On 14 November 2017, The French Chamber of Commerce hosted the 2nd edition of the Luxury Symposium entitled “The future of luxury retail: survival of the most agile”. Here, a summary.
The luxury symposium is an interactive platform aimed to bring together the different stakeholders in luxury retail and provide an overview of the state-of-the-art of luxury, and address the issues which emerge in the fast-pace Asian environment.
SEE ALSO : This the Chinese Luxury Mall of the Future?
Master of Ceremony and host was Anson Bailey, Partner and Business Development at KPMG, who greatly managed the intense programme and entertained 180 guests.
Delphine Colson, Executive Director of The French Chamber of Commerce in Hong Kong and Macau, welcomed the audience defining the occasion as a moment to learn from disruptors, thought leaders and key industry players in order to re-imagine luxury and create a better experience for the connected consumers.
Main sponsors of the event were KPMG, Nespresso, and Curiosity China, whose co-founder, Alexis Bonhomme, engaged the audience by unpacking the complex stratification of Chinese market.
Alexis opened the symposium by reminding his peers that luxury goods account for +300b US$ of the market worldwide, with Chinese consumers responsible for roughly 32% of these sales. The symposium catches momentum to discuss the Chinese Singles’ Day, which closed with a total sales amounting to US$25 billion.
Alexis highlighted how digital is key in China, and WeChat is the door to engage millions of consumers considering that only in September 2017 data say that the number of daily Wechat logins was over 902 millions. Official accounts collect an average of 797 million monthly active followers, and mobile payment reached US$ 5.5 trillion in 2016. This provide fertile terrain for China to become the first cashless country in the world.
SEE ALSO : Luxury brands adopt Wechat Mini Programs
China leads the world in terms of digital and it is the first time the wave hitting the world comes from the East. All this is happening in China, while UK and France are still testing money transfer on Facebook.
Therefore, today, in luxury goods market, we all need to accept that speed is more important than perfection.
Alexis explained how digital is no longer e-commerce only, but it is a powerful tool to communicate and engage the audience, without necessarily complete the economic transaction online. Communication becomes more important than positioning in the market. Brands need to establish a relationship with their potential consumers,not trying to sell them products.
Gucci and LV embraced this idea while relying on teams of millennials to understand the evolution of the market, Kering created an app to give savvy millennials the opportunity to understand how their purchase contribute to save the world, Chanel is revamping its history to engage the new generations, Hermes has its own club, Ralph Lauren engages consumers on WeChat and redirects them to JD.com, and Guerlain partners with Sunrise to experiment advergaming.
All those successful examples to explain how digital is much more than e-commerce.
Alexis also highlighted the importance of data analytics to understand how to construct a targeted communication tailored to the audience, for instance a communication tailored city per city basis in China.
Burberry, pioneer in digital innovation, has already changed its digital habit, shifting from posting on WeChat once a day at 6pm in 2014, to elaborate a group-targeted schedule which spans from 11am to 12pm in 2017, including weekends when users are more willing to engage in the discovery of products.
Christophe Cambournac, CEO APAC, at IPSOS, promoted a consumer-centric approach to the new Chinese consumer.
Millennials constitute the driving force for luxury goods market, and brands need to accept that consumers no longer buy them for what they are, but for whom they can become by consuming those goods.
Millennials buy to define themselves, and they look for authenticity and heritage to be associated with. Personalization is key in targeting millennials, and digital is a way to establish relationships and trust before leading to the purchase.
Francis Belin, Global Managing Director, Asia Art, at Christies, engaged the audience with an insightful presentation about the global art world. Art market accounts for 4-6 billion every year, it is equally divided into Asia, Europe, and US in terms of markets.
Art, differently from other sectors, does not include manufacture, and lives by the aura of uniqueness or art of reproduction (Walter Benjamin, 1935).
Data show that art market is driven by a sense of belonging, which positions European and American artworks in the wishlist of Western collectors, while Asians namely Chinese, Thai, Filipinos so far, prefer Asian artworks. The concept behind those patterns is that in buying art collectors are looking for artworks resonating their own culture.
Francis also mentioned that among the top 20 most sold artists, 7 are Chinese painters, who hold the podium together with Impressionists and Picasso for example.
Chinese market is seeing an increasing number of art appreciators. Unsurprisingly, since the most stable art production comes from the Chinese dynasties and there is no doubt that Asia will soon be a major market.
For now Chinese consumers are focusing on antiquities and modern artists from 18-19th century, and almost ignoring contemporary art because too similar to Western art and way too abstract. This latter is preferred instead by Chinese collectors living overseas.
As art is about personal taste, millennials are very likely to drive sales in this a market too.
Amaury La Fonta, General Manager at Maserati South East Asia Pacific, took the audience through a journey into the automotive retail. Maserati with its heritage of design and history, is the perfect example of how an over 100 year-old business embraces digital transformation and diversity.
Amaury explained the specificity of automotive retail, low margins, which account for around 30-40%, the reliance on retail partners and dealers, the need for adaptation to high taxation and regulations given the type of product involved.
