Luxury report - Drapers

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TOP STRAP LIGHT I TOP STRAP HEAVY

Luxury report

2013

IN ASSOCIATION WITH

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introduction I LUXURY focus

In association with

British shoppers continue to aspire towards luxury Sheila King

When Drapers launched its annual Luxury Report last year, the backdrop was less than perfect for a sector that, until then, had been pretty robust. Burberry and Mulberry had issued profit warnings, LMVH reported a slowdown in third-quarter growth and China’s economic boom was also slowing. But the sentiment among the brands and retailers we surveyed as part of the report Ana Santi was overwhelmingly positive, with just a hint of caution. One year Deputy editor, Drapers later, and the luxury sector appears characteristically stable once more, despite China’s economy still causing some concern. This year, instead of an industry survey, we polled 2,000 luxury consumers to find what is driving shopping behaviour. The findings raised some interesting questions around provenance, with 60% saying where a product came from wasn’t important, while 58% also said they wouldn’t be put off buying a product that was made in China. In fact the most important factor when it came to buying was fit, followed by quality. When these findings were discussed in our luxury roundtable breakfast, the conclusion around these results was that consumers care about the story behind the brand, what it stands for, how it fits and the level of quality – rather than where it is manufactured. A strong brand and product, we decided, were key. Luckily, unlike economic slowdowns, these are factors businesses like yours can control. To download the Luxury Report, go to www.drapersonline.com/luxury.

Nishma Robb

Chief marketing and client officer at digital marketing agency iProspect

As the global recovery has strengthened this year, the luxury industry has enjoyed greater levels of success. This success is being driven by evolving consumer habits, digital adoption and accelerated globalisation. In this changing environment it is more important than ever to understand the successes, opportunities, behaviours and

attitudes of those consumers. Luxury consumers demand a seamless, consistent experience both off and online, with the same attention to detail, userfriendliness and high levels of customer service. Brands competing in the luxury space must adapt or suffer decreasing sales and fading relevance. The PC, and now mobile devices, have changed the way consumers research, buy and interact with a brand. Engaging content is one way in which brands including Burberry, Swarovski and Louis Vuitton are interacting with customers and creating a personal voice. And with new emerging platforms and integrated ecommerce sites, luxury brands are now combining not just

written content such as reviews, tweets and posts, but also video and live streaming and commerce for consumers. Heritage and craftsmanship are highly cherished by luxury brands and their consumers. Rather than diminishing these values, digital marketing has a strong, integrated role to play with offline channels to enhance and position brands. From this research, it is clear that luxury consumers are embracing the convergence of the online and offline purchasing journey. They value the opportunity to read reviews, see celebrity images and view catwalk shows online, and choose whether they purchase in store or at their leisure via their PC or mobile device. This is a trend that we can expect to see accelerating as we move into 2014.

Leasing director, new business at retail property firm Hammerson

Many commentators heralded the recession as the end of consumers’ love of luxury. However, while purchases are now much more considered, consumers are still more than happy to add to their wardrobes and make-up bags with luxury brands. We’ve all become smarter shoppers and being savvy about how and where you spend has even permeated the luxury market. It’s not only consumers that have adopted a more considered outlook. Luxury retailers are also carefully scrutinising their store sites. It is a major investment to open a flagship and the major UK cities are now competing on a global level to attract retailers. There has to be something exceptional about the destination and a critical mass of luxury stores clustered together is becoming ever more vital. While London remains a popular luxury shopping destination with tourists, there is good news for regional growth as retailers are not overlooking the key catchments around big UK cities, where there is still a growing desire from consumers to update outfits regularly with luxury accessories. What’s clear from the report is that the UK still leads the world when it comes to department stores, as they top the list of locations where luxury goods are purchased. We’ve seen major investment in the quality of the stores and there is a real desire to attract the best premium brands. This report highlights the growing opportunity for luxury destinations and retailers that can capture consumers’ loyalty through an exceptional in-store and online experience – which we’re keen to make the most of.

