Exterior of Holt Renfrew’s store at Square One in Mississauga
Canadian department store chain Holt Renfrew is furthering its retail footprint in the greater Toronto area with the opening of a new store at Square One in Mississauga.
The 130,000-square-foot location reflects the retailer’s new flagship model, with large spaces dedicated to personal shopping and elevated services. Part of the company’s $300 million investment in growing its bricks-and-mortar presence, the new store officially opened on July 28.
Moving in
Designed by Janson Goldstein, the store exterior is meant to resemble a jewelry box. Inside, marble flooring and grey graphite walls create a modern look.
Holt Renfrew’s Square One location features the second ever Holt Renfrew Men concept, which was originally launched in 2014 with a store at 100 Bloor Street West in Toronto. At the Mississauga store, Holt Renfrew Men has its own entrance, a dedicated personal shopping suite and touches that have the male consumer in mind, including special grey and silver packaging.
Holt Renfrew Square One store
Available for all shoppers is a master tailor, a shoeshine service, a concierge and valet parking. An in-house leather artisan will be on-hand to emboss items to add a personal touch or repair leather goods.
On the mezzanine level, more than 2,500-square-feet of space has been allocated for personal shopping. This store holds Holt Renfrew’s second Apartment, which includes roomy personal shopping suites.
Carried in-store are brands such as Prada, Max Mara, Manolo Blahnik, Stuart Weitzman, Tiffany & Co., Gucci, Valentino and Jimmy Choo. To kick off the store opening, Holt Renfrew held a live streamed fashion show.
“As we prepare to celebrate our 180th anniversary next year, I am thrilled to welcome customers to a milestone moment in our history – the unveiling of our new shop at Square One, a world class destination that reinforces Holt Renfrew’s position as Canada’s specialty luxury retailer,” said Mark Derbyshire, president of Holt Renfrew in a statement.
“As part of our dynamic growth plan, including a $300 million commitment to enhance and expand our network, Holt Renfrew Square One sets a new standard for luxury, while continuing to be Canada’s leader in bringing bespoke services, elegant style and fine craftsmanship to customers,” he said. “We are thrilled to be on the forefront of these exciting times.”
As U.S. retail players extend north into Canada, expanding its own footprint may help Holt Renfrew retain leadership in its home country.
After opening two stores in Toronto, department store chain Saks Fifth Avenue unveiled plans to open its third Canadian store in Calgary, Alberta in January 2018.
Marking the retailer’s entrance into western Canada, the new two-level store will be located in the CF Chinook Centre, a Cadillac Fairview property. Canada holds great potential for luxury brands, causing multi-brand retailers based in the United States to plan northward expansion (see story).
Similarly, Nordstrom is currently in a multi-year process of opening six Canadian locations (see story).
Casa Particular Vinales posted a photo:
Video still from Lane Crawford
Chinese department store chain Lane Crawford is giving consumers a relaxing retreat from the bustle of Hong Kong.
Within the retailer’s ifc mall flagship, a Sound Room has been set up for visitors to experience the sound’s power as a form of therapy. Increasingly, sales floor space is being used for more than just product displays, as retailers seek to create places for consumers to extend their time in-store.
“I love Lane Crawford because they are always trying new things to differentiate themselves and create a luxurious and unique experience for their customers,” said Gustavo Gomez, senior advisor at Envirosell, New York.
“They are in the business of delighting their patrons, and this new sound space does that,” he said. “This space not only provides something new that other retailers don’t have, but it is an experience in sensorial luxury. In our modern cities, noise is a 24/7 phenomenon. Whether one perceives the daily noise or not, it has an influence on our mental function – it increases stress levels.
“I don’t know if this was Lane Crawford’s intention, but some sound therapy before shopping can reduce the stress level of the shopper and possibly contribute to an increased likelihood to purchase. It has been shown that increase stress makes shoppers more price sensitive and more likely to comparison shop.
“Lane Crawford’s sound room may help reduce stress and thus reduce price sensitivity. It would be interesting to see if those that use the sound room have different purchase patterns than those that don’t.It is also a great way to sell the high-end speakers.”
Mr. Gomez is not affiliated with Lane Crawford, but agreed to comment as an industry expert.
Lane Crawford did not respond before press deadline.
Tone quality
On Lane Crawford’s Web site, an article delves into sound’s effect on the mind and body, from health to well-being.
The constant noise of traffic, including car horns and the rumble of cars, ignites primal responses to danger based on its similarities to screams and the sound of earthquakes. This causes a fight or flight effect, sending adrenaline coursing through the body many times a day and making consumers tired.
Counteracting this, music that is slower than the heartbeat, at less than 60 beats per minute, can help create a sense of calm.
Inside Lane Crawford’s ifc mall store
Accompanying the article is a soundtrack of twinkling tones embellished with chirping birds, allowing the reader to heal themselves.
Responding to the rise in sound therapy, Lane Crawford has launched a Sound Room.
Demonstrating the escape from sound, Lane Crawford filmed a silent video.
