London/Paris: Unique Challenges & Trends Faced by Luxury Industry

During the past week, our study tour has visited 10 companies in the retail sector. They are mostly in the luxury industry but ranging from very different categories. I have noticed a few key trends and challenges they are facing as retailers and thought it would be interesting to share with you.

First of all, branding is the key to success for luxury retailers. Customers are looking for a story and special heritage from them. The Director of Savoir Beds called it “a touch of magic”. There must to be some kind of exclusivity and bespoke aspects to make products luxurious. A good example of this would be the fine jewelry collection at Vancleef. Every piece of jewelry is unique and only available to its VIPs. Pricing is not even allowed to be disclosed at the boutiques, making it the ultimate luxury for its clients. 

Another trend in the luxury industry is to go online. In 2017, e-tail accounted for 10% of global luxury goods consumption, and it is forecast to continue to grow. Luxury brands are slow to the game because it is difficult to replicate the luxury shopping experience you get from stores when shopping online. It is also buying higher price point items; therefore, consumers might not be willing to spend that much buying goods online without seeing in person. There are certainly solutions to address these issues but can be costly for smaller players. A large amount of money will need to be spent to create a great website experience. They have to make sure that delivery is done seamlessly in a short period of time and have to leave room for a higher rate of return. Brands are hiring dedicated digital and social media team to engage the growing numbers of online shoppers and this would definitely be a competitive advantage if done right. 

Multiple companies we visited mentioned that they have started to put extra attention on Chinese customers who have large spending power. New payment methods, such as WeChat Pay and AliPay are installed for the ease of payments. Sales associates are becoming more diverse and have to know how to speak Mandarin. Tailored holiday products and store decorations are done to welcome Chinese customers to stores and websites. There are lots to be done to manage the rise of shoppers in Asia but brands are seeing the importance of tailoring to shoppers from around the world.

Lastly, fashion industry is moving fast. Consumers change taste quickly and are expecting new designs and products coming out every season. As mentioned at the Vancleef presentation, fine jewelry has always been a slow process but they now notice that customers are asking for more and more. Brands must know how to balance creating new products versus maintaining the value of products to maintain the luxurious image.

Margaret Hung (CBS ’19) is an MBA student at Columbia Business School

London/Paris: Experience the Truly Luxury in Paris

While EuroStar had to cancelled some of the trains due to strike in Paris, we were lucky to arrive without delays. Our tour guide picked us up at the EuroStar station and took us to hotel to settle down. We had a pretty busy yet exciting schedule on the last day of the trip in Paris. Our wonderful organizers, Victoria and Eleanor, arranged three company tours – Christofle, Dior and Vancleef & Arpels.

We kicked off our last day with Christofle, a fine silver flatware and home accessories based in France. It was founded in 1830 by jeweler Charles Christofle. Prior to the trip, I didn’t know much about the brand and the silver flatware industry but it was surprisingly interesting. We were lucky to have the VP of Marketing to speak with us about their three year plan on rebranding Christofle into a truly luxurious retail brand. The presentation covered very detailed strategy plans and timeline to implement the changes. It’s amazing to learn about how a brand decided to go into transformation and I look forward to seeing the new look and feel of Christofle in the coming years.

We were all very excited about our next company visit with Dior after seeing its exhibition at the V&A in London. We went over the Dior house history and current structure before diving into the most exclusive visit to its archive museum. We were not allowed to upload any pictures of the museums online but the experience was definitely one of a kind. We had a lady from the archive museum to take us through all the old collections they bought back from their customers. Items in the museum includes old heels, clothing pieces, perfume and scratches preserved in temperature controlled environment. We were all amazed by the incredible collections of archives and felt really thankful to have the opportunity to visit Dior. 

Last but not least, we visited the workshops at Vancleef to end our trip on a high note. We were introduced to the house’s history first before we were taken through a security door to enter the actual workshops where fine jewelry is made in house. There are multiple stations and steps needed to create a piece of fine jewelry from creation, molding, cutting and assembling. Each and every steps are carefully managed to create a unique piece of art. After seeing the process of fine jewelry making, I learned to appreciate jewelry and the amazing teamwork behind the scene. It was an unforgettable experience to visit Vancleef and the brand truly represents the ultimate luxury in fine jewelry.

Paris was short yet a transformative experience for all of us.

