Selling Fashion to the 1% During a Pandemic | Intelligence, BoF Professional
LONDON, United Kingdom — It’s an open secret in luxury retail: anyone is welcome to walk into a store or browse a website, but brands reserve an entirely different shopping experience for their best customers, from private shopping parties to intimate dinners at Michelin-starred restaurants.
Now, with luxury sales expected to plunge this year amid the pandemic, retailers are doubling down on customers who still have plenty of money to burn. The goal is to strengthen the bond between shoppers and brands so that not even a global recession can break it. Only now, the cocktails and personal shopping appointments take place over Zoom, and sneak previews might feature more casual pieces, rather than bejewelled evening gowns.
Sales are down sharply at most luxury retailers, including both e-commerce sites and department stores, according to data from Earnest Research, which tracks US credit and debit card purchases. Spending by high-income US households is down 10 percent since January, according to data from Opportunity Insights, which analysed credit and debit card transactions information. McKinsey & Company estimates spending on personal luxury goods could shrink by as much as 35 to 39 percent this year compared with 2019.
But online luxury retailers Mytheresa, MatchesFashion and Moda Operandi say spending among their top clients has remained relatively steady. Comfort-driven clothes, home wear, and, more recently, resort wear have proved popular, as well as “investment pieces” such as fine jewellery seeing strong demand among the wealthiest shoppers.
Personal shopping is a critical element for survival.
Some retailers, like Neiman Marcus, Saks and Galeries Lafayette, are ramping up communication of perks like virtual personal shoppers to reach a wider group of customers. Browns is letting all customers book a private fitting room or schedule a private in-store appointment, while a new app helps sales associates pre select pieces for shoppers based on their past purchases and wish list before the consultation.
But it’s still a small number of big spenders that will help most luxury brands and retailers weather the pandemic. At Mytheresa, which pre-pandemic flew stylists around the world to give favoured customers a preview of upcoming collections, VIP clients account for about 30 percent of sales. At Moda Operandi, which hosts intimate audiences for select clients to hear directly from designers about their latest collections, it’s almost 50 percent.
“[Personal shopping is] a critical element for survival,” said retail consultant Robert Burke, adding, “I think retail therapy for that consumer is probably at a high.”
Retailers found that adapting quickly to continue to service its most important clients was a smooth transition. Since most were used to texting with their stylist over Whatsapp or Instagram, transitioning to digital-only interactions wasn’t such a leap.
“Because they already had that engagement with [us] partially virtually, they didn’t really hesitate to continue that relationship virtually,” said Browns Buying Director Ida Petersson.
For many luxury retailers, especially e-commerce players like Mytheresa, Moda Operandi and MatchesFashion, physical events beyond fittings were an important part wooing big spenders. In the past, Mytheresa VIP clients have been invited to the South of France for lunch with Gianvito Rossi and his family, followed by a dinner at La Guérite, while Matches guests have enjoyed supper clubs with Michelin-starred chefs like Ruthie Rogers and Skye Gyngell. Some of Moda Operandi’s top spenders recently attended a shopping event hosted by designer Johanna Ortiz before sitting down to dinner with Lauren Santo Domingo and Hollywood stars like Sofia Vergara and Kate Hudson.
It doesn’t have to be sales-driven. We want to build a long-lasting relationship.
But since the pandemic, much of this activity has had to go digital. Matches, for example, hosted an Aperitivo evening with Italian designer JJ Martin over Zoom, where a bespoke package of cheese, almonds, crostini and tomatoes, along with negroni cocktails and a bottle of wine, was delivered to attendees’ homes. Moda Operandi has run private Zoom workout classes with celebrity trainers and hosted video calls with designers like Carolina Herrera’s Wes Gordon and Anita Ko. Next up is a digital wine tasting, where clients will receive bottles of wine and have a virtual session with the vintner.
“It doesn’t have to be sales-driven,” said Moda Operandi’s Fashion and Buying Director Lisa Aiken. “We want to build a long-lasting relationship.”
The shift to digital has opened up the fashion industry’s insider experience, offering more top clients a deeper level of access to the industry, she continued.
“If a creative director is talking through a collection for us as we’re buying it, [previously] we couldn’t invite all of our clients to a showroom. But there’s no reason why we can’t invite our clients to that forum digitally,” she said. “So it actually opens up a whole realm of possibilities.”
Instead of flying stylists to visit customers, Mytheresa’s personal shopping team now holds appointments over video call, either shipping an edit of products to the client prior to the consultation, or showcasing the new styles on models during the appointment before shipping their purchases. Clients receive flowers “as a special greeting,” said Chief Customer Experience Officer and Managing Director Isabel May, to make the digital appointment feel more personal.
May said some clients turn their personal shopping appointments into social events, recalling a client from Shanghai who asked for a digital styling session for two.
“They bring a friend, so they do it together,” she said. “It’s [become] a highlight experience of the week in these times for people to get entertained.”
We really leave it to the customer to engage with us the way they want. The endgame is going to be keeping those relationships going.
At Matches, personal shoppers call and text clients, and, for Londoners, now holds one-on-one appointments at its Carlos Place showroom in the Mayfair neighbourhood, even though it’s closed to the public. Consignment services — where a product edit is shipped to clients before they choose what they want to purchase — in particular have been on the rise among VIP clientele over the past few months, said E-Commerce Director Nicolas Pickaerts.
“We really leave it to the customer to engage with us the way they want,” he said. “The endgame is going to be keeping those relationships going.”
It’s a good approach because personalised services lead shoppers to spend more — and building the relationship keeps them coming back. But catering to the individual’s needs is the easy part. The challenge is doing this at scale.
Yet digital innovations have helped some retailers stumble upon new opportunities, and some pandemic-era services may have staying power. Mytheresa said some customers have asked about continuing digital styling sessions even as concerns about the coronavirus ease.
“That will be something we actually will keep as long as the client wants it,” said May.
Related Articles:
How the Rich Are Shopping Right Now
How Personal Shopping Makes People Spend
