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What do consumers look for in a Luxury Store?

Exclusive findings from research carried out in the US, China, Germany and the UK into what consumers believe makes a store feel premium and luxury

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What do consumers look for in a Luxury Store?

  1. 1. What Makes a Retail Experience feel Premium?
  2. 2. PurchaseConsideration Post Purchase Price Product Store Staff Packaging Reaction of Others Quality of construction Aftersales service Brand Price Design Communication ‘Loyalty Loop’ Over a number of recent projects, we’ve noticed how crucial the point of purchase experience is for premium brands in driving the famous McKinsey ‘Loyalty Loop’ Volante do a lot of work with major luxury brands
  3. 3. We wanted to understand what makes a retail experience feel premium and luxury …so we ran our own self-funded research into the topic: Over 1,200 online interviews across four major markets • US - 310 • UK - 310 • China - 305 • Germany - 308 Eight x 2hr Groups • Two groups per market Two x 2hr Group discussions in each market • 1 male, 1 female • All mid/high incomes • Shopped in a premium store at least once in last 12 months Mix of genders Mix of income levels • Medium/high • Shopped in a premium store at least once in last 12 months • Broad geographic spread
  4. 4. Key Findings
  5. 5. Some good news for brands seeking to build global equity - there was striking consistency across markets and genders Two factors predominate as key drivers of premiumness: Spaciousness • Empty floor space • Items not cramped on top of each other • Shoppers not edging around each other Staff • Easy to find when you want them • Welcoming, friendly, knowledgeable • But unobtrusive when you wish to be let alone When stores get these two basic elements wrong, regardless of what else they get right, their sense of ‘Premiumness’ drops
  6. 6. Generally only ranked around 4th/5th; roughly on a par with being able to get hold of staff when you want them Interestingly, high design elements can actually mitigate against a brand if its customer service levels aren’t also high Premium Design features aren’t enough on their own… Ultra-stylish interior + disinterested/ill-informed/ absent staff = Implies the brand is more interested in itself than it is in its customers “ Some shops try so hard to be stylish that they just don’t feel welcoming. Its like, when you walk in you’re disturbing the loveliness!” Female shopper, London
  7. 7. A key sign of a store being premium is that there is a sizeable proportion of floor space devoted to not selling things • Bare floor • Sofas to sit on Space means a number of things • It is easy to walk around and to see display items clearly, even when the store is busy • Items on sale have plenty of space around them and display cabinets aren’t over-filled • in a sense elevating the status of the items on display More space than is needed = sign of Luxury “It looks quite comfy, because they have a sofa in the centre of the shop. There was a lot going on, but one (still) has the feeling that one can cruise the shop very relaxed.” Female shopper talking about Thomas Sabo store in Hamburg However, it is also important that a store isn’t so minimalist that it looks bare and empty • Smaller boutiques are sometimes thought to be like this • The store should feel like it has a wide range of items on sale • There needs to be enough store furniture to ensure that the shopper doesn’t feel like they stand out
  8. 8. Interesting cultural differences emerge Staff are the other key driver of perceived Premiumness Question: Thinking about stores that you have been into that sell premium or luxury items, please rank the following in order of their importance for making the store feel premium or luxury “ If I can’t get their attention [the staff], I just walk. When I’m about to drop a large amount of money I don’t want to have to work at it!” Male shopper, New York Americans rate quick access to staff highest Germans value friendliness Chinese look for enthusiasm and knowledgeable staff British see staff as less important (lower expectations?) “ I like the Swarovski store, It is very fancy and bright. The pieces are always well lit. The staff are all good looking and fashionable and from Shanghai.” Female shopper, Shanghai “ It always gives me a good feeling when the staff say hello and are friendly.” Female shopper, Hamburg Male shopper, London “ Frankly, it’s a bit ‘hit and miss’ with staff isn’t it - regardless of how posh the store is.”
  9. 9. Luxury brands have classically focused their efforts on appealing to a small group of frequent and high spending customers The ‘Long-tail’ BUT …there is another target group for Premium brands • They don’t go into Luxury stores very often • But when they do, it will be an important purchase for them • Individually they aren’t that valuable (one sale a year or less?) • But collectively they represent millions Valueofcustomer Frequency of purchase These customers are confident • they know they can buy almost anything they want in the store • They go into premium stores regularly, so know how they ‘work’ • They aren’t over-awed by the brand (or the staff) This group are the ones who are most readily put-off by sales staff (because they know that they are ‘impostors’ in the store!) • Truly engaged, open and welcoming staff are as crucial for them as they are for core, high net worth customers
  10. 10. Lighting works, not always consciously, to reinforce (or undermine) a brand’s proposition Lighting Strategies can communicate a lot about a brand’s proposition Ralph Lauren Chow Tai Fook Abercrombie & Fitch Swarovski Bright white, cold, ‘saturated’ light = a sense of ‘purity’ and calm Soft warm light, compliments the ‘club’ feel Visual metaphor for the purity of crystals Aspirationally relaxed Self-consciously dark – premium but also ‘naughty’ Low lighting compounds sense that store is too cramped /crowded Designed to be off-putting for the ‘wrong’ audience Forces you to work harder to find what you want
