(r)evolution in the Luxury retail industry

or the new Millennial paradigm

frenchfounders_retail_panel 2Following a packed day at NRF (National Retail Forum), French Founders members and guests met at Spring Studios for cocktails and conversation. The evening began with a strong panel of luxury and premium retails leaders including: Jean-Marc Bellaiche (SVP Strategy and Business Development at Tiffany & Co.), Kristina Buckley Kayel (VP Communications at Van Cleef & Arpels), Ketty Maisonrouge (Professor at Columbia University and Start-Up investor/advisor), Joelle Grunberg (Pres./CEO of Lacoste, North America), and Xavier Vey (President & COO of L’Oréal Luxe USA).

Surrounding much speculation of the future of the luxury market, the forum commenced with the question of whether the industry was in an evolution or revolution from the perspective of each panelist. Interestingly noted that luxury goods value decreased by 4%, while the overall market (which includes luxury experience) has increased by 8%.

Diverse representation of industry provided varied responses. Luxury cosmetics are seeing an incredible increase in business and customer engagement across all platforms; somewhat due to the accessibility to education available to become your own make-up and skincare expert, as well as the capability to hyper-target customer experience in-store and on-line. Premium brands are experiencing a real, no longer perceived, shift towards truly integrating the ecommerce and in-store experience, leaning on innovation in customer experience, CRM and marketing.

Luxury jewelry, however, is very much relying on core customers to continue to be the best brand influencers. As well, the shift is leaning away from obscure partnerships and collaborations and towards those that look to enhance the core brand message and experience. Tiffany, as an American company, continues to push the envelope through strategy and experiential services to create a truly American luxury experience – more intimate than a traditional European maison; while companies like Van Cleef maintain a traditional viewpoint on European luxury experiences.

The good news is despite the decrease in value of luxury goods, luxury leaders are increasingly using innovation to move the needle ahead – including new technology, innovation in customer experience, defining and redefining omni-channel and staying ‘in-touch’ with their customer. The question remains – will they do this fast enough? And, will strategy ever be ahead of the reactionary environment luxury has been accustomed to in recent years?

At Pi Executive – a boutique, consumer, executive search and consulting firm – we have seen uncertainty and determination in the luxury/consumer market. Having recently led the charge to fill such roles as – VP Marketing, North America, VP Customer Experience and Operations, CHRO, Managing Director and VP M&A & Strategy, and a slew of senior digital and omni-channel roles – the sector is struggling to get ahead of strategic approaches versus reacting to changes in customer behavior and declines (or historically lower increases) in revenue. True luxury goods will need to invest in innovation of customer experience and omni-channel, and get to know their younger audience. Premium, or aspirational luxury, companies are gaining traction on tactical plans as they are several years into tracking customer behavior through ecommerce and beginning to look through a truly omni-channel lense.

What is the most important role to a luxury firm in today’s climate? It is one that has yet to be defined but should look like this:  the role encompasses all sales channels, customer behavior, experience and insights, a little bit of risk and a lot of innovation. The ideal candidate is ‘experienced enough’ to have seen the changes and understand the history of the sector (and to know the store), and ‘young enough’ to have an expert grasp on digital (behind and on the scene).

 

About Pi Executive’s Leaders:

Katherine MacLane is a Director at Pi Executive, an Executive Talent Advisory Firm specialized in executive recruitment and leadership consulting. Katherine’s primary focus is luxury retail and hospitality, and includes retail start-ups, beauty and wellness. She specializes in senior-level executive search, with a focus on brand-oriented retail and multi-channel consumer goods.

Pierre Trippitelli is the Founder and Partner at Pi Executive and Executive Coach. Prior to joining Pi Executive, Pierre served as a member of the Global Consumer Practice at Korn Ferry. His recent searches include: Global CEO Food Retail – Global CEO Food Ingredients – President & CEO North America Food Ingredients – CEO USA Dairy – COO USA Confectionery – Head of Retail Luxury Cosmetic – CCO Household Goods – CMO Global Beverage – Head of Operations & Supply Chain Global Beverage – CFO Global Skincare…

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The talent is in the choices.

Robert De Niro