‘It’s a different play for them’: Luxury brands are turning to mega-celebs to lure young shoppers

Glossy – Seeking out collaborators with mega-star power among young audiences is trending among luxury brands. Stella McCartney is the latest, announcing on Friday a new collection with Taylor Swift tied to Swift’s upcoming album, “Lover.” Few details other than the collection’s existence have been shared — a post by Swift on Instagram said more information will be revealed closer to the album’s late-August release.

While this is Swift’s first fashion collaboration, Stella McCartney has previously worked with designers including Stan Smith and Ed Ruscha. But Swift is easily its highest-profile collaborator — with millions of young fans — and notably comes from outside the fashion industry.

This is a tactic that is becoming common for luxury brands. In March, Tommy Hilfiger debuted a collection designed with actress and singer Zendaya, who has 56 million Instagram followers. In late 2017, Helmut Lang collaborated with hip-hop star Travis Scott, who has 17 million Instagram followers.

“Luxury brands’ loyal customer bases are aging, and many of these brands realize the importance of attracting younger segments,” said David Naumann, vp of marketing at Boston Retail Partners. “Some brands have added new lines to appeal to younger shoppers, such as streetwear or styles at lower price points.”

“Celebrity collaborators that are popular among younger consumers help luxury brands increase awareness among this new customer segment and inspire them to shop at a store they normally don’t,” Naumann said.

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Giant Works to Live up to its Name

Frozen & Refrigerated Buyer – The Ahold banner makes a couple of bold moves in an effort to differentiate itself from mainstream competitors. With a name like Giant Food Stores, consumers tend to expect a lot. To be honest, though, the 96-year-old, Carlisle, Pa.-based chain, part of Ahold Delhaize USA, is generally viewed by shoppers as a very average supermarket, consistently ranked near the middle of the pack. “It’s a reliable, middle-of-the-road grocer, but not a destination,” confirms Karen Strauss, principal at Wilton, Conn.-based Cadent Consulting Group. That’s all well and good, she continues, except that Giant happens to operate in the same market as some pretty heavy hitters, most notably Wegman’s.

Although e- commerce reportedly represents only about 2% of total Ahold sales, “Online ordering and fulfillment are definitive ‘must-have’ services for grocers to compete both locally and nationally,” says Scott Langdoc, senior vp and practice lead at Boston-based BRP Consulting. From Kroger and Safeway to Target and Walmart, “Major national brands are pouring millions into e-commerce, and regional brands must work to keep pace as differentiating will be increasingly difficult.”

That said, Langdoc likes what he sees from Giant so far. But in order to stay ahead of the curve, the chain will have to remain “hyper-focused” on ways it can improve. “Customers expect the perfect blend of the assortment they know from Giant stores along with the most efficient, frictionless e-commerce experience possible,” he says. So although the chain is off to a good start, there’s no letting up.

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As luxury competitors thrive online, Capri Holdings bets on aggressive brick-and-mortar expansion

Glossy – In the past two years, Capri Holdings, formerly known as Michael Kors Holdings, has attempted to establish itself as a competitor to huge luxury groups like LVMH and Richemont. In the last two years, it spent billions to acquire big brands like Versace and Jimmy Choo.

“Opening more stores is one strategy to boost revenues, but it could backfire,” said David Naumann, vp of marketing at BRP Consulting. “Opening stores takes time, and if they are not in the right locations, they have the risk of increasing revenues at the expense of profits. For a faster revenue boost and controlled profit margins, Capri Holdings should consider focusing on expanding its distribution with luxury department stores or online marketplaces.”

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Cities of luxury: Dubai – Luxury Memo special report

Luxury Daily – As the business hub of the Middle East and one of the world’s wealthiest cities, Dubai has attracted its fair share of affluents and luxury brands. Luxury is arguably the primary industry in Dubai, as the city’s economy revolves around trade, tourism, real estate and financial services. The United Arab Emirates has increasingly become a haven for the ultra-affluent from around the globe, and brands across luxury sectors have expanded their presence in Dubai.

“Physical stores are essential for luxury brands expanding to Dubai, especially for brands that don’t have global brand awareness,” said Ken Morris, principal at BRP Consulting, Boston. “When consumers are buying extremely expensive products they want to see, touch, smell and try the products. “The experience is oftentimes just as important as the product itself,” he said.“Luxury consumers love the theater of shopping and want to be treated like royalty.”

“With more than half of the population in the Arab world under the age of 26, according to Vogue Arabia, retailers need to appeal to the communication styles and mediums preferred by younger shoppers,” BRP’s Mr. Morris said. “These young shoppers will be their future customers and brands need to introduce them to the brands and inspire them become loyal customers.”

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The long, slow fall of Lord and Taylor

Glossy – The world of department stores is facing rough seas. One company that has been hit particularly hard is Hudson’s Bay Company, the Canadian owner of retailers including Saks Fifth Avenue that announced plans earlier this month to sell the floundering Lord & Taylor brand.

“The challenges for department stores are primarily the result of selling commodity products — products that are available at their competitors’ stores and also sold by the manufacturers’ branded stores,” said Ken Morris, principal at BRP, retail consulting firm. “The best way to survive is to differentiate your brand through experiences, just like some of the successful European department stores such as Galeries Lafayette, Harrods and Selfridges.”

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Highsnobiety begins its e-commerce transformation

Glossy – Highsnobiety, the streetwear media company founded in 2005, is adding e-commerce with the debut of an exclusive collection of Prada’s newly relaunched Linea Rossa athletic line. Highsnobiety will be the only place outside of Prada’s own channels where this collection can be purchased.

