ASSOULINE’s Post

What makes a luxury brand successful? Is it the product or the experience? This McKinsey & Company article explores the emotional side of luxury retail. 🤔 #luxuryretail #customerexperience #branding

Luxury fashion houses are increasingly venturing beyond traditional retail, embracing pop-up stores and hospitality collaborations to enhance brand visibility and capture affluent consumers during their leisure time. If you are holidaying in Southern Europe this summer, you are likely to come across Loewe, Dior, Chanel and a bevy of other fashion houses. #fashion #retail #ecommrce #business #entrepreneurship

Many question the role of multi-brand department stores in the evolving luxury ecosystem. With so many luxury brands amping up their direct-to-consumer online and brick-and-mortar strategies, department stores appear to be fading into irrelevancy.

Many question the role of multi-brand department stores in the evolving luxury ecosystem. With so many luxury brands amping up their direct-to-consumer online and brick-and-mortar strategies, department stores appear to be fading into irrelevancy.

I wonder when manufacturers will realize that the traditional brick-and-mortar retail model, which expects retailers to pre-pay for production and stock up, essentially requiring them to invest in brands in order to feature their products, is coming to an end. Customers still want to see and experience products in person (and rightly so) before making a purchase or even discovering the brand. I believe the era of hybrid business models and showrooms supported by brands (not the other way around) is inevitable. It's rather annoying that the majority of brands still present a take-it-or-leave-it approach, especially when they aren't on the list of top luxury brands just yet, and the big department stores are losing the battle with e-commerce. #welcometoshowroom #ecommerce #homedecor https://lnkd.in/d35XvDc3

What's causing the slowdown in luxury sales? According to recent insights shared by one industry expert, it might be due to increasing fixed operating costs. These costs may no longer be variable able to track and adjust based on market trends. As a result, luxury brands may need to re-evaluate their operational strategies to remain competitive in an ever-changing market.

Luxury retail continues to shine...

Hot take, all luxury department stores (Saks, Neiman’s, and Nordstrom’s (not that they are in the same tier of luxury as the other 2)won’t exist in another 15 years as anything more then malls within a mall (aka big boxes with 50 leased boutiques inside and MAYBE a small amount of owned mens and woman’s contemporary. The reason being they don’t know how to buy goods anymore, brands are going to want to protect themselves from there constant markdowns caused from there poor buying choices, and brands are going to want to manage there own inventory. End of day, private equity owns everything now and are going to find this a safer play than managing stores as they previously were with no understanding of how to do so. We are already seeing this happen with Saks in NY as now more of that store is leased than owned!!

U.S. Outlet Centers - State of the Industry Post #4 - The Luxury Component The outlet industry for years has been a brand positive and very profitable channel for Luxury retailers (despite these companies keeping that presence well under the radar). For example Kering brands such as Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, all have outlet center presences. LVMH brands including Celine, Christian Dior, Fendi, Givenchy, Loewe, Loro Piana, and Tag Heuer do as well. Prada, Burberry, Balmain, Brunello Cucinelli, Golden Goose and Tom Ford just to name some others. Most of these brands are relatively exclusive within this channel, with their presence limited to major market, top performing outlet centers with a critical mass of other luxury. Objectively, there are approximately 10 of these centers in the U.S. that can be considered to contain a luxury component (I can provide details offline if you’d like to discuss!). And most of those centers over time have continued to build upon that foundation. Many of these brands have shown to be cyclical in their requirements, and at least for some short term fixes you can find some stretching their footprints deeper into the outlet landscape. In some cycles brands choose to have fewer outlet locations in order to focus on their full price retail and on pushing the brand more up-market and exclusive. Other times a brand may be chasing top line sales and profits, and they know the outlets provide this (in the right centers) in a high-velocity way. And other times there may be excess inventory issues, and clearing them in outlet centers where they control their own brand-positive environments is the most ideal channel to do this. This was especially true during Covid where many of these brands opened pop-ups or even multiple new permanent stores. And there were some outlet centers that thrived during Covid due to the additional presence of luxury brands given their need to clear worldwide inventory, including some centers that otherwise would not have gotten such tenant mix “love” under normal circumstances. The resulting benefit of luxury brands to these centers were incremental traffic and sales, the opportunity in many cases to extend these leases further out, and the opportunity to “lease around” such sexy brands. 

A fascinating article from Business of Fashion titled "Why Luxury Brands Are Poaching Store Employees from Mass Retail," In today's ever-evolving retail landscape, the dynamics between luxury brands and mass retail are undergoing significant shifts. This article delves deep into the strategic moves luxury brands are making by poaching talented store employees from mass retail chains. It's a compelling read that sheds light on the behind-the-scenes strategies shaping the future of retail. So, grab your coffee ☕️, take a break from your busy schedule, and give this article a read. I guarantee you'll come away with fresh perspectives and valuable knowledge. Check it out here: https://lnkd.in/evgPVpgW Happy reading, and let's keep the conversation going!