In order to embrace innovation, Maserati extended its product line targeting millennials, Levante for example. The new model, which was also the protagonist of an e-commerce experiment with Alibaba in China, its biggest market, concluded with sales of 100 cars in less than 18 seconds.
In automotive retail, in which the purchase requires a high-involvement, digital comes in as complementary with the physical store, to facilitate appointments in the showroom and target consumers who live in cities in which Maserati has not opened a showroom yet. The brand has estimated indeed that 50% of the consumers are actually not living in cities, where Maserati has a physical presence.
Digital has been used for in-store experience namely silent salesmen, car configurators, apps for store location based on the models, but also WeChat, and the development of apps for Maserati owners.
Besides, the implementation of digital solutions, Maserati has also embraced a 360 degree lifestyle branding activation, which span from installation in malls and airports like Dubai, associations with Made in Italy products such as gastronomic events with Balsamic vinegar from Modena, where the brand has its headquarters, partnerships with Italian brands like Zegna, and presence at art exhibitions and events like Art Basel.
Christophe Chaix, SVP, General Merchandise Manager at DFS Group Ltd, announced the raising star in travel retail, no longer part of airports, which still occupy 50% of the business, but Downtown Duty Free experience.
Travel retail is growing, Asia accounts for 38% of the profits, with China making 15%, and 78% of PRC luxury consumption happens. The growth is also driven by the increasing number of passports released.
Christophe released positive results, but also shared with the audience the challenges emerged in recent years: rental rates, and price and transparency among others.
Asia constitutes an important market and companies like Alibaba accounts for 8% of China GDP, which is 600 billions, twice Amazon’s profits. This made DFS realize that it needs to go digital to target the most connected consumers.
Following the steps of brands, which did it such as Gucci, LV, Malpiga, DFS aims to: accelerate and make their offer more agile, reviewing the value for price proposition, implement marketing strategies, CRM, which in China is already 5 times better, and improve in-store experience with personalization.
Besides, the key destinations for Japanese and Chinese customers, DFS has also recently opened in Cambodia, Siam Rep, and invested in training to engage the local community in the development of the department store.
Last achievement is also the opening of DFS in Venice, being the first department store in the city, where they used digital to drive the traffic towards the new retail experience.
Christophe closed his presentation with a video of the So Samaritaine, the upcoming retail space for DFS in Paris.
Julien Bence, Head of Sales & Marketing APAC, at XXII, entertained the audience with Augmented Reality, explaining how the future is not using internet to get information, but having information coming to us.
AR sets a new era for businesses such as real estate, art collections, automotive industry, in which space is always a constraint, and AR can recreate the in-store experience.
Luxury is embracing AR, jewellery and fashion are experimenting, and brands such as Prada and Gucci have also started exploring opportunities.
AR is also thought to entertain the whole family while shopping, it can make the shop alive and personalize the experience.
Yvon Le Renard, Managing Director, at Clever Age Asia Ltd focused on omnichannel, and issues of compliance and consent for data and cyber security.
The panel animated by Thibault Villet, Chairman and co-founder Mei.com, and with contributors from different types of businesses namely Gregoire Grandchamp, co-founder & CEO of Next Beauty, market place for emerging brands in cosmetics in China, Benoit Lavaud, Group Digital Director at Bluebell Group, a leading distributor for luxury and lifestyle brands in Asia, John Steere, President of MyMM, the Chinese startup, revolutionizing the brand-influencer matching game.
The new retail, which is one, either offline or online, has to focus on the key element, which is the brand DNA. O2O summarizes the new retail perfectly, now the challenge is to act on it.
Market places are key in Asia, and they need to be seen as partners in order to create successful synergies. Either you are LP (Lazada partners) or TP (Tmall partners), the objective is to drive traffic towards the brand. Also e-commerce players are stepping into offline experience with pop-up events for instance and this trend will be increasing. It is no longer a matter of offline or online DNA, or contrast between luxury brands and online platforms, the future is collaboration to improve customer experience.
The speakers chose words to encapsule their views, John left the audience with “virtual content network”, Gregoire with “seamless”, Benoit with “glocal”, and Thibault with “singularity”. This latter to replace individuality, which with millennials is taken to the next level.
For events, the more exclusive the better, but able to engage consumers and make them your first ambassadors. For influencers, choose the ones, who already like your brands, search for light minded ones, but do not forget the crowd.
The successful brand will not need to describe its brand identity and values, consumers will know already based on the values and emotions conveyed.
Laurence Ouaknine, President & co-founder Au Coeur Du Luxe, a bit provocative told the audience: forget China, focus on people, to remark the importance of training the employees.
Alexis Horowitz-Burdwick, Managing Director at Sephora Digital SEA, gave an overview of Sephora beauty tribes, and the activation of chatbots to enhance consumers’ engagement.
Simon R. Williamson, Group Retail Director at Value Retail China talked about the development and the growth of retail in China focusing on commercial complexes.
Rebecca Woo, Operation Director HK at K11 Concepts Ltd, presented the K11 concept as shopping mall with three pillars: art, nature, and people.
Retail in Asia is looking forward the 3rd edition of The French Chamber of Commerce Luxury Symposium.
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