The new platform is intended to be a place for highly curated product drops and exclusive collaborations for Highsnobiety. Jeff Carvalho, managing director of Highsnobiety, said that launching with a traditional luxury brand like Prada, as opposed to a streetwear brand was a conscious move.

“Everyone probably assumed we would launch with a sneaker,” Carvalho said. “We wanted to do something a little surprising, and even in the short time since it launched, we’ve learned so much. We now know that our customer is willing to pay for a premium luxury product.”

“Selling streetwear on Highsnobiety enables Prada and other luxury brands to reach a large number of shoppers that are interested in streetwear,” said David Naumann, vp of marketing at BRP, retail consulting firm. “With more than 6.5 million unique visitors to Highsnobiety each month and more than 5 million followers [Facebook, Instagram and other social channels combined], Prada has a captive audience for this product category. Prada joins several other luxury retailers that are expanding into streetwear to attract younger customers to their brand, and leveraging third-party media and marketplaces is a great way to accelerate the awareness and sales of new product categories.”

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Neiman Marcus pushes into secondhand retail as resale category climbs

Luxury Daily – Retailer Neiman Marcus Group is furthering its interest in luxury resale with an investment in designer handbag and accessory consigner Fashionphile, its latest partnership with an upscale secondhand platform.

In light of the rapid growth of the high-end consignment market, Neiman Marcus has previously sought strategic relationships with resale retailers. However, its minority stake in Fashionphile marks the retailer’s first investment in a secondhand luxury company.

“Secondhand or ‘preloved’ luxury merchandise is joining the mainstream trend of consumers that are passionate about sustainability and recycling,” said David Naumann, vice president of marketing at Boston Retail Partners, Boston. “Buying used merchandise and clothing doesn’t have the stigma it had in the past when people were embarrassed to admit they purchased an item at a secondhand store.

“Now, even some very affluent consumers are comfortable and proud to purchase previously-owned items,” he said. “Partnering with luxury resellers enables Neiman Marcus customers to enjoy the benefits of luxury goods at a fraction of the full price and it is a great way for aspiring consumers to obtain luxury goods they normally couldn’t afford.”

“Partnering with resellers enables luxury retailers to participate in the secondhand market opportunity without setting up completely new processes for obtaining used merchandise, inspecting it and managing the inventory and promotion of the items,” BRP’s Mr. Naumann said. “It allows them to offer used merchandise options immediately with minimal start-up costs.”

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How Madewell could become a billion-dollar brand

DIGIDAY – Madewell, which has been acting as the J.Crew Group’s breadwinner as the flagship brand’s sales struggle, is on a mission to double its annual sales from $500 million to $1 billion.

The company announced yesterday that Libby Wadle, who was previously Madewell’s president, will become its first CEO. In an interview with Fortune, Wadle said that she was getting a title change because the “complexity of the business is changing.” Madewell generated more than $500 million in revenue last year, and Wadle said that “we have our eyes set on becoming a billion-dollar brand in short order.”

Madewell has room to grow, but it will have to do so without diluting the brand. Ken Morris, principal at BRP, retail consulting firm, praised Madewell for its “narrow focus,” and said that its reputation for “offering a great product at good prices,” is what’s helped build customer loyalty.

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Ralph Lauren builds on its ‘next great chapter’ with diversity-focused campaign

Glossy – Ralph Lauren has always been associated with a certain image: a preppy, WASP-y style that has remained relatively unchanged for years. But its latest global campaign, which launched Thursday, sees it emphasizing diversity and inclusivity as the brand seeks to reinvent its image and its business strategy.

With the refocus, the brand has also embraced things like streetwear, both through the adoption of the drop model and in some of the brand’s high-profile collaborations, including one with British streetwear brand Palace that was named one of the best collaborations of 2018 by Highsnobiety.

Ralph Lauren has also shifted its attention to the international stage. After closing several stores in the U.S., including its Fifth Avenue flagship store in April last year, the brand has been actively rolling out stores in China, opening “one a week,” said Ralph Lauren CEO Patrice Louvet, who joined the company in 2017. (Ralph Lauren still plays an active role in brand decision-making.) The brand currently has around 80 stores in China.

“China represent about a third of all personal luxury goods purchases globally and is one of the fastest growing markets for luxury retail,” said David Naumann, vp of marketing at Boston Retail Partners. “Fashion brands can’t ignore the lucrative Asian markets, as it represents tremendous growth opportunities. Ralph Lauren can maximize profits by closing underperforming U.S. stores and using the capital to open stores in Asia that have the potential to garner significantly more revenue.”

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Grocery co-op identifies urgent store issues with AI

Chain Store Age – Associated Food Stores (AFS) is leveraging artificial intelligence (AI) to determine what really needs fixing in the store. Salt Lake City-based AFS, which consists of about 500 independent and corporately-owned stores in the western and southwestern U.S., found itself dealing with a growing number of SKUs. This resulted in more potential issues occurring at store level than a manager could effectively track or prioritize.

AFS may be ahead of the curve when it comes to applying AI to store-level SKU issues. According to the BRP, retail consulting firm, report, 2018 Integrated Planning and Inventory Management Survey, most retailers (67%) are not leveraging advanced analytics to improve their planning decisions and optimize inventory. In addition, only 39% of surveyed retailers identified improved analytics as a top priority.

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