5 Things You May Have Missed This Week
1. How Silicon Valley (and other global tech hubs) Are Helping Luxury Return To its Roots
The original principles of luxury were led astray by conglomerates’ mass market motives. Tech is helping new brands bring those standards back.
A luxury brand that avoids the internet is effectively refusing to engage with its customers. . . . It is not listening to what its customers want, which is dangerous in any consumer-facing industry.” This is the thinking of Lyst CEO Chris Morton, and he gets it completely right. For some time now, esteemed brands under the umbrellas of luxury’s ‘Big Three’ — LVMH, Kering, and Richemont — have initially refused to embrace e-commerce. Many of them still lag behind even today. But this is to their detriment.In its relatively brief history, the tech world (Silicon Valley and other tech hubs around the globe) has laid many a complacent industry in its disruptive wake. With its rapid innovation and intense growth, it’s kept old industries honest, on their toes, and in a permanent sweat.
The luxury sector is certainly no exception. Here, the tech sector has forced even the most stubborn of luxury luminaries — Chanel, Fendi, Celine among them — to (reluctantly) embrace e-commerce. At the same time, it’s allowing emerging brands to equal or surpass existing companies like these in quality, and keep costs low by avoiding the need for a storefront. Furthermore, new technologies are also enabling new brands to create custom, made-to-order garments for shoppers. And in the process, the tech world is pushing luxury to return to its roots.
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This article is by Amy Boone and originally featured on Lean Luxe
2. Is it Even Possible to Sell “Luxury on Amazon”?
While much of Amazon’s sales volume in diapers, blenders and other unglamorous products , the e-commerce behemoth is also a fashion giant. Next year it’s expected to become the biggest seller apparel seller in the US, and it boasts and enviable base for higher-end brands:Penetration of it’s “Prime” membership program is greater among upper-income households, and they are incredibly loyal repeat customers who like to shop for clothes.
And yet high-end luxury labels aren’t biting . Jean-Jacques Guiony, CFO of LVMH, which owns Louis Vuitton and other luxury labels, told analysts on an earnings call Oct. 11 that there is “no way” it would do business with Amazon.
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This article is by Marc Bain and originally featured on Quartz
3. Digital Luxury: Who Are 2016’S Winners (And Losers)?
Luxury was late to the digital party and for the most part hasn’t acquitted itself well ever since. Which is why the regular ContactLab/Exane BNP Paribas reports into just how good the purchasing experience is for consumers is always interesting.
The report looks at factors such as digital touchpoint like abandoned carts, customer service, ease of ordering and general communications, plus physical touchpoint like packaging, delivery and much more.
Last year it did this from a Milanese viewpoint and this year it was New York. So what did it learn?
Well, Balenciaga and Fendi topped the performance ranking this time after ContactLab did its usual practical tests. It bought and returned products from 31 brand websites and five multi brand e-tailers.
Kering (Balenciaga owner) and LVMH (Fendi owner) must be happy as they were joint first. Kering scored again in number three position as Saint Laurent (or is it YSL these days?) took the bronze medal. Chanel and Coach shared fourth place, just missing the medal-winners rostrum.
Dropping back this time were Cartier, which had scored well last year but was in eighth spot this time, plus former high-ranker Louis Vuitton at only number 17. Hugo Boss was a lowly 31. Gucci stayed at number 16.
Burberry and Prada both improved. But given that Burberry was only at number 13 when it prides itself on being very digitally-focused, that’s not great. And poor old Prada only managed a rise to number 27 so its much-talked-about digital turnaround obviously hasn’t kicked in yet.
What’s so interesting about this particular report is that it’s not about the things we often notice first, such as high profile websites or social media engagement; it’s purely about the nuts and bolts of buying and returning goods, because that’s what the customer does and that’s how the customer interacts most with a brand. Given that online accounted for all of luxury’s growth last year and is expected to do so for the next few years at least, you’d think the experience would be prioritised.