Margaret Hung (CBS ’19) is an MBA student at Columbia Business School

London/Paris: A Diverse Set of Business in London

By now, we have finished the first four days of our study tour and are on EuroStar heading towards our next destination – Paris. It has been an amazing four days; full of incredible learnings from all the company visits, including Christie’s, Burberry, UK’s Department of International Trade, Harrods, Business of Fashion, YNAP and Savoir Beds. There are a great mix of industry representations, giving us a better picture of the retail and luxury goods scene in London.

During our debrief session, a lot of us all agreed that Savoir is our favorite and most memorable visit. We were extremely lucky to have Alistair Hughes, Managing Director of Savoir Beds, to talk to us about the company’s history and strategy. Furthermore, the site visit to the production lines was a sight to see considering these luxurious beds costed £15,000. Alistair has a very entrepreneurial mindset and was bold enough to take on a company with minimal sales and track record at the time. We can easily tell how passionate he is for the business and how his grand vision is to expand the company’s footprint. The combination of quality, provenance, engagement and exclusivity makes Savoir Beds one of the world’s most luxurious mattress brands. It’s the bespoke aspect, the craftsmanship culture and the made to order model that really gives the brand the unique proposition. We admire Alistair’s ambition and focus that will continue the spirit of Savoy hotel and the heritage of legacy.

In terms of one of the most memorable activities, there’s no doubt that the afternoon tea at London’s iconic Savoy Hotel was the highlight of the trip. We sat in the center of the Thames Foyer next to the pianist who was beautifully playing classical music. We were asked to choose tea from an extensive menu and were served with finger sandwiches, homemade scones with clotted cream and jam and a mouth-watering selection of seasonal cakes. We talked about life, school and how we are all in love with London. It was a very elegant and unforgettable afternoon. 

We are on the way to Paris for the last one and a half days of the study tour. We are scheduled to visit Christofle, Dior and Van Cleef to end our study tour on a high note. I am very excited to be in Paris despite the fact that yellow vest strike seems to be a little uncontrollable. I hope that the group would be able to get around the city safe and still be able to see the beauty of Paris.

Margaret Hung (CBS ’19) is an MBA student at Columbia Business School

Paris/London: Let the journey begin!

Most of other CBS students are looking for traveling to a more “exotic” destination, such as Jordan, Bolivia or Colombia, for spring break. Yet, a group of about 20 of us decided to explore the cities of origin for the Retail and Luxury Goods industry. I assume some of us may already know London and Paris, but probably in a very different way. For me, I have only been to Paris very briefly but have never visited London. I am very excited for the amazing access to company executives and the unforgettable memory to travel with a group of people who share similar interests with you.

Our group will be kicking off the Chazen Retail and Luxury Goods trip at the private capsule in the London Eye on March 17th while giving a champagne toast to the Big Ben. For the first four days of the trip, we have a couple well-known brands lined up for company visits, including Christie’s, Soho House, Harrods, Burberry, Business of Fashion, Net-A-Porter, Savoir Beds and more. I love how there is a good mix of different retail categories. Aside from company visits, some of us plan to see Hamilton on London’s West End with a fraction of the price in NYC and join a distillery tour with Sipsmith Gin during the weeknights. On the last day of the trip in Paris, we will be in talk with Christofle, Christian Dior, Van Cleef & Arpels before having our farewell dinner at Georges.

I want to thank our organizers Eleanor Thadan and Victoria Harman for planning such a wonderful itinerary for the group. It must be very difficult to arrange trips for such a large party. Yet, I am thrilled by the company lineups and the culture activities arranged. I look forward to learning more about these companies and understanding their strategies to keep up the trends. I am sure everyone else is all as excited as I am to begin this journey in the retail and luxury good world.

Stay tuned for more updates from me during the trip!

Margaret Hung (CBS ’19) is an MBA student at Columbia Business School

Paris and London: pick your side

Paris or London: falling in love with the lovely French accent or being enchanted by the distinctive British humor? Our RLG Paris & London Chazen has come to an end, but we still cannot decide which city stole our heart.

Is it Paris, the capital of luxury, where you can eat a ‘Croque Monsieurs’ in one of the many cafés, where the smell of freshly baked baguettes will reach you from far away, where delicious macarons are served after each meal and where there is always an art exhibition worth seeing?

Or is it London, the fashion capital renowned for its distinctive street style, where pubs are national institutions, where you will never get tired of taking long strolls in one of the many parks, and where the Royal Houses and its inhabitants are among the greatest attractions?

