Luxury Retail Stores in India and Their Coming of Age

chillibreeze writer — Rima Halani

Until a few decades ago, luxury retail was limited in India and was associated with the rich and upper-middle classes only. Today, with introduction of a large number of international luxury brands in the country, the face of luxury retail in India has undergone a dramatic transformation. ‘Luxury’ is term mostly misunderstood to be beyond the common man’s reach. But over the years, more and more luxurious goods are becoming necessities, not just for the rich classes but also for the middle class populations.

Luxury retail has four important elements - quality, value for money, customer satisfaction, and creativity. For a luxury brand to be successful, it will need to fulfill and sustain these criteria on a long-term basis if it is to survive competition and remain in the market. Retailers often use the term “luxury” to signify their high-end expensive products for the users. The Indian luxury retail market is growing currently at a compounded annual growth of 25% meaning that consumers of luxury goods are increasing day by day in the country. In fact, India is the future destination for luxury retail brands across the globe. Many global luxury brands are planning for great expansion in India and Indian customers are more than ready to spend on these high-end luxury brands. India is set to evolve in a major way if industry experts are to be believed.

India has a huge population of young and fashion conscious shoppers who aspire and follow international lifestyles. Indians people have been travelling globally and they have great exposure to these international brands. They know that these international brands are famous for their quality, durability, and covetedness.

India has the presence of most of the luxury brands of US and Europe which are getting more popularity and consumption of their goods among the people here. Luxury retail is not only limited to foreign brands but there are many Indian retail brands producing luxurious goods for the users. The niche retailing is getting more and more popular day by day and it is a sure indicator of the newest trend catching up with the needs of Indians. Middle class people who are getting huge rise in the disposable income is because of the booming IT as well as other sectors in India. Growth in income is the reason behind the increase in consumption of luxury brands and better lifestyle as well as convenient living and comfort of middle class people.

Indian retail sector is on an upswing and luxury brands are getting more popular among the middle class people is a not doubt thing. The Indian retail sector is expected to grow from $400 billion to $700 billion as predicted by declared by Northbridge Capital. Today’s retailers offer comfort shopping by becoming more active in offering consumers the world class experience. Retailers sense the new psyche of today generation and understand the pulse of Indian shopper who is price conscious yet ready to get the value for money in return of luxury brand and also the

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retailers are coming with good new product of reasonable price. Retailers allure customers with innovative new schemes in addition to comfort factor. There is no doubt that the Indians are increasingly getting hooked on the modern luxury retail environment.

Luxury retail has great presence in Indian market and growth is expected in the coming years. When talking of the challenges and hindrances for the Indian luxury market it is believed that the international luxury brands need to take care of many aspects to ensure its future position in India. But there are still many challenges to overcome for the luxury retailers which are explained below.

Indians have become brand conscious over the time and now are ready to invest in the luxury brands yet the international retail has limited scope because of the presence of certain percentage of people who do not still see luxury as an important need.

Indian retail space has failed to match the international standards except for the five star hotels. This shortage of retail space exists because of the high rentals in the cities.

India still does not have any street which can be called high fashion street that like of New York’s Fifth Avenue and London’s fashion streets.

Satisfying the customer is still a bit difficult for an international brand in India mainly because of the lack of services.

Despite of all these challenges experts and people still believe that Luxury retail in India has good future.

Your Luxury Retail Brand Is Memorable; Why Not Your Sales Professionals?(3 votes, average: 5.00 out of 5)

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Retail is separating into two camps: high priced luxury brands that give high-touch, personalized service and no-touch, stack-it-high-and-let-it-fly discounters.

Discounters are seen as no-frills, no service stores where customers only return for a cheap price, not for the quality, not for a relationship, and not for the experience.

The luxury brands do it better… or so you’d think.

In a recent press release, the Luxury Institute shared some startling facts:

Most luxury brands lose 80-90% of customers in any given year.

Those same brands are deficient in retaining even 50% of their top customers.

Only 10-15 % of a luxury brand’s customers state that they have a relationship with a sales professional (brand ambassador) and can name that person.

Again, customer attrition rates in the luxury industry are at an astronomical 80-90 %.

Contrast those findings with the upside in the luxury market, “Customers who have a true human relationship with a brand ambassador typically buy double from that brand and stay loyal for a longer period of time.”