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Luxury FOCUS I location

Brands of all sizes are on the lookout for the next luxury retail hot spots in the UK’s major cities

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Words by James Knowles

uxury brands are always searching for the next international market to conquer, but there are pockets of untapped potential closer to home in the UK and Europe that could prove just as rewarding as more exotic locations. That potential is illustrated by the latest results of the large luxury groups. In the five months to September 12, sales at Richemont – which owns Net-a-Porter, Dunhill and Chloé among others – rose 10% in Europe and the Middle East compared with 4% in the Far East. Richemont said in a statement: “Good growth in Hong Kong and Macau [was] offset by lower sales in mainland China, largely reflecting a prudent consumer sentiment after several years of exceptional expansion.” By comparison, sales performance was high in Europe due to tourist spending. Similarly, sales at rival luxury group Kering – whose brands include Gucci, Christopher Kane and Stella McCartney – were up 2.5% in the first half of 2013 in western Europe, which remains its largest market and accounts for 31% of revenue, compared with 26% in the Asia-Pacific region, although sales there grew 3.4% in the same period. French luxury brand house LVMH, which owns Louis Vuitton, Marc Jacobs and Thomas Pink, reported a sales rise of 6% to €13.7bn (£11.5bn) in the first half of 2013. It said sales in Europe had been “resilient”, while Chinese customers of Louis Vuitton were snapping the brand up in Europe and overseas, rather than in China. Honor Westnedge, analyst at Verdict Research, says: “Despite weakness across the eurozone in countries such as Greece, Ireland, Spain and Italy, luxury houses have still achieved sales growth in the European region over the past few years, finding it to be a fairly stable market. We expect this to continue over the next five years. “It is the strong influx of international visitors that has buoyed the luxury market in the region. The fragility of the British pound appealed to overseas shoppers visiting the country, encouraging spend on luxury goods, with visits and spend from citizens of China, Russia, Brazil, Singapore, Nigeria and Thailand growing.” However, in the UK it is not just London’s prime sites on Bond Street, Oxford Street or Regent Street that benefit. Sheila King, leasing director, new business for retail landlord Hammerson, says there is an overspill into the surrounding streets in terms of demand: “Property costs are high in London, so it is spreading out. There are lots of new luxury shopping destinations popping up as a result.” Secondary sites in the capital such as Mount Street, Brompton Cross, St James’s, Dover Street, 3

Drapers / November 16 2013

the home

TRUNK, mayfair

Albemarle Street and South Molton Street have seen a rise in demand for units. Last year, Céline and Oscar de la Renta opened stores on Mount Street, and Temperley London opened on Bruton Street. Mats Klingberg opened his menswear store Trunk Clothiers on Chiltern Street in 2010. “I wanted to be somewhere central that was in one of the main retail destinations. Cost was a big factor too. It wouldn’t have gone so well if rents were what they are in other parts of London,” he says. it’s not all about London though, as the key regional cities are also high on the agenda for luxury brands. King says the most important thing is to find the right location. Hammerson last year acquired the Victoria Quarter in Leeds, which is anchored by Harvey Nichols, and is developing the city’s Victoria Gate scheme. According to King, units in the city are in demand among high-end brands. She says: “Leeds lost its way but it is now coming back and we’re looking at putting premium and luxury brands all under one roof. I think that in the UK, with the bigger regional centres and cities, you have much more of an opportunity to manage the environment. We’re really focused on making sure we get the experience right, the environment right, the parking right. It’s all important. “In London individual landlords are focused on rents and aren’t concerned about the whole

STELLA MCCARTNEY, Mayfair

In association with

front

VICTORIA QUARTER & VICTORIA GATE, LEEDS

ALAMY

Mount street, london

shopping environment. Whereas in a managed environment you have much more control of your tenant mix.” Scottish scarf brand Begg & Co is stocked by independents such as Trunk and Jane Davidson in Edinburgh – a city which is experiencing increased interest from luxury brands, according to Begg & Co’s sales and marketing director, Ann Ryley: “If you look at Edinburgh it is the same, with Harvey Nichols and the growth of George Street and Multrees Walk. Brands like Louis Vuitton and Mulberry have clustered around there and it has brought the whole area up.” Outside London, retail units tend to be smaller, and King says the requirements of luxury brands and retailers differ. “In London, brands want to showcase [their ranges], especially luxury ones such as Burberry or Watches of Switzerland, which took 17,000 sq ft in Regent Street, for example. They tend to want the larger stores. But when you go out to the regions or to the bigger cities luxury brands want to showcase more accessories, cosmetics, and smaller products. That’s what we’re finding with Victoria Quarter [in Leeds] because the units are 500 sq ft.” Christopher Di Pietro, marketing and merchandising director for Vivienne Westwood – which in addition to the Victoria Quarter has shops in Manchester, Liverpool, Glasgow, Newcastle, Nottingham and Cardiff – agrees: “Outside London we very much have to focus on the product, because you don’t have the big properties.”