  11. 11. Music and Scent work at a similar semi-conscious level Generally only noticed when a store gets it wrong Premium stores, esp. in Western markets are strongly associated with nostalgic ‘50s/60s American singers • Frank Sinatra/ Billie Holliday / Ella Fitzgerald / Nina Simone More contemporary tracks can also work well, provided that they are relatively relaxed • Some criticism of Michael Kors stores for playing music that feels too high energy to be properly premium Music seems to be important for relaxing customers • Putting them in the mood to buy As can scent • Shanghai Tang and Abercrombie & Fitch both identified for their ‘premium store fragrance’
  12. 12. Conclusions
  13. 13. Much of the success of a Premium Retail experience is dependent on getting the basics right Creating a sense of space and allowing the products to speak for themselves Staff that help, don’t judge and above all can read the mood of the shopper
  14. 14. Ranked significantly lower than either good staff or spaciousness Too much emphasis is placed on creating a uniquely luxurious environment For many, a ‘stylish and premium’ feel to the store can even be counter-productive • Can feel unwelcoming and cold – designed to intimidate Semiotically a sign that the brand is narcissistic, too wrapped up in itself to notice its customers Brand Customer ‘this store is impressive, but I don’t feel welcomed or valued.’ ‘Aren’t I gorgeous?’
  15. 15. Different Need states drive differing retail expectations Premium Retailers are focusing on the wrong Need States Leave me in peace Make me in feel important Excite me Relax me Make me feel good about myself Staff that don’t pester, plenty of space Acknowledged by friendly attentive staff Plenty of space, relaxing music, good lighting, friendly staff Imaginative displays, premium design features, glamorous staff An aggregate of all the above: space, lighting, design, staff, music Arguably too many stores put too much emphasis on ‘Excite me’ – trying to create a ‘shock and awe’ retail experience Whereas customers place a higher value on ‘leave me in peace’; ‘relax me’ and ‘make me feel important’
  16. 16. A Few Words About Volante Research…
  17. 17. We are Brand & Comms Specialists Brand positioning Brand equity Brand architecture Brand growth Concept generation Proposition development & testing Pack evolution Conjoint modelling & simulators Creative development Ad effectiveness Mixed media evaluation Brand Strategy Innovation Advertising and Marcoms U&A incl. segmentation Consumer journeys Retail & new channels Consumer Behavior
  18. 18. WE UNDERSTAND THE LUXURY/HNWI SECTOR
  19. 19. Recruiting HNWIs Key recruitment learnings are: • They can be wary and publicity shy; trust needs to be established and confidentiality maintained • They won’t come for money but will expect some form of monetary offer (as a mark of respect for their time), a charitable donation is sometimes preferred • They are hard to get hold of; they regularly cancel at short notice, so determination, charm and persistence are key to eventually speaking to them (this is one of the reasons why depths not groups are necessary – they may agree to come, but on the day may not be free) • To make it easier, we always let the respondent choose the venue that is most convenient for them (their home/their office/their members club/a favoured bar) • They are often curious to know how their lives compare to others who are similarly wealthy (can they learn anything from others; are they doing better/worse than their peers) • An offer to share research findings with them can often work well Volante have considerable experience of accessing informal networks of affluent potential respondents
  20. 20. Interviewing HNWIs Many HNWIs are wary of how their wealth may be perceived by others, leading to guarded conversations When interviewing them it is important to establish trust and to gradually get them to open up and be frank This requires taking the time to build and establish trust • Meeting at a venue of their choosing • Reassuring about confidentiality and anonymity Similarly, many can be classically ‘Alpha’ and this can require a confident moderating style in order to ensure that the discussion covers the issues that are needed and in the depth required • Being willing to challenge and probe respondents on their attitudes and motivations • Ensuring that the conversation covers the topics we need and not just the topics they want to talk about
  21. 21. Going Beyond the Rational A huge challenge is to get beyond the rational Respondents feel a huge need to demonstrate that their purchase decisions are entirely rational and based on hard metrics and a thorough assessment of the marketplace ….of course this is only half the story Their decisions are also driven by more human characteristics • Brand image • Inertia and unwillingness to change • A desire to present your own self image in a positive way • Etc. etc.
  22. 22. Going Beyond the Rational Volante employs a number of techniques to do this….. Wherever possible we interview in person • Direct human contact encourages a much more open and honest interaction than the more linear responses gained in an Online forum Adopting a robust moderating style that challenges respondents to go beyond their first comments Using Laddering and NLP techniques to access 2nd and 3rd order benefits, digging into the emotional drivers that lie under the surface of rational decision-making Ensuring that Online surveys are visually engaging and varied
  23. 23. London Brooklyn Worldwide Thank you reading! If you liked what you saw and want to see the full presentation please contact: Nick Johnson: nick@volante-research.com / volante-research.com

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