Fascinated by the many distinctiveness, we also noticed the striking similarities: both cities are built around a river (the Seine and the Thames), there is a bohemian neighborhood where artists love to hang out (Montmartre and Chelsea), both cities are home to very prestigious universities (La Sorbonne and HEC, London School of Economies and London Business School), they both have famous amusement parks nearby (Disneyland Paris and Harry Potter World), and there are in both Paris and London globally prestigious Opera Houses (Opera and Royal Opera House).

During this engaging week, we have come to appreciate the beauty of two of the most vibrant cities in Europe: even if the 13 company visits kept us all extremely busy, the romantic atmosphere and the vibrant vibe of these places did not go unnoticed.

G.K. Chersterton said ‘London is a riddle. Paris in an explanation’: why shall we choose,  then, when we can have them both?

~ Alice Signori ’18

London: The Retail Melting Pot

Are you a Harrod’s lover or a Selfridge’s fan? These iconic department stores are as different as they are alike: cool art exhibitions, majestic food halls and an impressive selection of fashion items are just few of the many wonders you will find inside. Still, the two stores have very distinctive brand identities: while Harrods is clearly focused on the luxury segment, placing a lot of attention in creating dedicated spaces for the participants of their selective and aspirational VIP program (such as the penthouse for exclusive private shopping sessions), Selfridges prides itself in being able to delight the full spectrum of consumers, hosting streetstyle in-shop pop-up as well as creating experiences of ‘theatrical retailing’ (as Mr. Selfridge used to call them).

From brick-and-mortal retailing to a champion of the e-commerce: the YNAP headquarters (ironically inside a Mall!) is decorated with minimal design and elegant furniture. Inside the office, though, a vibrant energy permeates the building: from the studios where product shootings happen all day long to the busy meeting rooms where executives are constantly questioning how to remain ahead of the competition.

Remaining in the luxury playing field, but this time dealing with beauty, we visited the majestic townhouse of Jo Malone: a physical representation of the most distinguishing traits of the brand itself. The high-quality materials, the distinctive scents which permeate the house and a sense of elegance and understatement are what this niche luxury brand is all about: with the promise of staying true to itself and its founder’s values, now and forever.

Not only large and established companies are thriving in London; the British capital is considered the Silicon Valley of Europe for the impressive number of startups which it hosts.

Bloom and Wild is the second fastest growing startup in the UK (right after Deliveroo) and one of the few companies who are trying to innovate a very traditional industry: flower gifting.

Bloom and Wild’s aim is to put the emotional value of sending flowers at the center, making sure the gift arrive in the hands of the receiver as beautiful as it has been conceived. The brown box the flowers come in fits in a mailbox, and not only contains a beautiful selection of flowers, but also simple instructions on how to style them. The best thing is that you cannot get it wrong: the flower selection is done is such a way that it will look good even if you follow your creative lead.

More seasoned, but still with a steady growth trajectory is Depop, where we had the privilege of interacting with the CEO herself. This startup focused on vintage clothing is becoming the point of reference for the growing industry in secondary market: an industry which is getting more and traction thanks to the focus on sustainability and waste management that has become prevalent in the last few years.

To conclude our trip, we wanted to understand how breakthroughs in fashion technologies are created. Holition is a young startup which has already achieved a lot: by applying AR to the creation of smart mirrors for Charlotte Tilbury, holographic fashion shows for Dunhill, virtual try on for Uniqlo and smart windows for Hermès, the company is constantly creating innovative solutions keeping the needs of its clients at heart. That is why it prides itself in being ‘a non-tech tech company’ or better, a technological company with a human touch.

And after our last dinner eating tapas in South Kensington, our Paris & London Chazen trip came to an end.

One week, two cities, 13 company visits, more than 25 hours of talks, presentations and Q&A sessions with executives and the management team: and still, we are ready to do it all over again.

~ Alice Signori ’18

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Harrods

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Harrods Food Hall

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Selfridges in-store popup

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Group picture at YNAP

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Group picture at YNAP

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YNAP HQ in Westfield

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Jo Malone Townhouse

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Bloom and Wild – an example of its iconic boxes

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Bloom and Wild

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Depop

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Holition

London: Where Fashion E-Commerce is Born

Before saying goodbye to the city of lovers, a visit to HEC Paris, the French business school renowned for its finance undergraduate program as well as for its retail and luxury MBA track, was mandatory.

