More than three-quarters of Harrods’ sales are now made on reward cards, managing director Michael Ward told delegates at the Drapers Fashion Forum this morning.
He said that the Knightsbridge department store is focused on data to enhance its product offer and service. Harrods is utilising third-party-shopper-engaging technology from software firm Rant & Rave, which provides the retailer with feedback from 1,400 customers each week.
“The London market over the last six to 12 months has been tough,” he said. “We have had fewer tourists as we have seen the clampdown in the Eurozone, sterling has moved against us and we have seen a higher pound so those masses of French, Germans and Italians have disappeared.
“For us, where China is a significant part of our market, growing [at a compound annual growth rate] of nearly 80% in the last five years, a crackdown on gift-giving has had an impact.
“We know the issues of Russia and we have seen the depressed oil price and a bit of instability in the Middle East, which has led to fewer tourists this summer.”
He said that other governments have been more proactive in embracing tourism in their countries.
“If I look at the recent changes in visa policy in Japan and an example such as Thailand, which is our fifth biggest market, the easing of any visa restrictions between Thailand and Japan has meant that the number of tourists has moved from 50,000 to 500,000 in a year. We have also just seen the Americans giving full long-term multiple entry visas to the Chinese so we are constantly at a disadvantage to our competitors.”
Despite this, he told delegates: “It is going to be tough, but I am absolutely convinced that we will continue to grow.”
“Shopping is more than a day out; it has to be theatre,” he said. “It is no longer enough to refurbish every five to 10 years. Now we need to do it every three to five years to refresh and re-energise the space. Unless you see a point of difference on the high street, there is no reason for the customer to come out and shop.”
He also highlighted the new ‘Superbrands’ area on the first floor, which opens on December 15. “It is a 35,000 sq ft space for very few select brands, which allows us to compete with the maisons, and there will be a further 25,000 sq ft area dedicated to womenswear next year.”