IESE Business School celebrated the 17th edition of Fashion and Luxury Goods industry meeting created by Professor Nueno seventeen years ago.
Once again, many CEOs were representing the luxury industry, mainly fashion and beauty houses. Patrizio di Marco (Dolce Gabbana), Alessandro Varisco (TWINSET Simona Barbieri), Giorgio Presca (Golden Goose), Sian Keane (Farfetch), Luca Solca and Henri Devos (Gucci), among others, shared their thoughts about brands, talent and Millennials in such a special industry.
Many different topics went over but I would like to underline the following ones:
- Retail as DNA: Take care of what products define your value proposition. If you focus on icons, you will fell.
- Understand your wholesale limits. If you are selling luxury, avoid to grow in every channel and at any price. Pricing is one of the main issues in a globalized and digital economy. Customers are omnichannel and if prices are not aligned across different channels, the brand will be negatively impacted.
- Louis Vuitton rented a flat in Paris and access was limited. Only customers with invitation could access to the event. In terms of retail, it is much cheaper to rent a flat than having a flagship in a high street…
Source: IESE Business School.
- Best practices on Digital: Burberry, Gucci, Luxottica… (i.e. Luxottica reviewed their wholesale channel because they found some of them selling at a 20-30% discount price).
- For luxury brands, to sell accessible products (opening price point) thru their site could be an option, but customers are expecting to have a special experience with their favourite brands.
- For luxury brands, Amazon is more a challenge than a opportunity. As I said before, in luxury, pricing is key and Amazon is a market place for many wholesalers competing in price. Therefore, customers are getting used to see the same product in many different prices. A good metric to evaluate your positioning is to calculate the number of items off price divided by the total number of items.
- What KPIs should be analysed when standard brick-and-mortar metrics are out of date? ROIC (Value creation), traffic conversion, units by ticket, average ticket, usage of instagram, Facebook followers, social media buzz…
- What about Virtual Reality? It can increase productivity in offline stores and improve conversion when stores don’t have availability (stock).
- A few years ago, companies calculated the number of pages printed in magazines divided by the total number of pages printed in the industry. In the digital era, companies have to rethink their marketing understanding and approach to what brand “temperature” means.
- Nowadays, companies don’t sell only products but stories (including social values and sustainability). A story means emotion. Millennials love store telling + story living. The challenge is how to engage with them, differently.
- A brand is the expression of the people that buy their products. Don’t try to redefine your brand experience, customers will make you evolve. Brands with a core DNA will perform better here.
Click on the image to watch the some insights featuring Patrizio di Marco, Giorgio Presca, Sian Keane (Farfetch), Prof. Fabrizio Ferraro amongst others.
Those are some important points I wanted to underline, but we had also the pleasure to listen to Lucas Carné (founder of Privalia, now Vente-Privée) explaining how the culture of a company is key to perform above expectations. And the presentation of Vudoir, a new app that allows people to decide what to buy and what to wear when they are doubting thanks to immediate and positive feedback of the fashion community.