Buy double…

Third quarter of 2011 found wines and spirits grew 11 percent, watches and jewelry 26 percent and perfumes 10 percent.

Yet we have proof a lot of very important customers slip through luxury brands’ hands every year, every month, every day – every hour. Why is that?

As I’ve said before, luxury retail is ready for a reboot – BIG TIME! The 1950’s sales practice of intimidation, feigned indifference and servitude aren’t going to deliver anything but a silent store in 2012.

Everyone agrees luxury spending has been strong, but how much more could they have gotten if they’d changed their luxury sales training?

Selling is not just an anyone pulling out a calculator and figuring the discount they can give the customer.

Selling is selling the merchandise by selling themselves first. Especially at the top end.

Since many miss on this, it isn’t that surprising we find the odds are 90% of customers not coming back because the salesperson hasn’t made the relationship personal and they’ve lost the key to the customer’s wallet.

Here are four tips from my Quick Guide to Selling Luxury Retail which you can purchase below:

Have A Treasure TroveYour salespeople must have a million ways to develop trust and sell your product. The one-size-fits-all approach that might work for someone working in a department store will not work when selling luxury goods. Customers who purchase luxury brands have stronger personalities, are self-assured and are just like the most exclusive luxury goods – no two are ever alike.

Have Four Versions of StoriesYes stories and product details are what make your luxury goods unique, but the four personalities demand that the story be shaped to their individual styles. That means cut it down so Drivers quickly see why it’s the best, stretch it out with reams of information so Analyticals know how it’s the best. Expressives want you to explain its uniqueness, and Amiables want to know how popular it is and which celebrities have endorsed it.

Address SmartphonesLuxury customers are busy with multiple demands on their time, even when they’re shopping. This is where your intuition, personality style training and patience have to kick in. While a coffeehouse can put up a sign, “Please finish your call before ordering,” you can’t, so come up with a way to deal with the probable interruptions. Even though every interaction/interruption will be different and there will be no one “right” answer, you must discuss these situations with your crew using past experiences as material for role playing. Otherwise, their hurt feelings might kill the sale.

Know All The BrandsWhether you sell cars or cashmere, the new luxury buyer is a player; their connections, brains, talent or looks got them their money. Salespeople must notice the brands that these customers are already wearing, from the Jimmy Choo shoes on their girlfriend’s feet to the Omega Seamaster watch on his wrist. Luxury customers appreciate talking to people who know the difference in feel, in smell, in taste and in service. If they don’t sense this shared appreciation, luxury customers won’t respect any advice or goodwill-building the employee has to offer. They’ll remain nameless.

And goodwill building it seems from this data, is what is typically missing in many luxury retailers. That’s why increasingly luxury brands are turning to me to help them upgrade and reboot their customer experience.

If you are a luxury brand, contact me and let’s create exceptional experiences for your customers like I’ve done with many premium brands, so you you keep your customers returning- in spite of the odds.

What ails Luxury Retail in India?Urbanization rate is on the increase – and while there had been a few setbacks over the past few years, the Indian luxury retail market is firmly back now. The

economy once again supports the rationale for spending on luxury goods, and it will continue to do so. Today, India’s upper social strata are once again aspiring to participate in the luxury shopping experience.

That said, the luxury retail market itself is not as attractive right now as it should be. Real estate is often mentioned as a major problem for many luxury players who are hoping to do business in India. This is a genuine concern.

Lack of suitable spacesLuxury retailing implies high profile, strategic locations near high income catchments. If we take the example of Mumbai, nothing less than locations such as Breach Candy, Colaba or Linking Road really make much sense for luxury retail. It is an unfortunate fact that in these very locations, there is really no existing or future scope for organized retail play. In most cases, we are talking about small residential buildings or old tenanted commercial buildings where luxury retail is being created.

In the process, the format of luxury retail gets compromised, and therefore there are rather limited opportunities for retailers to do meaningful business in such locations. The overall atmosphere that they would ideally wish to embellish their stores with can simply not be created. The customer does not get the feel and ambiance of luxury shopping, even if he or she has access to the brands.

