The Chinese have been driving luxury sales worldwide for some time now, however in 2014, luxury growth in China slowed, part of a global slowdown from 7% in 2013 to 5% in 2014 (€223 billion). Why? Mostly due to the government's anti-corruption drive, according to Bain & Co, as well as changing patterns of consumption. As a result, in 2014, brands like Gucci, Louis Vuitton and Hermès also experienced slower growth. Slower growth is expected to be the new "normal" say industry experts, but slow doesn't mean no. Rather, it means that even ultra-wealthy shoppers want M-O-R-E for their money...
...more intimate. More personal. More trusted. More value.
"Tall condo towers were the place for the ultra high net worth (UHNW) to put money in 2014, but this year buyers are likely to look for something more “homey”, personal and unique," notes Royce Pinkwater, Founder and CEO, Pinkwater Select, a global real estate company investing in super prime property throughout the world. "Not every buyer wants 6,000 square feet and wants to spend US$35 million and up." What's needed, says Pinkwater, are "smaller units in high quality buildings." Which also applies to luxury mega-yachts. Although 2014 showed a return to pre-recession levels of activity - Croatia, Greece and Turkey are current jet$etter destinations of choice - the mega yachts that are 70 meters long "see fewer bookings than people think," says Charlie Birkett, co-founder of yacht charter group Y.Co. "Many clients are looking to purchase yachts above 60 metres, but there is a relatively small number of quality yachts on the water of this size and this is something the industry needs to work on."
The rich also like their jewelry, of course, and Vanessa Chilton, Zoe Benyon and Kate Pelham Burn, directors at Robinson Pelham Jewellers note that luxury retailers need to really get a handle on their online presence. "In 2015, harnessing the power of social media is an opportunity not to be missed, and businesses must have a strong online presence that is innovative, alluring and practical," they explain. Which is definitely easier said than done. "Traditionally, the relationship between jeweller and customer is built on trust and understanding – and that’s a lot harder to achieve in cyber space," they continue. "Luxury brands need to find a place for themselves in the online world if they want to stay relevant."
The way brands like Chanel have done so is by maintaining a strong brick-and-mortar presence, treating their in-real-life stores as less of a place to purchase their merch than a way for their customers - both current and potential - to immerse themselves in the brand. Think theme park. "Having a bricks-and-mortar presence in your key markets is essential for the luxury industry," agrees Guillaume Davin, president of the luxury leather goods company Moynat. The brand is known for their refreshing lack of flashy logos and artisan-made bags that not everyone has - and typically only connoisseurs recognize. A sophisticated, knowledgeable and demanding bunch, fans of Moynat relish the opportunity to "come into the store and examine the leather, the stitching and the finish," continues Davin, noting that it cements the brand's bond with their customer base. "Since we have had a permanent presence in Hong Kong," he adds, "we have had clients who become our friends, they pop in every week and bring flowers or chocolates."
Dang, even my friends don't just "pop by" every week bearing bouquets and candy, so they're definitely doing something seriously right.
- Lesley Scott
Note: This post was about the Supremium fashion tribe, a clan of well-heeled, spendy, style-conscious fashionistas that enjoy jetsetting, globetrotting and shopping their way across the globe. To learn more about each of fashion's four mega-tribes that I track, START HERE.
(Illustrations by Arturo Elena via source)