At HEC, Professor Anne Michaut greeted us with a Luxury Master Class designed specifically for our group, where we discussed the importance of brand experience and dissected examples of brands who are getting it right. Be it the Chanel Spa at Ritz-Carlton in Paris (where Coco lived for part of the life), the Land Rover ‘Vanishing Game’ blogged by William Boyd or the Veuve Cliquot castle which hosts VIP guests, the most successful brands are those who are speaking to customers on different dimensions: not only delivering distinctive and recognizable sensory experiences but also emotional, cognitive and relational ones.

A short ride on the TGV brought us to our second stop: London. The English capital greeted us with an expected sunny day which rendered pleasant even-trafficked commutes.

First stop, Farfetch: the luxury e-commerce marketplace that everybody is talking about. The company, who is reported to be ready for an IPO soon, is already partnering with more than 800 brands and active in 190 cities worldwide, with delivery methods that ranges from an outstanding 90 minutes for Gucci items in selected locations to 4 days at the very maximum. According to Farfetch’s executives, the company is more of a technology company rather than a pure retailer and has the overarching goal of connecting customers to their favorite brands ‘for the love of fashion.’ Its special projects, the most famous being the realization of the ‘store of the future,’ are all centered around creating a seamless customer journey that blends the online and the offline experience into a never-ending loop.

Similar concept, but different business model, Asos (which stands for ‘As Seen On Screen’) is a pure e-commerce player with a clear target: the 20-something fashionista. In the London headquarters, shoots are happening all day long: in the 13 studios, 26 models are shooting more than 4,000 new items a week…Quite an impressive turnaround! The stacks of clothes ready to be filed, the models who use corridors as catwalks, and a young and fun atmosphere (the average age of the 3,000 employees orbits around the 20-ish) are the elements that strike a visitor from the start.

To round out the first day in the UK, which better way than drinking a beer at a London pub? While mingling with RLG members of LBS, we got a chance to exchange tips and ideas with our fellow MBA colleagues. In case you were wondering, CBS remains clearly the best choice. It is confirmed. At least in our eyes.

~ Alice Signori ’18

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Professor Michault – HEC Paris

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Farfetch – London Headquarters

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Farfetch – London Headquarters

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ASOS – London Headquarters

Where Haute Couture Meets Technology: the Parisian Formula

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Van Cleef & Arpels

Not yet recovered from the frantic fashion week, Paris welcomed us with its most shining self. The Tour Eiffel lit up, the decorations around the streets and the numerous fashion exhibitions scattered around the city seemed to welcome our group, being the perfect complement to the fascinating company visits.

After a walking tour of Montmartre lead by the founder of ‘A French Frye in Paris’ to discover a secret Paris (did you know that in Montmartre there is the only vineyard producing directly from the city of Paris? Not the best wine in the area – apparently, since the surrounding buildings produce too much shade for the grapes to mature perfectly – but a one-of-a-kind bottle to try), the Chazen study tour kicked off with the Sunday dinner at ‘Le Train Bleu.’ Tasting the delicacies that the French cuisine offers while being surrounded by painted ceilings and wooden interiors was the perfect preparation for the week ahead.

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Van Cleef & Arpels

Off to a great start with the triple treat at Van Cleef & Arpels, where we had the unique opportunity of visiting the Haute Joaillerie laboratory: the place were the most unique pieces are crafted by hand with a process that can take as long as one full year. The pieces of art crafted in this laboratory are among the most iconic and precious ever made, ranging from the tiara made for Princess Charlene of Monaco to the iconic zipper necklace for which the Maison is well known or the ‘mystery sliding’ techniques which allows Van Cleef to hide the metal structure of the jewel under the gems.

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L’école at Van Cleef & Arpels

After the laboratory, we visited l’École, a unique and very successful concept sponsored by the brand but run by full-time Professors whose aim is to transmit the love and knowledge of the jewelry industry to a wider public: spanning a wide range of classes and topics, it is worth a visit next time you happen to be in town. The last stop of our triple tour was the boutiques in Place Vendome, with their antique book archives and the ongoing exhibitions. In line with Van Cleef’s ability of embracing new technologies, the most complicated pieces were displayed with a QR code, to access the online information page and complement the offline experience with an online touch.

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Heuritech

Speaking of Artificial Intelligence application, we could have not landed in a better place than Heuritech. This startup company specialized in luxury has developed a proprietary technology based on deep learning which scans Instagram images to provide a precise feedback on the brands’ following. In fact, 81% of the content posted on Instagram remains hidden to the brand: very few people will tag all the brands they are wearing in each picture, making each item difficult to be traced by the brand itself. Heuritech’s technology allows the brand to benchmark its performance relative to its competitors, by teaching the machine how to recognize a certain item with an accuracy level that can arrive at 99%: an interesting application which has not gone unnoticed in the industry and that has already been awarded with the LVMH innovation award for 2017.

