Lancel Paris - Retail Experience


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A Mystery shopping project executed on the Lancel Paris Opera store.

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Lancel Paris - Retail Experience

  1. 1. Luxury Retail Management Vivek Kapoor Exchange Student
  2. 2. Agenda • Brand – History – Values – Kapferer’s prism • International Strategy • Financial Analysis • Opera: Location and Surroundings • Store Economics • Shop Exterior • Shop Concept • Shop Events • Shop Interior p – Observations – Sales Experience – Brand communication – Merchandizing • 3D Views • Sensorial Experience • Website • Social Media • Neiman Marcus • Conclusions
  3. 3. Lancel : The Brand 1876 : These were the times of the carefree Parisians who  1876 : These were the times of the carefree Parisians who flocked theatres, the new stores. Life was for living and enjoying.  This time epitomized thelégèreté. It was in these days that  Alphonse and AngèleLancel opened a small pipe‐making factory,  and specialized for smokers articles for the next 50 years.
  4. 4. Lancel : The Brand • 1926: Lancel focused on handbags and accessories for ladies. These years were extremely innovative and the Parisian ladies fell in love with the brand. brand As travel became easier, Lancel introduced the Aviona trunk specially designed for cabins.
  5. 5. Lancel : The Brand Lancel stands for the carefree  spirit, the French légèreté of sheer  elegance with a hint of frivolity. l ith hi t f f i lit The brand is recognized as a  symbol of Parisian elegance and  symbol of Parisian elegance and imagination. This recent advertisement  communicates that spirit with an  impromptu jump into the  impromptu jump into the Concorde fountain
  6. 6. Lancel : The Brand • Exquisite leather craft, innovative and designed by a lineage of craft leather masters, Lancel proudly asserts its quality • In a new campaign in 2003 the brand made an effort to move away from its stubborn position of quality and functionality to move to a more “majestic” halo around the bags
  7. 7. Lancel : Identity Prism Elegant, Sculpted looks and  Modern, emancipated, empowered  body. Carries herself/himself  and chic. They strike a balance  with dignity and poise, but can  between sophistication and fun be carefree and youthful The brand relates to  the user as a  the user as a Gaiety, socialization, Pa risian légèreté with  tionship friend, a helper and  cohort. It inspires to  innovation, experiment Cultu be impeccable and  be impeccable and ation, perfection.  Relat ure  innovative, and of  Modern, chic, leader the highest personal  s a da d standard Achiever, successful, tasteful, co Fashionable, chic, frivolous, nnoisseur  flirtatious, playful, impecca
  8. 8. International Strategy • Lancel has been increasing retail presence primarily through the 180 franchisee route 160 Lancel was d • L l dependent heavily on d th il 140 the French market till 2003 and a 120 slowdown impacted its sales 100 • Th current strategy is to expand The t t t i t d 80 quickly into the new markets 60 specially Asia where they are 40 experiencing double digit 20 growth, clearly via the franchisee 0 route 2005 2008 • New boutiques were opened in Hong Kong, Macau and Waffi DOS Franchised (Dubai) during 2008 Source: Richemont SA Annual Reports
  9. 9. Lancel International Botique Locations Source: Lancel website
  10. 10. Financial Analysis Lancel Operating Profit  • Strategy is to refocus on (Million Euro) France and take the brand back to its original 0 pioneering values ‐2 2005 2006 2007 2008 • Also, the brand wishes to ‐4 become an essential part of every woman’s ‐6 wardrobe in France ‐8 • The new strategy has shown limited results as ‐10 can be seen from the ‐12 declining operating losses over the past years. ‐14 ‐16 ‐18 Source: Richemont SA Annual Reports
  11. 11. Lancel : Opera The Paris Opera has always been a place that attracted the masses and the classes.  The theatres, café’s and Opera, the Ritz hotel in the vicinity all give the location an air  of gaiety and sophistication As can be seen from the old postcards, it always was a place with large number of  footfalls Today there are several other luxury brands and retail locations that further enhance  the relevance of this location such as the Galeries Lafayette and Rue de la Paix which  the relevance of this location such as the Galeries Lafayette and Rue de la Paix which ends in this square.
