We sat down with the former managing director of Goyard and RIMOWA to discuss the difficulty of distributing luxury products online and the power of brick and mortar retail in the luxury market.
In the full interview we also discuss:
- How Goyard built a brand presence in Asia whilst maintaining brand equity
- The importance of frontline retail staff in pitching your brand and telling the story to the consumer
- Luxury brand's relationship with landlords and how to build a coherent retail strategy
- The paradox of building a brand but limiting accessibility
- How RIMOWA approached building out distribution in APAC
What do you see as the biggest challenges, in distributing luxury products online?
Technically speaking, rate of return. Any product that is returned, is potentially damaged, scratched, worn and it's difficult to handle. Beyond the pricing issue, which I think is no longer really an issue as there are already large transactions being done online. Most people now have full confidence of buying online. For the brands themselves, the rate of return. What do we do with those products that are returned? How do we recycle them and put them back into distribution? How do we get up to speed with the logistics? Because when you buy something expensive, you want it right now. If you order a luxury watch and I tell you you're going to get it in three weeks, that's probably not going to do it.
Plus, obviously, servicing, training – all these products usually need some advice. How do use, maintain and service them. How do we invent that relationship that we create in the stores, between ourselves and our customers, online? I think that, probably, there is going to be a migration of the omni-channels, as we know it and really, the sales associate central role will remain, and will also move online. I think that customers will end up buying from someone online. Not from a website.
I've seen a few brands starting to do that and I think it's very powerful. As a customer, we all feel more comfortable having someone to talk to. If I have a problem, I want to talk to William. If I don't know how to use my watch, I want you to explain to me how it works. Rather than buying from a big, unknown website, such as Amazon, where you type your question and you don't know when you are going to get an answer. This is why the business model of Amazon is not equipped and adapted for the luxury distribution. It's perfect and I'm a huge Amazon fan; I pretty much buy everyday, online. I think their logistics is unbelievable and I think the luxury industry has a lot of catch-up to do.
But what we have and what we need to maintain, is that relationship between our staff and our customers. At the end of the day you, as a customer, if you desire a bag, you desire a watch, you need to have that relationship with someone, to have the confidence to buy, most of the time. Over time, that need for confidence, for some brands, may disappear, because the brand becomes so powerful – Louis Vuitton, Chanel and so on – that you trust the brand more than you can trust its sales associates. That's another story. But for most brands, you need that relationship. Successful emerging brands, such as Goyard, have very strong retail teams. The strength of the retail teams, their relationship with their customers, is really what is helping the brands.
Can we just talk about the power of the retail channel and that face to face, personal contact, especially in the luxury world. How do you design an experience for a specific customer, to make sure that you meet their expectations, when you are selling a product?
It's a very complex question and it's a very complex answer. Every transaction is different. I think what the brands can do is, first of all, understand what they are trying to achieve. Who do I want to sell my goods to? Then adapt everything, from then on. From my first point of contact, mostly online, nowadays – most of the customers discover you and your product online. To a store visit and my sales staff training and after sales service and so on. So that customer journey needs to be adapted to the core customer that you target, really.
So that's the key. At the end of the day, humanity is a very diverse pool of people so we cannot target everybody. We need to target a specific group of people, with specific tastes and people who like selling or socializing or whatever. But we need to target a specific group, in order to develop training material and things that work for them. At the end of the day, that relationship is down to, as I said earlier, your sales staff, your frontline sales staff, that are often overlooked in the strategy and the training, by the management. They are key. If you don't have good frontline staff, you are going to miss a lot of sales.
There are a lot of ways to work with frontline staff, obviously. Motivation, training, incentives, KPIs and so on. But at the end of the day, what really works is for them to also have a clear understanding of what the brand is about. What is the brand trying to do and who should they target? What the customers will hear is their speech, not mine, not yours. These people, in the store, they are going to be telling them about the latest product, which is a disaster, by the way – we never say that to a customer. But some good staff, well-trained staff, they are going to try to make their relationship and their speech to their unique customer, by discovering, for each new customer that they don't know, what is their level of knowledge and expertise for the brand.
For example, at Goyard, there was a line that I really liked, because it worked well for the brand, which was invented by one of our very talented staff in Hong Kong. Goyard had an array of colors for its products. You could buy the same product in many different colors, which was one of the strengths of the brand. Our member of staff, Jan, she was trying to discover, from the customer, with one of her first questions, if the customer knew about the colors, about the variety of colors and the fact that the colors were available for most products. She was testing the customer, to understand their level of knowledge and not to be able to serve them the generic, we are an old brand, we are in Saint-Honoré, blah, blah, blah. Or was the customer a fan of the brand, that owned 20 products and didn't need that. Really, the fact that we then used those discovery lines and really put that into our retail training and tried to help all the staff to appropriate these opening lines, in order to discover the customer's perception, understanding, knowledge of the brand, to adapt their speech. That's what is done in the store and that's what I'll need to be done online, as well. We are all different and we all have different expertise. If you ask me about Goyard, I will probably know a lot more than most customers, obviously, but yet, there are some customers that are extremely knowledgeable that know, in terms of products, as much as I do. We need to adapt all the time.
That huge variety of customers' relationships that we need to create and angles that we need to create with the customers, that can, so far, only be done by human interaction. We speak about AI, but sooner or later it will come, in our industry, yet our sales staff will still be there to be able to assess a customer's understanding and knowledge about the brand. That's very key.