Paris hosts symposium on the luxury industry’s new challenges
On May 5, Paris hosted the second edition of the Paris-New York Luxury Capitals symposium, first held in New York in 2016. The event focused on the luxury industry's evolution in the two cities, with experts discussing the technological and experiential challenges facing luxury brands.
"The luxury industry is confronted with new consumers, new attitudes, new experiences, new identities and a new pace. The key is to be able to rise to these challenges while preserving the luxury industry's own DNA," said Elsa Berry, President of FACC-NY (New York's French-American Chamber of Commerce) and founder of Vendôme Global Partners, in her keynote speech.
Focusing the symposium on the cities of New York and Paris was not a random choice, since they are respectively worth $27 billion and $13 billion for the luxury goods industry. "Paris is worth more than the entire Middle East and Russia together, and New York more than the whole of China," added Jonathan Siboni, CEO of Luxurynsight. "These two cities have an unparalleled financial and inspirational influence, and they embody the challenges faced by the luxury industry."
But the sector, in both cities, is heavily influenced by the changes affecting the market. "The Macron bill [on Sunday store openings] will totally change the face of luxury goods retailing in Paris," said Véronique Nocquet, in charge of France for commercial real estate services provider JLL. In Paris, luxury goods retailing is extending to new neighbourhoods, around the Opéra, on Boulevard Haussmann and boulevard des Capucines, and to new formats, such as the Beaugrenelle combined department store/shopping mall.
"In New York, luxury shopping is still concentrated on Madison Avenue and in Soho. And though everyone keeps talking about Fifth Avenue, we must acknowledge that it has probably ceased to be a byword for luxury retail," said Michael Hirschfeld, head of US retail services for JLL. "All brands are keen on unearthing successful new locations. But it is first come, first served, and latecomers will have to settle for leftovers."
"The customer experience is becoming in my opinion a crucial element in the choice of new locations," said Marc Durie, in charge of men's footwear at Christian Louboutin. According to him, temporary stores are now highly popular as the best way of testing new [retail] concepts, but they must at the same time adapt to their locations, since a [positive] customer experience is becoming the key new objective. "It is perhaps time for brands to change their narrative and adopt a different approach," said Luca Solca, Director of Luxury Good Research at Exane BNP Paribas. "In the last few years, brands have concentrated their efforts on opening new stores, but now the challenge is different."
Shifting from product focus to client focus
This sentiment was echoed by L’Oréal's Senior VP for Global Open Innovation & Digital Services, Esohe Omoruyi. "The main issue with which luxury goods brands are struggling nowadays is how to take customer service to the next level. Simply buying is no longer sufficient. Customers want to feel theirs is a luxury experience.”
"The luxury goods sector's main focus was traditionally the product, but with the data [now available] it must become the customer," said Mats Carduner, CEO of data specialist Fifty-Five. Carduner identified three crucial challenges: analysing the performance of different sales channels; creating a unique perspective on the customer, by merging the information on the latter's purchases and purchase research, both on and offline; and acquiring a better understanding of the communication tools that will maximise return on investment. "We can even imagine that one day brands may swap data among themselves," said the CEO.
"If you go to Nespresso on the Champs-Elysées in Paris, you realise it is the place where you can enjoy the best coffee experience. This experience phenomenon is something that affects the entire industry," said Chris Colyer, Vice-President Consumer Goods & Retail at Dassault Systèmes.
Other types of technology have been adopted more discreetly in the luxury sector. "Many luxury labels do not advertise the fact that they work with 3D printers, noted Catherine Gorgé, Director of 3D printing services provider Prodways. This printing method, initially a little awkward, is now routinely used by luxury labels. It allows for customisation, in terms of shapes, of printing on items and for the creation of limited-edition products. Some products are ready-made, but in the luxury industry there is always scope for handmade items," she concluded.
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