  12. 12. Lancel : Opera • Lancel moved into the Opera store in 1929 • The Opera (Grand Palais) was the hub of the elite and the most exclusive form of entertainment in the late 19th century. t • The store currently is situated in a beautiful square dominated by the opera, and lies exactly between the Galeries Lafayette and the Place V dô G l i L f tt d th Pl Vendôme. • The store is situated right next to the Opera metro exit
  13. 13. Location Analysis y Money  Changer, Swatch Lancel Grand Palais Bijoux Burma  j Zara, Promod Rolex Maity Rue de la Paix
  14. 14. Location Analysis
  15. 15. Around Lancel • Galeries Lafayette G l i L f • Google F G l France • Place Vendôme • Commerz Bank ions ommercial • Rue de la Paix • SociteGenerale estinati • Opera • BNP Paribas • Concorde • HSBC De Co • Louvre Credit Lyonnais • Zara • La Grand Café • Theatre Edouard ment • Geox • Café de la Paix VII • Cinema Paramou tertainm • Swatch S t h • Starbucks St b k opping • Rolex • Hard Rock France • Cinema Gaumont Bijoux Burma • Théâtre des fe • Sho Ent Caf • Promod Variétés
  16. 16. Luxury Hotels • Hôtel Ritz This list is not exhaustive  • Park Hyatt Paris-Vendome but only indicative of the  • HôtelCostes • Hotel Lotti Paris prestige associated with  ti i t d ith • HôtelMeurice the location.  • Hôtel Westminster • Le Grand Hotel These are some of the  InterContinental finest luxury hotels in  • Hôt l S ib Hôtel Scribe the world, all within 10  • Radisson Blu Ambassador mins walking distance  Hotel • Millennium Hotel Paris Opéra from Lancel f L l
  17. 17. Location Analysis • Lancel products lie in the lower end of the price range for similar products from competitors • The Brand is definitely targeting a broader market, and hence needs to be exposed to traffic • The location is extremely upmarket with the best luxury hotels and historic buildings, but also generates a lot of traffic due to offices, tourist attractions and popular , p p shopping destinations • It is easily accessible by Metro and RER • There is duplication of retail space in close-by locations, but p p y , the shops probably cater to different clientele • Lancel’s immediate neighbors cannot be categorized as luxury brands • There is heavy traffic on the road in front of the shop, and walking is not very convenient in rush hours • However, the location is excellent for exposing the brand and i d increasing recognition, and th large L i iti d the l Lancel l tt i l lettering delivers well
  18. 18. Economics Head Euros Per Explanation p Month Rent 500,000 Area assumed 1000 Sq. Mts Rent assumed 6000 Euro/Sq Mt./Yr – Based on Class lectures and  / q / age of contract Staff Costs 40,000 Number of employees 10 Average salary 4000 Euro Displays/Event 30,000 30,000 Euros per month (Assumption) s Sales 1,250,000 50,000 euros per day, 25 days open 1 250 000 50 000 euros per day 25 days open Margin 675,000 Based on a multiple of 2 (Self owned store, lower comparable prices) Overheads 62,500 5% of Turnover – Maintenance, Damages, Shop Lifting Profit/(Loss) 42,500 3.4% of sales, low for a luxury brand Comments: The entire store is not used for sales, a substantial portion ~40% is being used for  , p g exhibitions. As the store is a flagship store, its target is to not only drive profits but to also  increase brand recognition, and communicate the values, and a small profit is actually good as  the other objectives are achieved.
  19. 19. Shop Exterior
  20. 20. Shop Exterior The display window were aesthetically organized and uncluttered. The  The display window were aesthetically organized and uncluttered The colors used were soothing and opulent looking. Photographs and quotes  from A. Lancel communicated the heritage of the brand.  Most people crossing the shop stopped to look at the products in the  windows, however few went inside.
