Getting your message across to customers emerged as the big issue at an event discussing Drapers’ Luxury Report.
Communicating a brand’s story is critical when selling luxury fashion to the savvy high-end customer. That was one of the key themes to emerge from a Drapers roundtable on October 15, in which luxury retailers came together to discuss the findings of Drapers’ Luxury Report 2013.
The event was held at Claridge’s hotel in London with representatives from luxury retailers such as department store Fenwick, independent retailer Browns, Vivienne Westwood, Mr Porter and Rupert Sanderson in attendance.
Drapers’ survey of 2,000 consumers found that only 38% think provenance is an important factor in deciding whether to purchase a luxury product. However, 60% of those polled would be more willing to buy a product if it was made in the UK. Guy Salter, deputy chairman of luxury trade body Walpole, highlighted Mulberry as a brand that is tapping into its British provenance. The company has invested considerably in its Somerset manufacturing facilities as part of a move to make the whole offer “more upmarket” and give its brand a “coherent story”, said Salter.
However, not everyone agreed, with some asserting that for the most established luxury brands just their name is enough. Simon Burstein, chief executive of London designer indie Browns, said: “If you look at where some
of the big luxury brands are manufacturing, you’ll see that the hard truth is that the consumer doesn’t care. The big brands are so strong and their imagery is so powerful that in the end the ‘made in’ is secondary.”
Sheila King, group leasing director at Hammerson, said: “Luxury brands are placing the emphasis on their unique story and heritage as well as where the product is manufactured.”
Online is an important space in which to present a luxury message - whether it is about highlighting brand provenance or heritage. Luxury consumers are active online; the Drapers’ survey found that 51% of shoppers research and buy online, while as many as 49% at least begin their research online before completing in store.
Nishma Robb, chief client officer at digital marketing agency iProspect, said: “People are seeking out new brands and new places to shop and a lot of that research is happening online, whether that is through things they are reading, or the things their friends are talking about on social networks.” The luxury report survey showed that 25% of consumers engage with luxury brands on social media sites. This figure rises to 39% for 18 to 25-year-olds, and to 36% for 26 to 35-year-olds.
Given how critical online is, luxury tailoring brand Duchamp is investing heavily in this area, using photography and “beautiful films” to illustrate the brand’s DNA. Chief executive Marc Psarolis explained: “Our social side is really key to communicating the values of the brand and telling people about the business.”
Burstein added that online content can also help entice shoppers to come back. “The customer has a fantastic appetite for authentic content, and in the digital world if you can provide that you will have more of a chance of retaining that customer.”
However, the luxury sector has been known for its reluctance to adapt to and adopt multichannel retailing. But that has all changed now, and the sector is embracing the digital revolution. Psarolis said that for a small brand such as Duchamp, “online is its flagship store”. As a result, the business has to get the customer service elements such as fulfilment absolutely right.
As iProspect head of client experience Nick Drabicky pointed out: “Five to 10 years ago it was all about the [visual]representation of the brand online. The problem is that it can be the most lovely [product] picture you’ve ever seen but if [the mobile site or app] doesn’t work, you’ve lost the customer instantly. The convergence of form and function is where luxury brands are getting it right.”
Communicating the right brand message - be that based around quality, cut, fit, provenance, or heritage - is essential in luxury fashion. Retailers and brands that can do this clearly and consistently will be the ones that thrive in an ultra-competitive market.
Attendees at the breakfast meeting raised issues about the importance of pricing, with many agreeing that in luxury the old adage “you get what you pay for” is true. In the sector more expensive products often sell better, but if consumers are to trust that the price guarantees them a high-class product, the brand must convey this promise in its message.
Salter stressed that luxury brands are not just about “expensive things”. He explained: “It can be the case that something that is more expensive can sell well, but that assumes the brand is doing a sufficient job of reassuring the value of the product. There still has to be a sense that consumers are actually getting value.”
This was reflected in the findings of Drapers’ report. Of the respondents to the survey, 39% said cut and fit is the most important factor when purchasing from a luxury brand, closely followed by quality and materials at 37%.
Mats Klingberg, founder and managing director of London menswear retailer Trunk Clothiers, echoed this sentiment: “It is almost like the more expensive it is, the better it is sometimes. But quality, fit and cut must come with it. My customers are smart individuals who have money and are successful so are, in turn, intelligent buyers.”
What effect is online and mobile having on luxury retail?
“The Apple store is a good example of how retailers are using data at mobile till points; they know you came in last week and what you bought. From a luxury brand perspective that is a real gift to understand customers’ online purchases when they come in store and is absolutely crucial to closing the sale.”
- Nishma Robb, Chief client officer, iProspect
“Of the traffic to our websites, 40% is via mobile. It helps people transact with the physical, looking for deals, looking for specific products or in some instances through such features as big [digitally interactive] store windows. Brands that do such things use mobile as the glue between the physical and the virtual.”
- Stephen Brown, Group marketing director, Hammerson
“The growth in smartphone and tablet traffic in the past year has been unbelievable. We used to design a
site and then do a smartphone conversion of it, but now we are turning it on its head. Now we are designing
a smartphone and tablet site first.”
- Christopher Di Pietro, Marketing and merchandising director, Vivienne Westwood
“The beauty of online is that we can see where customers come from, what they do and all their habits, and we use this insight to our advantage. We also massively engage with customers on social media. It doesn’t generate a large portion of sales, but it drives brand awareness and aspirational enticement.”
- Lea Cranfield, Merchandising manager, Mr Porter
How is consumer demand in the luxury sector changing?
“We are seeing a polarisation between the luxury market and the high street. The sort of thing you can find at lower price points has come along so much, the market is more sophisticated. The consumer is more demanding in what they expect to see.”
- Adam Fenwick Group managing director, Fenwick
“If we are going to be successful there has to be a real creativity in the product because the high street is so good now. Most of the big brands make an enormous effort in being different so what is certainly spurring our customers on to spend is that it’s got to be special.”
- Simon Burstein, Chief executive, Browns
The state of the market
The luxury sector continues to look robust despite more worries than this time last year.
The good news from this year’s Luxury Report is that the British luxury consumer is still in a mood to shop.
Consumers still aspire to buy something special on a fairly regular basis. However, the report findings show that 67% of consumers said their favourite luxury goods have changed over the past five years and 60% said the provenance of luxury goods isn’t important.
The former is in line with my belief that most luxury consumers are on a journey along a ‘discernment curve’, in which they become more sophisticated, demand more and therefore trade up. However, the latter looks as if it contradicts that, especially when 58% are not put off if a product is made in China. Yet 60% would be more willing to buy a product if it was made in Britain.
My view is that this is consistent with macro luxury trends in other parts of the world. Consumers continue to demand quality of materials and making. Likewise a brand story that has integrity and relevance is crucial. Hence the growing interest in Britishness, but also in lesser-known, more niche brands.
However, the survey shows that the majority of British consumers’ desire for integrity isn’t necessarily connected with where a product is made (although for a large minority, 38%, it is). Whereas for the majority of consumers in developing markets - especially in China - European cultural attributes remain crucial.
British luxury brands have benefited hugely from this. And with rising numbers of travelling luxury shoppers, we forget this at our peril.