He says the large luxury groups buying up properties in central London are squeezing out the smaller players from the hottest locations. For King, the appeal of setting up shop outside London is clear: “It is very difficult to get into central London. It can become very expensive very quickly. And that is why I think there is an opportunity for them to go to other cities in the UK. So it’s just looking at lots of locations and maybe testing them with pop-ups.” However, Adam Fenwick, group managing director of department store business Fenwick, warns trading is tougher outside the capital. “We have 11 stores around the country and there is

HARVEY NICHOLS, EDINBURGH

a significant difference in commercial performance between what is happening in London – a city state almost – and what is happening in the rest of the UK. We’ve got a big business in Newcastle, we’re in places like York, and the economic realities in some of those markets are very different. The central London market is supported by tourist money.” Looking further afield, Westnedge says while mature markets such as the UK, France and Germany will continue to account for a sizeable proportion of luxury spend in the European region, future opportunities will be driven by growth markets in central and eastern Europe, such as Poland and the Ukraine: “Poland’s stable economy, growing tourism industry and increasing adoption of the latest trends create an attractive destination for luxury retailers to target – especially since the current luxury market is relatively small compared with the size of the country and the population. So brands should react fairly quickly and get a foothold in the market ahead of competitors. “Russia is forecast to be one of the key driving forces behind stronger growth in Europe in the coming five years. While Russia has a fairly mature luxury market, there is solid growth potential providing it can convince its domestic luxury shoppers to spend at home rather than overseas.” So while Asian expansion will undoubtedly remain key for luxury brands and retailers, it looks certain that those same businesses will also focus their efforts on opportunities closer to home. November 16 2013 /

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homegrown brands I Luxury Focus In association with

Begg & Co With a history stretching back to 1866, Scottish brand Alex Begg & Company has long produced luxury scarves and stoles. For autumn 13 it reinvented itself under the name Begg & Co and developed its own brand to include Trunk Clothiers in London, Jane Davidson in Edinburgh and Fortnum & Mason among its stockists. The company produces all its products from its factory in Ayr, where the coastal rainfall is essential to the washing process used to create soft cashmere and wools. Contact: 01292 267615 www.beggandcompany.com

Rule Britannia The UK is globally renowned for the high-quality luxury goods that are manufactured on its shores. Here are three good reasons why... Words by IAN WRIGHT

Lutwyche Tailoring brand Lutwyche manufactures its wholesale offer from its factory in Crewe that employs 50 skilled tailors. Every suit is made to high standards, from the quality of fabric to the precision of the cutters. Founded in 2000 by Tony Lutwyche, the business has resisted the pull of cheaper production in the Far East and has instead invested more in its England-based operation. It also offers bespoke and made-to-measure services Contact: 020 7287 5632 www.lutwyche.co.uk

Tricker’s Firmly established at the heart of the revered Northampton footwear community for more than 180 years, Tricker’s has quietly gone about creating beautifully made shoes and boots for a discerning customer the world over. The family-owned factory employs 90 people producing about 1,400 pairs per week – the small numbers allow the brand to ensure the quality of its premium product never slips. The brand boasts a Royal Warrant to the Prince of Wales and exports 70% of what it produces. More recently, special-edition collaborations with retailers such as Selfridges have introduced the historic brand to a new, more contemporary audience. Contact: 01604 630595 www.trickers.com

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Multichannel I Luxury focus In association with

Techno for an answer: Google Glass on the catwalk; Diane von Furstenberg and Google co-founder Sergey Brin; Selfridges’ Jeanius table; Angela Ahrendts

