Luxury Retail and Digital Management

Develop a winning customer experience in the digital world

Luxury consumers are changing – they come from all over the world, they are young and they are digital natives. How can luxury brands that have built themselves as pure physical players adapt their business model and practices to address their expectations without abandoning their luxury DNA?

Luxury Retail and Digital Management, 2^nd Edition sets focus on the major retailing challenges and customer evolutions luxury brands are facing today: the digitalisation and the emergence of the millennials and Chinese luxury consumers. These major changes have been affecting the distribution and communication channels of luxury brands; they now have to think simultaneously physical stores and e-commerce, global marketing and digital marketing.

• Defines all the tools that are necessary to manage luxury stores including analysis of location and design concept

• Explores the selection, training and motivation of the staff

• Covers everything executives, managers and retail staff need to know in order to enter, expand, understand and succeed in the world of luxury retail

Written by luxury retail experts Michel Chevalier and Michel Gutsatz, who lend their solid academic credentials and professional expertise to the subject, Luxury Retail and Digital Management, 2^nd Edition provides deep insight into the main challenges that luxury brands are facing in this digital age.

Foreword ix
by Luca Solca

Introduction xiii

Part I: Important Choices in Luxury Distribution 1

Chapter 1: The Various Models in Luxury Distribution 3

Chapter 2: Do Luxury Products Still Sell in Stores? 21

Chapter 3: Concept and Design of a Luxury Boutique 39

Chapter 4: Online, Offline or O2O? 67

Part II: Know and Understand the Client 87

Chapter 5: Putting the Customer Back in the Centre 89

Chapter 6: Customer Identification and CRM 107

Chapter 7: The Challenges of Offline and Online Integration 121

Chapter 8: Logistics Adapted to a Digital Culture 135

Part III: Making Client Relationships More Meaningful 151

Chapter 9: Customer Behaviour in the Store or Online 153

Chapter 10: The Importance of Stores for Building Customer Relationships 163

Chapter 11: Customer Experience and Building Loyalty 177

Chapter 12: How the Internet Has Shattered the Traditional Sales Model 203

Part IV: Management Tools for Luxury Stores 219

Chapter 13: Location of Sales Points 221

Chapter 14: Managing Store Personnel: A Toolbox 259

Chapter 15: At What Price Should Products Be Sold? 297

Chapter 16: Financial Analyses of Sales Points 315

Conclusion 339

Bibliography 345

About the Authors 351

Index 353

MICHEL CHEVALIER is an expert in luxury brand management and retailing. He was Executive Vice President of Bluebell Asia Ltd, a distributor of luxury brands, operating retail stores in Asia. He also managed the Paco Rabanne perfumes and fashion companies. He is now the president of Parfums Dusita, Paris, and a visiting professor of Luxury Management at HEC Paris and Universita Cattolica di Milano. He is the co-author of Luxury Brand Management (with Gérald Mazzalovo) and Luxury China (with Pierre-Xiao Lu), both published by Wiley.

MICHEL GUTSATZ is a visiting professor of marketing, brand management and luxury retailing at Kedge Business School, China Europe International Business School and Hong Kong University. He is the president of family-owned Maison de Parfum, created in 1975 by his father, perfumer Yuri Gutsatz. Yuri created the first artisan and niche perfume brand Le Jardin Retrouvé. Prior to that, Michel managed an image strategy agency and was Human Resources and Internal Communication Director of the Bally Group.

The luxury sector has undergone major changes in the years since the first edition of Luxury Retail and Digital Management was published. The luxury customer is no longer the same — the millennials are now shaping the market and influencing other generations. Millennials currently represent nearly half of luxury buyers, generating 85% of the growth in the luxury market. To succeed in this new environment, luxury brands must first understand the behaviour and expectations of this new driving force. Today's luxury customers do not simply consume a product, they live an experience. They choose luxury as a way of expressing their identity, seeking brands that form relationships around their passions. Brick-and-mortar stores and Internet boutiques are more than sales points, they are places where luxury clients live the story.

Authors Michel Chevalier and Michel Gutsatz have extensively revised this new edition to address the challenges faced by luxury brands, the evolution of the luxury customer, and the digital transformation of the luxury marketplace. The book examines the new omnichannel luxury business model, in which the customer is placed at the heart of communication and distribution channels, and discusses rebuilding marketing and customer relations in the age of digitalisation. This comprehensive, practical resource covers every critical aspect of the management of luxury sales outlets, including distribution models, store concepts, integrating offline and online businesses, hiring, training, and motivating staff, and much more.

At the heart of any retail business is the customer. This book delves into how brands can place the customer at the center of their approach and their organisation, how to build loyalty, and how to maintain the highest level of service both offline and online. Answering all the questions that luxury brands have today, and offering insights on what could happen in the future, Luxury Retail and Digital Management is an invaluable resource for executives, managers, marketers, and retail staff working in the luxury sector.

Praise for LUXURY RETAIL AND DIGITAL MANAGEMENT

"This comprehensive review of the luxury retail landscape highlights the key stakes luxury brands face and will face more and more, in a digital era where customers must be placed at the center, but in a multipolar and multichannel world. A clear vade mecum in the customers experience journey."
—Cyrille Vigneron, CEO, Cartier

"For any executive working in luxury goods and services, this is a bedside book to understand the opportunities and challenges of a comprehensive omnichannel strategy. To succeed in the digital times, brands will need to embrace a truly customer-centric approach."
—Joël Palix, former CEO, Feelunique

"This new edition of Luxury Retail and Digital Management brings a completely new approach on the way luxury should be distributed and how digital have transformed the way we should operate to be relevant to the new generation.''
—Patrick Chalhoub, CEO, Chalhoub Group

"Retailing has become a strong priority for most luxury brands today. This book presents the dos and don'ts of this activity and describes how digital resources can provide additional and effective management tools."
—Roberta Crespi, Associate Professor of Business Administration and Director of EMLUX - Master in Luxury Goods Management, Università Cattolica del Sacro Cuore, Milan, Italy