings, while House of Fraser, Marks & Spencer (M&S), Ted Baker and Debenhams look set to face more challenging times.
For retailers, it is clear the continual change we have seen shows brands – but particularly luxury brands – must innovate at every opportunity to continue to preserve their relevance with consumers and place on the high street. However, the future may still be bright for brands that can connect with consumers to gain and maintain loyalty. We know with some certainty that fortunately the future high street will not be filled with endlessly similar stores.
How Loewe can a brand go: LVMH’s Loewe, the Madrid-based luxury leather clothing brand, used art as a theme in their new Mayfair store on New Bond Street in London, blending it with fashionwear in one space. Casa Loewe is a showcase of works from the brand’s collection, a growing anthology for art, craft and design. It features a series of eclectic works by such renowned international artists as Ernst Gamperl, Anthea Hamilton and Daniel Sinsel.
A recent Financial Times article was emphatic that there is a future for quality retail experiences. Consumers will still want to experience quality: to touch, feel, learn about and engage with craftmanship. They may not buy in-store on the day, but the retail space they visit will encourage them to consider the brand, wherever they purchase.
Retail spaces offering such experiences are confident about engaging with shoppers, while pushing new boundaries. Brands will have to work much harder to win customer loyalty, but authentic, quality retail experiences will win out. Last year, Bernard Arnault, CEO of LVMH, acquired Tiffany, known for its duck egg blue packaging and diamond engagement rings.
The iconic Audrey Hepburn-associated brand has joined a luxury stable which includes Christian Dior, Hennessey, Rimowa suitcases, Fenty by Rhianna and the luxury Venice-Simplon Orient Express train. LVMH’s shares surged by 60 per cent on the back of the purchase, defying odds that consumer spending would dampen with a US-China trade war.
LMVH says the attraction of Tiffany comes down to it being a strong brand with exposure to a jewellery sector which is growing but has high barriers to entry. Purchasing your first luxury piece is an experience, particularly for the likes of Tiffany. As Patrick Thomas, former CEO of luxury brand Hermes, said: “People will start at the bottom and move their spending up the ladder. It’s like with wine – you start as a follower and then become a connoisseur.”
Tiffany has come a mighty long way since being founded as a stationery business in New York in 1837. LMVH markets the brand as an arbiter of taste and style, with its sterling silver, china, crystal, fragrances, water bottles, watches and leather goods. The company has over 300 stores across North and South America, Europe, the Far East and the UAE.
A SHOP’S PURPOSE
Whether it be London’s New Bond Street or Rue Saint Honore in Paris, soaring rents determine the selection of high-end brands operating in auspicious locations. But opening the door and hoping consumers will be in love enough with the brand to purchase is not enough. Brands must reinforce the principle of making high end retail a destination experience.
Loewe’s store in Mayfair ties in the brand naturally with art installations and introduces their Art Basel Miami Beach 2019 installation, consolidating its new retail narrative. Jonathan Anderson, Loewe’s Belfast-born creative director, was quoted in the Financial Times as saying the store was about creating a retail statement while also being a cultural draw.
“A shop is a public space. Anyone can come in. So, there’s a responsibility on a shop, that it doesn’t always have to sell to you,” Anderson said. Loewe’s focus is in keeping with future retail thinking. Where 10 years ago, luxury stores would have private rooms dedicated to high spending customers, today’s spaces rely more on art, flowers, a café or a gallery.
The purchase of a Loewe can happen in-store, online, or with the sustainable fashion agenda, on a vintage Loewe site. The key is converting the sale and as consumers increasingly rely on visual content like Instagram, a post of art in the store inspires new shoppers, broadening the potential audience. The actual purchase may take place on Net-A-Porter.
While household retailers struggle to be relevant, luxury brands use experiences to create brand stories. It is an expensive exercise and there will be casualties, but those that get it right will be rewarded. E-commerce continues to grow, but still only accounts for 15 per cent of all luxury spend. Retailers cannot be casual about the customer experiences they provide.
Valerie Rice is managing director at Valerie Rice & Associates