The text “Lane Crawford presents a journey of discovery through sound” appears over a series of scene-setting shots in which people crowd into subway cars and buses roam the streets of Hong Kong. Suddenly, the film zooms in on a man, who walks up to a pair of B&O Play headphones.
As he puts them over his ears, he is suddenly transported to a plant-filled room painted green. The tranquil space boasts beanbag chairs, reading material and mood lighting.
While sound waves surround his head, he can place himself on the beach or on a mountaintop.
The Sound Room will be open until Aug. 29.
“This addition once again makes Lane Crawford stand apart from the competition as an innovative retailer that cares about the whole customer and not only about the individual sale,” Mr. Gomez said. “Lane Crawford continues to be a place where one goes to indulge all the senses.
“They are going beyond the touch and feel aspect of shopping and beyond background music while you shop,” he said. “One can now pamper oneself through hearing.”
Experiential environments
Other retailers have turned what would traditionally be selling space into places to engage consumers.
British department store chain Selfridges is embracing literal retail theater with a celebration of the work of renowned playwright William Shakespeare.
In honor of the 400th anniversary of the Bard’s death, the retailer is launching a multichannel campaign, “Shakespeare Refashioned,” updating some of his most popular plays through a fashion-forward filter. Through this celebration, beginning July 4, Selfridges is able to showcase its affection for the arts while highlighting its British heritage.
Part of Selfridges’ effort includes the opening of an in-store theater, which will host a production and drama workshop classes (see story).
The luxury retail environment is undergoing critical changes, making it is essential for retailers to focus their attention on enhancing the in-store experience, according to a report by Unity Marketing.
Affluent consumers increasingly prefer to shop online, and for traditional retailers to compete they will need to offer more specialized and personalized retail experiences. Furthermore, as affluents have been shown to have less interest in the accumulation of possessions, it is important for retailers to make stores more experiential and craft a rewarding experience for consumers (see story).
“Retail has been on the experiential route for a couple of years now,” Mr. Gomez said. “From in-store cafes to treasure hunts, from lighting and sound to concerts.
“The key is to match the experience with the brand,” he said. “Many retailers are still missing that connection.
“Lane Crawford seems to match their experience with their brand. Only time will tell if shoppers see the sound experience and something they want in-store. If it succeeds, it may become a permanent area of the store.”
Image courtesy of Bloomingdale’s
Retailers looking for an upper hand on mobile this holiday season may want to boost their efforts to drive installs in September, when acquisition costs are at their lowest while install-to-purchase rates are still high, according to a new report from Liftoff.
The analysis of 44 popular shopping applications found that acquisition costs during July, November and December – traditionally popular shopping months – were as much as 70.5 percent more expensive than in September. A key takeaway is that, with mobile sales during the holidays likely to spike again this year, retailers should start early to introduce new mobile shoppers to their apps.
“The big news for retailers is that the traditional ‘crunch times’ of the year for retailers – back-to-school and Black Friday – are actually not when they should be allocating the most effort and dollars to acquiring new customers, particularly on mobile,” said Mark Ellis, CEO of Liftoff.
“The most surprising finding was around seasonality and acquisition costs in September,” he said.
The report is based on an analysis of 4.6 billion impressions and over 1.9 million app-installs between May 2015 and April 2016.
Valuable customers
Key findings include that the cost per first purchase was $87 in September, the cheapest month during the year and the month boasted the third highest install-to-purchase rate at 5.8 percent, making it the best time to acquire new mobile shoppers.
For retail marketers gearing up for the Thanksgiving weekend shopping bonanza, the findings suggest they should target September to maximize their investment. Boosting acquisition efforts in September and then focusing on re-engaging those users in November and December could be a more cost-effective approach that focusing on driving downloads during July, November and December.
On average, marketers spend $114 to acquire a user who goes on to make a purchase. Those who do make a purchase are typically valuable customers, with the average mobile purchaser making three or more transactions and spending an average of $68 per order within 5.5 months.
However, only 4.3 percent of users who install a shopping app go on to make a first purchase, contributing to the high acquisition costs.
Savvy marketers are looking at how to move beyond installs and convert users into repeat shoppers.
Gender differences
The report finds some key differences in how men and women engage with shopping apps. Women are 27 percent more likely to make a purchase in a shopping app than men even though retailers spend nearly the same amount acquiring each.
Additionally, women take just 4.5 days after an install to make their purchase compared to 6.8 days for men.
Overall, getting to the purchasing stage after installing a shopping app takes 5.5 days with the second purchase occurring 7.5 days later.
Spending amounts are similar between genders, with men spending an average of $66 per purchase compared to $68 for women.
While acquisition costs are more expensive during back-to-school and holiday shopping periods, conversion rates and overall spending still make the costs worthwhile and provide a large return on investment.
With this in mind, Liftoff recommends that retailers continue their efforts during these periods while also focusing on September to maximize their profits.
“Retailers must consider how it long it takes the average user to make their first purchase after install,” Mr. Ellis said. “Mobile users who download the app and complete a first purchase are far more likely to become repeat shoppers.