The scenario is really not very different in Delhi – the other metropolis that holds the greatest potential for luxury retailing in India. While it does have locations such as Connaught Place and Khan Market, the opportunities for luxury retailing are also limited. The same holds true for Bangalore’s MG Road. The point is, luxury retailers need to create the appropriate infrastructure for luxury retail in most cases, since it simply does not exist in the very locations that make most sense for luxury retail.

The cost of Real EstateReal estate cost is obviously a problem. Strategic high street locations in the right catchments are in limited supply in our primary cities, which makes them very expensive. Also, there are many other businesses that are equally attractive for organized investors, and they have the option of giving out their spaces to high profit margin businesses such as jewelers. The returns from such a business as compared to those that a Burberry, Armani, Fendi or Gucci store would fetch either on a pure rental or a profit-sharing basis are much higher.

Transparency, quality of infrastructure and legality are other concerns. In cities like Mumbai, many of the locations that would be seen as prime from a luxury retailer’s point of view have serious tenancy issues. They are privately leased, and sub-leasing is not permitted in these locations. If the original lease-holders do sub-lease these properties, the tenancy is not legally sacrosanct and therefore unprotected. We often see that the sub-leasing tenant becomes a franchisee of the retail format on paper, while it is the master franchisee who conducts the actual business on-site. These complications tend to become deterrents for international luxury retailers, who find themselves unable to sort them out and do secure, profitable business.

Another question in a luxury retailer’s mind is – will the footfalls his store generates justify the high rentals? This is where the constraints of infrastructure come into sharp focus. Luxury retail consumers expect the right kind of convenience while visiting such a store. They expect accessible parking, which the location often cannot supply.

The footfall versus rental cost is therefore a concern. Rentals vary from Rs. 450-550/sq.ft. for a strategic high street location and in the case of organized luxury retail – in other words, luxury malls – they tend to range from Rs. 350-450/sq.ft. Prime locations such as Khan Market in Delhi or Breach Candy, Kala Ghoda and Colaba in Mumbai have very few spaces left for luxury retailers, and the cost is consummately steep.

It is doubtful that these rates will come down in the future, except when the Government comes up with clarity on the redevelopment of these properties. This will eventually happen, leading to more supply on the market and some relief in the situation - but there are no prospects of it in the short term.

Luxury MallsThe format of luxury retail is still not understood very well in India. To a large extent, developers of luxury malls in this country come from a residential or commercial real estate background. While they have invested in educating themselves and bringing in the best architects, the principles of running an organized luxury retail development are ignored. It is important to create an atmosphere for a luxury retailer in which he can attract footfalls and then convert these footfalls to revenue. This entails a finely-tuned combination of promotion, ambience, catchment-specific discounts and schemes, the right merchandise, a fail-proof supply chain and well-trained staff. Only when such a formula exists will luxury retail work in a mall.

To be fair, this disconnect is now being identified by many developers, investors and retailers as an opportunity, and in markets like Delhi, Mumbai and Bangalore and Pune, the right formats with the right formula in place are now coming into being.

The cost of building a Luxury MallIt begins with the right location. In a city like Mumbai, the cost of FSI alone in South Mumbai would be between Rs. 20,000-30,000/sq.ft. Conservatively speaking, and not considering any kind of fanciness, the cost of construction would come to between Rs. 4000-5000/sq.ft. The fee of a world-renowned architect would come to Rs. 2000-3000/sq.ft. All in all, building a strategically located luxury retail mall would cost around Rs. 40,000/sq.ft. In rental terms, this would translate into nothing less than Rs. 500/sq.ft.. Factoring in a profit margin, the rent shoots up to around Rs. 800/sq.ft.

In Delhi, land is controlled by the DDA, which auctions it only among the few that are entitled to bid for it. Moreover, the development that takes place on the purchased land has to conform to the DDA’s master-plan for that particular location. The cost of land would be less than in Mumbai, but the cost of construction remains the same. Even so, no organized luxury retail format in Delhi would be viable at rentals below Rs. 400-500/sq.ft on carpet area.

We all come into contact with businesses every single day. Often we deal with businesses that are mediocre – There is nothing “wrong” with them but there is nothing terribly exciting about them either.

