Luxury business digest with expert analysis by Alessandro Maria Ferreri (February 2018)

Luxury fashion embraces pop-up

Onomatopoeic miracle. Together with ROARR!, GRUNT!, SLURP!, without doubts also POP UP has for all of us a cartoon recollection and clearly states for something that comes out of the blue and probably won’t stay long time. It is incredible to realize that so much income of many high end fashion brands today comes in fact from a cartoon sound.

It is not a shop in shop or a corner, is not an hard furnished retail space and often many people do not even know where it will appear and this is the clue: the secret location, the limited edition merchandise on sale and the uniqueness of the aesthetic and the time frame related to these kinds of projects are the precious ingredients for a business that today values many billion dollars. And it appeals to young generations as well as to fashion victims.

Supreme does pop ups, Dior does pop ups, Vuitton does as well as Nike.

This selling method involves very low capex investments, low rental and personnel costs but has a very high impact on the public and it is gold for all those sleepy dept stores or specialty stores that need to increase traffic and attention.

A pop up space, in fact, miraculously marries the interests of the brands and the interests of the retailers and often gives also an option to emerging designers for having a window on the market and a visibility chance at reasonable costs.

Who has a larger knowledge of fashion retail might immediately remember who has been the real mother of such a modern idea: Rei Kawakubo. Yes, the creative genius behind Comme des Garçons is also a retail genius and was the one who, already in the early80’s, started such a way of establishing the fashion dialogue with her customers, by keeping her creations exclusive and desirable.

She was calling these spaces “Guerilla”. Kawakubo was famous for taking over an old garage in the Berlin suburbs or under a bridge of river Thames and build, over night, a temporary space that was “popping up” and then “puff away” in a very limited time but during which, if you were quick enough and fashion sick for limited edition products, you could find collector pieces, available once in a life time.

After Rei, this retail approach has become a normal procedure for retailers who wants to host a designer without too much commitment or, more recently, to display “cobranded products” or cooperations between creatives: and here comes Colette, 10 Corso Como, Dover Street Market (Rei again) or even Selfridge’s with its recent beautiful cooperation with the wife of Rick Owens. Think to a blockbuster in fashion and you will realize that it has been presented or launched through a pop up: Chanel and Farrell Williams? Pop up! Supreme and Vuitton? Pop up! Sacai and Lacoste? Pop up! Vetements in hong kong? Pop up!

But, if we better analyze this way of approaching retail, a lot of possibilities open up (or “pop up”): Balenciaga needs to open a summer space in the Hamptons? Let’s do a Pop up! Chanel wants to temporarily attract wealthy russians in Courchevel? Pop up! Or even Hermes, in order to meet its clients in Bangalore, does a “silk twill carré” pop up!. And this soon invaded, of course, the web as well, as the last Tisci designed Nike sneakers were available only during a 7 minutes web shopping craziness with bomb like countdown and consequent website burnout. It is crystal clear that this onomatopoeic type of business, no matter if destined to hit seasonal markets or test new products, will still be for long time a very tasty opportunity to satisfy the fast changing appetite of modern consumers.

More fashion brands collaborate with architects and artists.

It is not uncommon for established luxury brands to let design their retail spaces by star architects. Peter Marino on Vuitton, Zaha Hadid for Stuart Weitzmann, Andrea Tognon for Jil Sander are just a few names among the most famous architects of the actual design scene who created impressive shop concepts to display beautiful ready to wear and accessories collections.

However, it is still rare that pure artists are involved in luxury retail projects and even more rare that they are requested to give inputs on the creative process also of the garments.

As often happens, Mrs Miuccia Prada anticipated all her colleagues already in 2016 and called the french designer Christophe Chemin to create her new prints and this season moved even further by involving a team of super artists like Ronan and Erwan Bouroullec, Konstantin Grcic, Herzog and De Meuron, and Rem Koolhaas and asked them their personal reinterpretation of her icon material: the black nylon.