IMAGES REX FEATURES AND CATWALKING.COM

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ast month Angela Ahrendts announced her departure from Burberry to join Apple as senior vice president of online and retail stores. The move marked the latest stage in luxury’s convergence with the technological world, which – with the advent of innovations such as Google Glass and wearable tech – will become increasingly intertwined. High-end brands, which had traditionally been mistrustful of selling online for fear it would impact their exclusivity, are increasingly leading the way when it comes to retail innovation. This is largely being driven by luxury shoppers. “Consumers now expect to shop on every different channel at any given time,” says Helen Goodson, head of ecommerce at five-store London retailer Question Air, adding that the independent retailer is investing ‘considerably’ in overhauling its digital channels with plans to make online its number one store in terms of sales. “We will focus a lot on personal service; replicating what we do in store. Our social media strategy is also complementing this, creating a community around the shops,” she says. Cari Marsden, ecommerce manager at two-store London womenswear retailer Austique, agrees: “Our customers interact with our brand in a totally holistic way, and they don’t consciously separate the channels. The way people use their tablets is part of the luxury experience and in fact enhances it.” Tellingly, Ahrendts’ appointment at Apple follows the company’s hiring of former Yves Saint Laurent chief executive Paul Deneve in

Through the looking glass

The luxury sector has traditionally been slow to adapt to digital innovation – but not any more Words by Lucie Greene

September 2013 as vice president. His main responsibility is for special projects. And this focus on multichannel is evident across the luxury sector. US department store chain Neiman Marcus recently reported investment of $100m (£62m) over the next five years. In March 2012, the retailer introduced its Signature app, which alerts sales clerks when consumers who have signed up to the service enter the store. Shoppers can browse event schedules and be alerted to promotions, while sales assistants can see their previous searches and gather recommendations. In January, US group Saks Fifth Avenue, which has hired Marigay McKee from Harrods as chief executive, also announced similar investment to be carried out in a multichannel overhaul. Many are also investing in digital formats to augment the in-store experience, making it more immersive, social and shoppable. In the UK, Selfridges’ new Denim Studio features the ‘Jeanius table’ – an interactive screen that allows shoppers to sift through brands, fits and styles to find the perfect pair of jeans. Brands have also entered the next frontier with digital payments. Burberry has been experimenting with contactless payments through

mobile platform provider Square, while PayPal has been trialling facial recognition payments in a handful of London fashion stores, including men’s and women’s wear retailer Noble Jones in Richmond. Apple has already introduced thumbprint recognition technology on its iPhone 5S. “Customers like [the fact] that they don’t have to bring out their wallet,” says Lina Grabow, manager of Noble Jones. “They like the convenience.” Social media is also being used in more sophisticated ways. Google+ recently teamed up with Diane von Furstenberg to launch ‘shoppable’ Google Hangouts (virtual chat rooms) from her showroom. According to research released by Shareaholic, a US-based content sharing platform, Pinterest now drives more referral traffic to retail than Google+, YouTube and LinkedIn combined. According to the Drapers poll of 2,000 consumers, social media is an important way to engage with luxury brands, with 73% using Facebook, 28.5% on Twitter and 9.2% on Instagram. “Luxury brands are learning that by engaging on these platforms they can also u November 16 2013 /

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Luxury focus I Multichannel

You cannot simply choose one avenue to retail – you must have all the ones your customer is accustomed to using

Ed Burstell, managing director, Liberty

gain key insights into the consumer through their sharing and shopping behaviour,” says Nishma Robb, chief client and marketing officer at iProspect, a digital performance marketing agency that works with brands including Asos and Burberry. However, it wasn’t always like this. The luxury sector previously took a dim view of technical innovation and digital channels. “It’s totally changed. Before, the luxury industry believed its traditional pillars of exclusivity and authority were threatened by the web,” says Chris Norton, chief executive of upmarket ecommerce portal Lyst. “But bloggers have made fashion more accessible. The social web has turned fashion brands’ authoritative monologues into engaging dialogues.” “Net-a-Porter has shown you can be digital but also still luxurious,” says Goodson. “Consumers are not afraid to buy high-price luxury items on digital channels now. It helps that the photography has become so good.” The shift towards digital and physical convergence is also being led by the proliferation of smartphones, which are bridging the divide between shopping online and in a physical environment. According to global research firm The Luxury Institute, eight out of 10 affluent consumers over the age of 21 own a smartphone, while 56% own tablets. “We’re living in a much more converged world. TV is converged with social media, which