“This shows that retailers need to re-engage with these users who have made their first purchase, and take these numbers into consideration in order to re-engage users at the most valuable time,” he said. “If retailers proceed with this in mind, they’ll see higher conversion rates and mobile revenue overall.”
Porsche 2017 Panamera
Luxury automakers vastly outperform mass-market competitors in measurements of owner attachment and excitement, according to a new study by J.D. Power.
For the 12th consecutive year, Porsche’s score of 877 out of 1,000 led all brands in the United States Automotive Performance, Execution and Layout (APEAL) Study, with BMW, Jaguar, Mercedes-Benz, Land Rover, Lexus, Lincoln and Audi following. These companies’ driver-assist technologies accounted for a large portion of the gap and help instigate recommendations to friends and family.
“Consumer’s experience with today’s features like lane departure warning, low speed collision avoidance, automatic braking and other assist technologies are helping to pave the way to more fully autonomous driving,” said Renee Stephens, vice president of U.S. auto quality at J.D. Power. “Over 80 percent of consumers want technologies that assist their driving, but still only 14 percent express interest in having their next vehicle be fully autonomous (at a market price of $3000).
“As consumers utilize and begin to trust the semi-autonomous features, that will build more trust and confidence in giving up control to fully autonomous driving,” she said. “We’re not there yet, but on the right road.”
The APEAL Study asks consumers to rate vehicles in 90 attributes across 10 categories after 90 days of ownership. Those categories are exterior, seats, interior, driving dynamics, storage and space, engine/transmission, fuel economy, visibility and safety, heating/ventilation/air-conditioning and audio/communication/entertainment/navigation.
Driver assistance
In otherwise similar vehicles, those that have blind spot monitoring, low speed collision avoidance and other similar safety and assist features significantly outscore their counterparts. Overall, scores are 41 percent higher for vehicles with blind spot monitoring and 30 percent higher for collision avoidance.
Jaguar Land Rover Roadwork Assist
“Technology-enabled safety features help drivers feel more comfortable and confident while driving their vehicles,” said Renee Stephens, vice president of U.S. automotive quality at J.D. Power, in a statement. “These features are also ‘gateway technologies’ to autonomous driving capabilities, so the continued level of consumer interest in them will be a critical metric to watch as the industry evolves toward including more automation in new vehicles.”
Fuel economy, audio/communication/entertainment/navigation and safety gained 14, 6 and 4 points respectively as the categories with the largest growth.
On the reverse end of the spectrum, usefulness of and ease of use for navigational system were two of the lowest scoring attributes, even as the category grew overall. Engine/transmission lost a point compared to the previous year due to 8- and 9-speed transmissions resulting in a decline in smoothness when shifting.
Overall, automakers continue to show signs of continual improvement. Over the past 10 years, newly launched vehicles have scored 29 points higher than their segment average, with the same remaining true this year.
Porsche 718 Cayman
While Porsche’s 877 score is a sizable 18 points ahead of second-place BMW, the latter brand took home the most segment award among premium brands, with three. The BMW 2 Series was the highest scoring small premium car, while the X1 and X6 won for small and midsize premium SUV, respectively.
BMW also had the highest scoring vehicle overall in the 7 Series, but there were not enough large premium cars for J.D. Power to award the segment.
The full results, including segment rankings and scores, are available here.
The APEAL score translates almost directly into recommendations. Those whose vehicles score at least the 801 industry average and also do not have defects or problems within 90 days of ownership “definitely will” recommend the vehicle to others at a 90 percent clip.
BMW 7 Series
For those with scores of 800 or lower, that rate plummets to 64 percent. However, regardless of score, those who experience a problem with the vehicle have advocacy rates of just 49 percent.
“Typically, luxury brands score higher in the APEAL study than non-premium brands,” Ms. Stephens said. “However, that gap has narrowed over time.
“In the past, luxury models had more upscale features like leather, wood as well as option content,” she said. “They still do to an extent, but less of an extent than in years past.
“Now, you can find driver assist features like lane departure warning, blind spot monitoring and low speed collision avoidance on models in non-premium brands and various price points.”
More APEALing
The premium brand average of 844 compared to non-premium brands’ 794 suggests that advocacy is far more likely for premium brands, and that consumers agree they are getting a better product.
However, while the significantly higher APEAL scores for premium and luxury vehicles will aid with advocacy in theory, non-premium brand automobiles have higher-quality new vehicles than their premium counterparts.
Premium brands averaged 108 problems per 100 vehicles within the first three months of ownership and non-premium brands averaged 104. Initial quality is correlated with repeat business, suggesting that luxury brands should get back to basics and improve quality control before proceeding to make sales (see story).
While Porsche regularly performs well in these studies, Tesla, not included in the APEAL Study, is also finding a place in consumers’ hearts.
U.S. electronic automaker Tesla Motors’ Model S is the ideal luxury passenger vehicle, according to research and consulting firm AutoPacific, Inc.
Owing to its focus on technology, Tesla also unseated Porsche as the top brand to end its three-year reign. Tesla’s popularity points to a shift in concerns for today’s drivers and further cements its growing reputation among luxury consumers as they adapt environmental and technologically minded values (see story).
