Is Luxury Travel Your New "IT" Bag?
Now that January has come and gone, most luxury retailers have definitely moved way beyond their holiday windows, replaced the sale racks for full price merchandise and carefully reviewed their 2015 business. Depending on the product category, some retailers were luckier than others. Although most brands were coming off of a disappointing December, the burning question retailers were asking seemed to be, "did we pick up steam and close out the end of year goal?" The streets didn't have the volume of tourist and locals 'tis-ing the season verses prior years. And, it was evident that the arms also lacked multiple shopping bags. Nonetheless, online sales jumping from $2.6 billion in 2014 to $3.0 billion in 2015. Could e-commerce be stealing the thunder?
Globally, the luxury industry has seen better years. But, because of the dollar to euro, the U.S. continues to hold steady as the largest market contributor in luxury goods sales. Based on 2015 end of year earnings, many companies have experienced a decline in over-all business. For example, Prada ended 2015 with a 26.3% decline in total sales. On the bright side, the accessories market continues to shine at a 30% increase, specifically, shoes are the winning category. According to Luxury Society, Salvatore Ferragamo's handbag and leather goods sales rose 11% in just 9 months. A major contributor to this trend are fast fashion brands such as Zara and H&M. With the rise of product quality and fit, these stores are giving luxury shoppers like myself the comfort of mixing high brands with the low brands -- pairing Zara's ready-to-wear with the "it" bag from brands like Chloe, Fendi, or Celine, and shoes from Gianvito Rossi or Valentino.
There are so many contributing aspects to the slowdown at brick and mortar -- unseasonable warm weather being faced across the globe, the pending election year in the US and the generational spending shift. An election year can bring uncertainty to the US economic market, which can result in a more conservative customer. The new shift of spending has headed towards Millennials. This generation has very different shopping habits than Generation X and Baby Boomers. They seek immediate gratification, have the ability to quickly research on their smartphone multiple vendors and the thought of putting their money into the purchase of a full collection is not appealing to most. They also see luxury from a new perspective -- a one of a kind luxury experience is greatly appealing to them. In addition to fashion, they will indulge in the best electronics, luxury cars, and travel experiences.
According to Baroque Access, an uber luxury concierge service that focuses on high net-worth clients, places like Dubai, St. Moritz, Morocco and Maldives have been the most sought after destinations this past holiday season. Most of their clients were seeking exceptional luxury experiences in the boating and aviation world by renting yachts or major villas, and chartering private jets -- this is a different kind of experience that money can buy. More than that, this can now be accomplished through digital technology. On this level of luxury it's about exclusivity, therefore, these jet setters are paying for apps that offer exceptional luxury experiences and destinations.
I bared witness to this type of service and experience this past holiday season by spending time in the mountains of St. Moritz, Switzerland. Although not a trace of real snow in the Alps, the place was flooded with wealthy European jet setters who spoke English fluently as a second language and grew up spending their Christmas and New Years on the slopes of St Moritz. It felt more like a community then a vacation destination. Mostly everyone knew each other, yet, was super excited to be meeting someone new. By day two I was beginning to feel included in this community.
I had the pleasure of splitting my time between The Crystal, The Kulm and The Steffani hotels, and the customer service and experience that I received was above and beyond my imagination. The management and staff really took the time to ask questions about my likes and dislikes to make sure I was truly comfortable. By the end of the trip I felt as though I had been a guest spending my holiday here for years.
The excellence of providing exceptional service didn't just stop at the hotel sector, it even transformed at retail. Strolling around Via Serlas, the heart of luxury boutiques, nonchalantly I found myself at Prada checking out the collection. After a while, I decided to visit the Dolce Gabbana shop, but I wasn't really sure about the right direction so I asked the Prada employee who surprisingly was the store manager. At that time, the boutique was relatively crowded however she made sure that all the clients were serviced, then personally walked me to the Dolce boutique ,where I was then introduced to the store manager . It is truly the definition of exceeding the customer's expectation and that will make a huge impact for brand positioning in the client mind.
My next stop was Zurich for business. After my 2.5 hour train ride from St. Moritz, I arrived at the Baur au Lac hotel. I hadn't been here in two years but the bellman greeted me by name and recalled the conversation we had during that time, that was impressive. I moved on to check in, and was met with exceptional service by a highly groomed staff. There was a clear attention to detail. The pristine hairdos, which differentiated the female employees working in the restaurant from the front desk, was perfection... just like my room. As a luxury retail expert, these were all great takeaways, especially as customer service and experience is the key in any service industry.
With so much happening in our lives today more and more consumers are replacing their thoughts of waiting for the right moment to indulge with the power of NOW by honoring their bucket lists to seek out these authentic experiences for either personal enrichment, celebration of a milestone birthday, or simply to spend time with loved ones. It's no wonder Virtuoso Luxe wrote that "for 2016, some emerging destinations like Cuba, Bhutan, Myanmar, Africa and Iceland have been booked and paid for, with millennials accounting for 11.4% of these one of a kind luxury experiences." Hotels are popping up globally with names like; Versace, Bulgari, Armani and Missoni -- even a Chanel spa at the Ritz hotel in Paris is part of this mix. While these brands, in essence, have nothing to do with hospitality the mission is to focus on fulfilling the consumers lifestyle.
So, will luxury travel experiences be competing with luxury brands such as Louis Vuitton, Tiffany's and Hermes? Or is this a trend in fashion like a pair of bell-bottom jeans?