  21. 21. Shop Exterior The displays and doors of the store are made from dark polished wood cleverly nestled  between the stone pillars of the building. The stone pillars on the corner have Lancel b h ill f h b ildi h ill h h l engravings in them.  The display windows featured no special decorations for Christmas, only a couple of  large prints of Christmas trees made out of Lancel symbols and motifs. l i t f Ch i t t d t fL l b l d tif
  22. 22. Shop Exterior • The side of the shop not facing the square faces a newspaper stall. • There was a man selling g roasted chestnuts on a shopping cart on the shop corner • The door on this side was closed with no markings or directions to the other door • Some of the paint/polish on the wooden exterior of the shop was chipping off • The stands used for display of products were covered in p a suede like material that was very scratched and had loose ends and stitching g
  23. 23. Shop Exterior • Th L The Lancel l l logo adorned the windows of the 1st fl d d h i d f h t floor • The pillars of the building were bathed in red light, drawing atte t o away o t e ag attention a ay from the magnificent Grand Palais. If it were ce t G a d a a s t e e not for this unusual lighting, all eyes would turn towards the Opera •Lancel in large type is written across the building at the 2nd floor in white. The name appearing multiple times looks loud and p unsophisticated. •The prices of the products in the display windows were consolidated in small frames •There was no doorman or any staff at the door of the store to offer any help or welcome
  24. 24. Shop Concept As can be seen from the 1930’s  advertisement, the shop itself was a  destination when it was made h It was entirely renovated in 2004, however  the lower floor already looks old Many people stop to look at the display  yp p p p y windows, but very few enter the shop As can be seen in the old ad., the shop had  As can be seen in the old ad the shop had an openness and spaciousness about  it, while today it feels cramped and closed Lancel Opera Advt. in 1930
  25. 25. Shop Events : Lancel Harcourt Vintage exhibition Since September 2009, the flagship Opera store of  Lancel is showcasing the masterpieces of the Lancel heritage. These include various items that were a rage in  their times, and were turning points for the company  and the fashion trends. The store was spruced up for the inauguration ceremony  with the signature red color. 
  26. 26. Images and actual vintage products are  exemplifying the Lancel heritage inside the store
  27. 27. Shop Events The Opera store is the flagship store for Lancel and hosts all special events and  exhibitions. It is currently hosting a public exhibition of the most select Lancel products that have shaped the brands heritage. These include the crocodile and  products that have shaped the brands heritage These include the crocodile and umbrella bag among others.  This exhibition also showcased the transition of Lancel from a smoking accessory  brands to a brand for bags for both men and women. brands to a brand for bags for both men and women There is no signage in the store informing clients about this exhibition. Hence no‐one  seems to be going up to see it and the sales people also do not inform customers of its  p presence. So an excellent opportunity to increase brand awsareness is being wasted  pp y g
  28. 28. Shop Interior The ground floor had 2 entrances, one of which was closed. Most of the windows had displays  of products making the inside of the store feel cramped and suffocated.  The shelves on which the products were kept were made of white laminate which was chipped  on the edges and had scratches on it making it look old and untidy The floor was made of tiny mosaic tiles, probably preserved from the original shop. In several  places in the mosaic, a golden L was embedded and at the entrance, the entire logo embellished  the floor in golden mosaic tiles. 
  29. 29. Instore Experience : Observations • I was the only Customer on the floor • 7-8 sales associates • Comfort - One Large imposing man p g p g probably security y y standing next to the cash counter and closely observing all the customers, very unnerving • Cleanliness - Shelves made of white laminate, chipped and scratched in places • Opulence - Large glass elevator and ordinary staircase for going to other floors g g • Comfort - A couple of chairs against the walls to sit, looked more for the sales people than customers – No place to sit • Large red chandelier cutting across floors in the centre of the shop • No open space cramped by table displays and space, accessory stands
  30. 30. Instore Experience : Sales • Greeting - At the door a sales person of Chinese origin greeted me. All the other sales people seemed to be native French • Language - I was greeted in French, and I inquired if she spoke English, to which I got a nod and an reply in French which I couldn’t couldn t understand • This went on progressively and the price range of the bags kept reducing • Attention - I requested to walk around to look at the bags, but she kept bringing bags • Sales representatives were pacing around the shop. • Uniform - Sales people wearing black suits, black glove on left hand • Behavior – Sales people were all curt and were not smiling at customers • Modeling – I was alone so the sales person herslef modeled holding the bags so that I could picture them better • Demographics - One sales person of Chinese origin, all others looked French, most aged between 30-40 years
  31. 31. Instore Experience : Brand • Brand Heritage – The sales girl did not try to sell the bag by showcasing Lancel heritage. She stuck to functional aspects. • B and Codes - Fl Brand Flooring made of mosaic tiles, with i d f i til ith golden ‘L’’s in places, very antique looking • Information - While I examined the bag she told me that it took 50 pieces of leather and 100 man th t t k i f l th d hours of work to make one of those bags • Information - She also offered to open and showcase th insides of the b h the i id f th bags explaining each l i i h of the pockets and informing me that it was a very good and functional bag at each of these instances.
