Retail and luxury goods serve as mirrors of our self-worth, personality, economic, social and political standings. In the past, luxury goods were only available exclusively to the high-class, rich and famous. Today, the luxury industry has changed drastically to become democratic. The industry has realigned our economic class system because it has grown to become democratic. Target, for example, has performed a brilliant job of bringing a sense of design and individuality to the middle-class who cannot afford luxury brands.
The 4th Annual Retail and Luxury Goods Conference at the Harvard Business School explored the notion that fashion is available to the masses and that notion of being fashionable today has become an easily obtainable aspiration. The term luxury has become so ubiquitous that we have stopped talking about it. The panel on “Bringing Fashion to the Masses” examined how retailers are required to react quickly to trends in an increasingly competitive market, from partnering with a high fashion designer to effectively managing their supply chain cycle and channels.
The keynote speakers of the conference included the President of Target Sourcing Services, Stacia Andersen, and the President & CEO of Lalique North America, Guillaume Gauthereau. Some of the esteemed panelists included Elizabeth Edmiston (VP of Brand Merchandising for Victoria’s Secret), Laura Elkins (VP of International Marketing & CRM for MAC Cosmetics, Estée Lauder Companies), Dana Gers, (SVP Marketing, Ferragamo USA), Leslie Fletcher (Director of International Strategy, Wal-Mart), Elizabeth Harrison (Co-Founder & Principal, Harrison & Shriftman), Massimo Redaelli (CEO, IMG Fashion Europe), Jan Hilger (Director, Shirt and Neckwear Unit, Hugo Boss Switzerland), Kate Sullivan (Marketing Director, Diane Von Furstenberg), Brooke Travis (Club Monaco Senior Director of Global Marketing and Communications), and Thuy Tranthi (Former US President, Celine and Thomas Pink).
The panel on globalization and brand management explored the two ways for retail and luxury brands to enter the international market: (1) Invisible adaptation, as consistency model and (2) Portfolio approach, as an investment. It is important to hold a strong voice to insist on designs that can reach out to an international market. According to Thuy Tranthi, many LVMH designers are based in cold-weather climates www.replicabestsale.co.uk, and tend to design exclusively in very heavy cold-weather fabrics such as thick wool. Additionally, price consistency may not always make sense. According to Laura Elkins, mascara in America is the entry level market. Originally, MAC decided to keep its mascara prices consistent when expanding into the global market; however, the company later decided to match its prices in Europe because the European markets perceived the lower-cost mascara as lower-quality.
Following are a couple notes for the MBA student who aspires to work in the retail and luxury goods industries:
According to April Cross, Associate Couture Buyer, Neiman Marcus (HBS MBA’04), it is not necessary to have an MBA degree to work in retail or even be a buyer; however, securing an MBA degree distinguishes you and allows you think strategically
Foreign cultural knowledge is crucial. Europe is considered the epicenter and birth of retail and luxury creation. According to Dana Gers, SVP of Marketing, Ferragamo USA, studying and living in Europe allows one to develop an insight into European culture, allowing one to secure assignments in the luxury goods world tag heuer replica for sale . Today, we must understand other foreign countries such China because it is so explosive, dynamic and aggressive and serves as a new customer base.
Visit the internet regularly in order to understand social marketing. According to Kate Sullivan, bloggers are taking over and are also know as the “luxury priests”.
Observe 3-D platforms such as Second Life, where high fashion designers such as Georgio Armani have created stores. According to Uché Okonkwo (Head, The Luxury Centre, ESC Rennes School of Business; Director & Co-Founder, Luxe E.t.c. Paris), luxury brands should approach 3-D platforms cautiously, although not suspiciously, since they are new platforms and their dimensions and potential are yet to be fully defined for industry. Luxury brands should observe Second Life in order to understand its demographics and power to reach millions of clients. From here, they can then optimize their PR through this platform tool. For example, the Second Life platform can be an effective PR tool for special projects such as new product launches and luxury goods events.
The Retail and Luxury Goods Industries are Changing
Statistics from the Boston Consulting Group reveal that the United States market for luxury goods and services in 2004 was valued at $400 billion, or 12% of all retail sales. The wealthier are growing wealthier. The luxury sector is expected to grow 15% per year, reaching $1 trillion by 2010. At the same time, the industry is embracing responsibility luxury. Lalique, for example, has organized the BELIEVE campaign, whose goal is to impact the substandard physiological needs – water, food, shelter and health – of one million lives by 2012. The effort will raise funds with luxury brand partners that will sell exclusively-created products that will designate a portion of each sale towards the campaign. The retail and luxury goods industry was once a world only available to the aristocrats and wealthy but this is not always the case anymore.
Today, the industry is controlled by multibillion-dollar global corporations that are oftentimes primarily focused on profits. While many in the industry are concerned about the loss of integrity in the industry, the democratization of luxury ought be applauded because it means that more people will have access to better fashion. After all, fashion is a reflection of our self-worth, personality, economic breitling superocean replica, social and political standings.
Many thanks to the HBS Retail & Luxury Goods Club for organizing the Conference and especially to its Platinum Sponsors: Lalique and Target.
What defines luxury brands? According to Guillaume Gauthereau, there are six elements to the definition of luxury.
Integrity: Luxury brands hold small values that have been carrying around for centuries. Carmen Busquets of COUTURELAB once said, “We want to sell products with a story and tradition behind them.”
Exclusivity: True luxury must be rare. The rarer and the more unique the product is, the more one will be amazed by the product.
Individuality: Do not look at others; Have your own brand.
Craftsmanship: A genuine luxury brand must stand on excellent craftsmanship. All luxury brands are owned by people, not machines.
Vivid Experiences: Luxury is about presenting a dream to the customer from the day he / she enters the stores onward. Creating an unforgettable customer service experience is vital for all luxury brands. The goal of the luxury brand is to create an experience so amazing for the customer that it will be remembered even twenty years down the line. The French shoe designer Christian Louboutin once said, “I see these men who build luxury brands to make money, and I am working in the same industry but I feel I have nothing in common with that. Luxury is the possibility to stay close to your customers.”
Constant Change: Always stay true to the brand’s integrity during constant change.