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Luxury in their sites: retailers such as Liberty and Net-a-Porter have shown that multichannel retail is not at odds with success in the upmarket sector

is converged with retail. All these join up and we increasingly expect them to be seamlessly linked,” says Robb. Ed Burstell, managing director of Liberty in London, agrees: “If you play in the luxury game you cannot simply choose one avenue to retail – you must have all the ones your customer is accustomed to using. You have to have a compelling in-store experience but more and more it’s about convenience. As the world gets more time-poor you have to give them the luxury of time – and technology is the way.” The next stage of this, futurologists believe, is the idea of a ‘shoppable world’. According to UK consultancy The Future Laboratory and digital agency Somewhat’s collaborative 2013 report, Goldpapers: Phy-gital Luxury, through the use of connected devices and image searching apps everything on the street will become searchable and shoppable. “Some 30 billion devices are predicted to be connected to the internet by 2020, according to technology consultancy ABI Research, from cars to store windows, allowing for all of these channels to be connected to retail,” says The Future Laboratory co-founder Chris Sanderson. Already, Snap Fashion, a visible search shopping app, allows users to take a photo of shoes, bags, coats or any items on the street and do an instant search of where to buy a particular piece online. And with the advent of Google Glass and other intuitive, connected devices, this will only continue. Google has made no secret of its endeavours to

connect to the luxury fashion world, teaming up through its social network Google+ with collaborators such as Diane von Furstenberg and more recently announcing collaborations with the Council of Fashion Designers of America (CFDA). Google Glass was also featured on all the models in one of US Vogue’s September issue fashion shoots, while at the recent New York Fashion Week, US Marie Claire creative director Nina Garcia wore Google Glass and tracked her experience. Wearable tech devices look set to be a new frontier in the luxury sector. According to data published by US market research consultancy IMS Research, there are about 14 million wearable tech devices – such as Nike Fuel Band, the wirelessly connected athletic wristband that monitors time, heart rate and personal performance. By 2016, the global market for such products could reach $6bn (£3.7bn), including connected eyewear, watches and eventually clothing. Personalising the web experience is also another focus in future. Amazon – which recently began selling discounted luxury fashion brands such as Vince Camuto, Halston and Calvin Klein – already uses algorithms to present users with tailored home pages and suggested shopping lists. Although the luxury sector was slow to join the multichannel world, it now leads the way in terms of innovation.

luxury FOCUS I roundtable

Selling the story behind the brand

Getting your message across to customers emerged as the big issue at an event discussing Drapers’ Luxury Report

Words by DAVID BROOKS Photography by Phil WEEDoN

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ommunicating 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

What effect is online and mobile having on luxury retail? “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

“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 “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 8

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“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

In association with

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

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

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

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 Guy Salter mood to shop. Deputy chairman, Consumers still aspire Walpole 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.

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, u in turn, intelligent buyers.” November 16 2013 /

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SURVEY RESULTS I LUXURY Focus

In association with

Customer breakdown Are you male or female?

3

%

6.9

14.2

8 5.4

%

15.3 47.3

8.2 32.2

● Female

%

16.8

6.2 7.2

How much do you spend a month on luxury fashion brands? 2.3

24.7

6.3

2.2

12.8

● 18 to 25 ● 26 to 35 ● 36 to 45 ● 46 to 55 ● 56 to 65 ● 66+

What is your personal income?

13.1

6.4

13.6

24.8

● Male

What region do you live in?

How old are you?

10.5

52.7

The full findings the Luxury Report 2013 are available as a free downloadable white paper at www.drapersonline.com

%

How do you usually buy luxury goods? (more than one answer)

0.8

50.7%

8.9

20.6

34.1

48.5%

%

19.4% 53.9 27.9%

41.6 4.7% ● £0 to £19,999 ● £20,000 to £39,999 ● £40,000 to £59,999 ● £60,000+

Top 10 luxury brands

1. Gucci 2. Chanel 3. Hugo Boss 4. Giorgio Armani 5. Ralph Lauren 6. Prada 7. Christian Dior 8. Mulberry 9. Burberry 10. Louis Vuitton