Occasionally we’ll be lucky enough to deal with a business that operates “text book style”. They are refreshing in their professionalism and service and when we come across businesses like this we should take the opportunity to use it as a benchmark for what we’d like our own business to measure up to.

1. Offer Exceptional Customer Service:This should go without saying but so often companies forget that a polite “hello, how can I help you” or a professional and prompt dealing with a customer complaint can actually mean the difference between a repeat customer and one that goes over the road to the competition.

Customer service isn’t just about big white smiles and being polite, it’s also about being efficient and going the extra mile for customers. A good example of “going the extra mile” is when a store calls one of their other branches trying to locate a particular product for a customer. In the case of exceptional service, the store would actually orchestrate the transfer of the product to the store closest to the customer and ensure that they received it!

Companies need to foster an environment where all employees have a thorough understanding of what good customer service is. This can be achieved through on-going training sessions of company policies and practical examples.

2. Make Sure that your Business is Well Stocked with Products How can businesses operate without any stock? The answer is they can’t operate, well not for very long anyway! Investing in too little stock is such a common business mistake that it is surprising that so many people still do it. The downward spiral begins with the decision to invest a small amount in stock (be it lack of funds or fear of investing too much), customers then don’t feel as though they have enough choice, they can’t find the products they are looking for and any request for a product is met with “sorry, we are out of stock”. The shop then loses customers daily which also has a ripple effect because people tell their friends, yes, people talk! Sales drop, in fact they reach an all time low and the cycle repeats itself until the owner is forced to put a closing down sign on the door.

This kind of thing occurs around the world on a daily basis but the good news is that it can be avoided. The key is to invest a significant amount in stock and keep stock levels at an acceptable level. In doing so, businesses give their customers more choice and make more sales at the same time!

3. Keep With The Times There are always a few stores that get stuck in a time warp and one wonders how they survive. Perhaps their most loyal customers get stuck in the time warp with them!?

Successful retail stores keep up to date with trends, technology and new products. They source different and unique products as well as those in demand by customers and the market in general. Magazines, customer surveys, international trends, blogs and industry websites are great ways for retail stores to keep up to date.

4. Train Your Staff Well Training staff is an integral part of running a successful retail store. Customers don’t have time to wait at a checkout counter while new staff try and figure out the invoicing software. Staff need to know exactly where groups of products are placed, they need to be able to guide customers to the products they are looking for, give useful advice and be knowledgeable on products. Nothing makes a customer walk out of a shop faster than a sales person who doesn’t know what they are talking about.

5. Offer Seasonal Discounts and Loyalty Programs. Customers like to feel special and enjoy being rewarded for spending money at a store they visit regularly. Loyalty programs can be implemented in both small and large stores with relative ease. Customers will not only feel as though they are benefitting from shopping at a store that offers an incentive program but they are also likely to become more loyal supporters of the store in the long-run.

Seasonal specials are a great way to clear old stock and to get more feet in the door. Customers might purchase “sale” items but they may very well buy higher priced items not on sale as well. Sales, specials and discounts should be planned for specific times/seasons during the year and marketing campaigns should be put in place to promote these events.

Transform your retail store into one that becomes the benchmark for others to aspire to. Integrate these points into your business policies, mission and vision statements, make them the foundation of your business and communicate them clearly to your staff. Make the decision and take the steps to be an exceptional business and you’ll never look back!

OVERVIEW

Not all retail staff instinctively know how to offer the demanding customer what they want when they walk into a high end store. Not all retail staff understand luxury retail well enough to execute the selling process with confidence and initiative.

While employers understand that their front line staff need to provide the requisite service, there are also many key personnel within the organisation who need to hire, manage or also interact on a regular basis with customers, landlords and other business partners. It is therefore critical that these employees think, feel, talk and walk the same language that is reflective of the nature of your business ie luxury!

This 2 day programme will examine the fundamentals of what makes for outstanding customer service, the critical factors that distinguish a great sales person from a good one and how to develop a retail mindset not just with your front liners but with relevant key personnel within your company.

ObjectivesAfter completion, participants will understand:

What it means to provide luxury retail service Understanding the customer experience and how to provide it consistently Shifting from a one time sale to a lifetime customer Raising the bar of luxury retail service standards Examining the fundamentals of a service provider

Course ContentThe Importance Of Being Luxury

You are your product:Do not just sell your merchandise, sell yourself! Key factors that make or break that first impression. Interaction & Communication: Language does not only come in the spoken and written form Learn about the other ways of effective communication Customer Engagement: It is not just about what you say, its how you say it. Keeping your customer enthralled.