“Launch performance is critical – designing and delivering vehicles with high appeal that lasts over time,” Ms. Stephens said. “Some manufacturers are launching with high appeal as well as low problems, with improved performance compared to predecessor models.
“Consumers are increasingly describing the quality and the appeal of their vehicle in terms of their technology experience – that will only increase over time as increased capability is added to vehicles,” she said. “Having intuitive controls that respond in a way that drivers are comfortable with will garner usage and trust over time.”
Representatives from Chanel, Carolina Herrera, Cartier, Chanel and Luxury Daily at a Luxury Education Foundation panel July 21 with New York’s Columbia Business School on retail internships
NEW YORK – Senior executives from Cartier, Carolina Herrera and Chanel as well as a former intern at Van Cleef & Arpels stressed the importance of retail internships at a Luxury Education Foundation luncheon panel July 21 titled “From Retail Internships to the C-Suite” and addressed to graduating MBAs from Columbia Business School.
The lineup comprised Mercedes Abramo, president/CEO of Cartier North America; Francois Kress, president/CEO of Carolina Herrera North America; Lauren Aviram, associate director for client engagement and service at Chanel; and Sylvette Sein, former retail CRM intern at Van Cleef & Arpels. LEF president and Columbia luxury lecturer Ketty Maisonrouge, as host, welcome all, and Mickey Alam Khan, editor in chief of event sponsor Luxury Daily, moderated. Excerpts from the conversation:
Cartier’s Mercedes Abramo: I’ve had direct experience in retail and am an endorser of retail internships. Retail continues to change dramatically and change more rapidly than ever before. At Cartier, we ask ourselves, “How do we touch our clients at every touch point at a very high level?” We have to think from the client-in.
We have had an ecommerce subsidiary for five years. We see people trying on in the boutique and buying online. Desktop-to-mobile has grown leaps and bounds from last year.
Carolina Herrera’s Francois Kress: We do not have ecommerce yet at Carolina Herrera. The most important thing is to facilitate access to the product. Previously, you didn’t have access through digital research channels as we have today. Now, you have to give a stronger reason for people to come into the stores.
The shift to online has been drastic. Clients are shopping 50 percent online now. That was unthinkable a few years ago. You can expect some [retail store] closures going forward.
On internships
Cartier’s Ms. Abramo: Luxury internships give you knowledge of inside workings of the company. We are requiring some existing teams to spend one to two years in retail. We want to let people know that retail is a career and a métier at Cartier. Lots of our leadership is expected to spend time in the retail store.
Carolina Herrera’s Mr. Kress: At Carolina Herrera, we offer internships. We do not have a specific MBA internship.
How do we keep being relevant with a luxury product, which requires a slower selling ceremony? We need people who understand all channels of distribution.
From left to right: Lauren Aviram, Francois Kress, Mercedes Abramo, Sylvette Sein and Mickey Alam Khan
On what should people expect to learn when exposed to a retail internship
Cartier’s Ms. Abramo: I’m a big believer in longer internships, for about six to nine months after you graduate. We have interns who also move around and spend some time in retail, time in corporate and other areas, giving them a 360-degree perspective.
If it’s for a summer internship, we hope it opens your eyes to the retail industry. You see what clients are asking for and are able to give valuable feedback to our team about product decisions, what’s working and what’s not.
Chanel’s Lauren Aviram: My path was a little different because I started in digital and fashion marketing and then went to retail. I wanted to immerse myself in a store and see how it works. I thought to myself, “I’m seeing things I was pretty much blind to before.”
Van Cleef & Arpels’ Sylvette Sein: During my internship at Van Cleef, I spent one day per week in the store. You see first-hand the process.
On a concrete example of one quality or lesson these executives have learned from their retail internship
Cartier’s Ms. Abramo: I learned a lesson early on that I think about every day: “How to manage people” and “How to interact with people.” It is the same whether you are working with a client at the retail level or people you work with every day.
Luxury Daily’s Mickey Alam Khan: Yes, you have to manage up, down and sideways.
Carolina Herrera’s Mr. Kress: Salespeople are there to sell products to people that don’t really need them and don’t really want to pay such a high price. You have to keep people excited about their jobs, too, and get them to like you. One of my best experiences was being confined to a store.
Chanel’s Ms. Aviram: There is a huge range of skill sets in a store. Everyone’s role is important to make things run. It was an eye-opening experience for me. People management is important. How much time is spent managing people, coaching and motivating?
LEF members attending a panel session
On given the pace of change in the retail world, influenced by digital, what are the skills of the future you require?
Chanel’s Ms. Aviram: For skills, it’s the ability to connect the dots. To understand how you can convey these big-picture ideas to the stores in a meaningful way. Also communication: there is so much reliance on communication at the store level. I think it’s also important to have an open-mind, an upbeat attitude and humility is essential.
Carolina Herrera’s Mr. Kress: We are appealing to beauty and luxury – it’s not a need. There needs to be a level of passion, for beauty and well-made craftsmanship. Our products are not changing. We are making them the same way we did 100 years ago.