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Women @ Dior

As a last minute surprise, the group was graciously invited to take part in the ‘Women @ Dior’ event: a two-day event where Dior mentors are reunited with their mentees to start a one-year journey together. The program is designed for women approaching the job market for the first time who will benefit from seasoned executives’ mentorship on how to better shape their career in the short and long-term. The essence of this initiative (already at its second edition) is explained by the words of Christian Dior itself: ‘Women, with their unfailing instinct, doubtlessly realized that my dream was to make them not only more beautiful, but happier too.’

After the Conference, Dior invited us to join the participants of the program for an evening reception where to meet and network with talented young women: sipping the signature champagne of the house and staring at the Tour Eiffel shining from not too far away, I caught myself wondering…. What else?

~ Alice Signori ’18

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Welcome dinner at ‘Le Train Bleu’

When dreams come true: the trip that every retail-lover has been waiting for

Have you ever wondered how jewels are made? Or what does it take to manage the most important malls in the world? Or which are the most successful online selling strategies? A group of 20 students enrolled in the RLG Chazen Paris & London will make the dream of every Retail-lover come true: visiting those companies featured in the daily news and dictating fashion trends all over the globe.

From industry disruptors (Farfetch and YNAP) to veteran companies (Asos and Harrods), we will be granted the unique opportunity of getting in touch with the executives who are shaping the industry, getting access to companies’ best kept secrets and discovering what does it take to be a successful retail startup. This one-of-a-kind experience will be led by Professor Akinola and the three organizers Marta Cuenca, Karen Fahmy and Heather Li.

After having attended a master class crafted specifically for us by a renowned HEC Professor, having participated into the debate regarding the future of retail hosted by Galeries Lafayette and Facebook’s executives and toured the atélier of Van Cleef & Arpels, it will be time to fall in love with French cuisine, stroll in London’s parks and visit the famous cultural attractions of both cities. Pairing your coffee with a pan au chocolate, tasting a fresh macaron, blending with peers during the mixer with the Retail & Luxury Goods Club of London Business School (LBS), checking out the best pub in London or trying to decide which city has the best restaurants and the most active nightlife will be key in making the trip a real success also outside the meeting rooms.

When asking the organizers to provide a short preview on the week ahead, they made it clear: “It will be a blast!”.

À bientôt à Paris!

Alice Signori ’18

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Chazen

Final Ciao Chazen Post: Pasta and People Withdrawals

Reflecting back on our #CiaoChazen trip throughout Italy, there are so many experiences and memories that will last a lifetime, but it was definitely the people on the trip that made the biggest impression. As someone who has gone on three Chazen trips, my favorite thing about these trips in general is the ability to meet and make memories with such a diverse group of CBS classmates that I otherwise may not have crossed paths with. This Chazen was no different as more than half were first years who I likely would not have had the opportunity to get to know before graduating without this trip. Additionally, our incredible three Italian leads organized such an amazing itinerary, allowing us to see all sides of Italy through their eyes. They were so good, I decided I must only go on trips organized by Italians from now on as they thought through every minute detail and really enjoy indulging in the nicest of food and wine!

This trip was also a once-in-a-lifetime experience to see the inner workings of the many and diverse companies I wrote about in earlier blogs from Ferrari to YOOX Net-A-Porter to Villa Antinori. Each of these companies really showed us Italian hospitality as they were so welcoming and excited for our visits, with some of them like Brunello Cucinelli literally welcoming us into their hometown! These visits made it so clear that personal relationships are very important in business in Italy and are the way lots of things get done. This also makes sense given the importance many of the companies put on their family ownership or heritage like we saw at brands like Ermemegildo Zegna and also Antinori, which is one of the top 10 longest running family companies started in 1385.

Speaking of heritage, it is something that was emphasized over and over again in our visits regardless the type of company. It was very clear that there is Italian pride in everything they do. However, interestingly we still saw a willingness to evolve and push boundaries. Gucci’s recent transformation is a great example of this idea of reinvention rooted in their heritage. I think that this authentic sense of heritage but willingness to evolve will be what pushes these legacy brands into the future…

We will see were the future takes these companies…but I know that the future will definitely take me back to Italy for more exploration and gelato after such an amazing trip!