Delivering The Promise

See the World from the Customer's Point of View: Discerning what's important to the customer and delivering precisely that. Building Trust: Ever had that customer walk in …and leave? It is called the speed of trust and confidence. Inspire these critical factors Handling Demanding Customers: We have all had a few and we've all been one. How do we deal with that difficult situation? One Time Deal vs Lifetime Customers: Yu could either sell that one bag ...or fifty more! Keep them coming back and how.

Walking The Talk

Minding your Ps: Pride, Passion, Patience, Perseverance Do you Know Your Stuff?: Discover what else you should know apart from your product. Details, details, details!: It is always the little things that trip us up or that set us above the rest. Understand the importance of paying attention! Taking the Initiative: Do not wait to be asked, sometimes we need to do the asking! What is Your Priority: With a million things to do each day, learn the importance of prioritising and how to.

Who Should AttendFront line retail teams, supervisors, managers and relevant retail office staff who interact and deal with customers.

DeliveryThis 2-day course is conducted in an interactive workshop style using discussions, case studies, skill development exercises and presentations. The assessment is compulsory.

FacilitatorCaroline Lee

Merchandising Tips for Luxury Retail StoresX

By Bettina Drew, eHow Contributor

Cluttered merchandising displays cheapen the effect of luxury retail goods.

Consumers enter luxury retail stores expecting to be charmed, excited or lulled into sensory indulgence thanks to the perceived higher quality of goods displayed and stored within. Luxury retail stores must meet high expectations for justification that consumers should spend extra money on items that are more costly or not vital to their daily satisfaction. The right merchandising can persuade consumers that purchasing luxury retail items will enhance their quality of life in some way. Follow merchandising tips for luxury retail stores to help increase sales, generate buzz or boost customer loyalty.

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Tips on Visual Merchandising

Starting a Retail Store

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1. Materials

o Use high-quality materials for shelving, store displays and accessories to permeate the sense of luxury throughout the store. Prop pricey sunglasses on shelves made from soft, reconditioned wood or gleaming glass countertops. Marble, glass, wood and top-notch industrial metals create an impression of luxury; customers will want to take the experience home with them by purchasing a retail item. Shimmering satins, rustic burlap, organic cotton and hand-dyed textiles make impressive luxury merchandising fabrics for storefront window displays. Using this merchandising tip affirms a customer's perception that the store's visual luxury extends to the quality of the product.

Lightingo Avoid blasting luxury retail goods with cheap fluorescent lighting. Instead, use

chandeliers, wall sconces or modern track lighting to create special moods surrounding the merchandise. Spotlights can make an exquisite vase or elegant piece of jewelry look like a piece of art. Lighting dimmers help adjust variations throughout the store, creating pockets of brightness and cool shadow that visually stimulate customers to explore different areas. Another merchandising tip: tasteful electric candles resembling the real thing add intimacy in dimmed store windows.

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Spaceo Part of the appeal in luxury retail goods lies in its perceived rarity, so don't

showcase 45 units of the same watch in your below-counter glass display cases. Instead, carefully place only a small, carefully selected variety of watches with plenty of surrounding space made more dramatic with lighting choices discussed earlier. Showcasing only a few luxury goods encourages customers to dawdle over displays, appreciating the subtleties of a product. This merchandising tip reinforces the idea that the luxury item's scarcity adds to its value and encourages customer interaction; when customers like a particular object (for example, a bracelet made of semi-precious stones) but are curious about other color choices, they'll need to approach sales staff to see additional merchandise. This offers employees additional face-time to seal the deal.

Themeo Some luxury retail stores may build merchandising displays around a theme. A

fine leather jacket may look somewhat appealing on a plastic hanger -- but imagine building a center display involving a vintage motorcycle with a baguette and wine bottles loaded into the front basket, with that same leather jacket artfully tossed over the seat. This merchandising scenario entrances customers

with the idea of tootling around windblown, coastal highways in Greece or Italy wearing the leather jacket: an instant sell.