Cartier’s Ms. Abramo: I think you need critical thinking to make assessments and recommendations. And you need a balance of heritage and risk-taking. We need to balance a 170-year-old history with stretching the organization to move forward. I think you also need communication skills, oral, written.
On the path from A to C to become the head of a global brand?
Cartier’s Ms. Abramo: Learning about everything. Having a direct responsibility for a P&L. You need that. It can help to also have exposure in marketing, finance and communications. At the end of the day, we are a business and making money is the goal. You have to have a passion for what you are selling to inspire others.
Carolina Herrera’s Mr. Kress: If I were cynical, “Right place at right time.” I think you need to show gradually success stories. Before someone gives you a P&L and you can call your own shots, you need to build gradually. Today, it’s more about building from inside. It’s no longer about bringing someone in from another industry.
On how technology and analytics have changed the way the panelists view talent
Cartier’s Ms. Abramo: We are wrestling with “Where does technology fit in the Cartier retail store?” Technology can also play a part behind the scenes, where the customer doesn’t see it, but it makes a more seamless experience for the client and reduces the waiting time for the customer.
Luxury Daily’s Mr. Alam Khan told about his good experience when taking his watch into the Cartier boutique to be fixed and receiving a text message saying “Your watch is ready.” He liked that and said “Just because you are a luxury brand doesn’t mean you can’t use SMS.”
Cartier’s Ms. Abramo: Yes, we are giving customers that choice. They can opt in and most customers do.
From left to right: Lauren Aviram, Francois Kress, Mercedes Abramo, Sylvette Sein and Mickey Alam Khan
On whether ecommerce is more important for marketing than sales as an image issue
Cartier’s Ms. Abramo: We started ecommerce as both a communications platform and a complementary option for client service, to reach more clients. What is the threshold? We’ve tested and we find it depends upon geography and culture. If there isn’t a Cartier boutique nearby, they are more likely to buy online. For culture, it depends how developed the ecommerce culture is in that country.
There is also the counterfeit and resale side of the industry. But, the problem is if you are not there, people don’t realize if you are an authorized retailer.
On the risk of losing exclusivity
Cartier’s Ms. Abramo: It’s a balance because the definition of exclusivity is changing. It’s a fine line between what we think the customer wants and what the client is telling us they want.
Luxury Daily’s Mr. Alam Khan: The language of this next generation is digital.
On price calibration among global markets
Carolina Herrera’s Mr. Kress: There is a differential you have to maintain. But with global shipping, you have to keep it within reason.
On whether price is the only factor that plays a role in determining which pieces Cartier sells online
Cartier’s Ms. Abramo: We think about “Can we tell that story well online?” Do we have the narrative?
On South Africa and Africa being a target of luxury brands
LEF’s Ms. Maisonrouge: South Africa is a huge market for startups. And they are doing it better than the Chinese because they are staying true to their heritage.
LEF PR representative Sarah Gargano: Recent article by Bill Gates on LinkedIn said that Africa points to incredible potential because it is the world’s youngest continent.
On the one piece of advice the panelists would give to students trying to get into luxury
Chanel’s Ms. Aviram: Having humility, being open-minded and willing to try a new experience. As an MBA, we sometimes get a bad rap. Demonstrate you are willing to learn. Once people realize how valuable you are, it will be smoother sailing.”
Carolina Herrera’s Mr. Kress: Love beautiful things. If you are not willing to get your hands dirty, go launch an app or into finance.
Cartier’s Ms. Abramo: Be open to new things. As an MBA, I didn’t want to be thought of as above it and you have to get your hands dirty, so I was operational and open and closed the stores among other daily tasks. I fell in love with retail and I stuck with it. Also, I think someone has to have strategic and critical thinking skills and not be afraid to work.
Van Cleef & Arpels’ Ms. Sein: I’m going to shamelessly plug Ketty’s class. I’ve taken both and learned so much. Now, going to Tiffany, I’m headed to spend six months in retail.
Rolls-Royce in Porto Cervo, Sardinia, Italy
British automaker Rolls-Royce Motor Cars took to its Summer Studio in Sardinia, Italy to unveil two of its latest bespoke models.
Rolls-Royce’s Summer Studio is located in the seaside port of Porto Cervo on the island of Sardinia, a popular holiday destination among the elite. The bespoke models, a Dawn and a Wraith, were inspired by Porto Cervo and its marina along the Costa Smeralda.
By the sea
The theme for the duo of bespoke Rolls-Royce cars is “Dusk until Dawn.”
Rolls-Royce selected the Wraith model to represent dusk and used a two-tone silver exterior paint to reflect the dimming of daylight as dusk approaches. A purple, meant to evoke twilight, was used to create an interior mood for the bespoke Wraith through violet ostrich leather upholstery and additional elements of blue, slate and black.
Bespoke Rolls-Royce Wraith in Porto Cervo, Sardinia
For the Rolls-Royce Dawn, the color palette is much different. Instead of evoking day break, the Dawn has a nautical theme.