● Under £100 ● £101 to £500 ● £501 to £1,000 ● £1,001 to £2,000 ● £2,000+

● East Anglia ● East Midlands ● London ● Northern Ireland ● Northeast ● Northwest ● Scotland ● Southeast ● Southwest ● Wales ● West Midlands ● Yorkshire

● Research online and buy online ● Research online and buy in store ● Research in store and buy online ● Research in store and buy in store ● Research on a mobile/tablet and buy on a mobile/ tablet ● Research on a mobile/tablet and buy in store

5.7%

What luxury goods have you bought in the past 12 months? (more than one answer)

What is most important to you when purchasing from a luxury brand? (more than one answer)

15.3% 35.1% 42% 29.7% 30.9% 62.4%

● Luggage ● Handbags ● Cosmetics ● Accessories (sunglasses/scarves) ● Jewellery/watches ● Clothing ● Footwear ● Lingerie

43% 16.7%

38.7% 37.1% 36.8% 29.6% 25.2% 16.1% 13% ● Fit/cut ● Quality/materials ● Style ● Comfort ● Price ● Brand image ● Exclusivity

Drapers polled 2,000 luxury consumers to find out how they shop for luxury goods and what motivates and influences them to buy November 16 2013 /

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Background Are you male or female?

How old are you?

KEY

KEY

● Male ● Female

47.3% 52.7%

10.5%

3% 14.2%

15.3%

● 18 to 25 ● 26 to 35 ● 36 to 45 ● 46 to 55 ● 56 to 65 ● 66+

32.2%

24.8%

Do you buy luxury fashion products?

Which region do you currently live in?

(Such as clothing, footwear, accessories or lingerie)

KEY

6.9% 6.4% 6.3% 8% 5.4%

16.8%

8.2%

2.2% 6.2%

13.6%

7.2% 12.8%

● East Anglia ● East Midlands ● London ● Northern Ireland ● Northeast ● Northwest ● Scotland ● Southeast ● Southwest ● Wales ● West Midlands ● Yorkshire

KEY

100%

● Yes ● No

What is your current personal income? KEY

13.1%

20.7%

● £0 to £19,999 ● £20,000 to £39,999 ● £40,000 to £59,999 ● £60,000+

24.7% 41.6%

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Spend How much do you spend a month on luxury fashion brands?

2.3%

0.8%

8.9%

34.1%

KEY

● Under £100 ● £101 to £500 ● £501 to £1,000 ● £1,001 to £2,000 ● £2,000+

53.9%

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favourites What luxury goods have you bought in the past 12 months?

KEY

● Luggage ● Handbags ● Cosmetics ● Accessories:

15.3% 35.1% 42% 29.7% 30.9% 62.4% 43% 16.7% 0

Which luxury goods do you buy most regularly?

10

20

30

40

50

sunglasses/scarves

● Jewellery/ watches ● Clothing ● Footwear ● Lingerie

60

70

80

KEY

● Luggage ● Handbags ● Cosmetics ● Accessories:

4.7% 15.2%

sunglasses/scarves

32.6%

● Jewellery/ watches ● Clothing ● Footwear ● Lingerie

12.6% 13.1% 53.1% 23.5% 7.7% 0

10

Have your favourite goods changed over the past five years?

20

30

40

50

60

KEY

● Yes ● No

66.6% 33.4%

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Priorities What is most important to you when purchasing from a luxury brand? Price

Style

KEY

● 1 – Least important ● 2 ● 3 ● 4 ● 5 – Most important

9.7% 25.2%

10.7%

36.8%

3.6% 7.6% 16.2%

30.2%

24.2%

35.8%

Comfort

Quality/materials 3.2% 7.5%

3% 6%

29.6% 24.2%

3.8% 5.3% 18.5%

37.1%

Brand image

38.7%

17.6%

34.6%

35.4%

35.5%

16.1%

Fit/cut

Exclusivity 10.1%

13%

17%

15.5% 20.8%

26.7% 31.6%

17.8%

31.4%

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in store When buying in store, what is most important to you? Customer service

