Putting on the Ritz
June 19, 2017
Luxury retail, as with any retail sector, certainly has its own share of ups and downs. Recent press has highlighted market challenges that many luxury brands are currently facing, including global political and social turmoil, anxious investment markets, changes in customer shopping behavior between brick-and-mortar and online sales, significant shifts in media and marketing, and increased competitive pressure between brands.
Luxury retail fulfills a unique and powerful role within the pantheon of the continuously evolving landscape of retail environments. Often overused, the term “luxury” itself continues to evolve and adapt to the changing world of wealth and prestige brands.
Luxury goods generally are products and services that are of exceptional quality and high price. They include an electrifying range of designer clothes, accessories, jewelry, watches, cars, yachts, property, technology and travel experiences. They are marketed as both aspirational and inspirational, and not considered a necessity, like food, clothing or shelter. (Just don’t try telling that to the next new Hermès Birkin bag owner!)
In economics, luxury goods are considered to be a Veblen good—essentially a material commodity in which demand increases as the price increases due to the perception of the product or service as a status symbol. This differs from Giffen goods, in which price and demand for inferior goods are driven up by the lack of competitive options. Both Veblen and Giffen goods go against the “Law of Demand,” which assumes that as the price of a good increases demand decreases (and vice versa).
In order to maintain the desire for such costly products and services, luxury brands invest aggressively on sales and marketing platforms—be it in online or brick and mortar; providing a seamless luxury shopping experience to meet and exceed the exactingly high expectations of today’s
Furthermore, luxury retail environments provide a unique range of variables for retail design and visual merchandising, including:
Prime retail locations—be it corner flagship sites, luxury shopping districts or exotic travel destinations; basically, wherever there are the highest retail rents in the world.
Premium materials and finishes are liberally used in key customer areas, including expensive marble, metal, fabrics, furniture and flooring.
Custom designed fixtures and materials specifically for the brand—one-of-a-kind or limited runs, these items take extra time to develop and produce, but are essential in creating an exclusive, branded luxury environment.
Cutting-edge technology that is incorporated into both sales and non-sales areas—real time data collection, augmented reality or 3-D holographic imaging, integrated touchscreens—creating an exclusive, seamless experience.
Security is a significant aspect for any retailer, but due to the high-value nature of the product, security in luxury retail takes on an elevated role—albeit preferably in a noticeable, but not overt manner; doorman or buzzer-activated entrances oftentimes add an additional layer of security.
Gracious customer service areas are key, including well-appointed private sales and dressing rooms, discreet POS stations shielding the sales transaction, and elegant customer restrooms. This also can include unique details, such as having cash counting machines in select stores given that shoppers in certain regions prefer to pay cash in large stacks of bills rather then financing or credit cards.
Exceptional lighting—a critical layer, with extra attention and resources provided for lighting luxury retail environments due to the elevated nature of the product presentations and high-quality customer service areas.
All these noted details help to maintain an aura of brand prestige, glamour and store opulence. They build customer confidence in the quality of the brand, the product and its craftsmanship. And, most importantly, they help drive sales. Which is a good thing for any type of retailer.
Peter-Tolin Baker is actively involved with retail design and visual merchandising via P-T B Design Services (owner), and as a regular contributor to design:retail.
Photo by Creative Lab/Shutterstock