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Types of PlanogramsX

By Leann Harms, eHow Contributor

Planograms are used to illustrate how items should be merchandised.

Planograms are diagrams primarily used by retailers to show where products should be placed and how they should be merchandised. Many chain retailers use planograms to maintain consistency in various stores, although the planograms may vary somewhat according to the different needs of each location. Some are very detailed and some are basic, intended for fast turnover of products and displays. There are basically three types of planograms.

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What Are Planograms?

What Does a Planogram Look Like?

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1. Box With Text

o The most basic type of planograms uses box shapes to represent different products, with the name of the item typed inside the box. For example, a planogram designed for a condiment aisle might have rows of thin rectangular boxes to represent ketchup bottles. The brand of ketchup will be typed inside of the box. There might be two rows of each brand depending on the store’s needs. If they typically sell more of one brand than another, there will be more facings of the high seller. These planograms are usually black and white, two-dimensional diagrams meant for use in grocery stores or areas of retail department stores where merchandise turns around quickly.

Pictorialo Pictorial planograms are more complex and detailed than basic planograms

consisting of only boxes and text. Pictorial planograms incorporate images of the product and how it should be displayed. They are usually drawn more accurately to scale and are in color to provide an exact depiction of how the items are to be merchandised. This type of planogram is commonly used in apparel and department stores, where displays are more prominent and presentation is imperative. They may illustrate how shirts should be organized on a sales rack or they may show how dishes or small appliances should be displayed. These planograms are usually flat, two-dimensional, computerized illustrations.

o

3-Do As technology continues to advance, so do the applications and software used to

create planograms. These advances have led to the growing popularity of three-dimensional planograms. They usually encompass an entire department layout, and computerized images create photographic illustrations of how the entire department, including promotions and displays, should look. Three-dimensional planograms are usually drawn to scale and include aerial views of the area.

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What Retailers Can Learn From Luxury BrandsFriday, 21 October 2011 08:31

As the powers of mobile, social and web continue to develop, retailers must implement compelling multimedia elements such as photos, video and blogging to excel in the space. The luxury retail market in particular has provided optimal examples of branding and multichannel engagement. By creating a unique, elite experience, luxury retailers such as Neiman Marcus and Nordstrom, and upscale manufacturers such as Burberry and Gucci, have successfully utilized social, mobile and web elements to engage consumers and formulate long-lasting relationships with their shoppers.

To provide insight on the thriving luxury market, the e-tailing group recently released its “Inaugural Luxury Mystery Shopping Study” and “Luxury Customer Experience Index.” In a survey of 1,000 shoppers during September 2011, the consultancy investigated consumer response to web, social and other multimedia experiences. “The convergence of technology, from mobile to social trends, may ultimately be the most important factor connecting consumers to the brands they covet,” the report revealed.

For the study, the e-tailing group analyzed 12 luxury brand manufacturers and eight retailers based on factors including overall brand engagement, shopping efficiencies, customer service and merchandising tactics. Lauren Freedman, President of the e-tailing group, revealed key insights and findings from the study and what retailers can learn from luxury brands and department

stores.

Retail TouchPoints: Based on your analysis from a variety of outside sources for the e-tailing group’s “Inaugural Luxury Mystery Shopping Study” and “Luxury Customer Experience Index,” can you provide an outline of the general browsing and buying behaviors of today’s luxury shoppers?

Lauren Freedman: Affluent consumers have embraced technology and associated devices to where tablets and social access via Facebook now are part and parcel to daily media consumption. Industry research shows that while less than 50% of affluent shoppers actually make purchases on luxury sites, the browse factor is entrenched as more than half of wealthy customers are visiting fashion web sites to browse, shop or check out the latest designers. In fact, a large portion of luxury shoppers say the convenience of e-Commerce has led them to spend less time shopping in stores.

RTP: The study revealed that overall, luxury brand retailers such as Bloomingdale’s and Barneys excelled in an overall online experience versus upscale manufacturers such as Gucci and Burberry. Can you explain this?

LF: Luxury retailers are beginning to realize the requirements for a comprehensive on-site selling experience and continue to elevate it, while brand manufacturers face a steeper learning and selling curve, focusing their energies more on the “brand” experience.