  32. 32. InStore Experience - Merchandizing • All the bags were available in several colors th b il bl i l l • Some bags were available in different sizes • All these were not displayed, but when I inquired about a specific color in a bag, she was able to bring the bag from a store in 5 minutes. • Expensive bags were kept on a soft sofa-like display, normal bags were kept on shelves, cheap bags were hung on stands and accessories and small bags were in display cases.
  33. 33. Instore Experience • At one point the sales representative stopped in mid p p pp conversation and walked to walk some customer out! • She handed the bag to the security man who handed the bag to me and ordered me (pointed) to move back with the b ! th bag! • The sales representative came back and continued without apologizing!! • I told her I would like to take a look at the collection myself t ld h ld lik t t k l k t th ll ti lf and she ignored me and kept bringing bags!! • Without inquiring/judging my budget, she kept showing me progressively cheaper bags • I told her that I’d like to take some time to think about the purchase, and she showed me a cheaper bag! • The Security man’s eyes kept following the customers! man s The experience was a mixed bag. The sales people did some things right, but did  most things wrong. The brand did not communicate its heritage through the sales  process, only through the exhibition and old framed posters.
  34. 34. Shop 3D View (Ground Floor) Scarves and  Display  Accessories Window Closed  Door Stairs Stand for  Stand for Cash  cheaper  Counter bags Main  Glass  Entrance Elevator
  35. 35. 3D View 3 Walls with  Small  shelves for  Bags  p products Conter Adjani  Closed  Bags display, Back  wall has  shelves
  36. 36. Sensorial Experience Sight Si h All products were arranged neatly on shelves or  ll d d l h l stands. The lighting was sufficient, but the store  did not feel open. No display screens were used  Sound No music was playing in the store. The traffic  outside was audible inside the shop, though  muffled. Smell There was no odor in the store, not even of new  leather. Touch The materials used within the store for shelves,  drapes etc. were not luxurious, the materials  p used in the window displays were better Taste The look of the store was a mixture of vintage  and modern, this looked tacky so wasn t probably  and modern this looked tacky so wasn’t probably done well
  37. 37. Website 2005 – No website, Coming Soon 2006 (Jul) – Website launched in French and  English. Use of models for initial few years of  website is in contrast to current site 2006 (Jan) – No website, Coming Soon Source: Wayback Machine, Internet Archive
  38. 38. Current Website
  39. 39. Website : Brand Communication • Th website h excellent The b it has ll t communication of the brands heritage • Videos, old photographs and details of merchandize narrate the Lancel story in an easy to use interface f • No models are used in the current website and the focus is on products and heritage • Information about events and boutiques is also available on the site q
  40. 40. Website : Store Locator • Easy to use well organized store locator on the site
  41. 41. Social Media Lancel is active on Social Networking is active on Social Networking  sites Regular updates about new  products, sites and events Videos and photos from events and  Vid d h f d shoots Facebook has 3100 followers, twitter  has 250 and these are possibly the  brands biggest fans Showcase websites for products  Sh b it f d t promoted through social networking
  42. 42. Neiman Marcus • I felt as if the sales person was trying to f lt th l t i t make a sale by reducing price • Sh did not inquire about my She ti i b t requirements till I offered them • She was focusing on functional aspects rather than than communicating the brand ethics and values • Therefore, I think she only wanted to make a sale, not a good one for the customer. • So the store does not follow the Neiman Marcus philosophy. p p y
  43. 43. Conclusions • Lancel has an excellent location for the Opera store • The quality of products is good • The website and online activities support the stores pp well • The customer experience is not up to scratch. Interaction with sales people was not relaxed and p p involved • The store does well to communicate the brand g heritage • No special efforts were made to establish a long term relationship • I was not allowed to move freely inside the store, the store sales person wouldn’t leave me alone! • I entered the store with an actual intention to buy a bag as a gift and exited the store without gift, the bag!
  44. 44. Thank You