You’d also think luxury retailers rather than monobrands might perform better with their long traditions of customer service, but some of those don’t acquit themselves that well. Saks was only in 13th place, Nordstrom 18th, Barneys 26th and Bergdorf Goodman an unimpressive 35th.
Who was the top retailer? Net-a-Porter in sixth place. I must admit, the experience of buying from this company (and its Yoox arm) is generally excellent. It wasn’t always. Many a time I’ve paid extra for Saturday delivery from Yoox only for something to arrive on Monday. While Net-a-Porter once took five months to refund me for an item returned the day after delivery. It was only a small amount and I completely overlooked not getting the refund until it just showed up nearly half a year later.
But that was five years ago, since then the company has shown why it’s the luxury e-tail leader.
“Net-A-Porter is digital native and is extremely consistent in assuring a top luxury performance in the majority of the more than 100 digital and physical touch points we have been evaluating along the online purchasing process,” said Marco Pozzi, senior advisor at ContactLab. He added that US department stores came out better on the digital touch points (especially Nordstrom and Saks) but they’re “average or lagging on physical touch points”.
“It should not be difficult for department stores to improve packaging, fillers, documentation and overall care in order to give a more luxury and less Amazon-like feeling to online customers,” Pozzi said. “Of course this requires focus on the problem, and for sure additional costs.”
The stores do rate highly on returns though, especially Nordstrom, which is unsurprising as multibrand retailers have a long tradition of liberal returns policies while luxury brands themselves are frequently very unforgiving if you change your mind. However, ContactLab said Burberry and Cartier top the returns service rankings.
This post first appeared on Trendwalk.net, a style-meets-business blog by journalist, trends specialist and business analyst, Sandra Halliday.
4. Alibaba's New Payment System Lets Virtual Reality Shoppers Pay by Nodding
Alibaba Group Holdings' finance arm on Wednesday demonstrated a payment service that will allow virtual reality shoppers to pay for things in future just by nodding their heads.
VR Pay, the new payment system, is part of Alibaba's efforts to capitalize on the latest technology in online shopping. In 2015, for example, it introduced a facial recognition technology for Alipay mobile payments service advertised as "pay with a selfie".
The VR payment technology means people using virtual reality goggles to browse virtual reality shopping malls will be able pay for purchases without taking off the goggles. They can just nod or look instead.
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This article is by Sijia Jiang and originally featured on Reuters
5. Nike’s Mark Parker on Imagination, Innovation and Art
It takes a truly insatiable creative appetite to find your way to the top at Nike, a company which has long been acclaimed for gnawing at the bit when it comes to innovation in design. In the case of Mark Parker, who this year celebrates his tenth anniversary as chief executive officer of the company (and his 37th, no less, as a designer there) his hunger for the new is as acute now as it ever was. By placing values accrued through his rigorous design training at the forefront of what the sportswear behemoth does, Parker has played a key part in revolutionising sportswear. In short, form follows function, and there is always potential for more change, more innovation.
On this he is resolute. “When I started at Nike as a designer I was always asked, ‘what more you can do with shoes that hasn’t already been done?’” he told AnOther, in a moment out from the action-packed Olympics Games in Rio de Janeiro this summer. We're sat in the cool, air-conditioned Nike headquarters, overlooking Copacabana beach and the noisy volleyball stadium situated there. “That was over 30 years ago, and I see more potential for change and innovation, meaningful innovation, today than I did then. It’s a case of asking, how do you get the best combination of performance, sustainability and aesthetic? This stuff is always changing, so there are more and more possibilities, and that’s always exciting.” Often, in fact, the company’s strongest ideas are put on hold while the technology necessary to execute them catches up, he tells me. “That’s okay, it’s part of being an innovator, but it also makes it fun because we’re constantly pushing. I like the fact that we can work with people in other fields to solve those problems.”
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This article is by Maisie Skidmore and originally featured on AnOther