Retail Focus Online
Volume 3 - 2011 Fashion fades, only style remains the same.. -- Coco Chanel
Gregory J. Furman
Courting the Best Customer
By Gregory J. Furman

Gregory J. Furman is Founder/President of the Luxury Marketing Council. Prior to founding the Luxury Council, Mr. Furman held a number of senior level positions in different industry groups, including Bergdorf Goodman and J. Walter Thompson. Since 1994, The Luxury Council has added 1,000 luxury brands, 4,000 CEO's and CMO's in 36 cities worldwide. For more, visit www.luxurycouncil.com, email gfurman@luxurycouncil.com or phone 212.517.4614.

As luxury brands begin to emerge from the toughest economic period since the Great Depression, the "best customer" - those with liquid portfolios of $1 million or more - are now kings and queens, and must be "courted" as never before. As if they were trying to win favor as "the courtiers" of a royal court, these consumers are quite aggressively causing luxury brands to rethink their approaches to every facet of the marketing mix.

These "best customers" are demanding high-touch, sophisticated, intimate, and intelligent personalized communications. Their loyalty is no longer correlated to brand alone, but to the quality of service and product offered, and as well - the way service and product are provided. Luxury consumers are "ad cynical," newly skeptical of "push" strategies, and actually more open to "pull" strategies. Or in other words, they are dependent upon what friends say; what they see online via blogs and through social networking; special, bespoke and intimate events.

Who's the Boss
The convergence of television, phone, computer, camera, fax, computer and Web are revolutionizing the way the "new luxury consumer" will buy and be influenced. Luxury marketing is rapidly moving away from the old corporate model of push (create desire and listen), to create new value-added services and products.

The luxury consumer is now in charge as never before!

The "recession" served as a call to action for luxury brands be more creative, to assemble communities, to share best practices in order to win. Essentially by redefining the entire marketing proposition based on what our customers say it should be, we can better leverage the community of like-minded, kindred-spirited luxury brands. For those who see the power of community as the way to learn faster, and market more cost-effectively, intelligently and profitably; we can surprise and delight the best customer by courting them, like the kings and queens they are.

How the Customer is Changing
Innovations in customer service and product tracking, along with new segmentation models and marketing approaches are forcing marketers to think out of the box to be on the radar of this elite group. Essentially, mass goes class; but class goes mass! After all, these "best customers" with liquid portfolios of $1 million or more number 3.2 million in the U.S. and 10 million worldwide. Here are some of this segment's unique attributes:

-- Demands courting - expects a high touch, sophistication, intimacy, intelligence

-- Splintering of once homogenous market; their loyalty correlated directly to intelligence and quality of service/product

-- Wealth is to be enjoyed rather than displayed

-- Desires concierge services and personalized, home services - from personal trainers, shoppers, financial planners, and sports coaches (golf, fly fishing, marathon etc.), to home auto mechanics, art consultants, preventive health care providers

-- Suffers from "ad deafness" - cynical, forcing integration of message and service

-- Hungers to know and the rise of connoisseurship (meets the luxury marketers' need to educate about "price/value equation")

-- Values experience - searches for the unique, the memorable

-- Requires purveyors to recognize and respect their time

Focusing on the Consumer
Every thinking luxury brand is now obsessed with their best customers, and is focusing their marketing efforts on "surprising and delighting." In turn, they are winning loyalty, greater share of wallet, and referrals of customers from this elite group.

And here's the bottom-line reason why -- This "best customer" spends more, is more loyal over time, refers more if asked (especially when rewarded), is willing to partner, wants favored/loved brands to succeed, forgives (corrected) mistakes more readily, offers better word of mouth, and even in this economy, is not price, but rather value sensitive.

