Innovation of Luxury Brands with Cartier

May 17, 2017 at London

Download a summary of Peter Fisk’s masterclass Innovation: The Future of Luxury Brands

At the centre of Milan’s premier luxury shopping district — the Quadrilatero D’Oro, or Golden Grid — is a new opening that highlights how the luxury goods industry is responding to economic pressures.

MonteNapoleone VIP Lounge, in a palazzo between the Céline and Valentino stores, draws on nearly 150 luxury brands to tackle the problem of declining footfall. It offers private fitting services and a concierge able to obtain hard-to-find tickets. “If you want to see every red dress in a size 38 in the Quadrilatero we can bring it to the lounge for you,” says Guglielmo Miani, chief executive of fashion brand Larusmiani and boss of the Quadrilatero industry association.

Five years ago such perks were nice to have. But today, as luxury goods companies face another difficult year, they have become must-haves as brands, stores and luxury centres like Milan, London, New York and Paris fight for shoppers, Mr Miani says.

These are testing times for the luxury goods industry, worth €250bn in 2015, according to a Bain & Company study. Companies’ expectations of solid growth from emerging markets are being undermined and are embarrassing their current strategies for expansion, while developed markets look pallid and hesitant.

The LVMH conglomerate has blamed terror attacks in Paris and Brussels for weighing on sales in Europe, while the strong dollar and weakening consumer sentiment are hurting luxury sales generally in the US. Falling demand in China and Hong Kong is causing brands to rethink their tactics there. Sales growth of personal luxury goods — from handbags and shoes to prêt-à-porter — slowed to 1-2 per cent in 2015 from 7 per cent in 2013 at constant currency rates, according to Bain.

Thomas Chauvet, luxury analyst at Citi, argues that for a few years companies were “in denial” about the “reset” of the luxury goods industry triggered by the collapse of demand in China from 2013 onwards. Prada was among the brands whose sales began to slow then. “In 2015 and at the start of 2016, they have realised it is a different story,” says Mr Chauvet.

In response, the industry is adjusting to lower expectations with a variety of tactics. Cost cutting — from ending product lines and closing stores to removing well paid designers — is significant. Though not all moves were solely driven by reducing cost, several top designers have left their brands in the past year: Hedi Slimane from Yves Saint Laurent, Raf Simons from Christian Dior, Alexander Wang from Balenciaga and Alber Elbaz from Lanvin.

Instead, brands are introducing features such as concierge services, pop-up shops and art installations in stores as the lines between shopping and entertainment blur and brands compete with consumer groups.

So let’s explore what innovation really means for luxury goods today – how to innovate the concept of luxury, through to innovating heritage products and new services, and ensuring that it creates value for consumers and shareholders:

Session 1: Market disruption … how is the market for luxury goods being transformed?

  • Global trends … power shifts, new tribes, growth markets and new responsibilities
  • New consumers … Chinese to millennials, and their diverse and different aspirations
  • Digital technologies … online sales, new channels, personalization and social influeners
  • New entrants … how new and existing brands compete, niches and adjacent markets

Session 2: Innovative luxury … who are the most innovative luxury brands, and why?

  • Learning from the most disruptive innovators – Airbnb to Netflix, Tesla and Xiaomi
  • Case studies … Burberry’s digital kisses and Hublot’s luxurious reinvention
  • Case studies … 1Atelier’s personalized luxury and 77Diamonds direct to you
  • What it means for the future of luxury, challenges and opportunities for Cartier

Session 3: Business innovation … what are the different approaches to innovation?

  • 10 types of innovation and the relevant opportunities for luxury brands
  • Innovative products … classic designs and new ideas, personalized and social
  • Innovative experiences … new services, partners and retail experiences
  • Innovative business models … new revenues, new processes, new solutions

Session 4: Value impact … what is the business case, risk and return of innovation?

  • Do luxury brands need to innovate? Risks and rewards of change and no change.
  • Evaluating the potential risks, costs, revenues and value impact of innovations
  • The broader impact on business value, brand reputation and customer engagement.
  • How finance can effectively contribute to business innovation and profitable growth.

Download a summary of Peter Fisk’s masterclass Innovation: The Future of Luxury Brands

Download a summary of Peter Fisk’s masterclass Innovation: The Future of Luxury Brands

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