The Dawn is painted in a vivid emerald green calling to mind the color of the Porto Cervo seascape and includes elements of seashells. To coordinate with the exterior, the interior of the Dawn has seashell and green leather interior along with accents of teak wood, often seen in boats, to continue the nautical theme.
Keeping with the nautical influences, the Dawn also has emeralds and mother of pearl set into white gold to create the Porto Cervo emblem, which has been placed above the glove box.
Bespoke Rolls-Royce Dawn in Porto Cervo, Sardinia
During the creative meetings for the Dusk until Dawn bespoke series, London-based tattoo artist Mo Coppoletta sat in and was inspired by Rolls-Royce’s work. Mr. Coppoletta was invited to design two leather Rolls-Royce headrests with the resulting tattoo works being presented alongside the models at the Summer Studio.
“Patrons of our marquee delight in inhabiting some of the world’s most beautiful enclaves,” said Isobel Dando, general manager, future retail of Rolls-Royce, in a statement. “Sardinia, and its stunning Costa Smeralda, serves as the perfect backdrop for Rolls-Royce to host these patrons of true luxury in an intimate setting: The Rolls-Royce Summer Studio.
“The stunning bespoke Wraith and emerald embellished Dawn, inspired by the sights and colors of Porto Cervo, have been commissioned in the spirit that so many of our customers delight in,” she said.
Rolls-Royce’s emerald embellished Dawn
Now in its third year, Rolls-Royce’s Summer Studio will be open through September 2016.
The Summer Studio is intended to serve as a relaxing and fun location where consumers can enjoy cocktails with friends after leaving their yachts. The atmosphere is casual to complement the seaside aesthetic of Porto Cervo.
Consumers who are interested may request to view several Rolls-Royce cars on display or take them on a test drive around the winding roads of Costa Smeralda. Consumers may even have Rolls-Royce drive them to a social function or event, mimicking the way the car would be used if purchased (see story).
Image courtesy of Amazon Fashion
While Amazon continues to grow, its penetration into the most affluent households has decreased over the past year, according to new research from the Shullman Research Center.
Luxury brands continue to ostracize the retailer, worried that its counterfeit goods and tendency to discount would hurt the brand too much to justify the revenue increases. Nevertheless, affluent classes’ growing affinity for the marketplace provides a provocative counterpoint arguing for its eventual integration into the luxury industry.
“[The relative threat of counterfeit goods versus selling merchandise on Amazon] really depends upon the clout of the luxury brand and the deal it can negotiate with Amazon,” said Bob Shullman, founder and CEO of the Shullman Research Center. “My current take is that Amazon really wants to sell merchandise with high dollar margins (luxury type items) and then take their percentage cut of the sales price.
“But for the brands to sign up with Amazon, there can be no unilateral discounting by Amazon,” he said. “It’s got to be a relationship with the brand having ultimate control.
“Plus there needs to be an agreement on what other merchandise gets shown next to the luxury brand’s merchandise. Last but not least, Amazon has to address the counterfeiting issue.”
“Is Amazon Coming Into Its Prime?” data was gathered through a survey of 1,690 consumers and 1,078 interviews of consumers across four different income levels in roughly equal numbers.
Customer support
Compared to last year’s study, Amazon shopping has decreased among consumers in the $250,000-$499,999 bracket and the $500,000+ bracket. Conversely, the percentage of consumers who shop at Amazon at least once a month grew among all income brackets and was highest among higher income households.
Similarly, Amazon Prime enrollment increased, to 41 percent of Amazon customers from 32 percent last August, with growth most apparent in the $75,000-$249,999 and $250,000-$499,999 brackets. Notably, the number has dropped among the top 1 percent of consumers – those earning at least $500,000 – as this segment appears to have waned off Amazon since last August.
Amazon beauty store
The drop in Amazon usage is likely due to service. Last August 83 percent of these consumers said Amazon is better than other places they shop, compared to only 64 percent of all Amazon customers who felt that way. This year shows that Amazon satisfaction has increased, with 73 percent agreeing now, but agreement among the top 1 percent has dropped 10 percentage points.
While Amazon’s intent to enter the luxury market has long been the elephant in the room, the changes in the sentiment of the highest earners – and the most frequent luxury purchasers – suggests that service remains a point of differentiation for luxury brands. If brands focus on providing excellent service in ways that Amazon cannot, they can prevent or prolong the giant’s entry into luxury.
While Amazon usage among the top 1 percent might be falling, the numbers are still high, and are growing among the next two income brackets. Consumers in those brackets are just as likely to have purchased a personal luxury good in the past year, with the most affluent differentiated primarily because of increased spend on fine wine/beer/spirits, cruises/vacations and vehicles.
Amazon Prime benefits
The data therefore shows that brands would likely see good sales returns from selling on Amazon. However, the damage to the brand reputation in being sold alongside counterfeit goods, being listed alongside non-luxury products and in the possibility of Amazon discounting at its own discretion has led brands to believe that avoiding the platform altogether is the safer move.