Luxury brands who adopt a more "packaged-goods" approach to marketing will emerge as the winners. Welcome to the new post-recession world of luxury marketing renewed!
Museum of Arts & Design
Mad About MAD
Since it moved to its current location at 2 Columbus Circle, The Store at MAD (Museum of Arts & Design) has become a premier shopping destination for both New Yorkers and visitors to the city alike. Designed by JGA, this 1,350 square foot retail environment is a natural place for consumers to look for objects from serious to whimsical, functional to esoteric, and complex to simple. Positioned off the museum's main lobby, The Store becomes the perfect setting to showcase their unique assortment of saleable art and merchandise. Key elements include an elliptical curved glass showcase, ceiling mounted merchandising "trees" that provide innovative display space, and the main focal element; a 40-foot long organically-curved translucent glass merchandising installation that both showcases product and becomes an art object in its own right. For more, click here.
Hot Topic
And the Winner Is: Hot Topic
By connecting social and technological components into the shopping experience, the evolutionary Hot Topic store design, created in collaboration by JGA, Hot Topic and CRI was presented the Award of Merit at the 39th annual International Store Design Competition from the Retail Design Institute and VMSD Magazine. A full spectrum of exceptional retail design projects were represented through 20 competition categories. Hot Topic's award was presented in the Specialty Store category, 1,501-3,000 Square Feet. The store was also featured as the cover story in the March/April 2011 issue of Retail Environments magazine. In the feature, Darrell Kinsley, Hot Topic VP of Visual and Store Design commented, "The whole basis of this new evolution is the idea of transparency." For more on the new design, read here.
Ken Nisch & Paco Underhill
Time to SHOP
The inaugural SHOP Conference will be held May 12, 2011 at the Center for Retailing Excellence at the University of Arkansas/Sam Walton College of Business. As "The Industry Informant," this conference focuses on what it takes to be an industry leader - from the practitioners who excel in the field. Among noted speakers are Paco Underhill, founder of Envirosell and author of "Why We Buy" and "What Women Want," along with JGA chairman, Ken Nisch. They will present: Looking In, Looking Out, Looking Ahead - Shopper Trends Impacting Your Business Today and Tomorrow. For more details, visit the JGA website or the conference website.
Triennial EuroShop
Draws Record Crowds

The world's biggest trade fair for retailers was held last month in Dusseldorf. The 2,038 exhibitors from 53 nations hosted more than 106,000 visitors from around the globe. JGA was represented by chairman, Ken Nisch, and creative directors, Gordon Eason and Miho Koshido. Ken also moderated a session with leading retailers on Green Retail - Social, Environmental and Business Perspectives through Environmentally-Friendly Business Practices. Joining Ken's panel were Urs Berger (Migros-Genossenschafts-Bund), Deepak Deshpande (Tata International), Harald Fischer (Rewe Group) and Brendan Sullivan (VF Corporation) who discussed their companies' sustainability practices. For highlights, visit EuroShop's website. A recap of the show highlights will be featured in a special edition of Retail Focus Online coming soon. Watch for it!
In The News
Chicago Tribune: Resale Shops Remake Empty Retail Spaces
"Customers are becoming merchants and merchants are becoming customers," said Ken Nisch in a recent article written by Chicago Tribune retail reporter, Sandra Jones. According to the feature, "resale and consignment shops are expanding as Americans cling to their bargain-hunting ways. No longer relegated to back alleys, these secondhand stores are moving into prime locations." Ken added, "Retailers need to figure out how to create consumer liquidity, and this is a way to do it - taking things out of your closet that have value." To read the entire article, click here.
DXL Retail Design International: Destination XL
Martin Pegler recently featured Destination XL in Retail Design International, a quarterly publication highlighting the best of global retail. According to Pegler, "The "big guys" have all the luck! Not only can they see over the heads of crowds, but now they have a 12,000 sq. ft. store all to themselves. As designed by the JGA design team, the new Destination XL in Schaumburg, IL caters to big and tall men who 'seek choices in value and luxury apparel, convenience, and a more unique shopping experience for dress, casual and active attire.' This is an all-inclusive, superstore concept and it reinforces the DXL brand as a leader in XL (extra large) men's fashions and accessories." For the entire feature, click here.
Tashi L'Arreda Negozi Presents Tashi by Tata International
Italian Shopfitting Magazine L'Arreda Negozi recently featured Indian shoe retailer Tashi by Tata International among its profiles of innovative international designs. To learn more about how Tashi and its unique exterior caught the eye of design lovers everywhere, read the feature here.

Does Your Shop Pop?
Paul Holewa, senior editor of JCK Online, a jewelry-focused publication recently interviewed luxury marketing expert, Pam Danziger, about how retailers can attract new customers in 2011. Pam commented about how taxing it is to bring together "atmosphere, design and inventory," calling it a "defining exercise for retail jewelers." Pam referred to Ken Nisch's comments from her book "Shopping, Why We Love It." Quoting Ken she said, "The convergence of these elements creates a 'paradox environment,' where people confront the unexpected and surprises throughout the store, from one where customers find the ordinary and expected, or a 'parallel environment.'" For more on Pam's interview, visit JCK Online here.
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