Can luxury retail attract a new generation of shoppers?
Presented here for discussion is a summary of a current article published with permission from Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.
“I think the strategy for Millennials is actually not to have any strategy for Millennials, because they can smell it,” said Laurent Claquin, president of Kering Americas, the major European designer brand group, at the Baker Retailing Center CEO Summit in New York.
Authenticity is key with this demographic, especially since we live in a world of transparency and sharing, he noted.
Mr. Claquin cited Gucci, a Kering brand, as achieving success with Millennials and Gen Z by allowing consumers and new design trends to influence the brand, “opening the door of the retail stores, literally and also digitally.” He noted that Gucci has worked with a variety of artists on Instagram, for example.
Mr. Claquin also named sustainability as an important principle for Millennials. He said that companies need to not just issue statements about helping the environment, but actually practice those principles. Reducing fashion industry-related pollution has long been embedded into Kering’s business model, he said.
Supporting inspiration, discovery and experiences were behind Saks Fifth Avenue’s $250 million renovation, Nordstrom’s New York flagship and the Hudson Yards complex.
Saks president Marc Metrick at another session commented that Saks’ renovation was critical in repositioning the brand and entering into what he called “the new luxury.”
He emphasized the power of brick-and-mortar stores, especially when it comes to luxury items. He compared the luxury shopping experience to watching a top Broadway show like Hamilton — people want to be in the theater seeing it live rather than sitting home watching TV.
At the same time that new luxury consumers want an exciting, entertaining shopping experience, they also want to feel comfortable and “at home,” Mr. Metrick said. “A lot of what we’ve done is all about becoming less transactional, becoming a much more emotionally connected retailer for our customer.”
Like Mr. Metrick, Shea Jensen, a senior VP of customer experience at Nordstrom, shared in another talk that her goal was to serve customers where, when and how they want to shop, “across multiple touch points and through multiple channels,” she said. “We’re very aware that all of us are living in an increasingly digital world.”
DISCUSSION QUESTIONS: Which traditional approaches should luxury retailers keep the same and what adjustments should they make to attract Millennials? What are the most significant ways that luxury retailers need to change the in-store experience?