Competitive pricing

KEY

● 1 – Least important ● 2 ● 3 ● 4 ● 5 – Most important

3.7% 8.7%

9% 21.8%

10%

34.1% 19%

26.5%

32.7%

34.5%

Store environment 12.2%

35.5%

Brand mix

5.9% 9.9%

36.5%

13.5%

34.1%

6.2% 12.6%

33.6%

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Environment Is the wider retail environment where luxury stores are located important to your shopping experience? Quality of shopping centre

Quality of high street location

KEY

● 1 – Least important ● 2 ● 3 ● 4 ● 5 ● 6 ● 7 ● 8 ● 9 ● 10 – Most important

12.8%

25.5%

7.7% 8.1%

Quality of retail ambience 3.2% 7.1%

6.2% 16.6%

6.2%

13.2%

12.5%

7.6%

Quality of store environment 1.6% 1.7%

21.3%

7.8% 7.8%

8.1% 12.1%

4.8%

10.6%

10.7% 8.5%

12.8%

14.9% 6.3%

4.8% 3.6% 4% 9.1%

Quality of service

1.6%

17.7% 13.5%

13.8%

15.2%

9.2%

15.5%

18.5%

3.7% 9.1%

10.7% 13.5%

22.8%

1.5% 2.1% 4.5% 16%

11.2% 8.1%

14.6%

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Location Do you purchase most of your luxury fashion in the UK or abroad?

KEY

● The UK ● Abroad ● Don't know

2.5% 9.8%

87.7%

Where do you buy luxury goods?

KEY

● In a department store ● In a multi-brand store ● In an independent ● From an pure-play (online-only

16.7% 9% 21.3%

68.3%

16.6%

retailer)

● From a discount website ● From a department store website

18.6% 7.6% 28%

21.5%

● From a brand website ● From an independent retailer’s website

● From an outlet store/fashion retail park

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provenance Is provenance of luxury products important to you?

KEY

● Yes ● No ● Don't know

1.5% 38.2%

60.3%

Would you be more willing to buy a product if it was made in Britain?

KEY

● Yes ● No

59.9%

40.1%

Would it put you off buying a product from your favourite luxury brand if you knew it was made in China?

KEY

● Yes ● No

41.6%

58.4%

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Social media Do you follow/like/ share/retweet luxury brands on social media platforms?

KEY

● Yes ● No

25.5%

74.5%

Which platforms do you use to engage with luxury brands?

KEY

● Facebook ● Twitter ● Instagram ● Tumblr ● Pinterest

73% 28.5% 9.2% 3.6% 9.9% 0

Are you happy for them to use the data that they capture across channels from your browsing or purchasing history to offer a more personalised service?

10

20

30

40

50

60

70

80

KEY

● Yes ● No

42.3%

57.7%

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Interaction What type of communication do you want to receive from a luxury brand?

KEY

● Personalised Email

alerts about new products ● Invites to in-store events and promotions ● A catalogue ● Notifications about sales and promotions

36.5% 36.8% 35.3% 41.7% 0

10

20

30

40

50

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Purchasing How do you usually purchase luxury goods?

KEY

● Research online and buy online

50.7%

● Research online

and buy in store

48.5%

● Research in store and buy online

19.4%

● Research in store and buy in store

27.9%

● Research on a

4.7% 5.7% 0

10

20

30

40

50

60

mobile/tablet and buy on a mobile/ tablet ● Research on a mobile/tablet and buy in store

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Online Which devices do you mainly use to research and buy luxury goods online?

KEY

● PC/Laptop to research and buy

68.5%

● PC/Laptop to research

16.6%

and tablet to buy

● Tablet to research and

18.2%

PC/laptop to buy

● Tablet to research and

9%

smartphone to buy

12.3%

● Smartphone to research and buy

4.4%

● Smartphone to research and tablet to buy

5.9%

● Smartphone to research and PC/laptop to buy

0

How do you search online for luxury goods?

10

20

30

40

50

60

70

80

KEY

● By retailer name ● By brand name ● By product name

18.8% 26.3%

54.9%

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Online How much is your online purchase of luxury goods influenced by the following? Customer service

Competitive pricing

KEY

● 1 – Least important ● 2 ● 3 – Most important

7% 29.5%

25.9%

56.2% 36.8% 44.6%

Store environment

20.9%

51.5%

Brand mix

27.6%

20.9%

26.3%

52.8%

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