While luxury retailers do a better job of presenting the “whole package,” both brand manufacturers and retailers in the market must work to create a complete online shopping experience. For example, despite the encouraging results for those at the top of our “Luxury Customer Experience Index,” it is interesting to note that only two sellers in our study achieved a score of 80-plus, with 83 as the highest score on the 100-point scale. These 80-plus results are modest compared to our more established “e-tailing group 100 web sites” (EG100 index), where 10 sites achieved a score of 80-plus, with 88 points attained by the highest scoring merchant.

RTP: There is a noted increase in video/audio usage across channels, especially in blogs. How do you think this allows luxury manufacturers and retailers to connect with their audiences? What do you believe makes a “successful” video marketing strategy?

LF: Video is used extensively (95%) by luxury merchants. A “successful” video marketing strategy is one that engages the shopper and reinforces the brand image and persona. In addition, our research shows that a category page and product page presence dominates, where retailers exploit video’s ability to drive conversion. This will become increasingly relevant as we see a greater penetration of “shoppable” videos where item details can be perused directly from the video content.

RTP: The “Luxury Mystery Shopping Study” reinforces the importance of tapping into multimedia strategies. How can retailers across markets learn from these luxury brands/retailers to create a richer, more engaging experience across mobile, social and e-

Commerce sites?

LF: A few tips retailers can implement into their cross-channel strategies include:

1. Take advantage of a captive audience by enhancing product pages with relevant recommendations that will inspire target customers to increase buying likelihood;

2. Incorporate tools that give customers the ability to “touch and feel” the product;

3. Advance the customer relationship (and sales!) by including and encouraging product ratings/reviews;

4. Deliver tools that will encourage social engagement such as sharing options, links to Facebook and Twitter, and the Facebook “Like” and Google+ “+1” buttons; and

5. Utilize video as an extension of selling products and bringing them to life for consumers.

RTP: Social shopping has increased significantly in the last year, based on the e-tailing group’s research. Four percent of the e-tailing 100 participated in social shopping during Q4 2010. During Q3 2011, participation boosted to 15%. How do you anticipate social shopping will develop in the coming year? Furthermore, what makes combining social and commerce a logical investment for retailers?

LF: Social engagers encourage shoppers to forge a lasting relationship with the brand. Very early results from our current “Q4 2011 Mystery Shopping Study” show that more merchants are integrating some form of shopping functionality into their Facebook pages. While from a revenue-generating standpoint they may not be the most lucrative right now, content-rich Facebook pages have become another channel replete with merchandising, promotions and customer engagers such as video and discussion boards. Enter the age of F-Commerce: From a shopping perspective, merchant Facebook pages enable customers to interact with the brand, become involved and informed, and shop directly from a Facebook storefront without being redirected to the main e-Commerce site.

RTP: Which luxury retailers excelled in cross-channel engagement and communication strategies this year? Moreover, what can merchants across markets learn from these retailers’ strategies and techniques?

LF: Nordstrom artfully supports a very active social community on Facebook and also encourages engagement on its site with a blog and multiple sharing options. This is leveraged not only to lure online shoppers but to drive foot traffic to its brick-and-mortar locations. Cross-channel efforts are further enhanced with a sophisticated store locator and “shoppable” catalogs.

Finally, Nordstrom is a master of merchandising up-to-the-minute trends and hot designers in a creative way, using relevant search options to help shoppers find them and enhanced product

pages to sell them.

Taking a page from Nordstrom’s book, merchants must avoid siloed online efforts by providing lots of visual “wow” and branded content and backing it up with innovative merchandising, sophisticated search options and robust product pages that sell the merchandise.

Lauren Freedman is a 15-year veteran in the e-Commerce field. She founded the e-tailing group in 1993 after an extensive career as a department/specialty store buyer. Under her guidance the e-tailing group has evolved as one of the premier e-Commerce consultancies. In 2001 Freedman authored her first book, It’s Just Shopping, which provides a comprehensive, behind-the-scenes look at the evolution of multichannel selling. She is a frequent speaker at conferences such as Shop.org, eTail and Internet Retailer, and is a go-to-resource for media outlets including The New York Times, WWD, CNN, Financial Times, USAToday, Business Week, Forbes, Internet Retailer and Crains.