“It really depends on the brand and how important their customers and prospects feel about the issue of ‘exclusivity,’” Mr. Shullman said. “Right now, for the really high end brands, they don’t want their very high quality, expensive shirts to be shown next to $16 mainstream shirt.
“I believe we all understand that issue and Amazon has to deal with it,” he said.
Additionally, with luxury-specific marketplaces such as Yoox and Net-A-Porter providing these security and comfort checks, brands likely feel that their highest spenders already have an ecommerce marketplace offering luxury goods.
Counterfeit controversy
Because Amazon is a marketplace, it holds no direct responsibility for consumers duped by counterfeit goods, and even gets a cut of the sale.
As a result, Amazon’s counterfeit problem is only getting worse, as the company’s efforts to curtail fakes fall short.
Tightly distributed luxury brands tend to avoid Amazon as a selling platform to keep their positioning in tact, but many end up having a presence on the marketplace whether they want to or not, as counterfeiters sell goods using their name. While Amazon does have a counterfeit policy, the general feeling is that the company could be doing more to protect brands and consumers from illegal copycats (see story).
While there may not a single silver bullet solution to end counterfeiting, technological methods may be able to curb the practice.
In a white paper prepared by the Coalition Against Illicit Trade (CAIT) titled “The Role of New Technologies in Combatting Counterfeiting and Illicit Trade,” the business alliance seeks to raise awareness for the technology solutions available to fight the knock-off market. In an environment of rapid digitalization, these solutions will benefit not only brand owners and service providers, but also governments that are plagued by illicit tax-free trade and consumers (see story).
“In my estimation, it is up to Amazon to make the first move,” Mr. Shullman said. “If it really want to be in the luxury world, I believe it needs to create a separate luxury site that looks like a luxury brand’s or luxury retailer’s site (a la Net A Porter, etc.).
“Commingling high-end luxury goods with mainstream items will not work for virtually all the luxury brands,” he said. “Then Amazon needs to work out deals with the luxury brands that honor their concerns and guarantees Amazon will follow through on the deals.
“Feasible? In my estimation, it is all up to Amazon and its desire and plans to service the luxury brands and Amazon’s many millions of consumers (upscale and mainstream) who currently buy luxuries through other channels.”
The Fendirumi
Italian fashion house Fendi’s furry Fendirumi mascots are serving as the inspiration for a whimsical pop-up at British department store Harrods.
Starting Aug. 4, consumers will be able to step inside a Fendirumi-themed world, complete with an LED screen playing a specially created cartoon and a curated selection of merchandise. Having become celebrities among Fendi’s followers, the Fendirumi will be making an appearance at the store, allowing fans to interact with the characters.
Playful point of sale
Inspired by the Japanese kigurumi, or costumed characters, the 6-foot-tall Fendirumi made their first public appearance in Tokyo at Fendi’s Ginza pop-up store opening event in November.
The pink Piro-chan was inspired by Fendi’s Qutweet charm, with yellow eyes and a tiny silver beak. Bug-kun more closely resembles the Bag Bugs, with a yellow Mohawk and the Fendi double F logo on his chest in yellow fur.
From there, the duo with big personalities traveled to Milan to document Fendi’s runway show in February from the front row (see story).
On a new adventure in London, the Fendirumi will take over part of Harrods. On the walls of the pop-up will be hundreds of glass jars containing rotating mini Fendirumi.
A day with Fendirumi!
For the pop-up, Harrods has also created a number of exclusives, including ready-to-wear, croco-steel handbags and pieces from the Mini Dotcom Click and Strap You collections inspired by the Fendirumi. Additionally, consumers can get their hands on Fendirumi bag charms in mink and kidassia fur, and two new Bag Bugs, Har and Rod, will be available in limited quantities.
Following Fendi’s recent merchandising strategy for its pop-ups, products will be displayed in a pink Ape car, a three-wheeled Italian truck.
Similar to what they did in Milan, Piro-chan and Bug-kun will be exploring London’s tourist sites in the week leading up to the pop-up opening.
Jaguar Land Rover Roadwork Assist technology
British automaker Jaguar Land Rover is responding to changes in the automotive sector by furthering its technology research operations.
Jaguar Land Rover’s Portland, OR-based research center is expanding engineering facilities and workforce and welcoming three new start-ups into its Tech Incubator program. The company is increasingly investing in technology to stay ahead as the industry braces for major changes.
“While design and drivability of our vehicles are still crucial to our customers, their expectations of the driving experience itself are being set by their consumer devices,” said Rupert Poole, Portland senior collaboration manager at Jaguar Land Rover. “Working with startups provides us access to diverse new technologies and will help us continue building better experiences for drivers and passengers.”
Influencing infotainment
A new, 20,000-square-foot vehicle center is planned to open within the Portland location later this year. The center will serve as a testing and development ground for “next generation in-vehicle experiences.”
Accordingly, Jaguar has acquired three start-ups for its Tech Incubator program, opened in January to encourage and cultivate innovation in connected car and infotainment system technologies.
Jaguar XE infotainment system
The first of these start-ups, AVE, aims to optimize content display and distribution on in-vehicle infotainment. With autonomous vehicles approaching and changes to vehicular seating arrangements a likely corollary, infotainment displays will need to keep up as the vehicle transforms into an entertainment hub for long journeys.
The second, Validated, is live in Seattle, Portland and Los Angeles. It allows businesses to buy customers a ride or pay for parking, improving customer loyalty and increasing spend as well.
Lyfeboat, the last in this round of acquisitions, provides logistical and online booking tools for auto service centers to streamline communication with customers.
“The latest start-ups to join our Tech Incubator, AVE, Validated and Lyfeboat share our spirit of innovation and we’re excited to work with them to explore ways of enhancing the driver experience for our customers by building solutions that they will use, enjoy and benefit from,” Mr. Poole said.
To manage the growing space, Rupert Poole has been appointed senior collaborations manager for future technology and will run the technology centers in Portland and manage Tech Incubator collaborations. Mr. Poole has been with Jaguar Land Rover for 14 years and was previously head of future infotainment.
Jaguar F-Pace
“With the rapid growth and evolution of future technology, it’s an incredibly exciting time to be leading Jaguar Land Rover’s Technology Center and Incubator program in Portland,” Mr. Poole said in a statement. “The latest start-ups to join our Tech Incubator, AVE, Validated and Lyfeboat, share our spirit of innovation and we’re excited to work with them to explore ways of enhancing the driver experience for our customers.”
Jaguar Land Rover will also hire 30 new developers and engineers to work in the expanded center, a sizable increase from the current 80 employees. The sizable expansion within one year of opening is testament to the success it has had so far.
Land Rover Defender
The investments reinforce the company’s dedication to standing out and getting ahead of the field as automakers scramble to establish themselves as technological frontrunners via infotainment and other technologies in the short-term. Continued investment in tech will also help introduce safer, more efficient and more advanced autonomous and connected vehicles in the longer term.
Tech trepidation
Technology and vehicles have always been in close proximity, but with automobiles on the verge of undergoing such radical shifts signaled by connected and autonomous cars, Jaguar Land Rover has been making ambitious, highly visible investments into technology.
Jaguar Land Rover is beginning real-world testing for autonomous vehicles.
Over the next four years, the automaker plans to have a fleet of more than 100 research automobiles for development and testing of Connected and Autonomous Vehicle technologies. The announcement came immediately after the company detailed plans for all-terrain autonomous driving (see story), signaling the urgency of the goal (see story).
As automakers work toward something of a holy grail, they would be wise not to shirk on security.
Nearly all consumers would be less likely to stay loyal to an automaker if it is hacked, according to the 2016 KPMG Consumer Loss Barometer study.
With connected and autonomous vehicles penetrating public consciousness, fear of cyber attacks not on automakers’ data but on vehicles themselves has been the corollary. Despite public worries and dangers, however, automakers are not sufficiently investing in cyber security (see story).
“Jaguar Land Rover is actively embracing the connected car,” Mr. Poole said. “Today we have over 80 developers in Portland working with connected technologies such as InControl Remote and InControl Touch Pro infotainment systems.
“The Incubator companies we have selected have a connected element, and we are working with them to explore fantastic connected experiences for our customers,” he said.
Ferrari California T
Italian automaker Ferrari has developed a “Next Generation” platform to assist the development of variations on several of its flagship models.
Continuing a decade-long partnership with Michigan-based Altair, Ferrari’s platform accounts for flexibility of packaging design and manufacturing processes. With many ideas feeding into the eventual design of a concept vehicle, this platform was developed to better handle the evolving nature of the process.
Concept cars
Working with Ferrari’s in-house team, Altair’s specialized designers and engineers developed the Next Generation platform.
The resulting software includes design optimization methods such as Altair’s C123, a three-step concept development process which allows for faster simulation of design changes. This leverages Hyperworks simulation technologies.
Next Generation is 15 percent lighter than other simulation technologies, and it has a 20 percent improvement in reporting information such as crash and noise, vibration and harshness.
Ferrari GTC4Lusso
Maximilian Szwaj, Ferrari’s director of innovation and BIW Development, said in a statement, “It was important for Altair to supply both CAD and CAE expertise to facilitate tight integration particularly when packaging ideas and manufacturing process are so fluid.
“The speed of the optimization processes deployed were able to control the weight whilst achieving the demanding structural targets as new packaging changes were introduced,” he said. “For Ferrari, the Next Generation platform is a significant engineering achievement and a symbol of our successful collaboration with Altair.”
As automotive brands seek to get ahead of their competition through innovation, a number of digital incubators and partnerships are beginning.
For instance, German automaker Porsche is ensuring its development as the leading provider of digital mobility solutions with a new hire and subsidiary company.
Porsche’s supervisory board has approved the founding of Porsche Digital GmnH to further enhance the automaker’s digital mobility solutions in its sector. Leading the endeavor will be Thilo Koslowski as managing director, who joined Porsche from Gartner Inc., a United States IT consulting firm (see story).