At the other corner of Europe, also Vuitton involved Jeff Koons in its bags creation and Dior decided to include an impressive artist touch in its new Berlin flagship-store, using furniture made with recycled materials by Stefan Leo and enriched the shop with the beautiful paintings by Jan Kalab.

Even if historically also Versace or Yves Saint Laurent had their creative roads temporarily crossed by talented artists, it seems nowadays there is a new sensibility that moves fashion designers outside their comfort zone and area of pertinence, to the aim of including more cultural references in their work and, probably, of finding new original inputs.

Is this new tendency just a marketing secret or really the fashion business is facing a worrying lack of ideas?

Who writes believes that both scenarios are correct, which also gives us a glimmer of hope when, as consumers or as retailers, we have to invest in luxury items.

From a very basic communication angle, it is fully comprehensible that a fashion collection, when decorated with art patterns or inspired by modern art aesthetics, has always a deeper meaning and, consequently, more price justification, beside of course being unique, original and having the power to convince the customers that they are making a mature and cultural choice when buying it.

But on another hand, we have to thank the other arts  for still being so unexplored and unexploited like fashion is.

Supporting the evidence of the above is, for example, the growing importance of Art Basel in Miami or Salone del Mobile in Milano. Both happenings not only are bringing to town an high voltage array of super talents and super reviewers, but also many potential customers and normal people who, more and more, find in decorative arts that original creativity that they do not see anywhere else.

What probably design still has is, in fact, authenticity. Try to remove the label from a fashion garment and often it might immediately lose 80% of its value to the eyes of shoppers and for sure the marketing and branding around it has been so strong that the piece exists only if carries the designer label. On the contrary this seldom happens in the other part of the design world. A lamp designed by Philip Stark or a car designed by Pininfarina might lose their label but will still remain recognizable and unique.

By saying this am of course trying to keep a sense of proportions and not throwing the baby out with the bath water, but undoubtedly figurative arts and design still have a big potential to be discovered and it is not a surprise that fashion, more and more, tries to fish from them ingenious details to decorate its expensive creations or the luxury spaces in which they are sold.

Who are the Ultra Wealthy, how do you market your brand to them and can street wear teach us how to do it?

I recently went through a beautiful article on the web where the author was challenging the reader by asking “do you really want to know how rich can be rich people”?

Well, probably, given the several actual crisis  our society is suffering, due to job losses or often uneven wealth distribution in a lot of countries, it would be better for many persons not to go deeper in this subject as many riots might come up in the streets. The article in fact was turning the subject into a sociological analysis of our modern world and, frankly, was too much stirring in troubled waters just to please a specific type of reader. But this smart angle of view gave me the hint for a more specific reflection on how the luxury brands are able to understand their final consumers.

Among us, in the control room of high fashion, there is an acronym, UHNWI, that is unknown to many and sounds like another branch of United Nations, like UNICEF or FAO. In actual facts this acronym indicates far more than a nation or organization and is the Shangri-la for all of us who, every day, have to produce, promote and sell high end luxury items. I am talking about the category of Ultra High Net Worth Individuals.

This larger-than-you-could-ever-think population not only exists, not only increases at significant year-over-year rates, but within 2025 is estimated to exceed $100 trillion of consumption power. Several nations in Asia and Europe have seen wealth sectors booming and growing 10 to 20 percent from last year and wealth records are met in many countries of Americas or Asia Pacific.

But who are these UHNWI?

First of all, in most of the cases, if they enter your store you would not bet even for a minute on their possibility to spend as they look absolutely low tone and with their head in the clouds. Second, despite many of them might still be interested in the classic luxury purchases that we typically associate with affluence, like jewelry or expensive watches, still the majority already developed an individual meaning of an affluent and empowered lifestyle and they constantly want to identify new products and trends that specifically match their taste.

More precisely, these individuals, equally divided among men and women, are very sensitive not only to the objects them selves but even more are touched by the type of marketing that is used to promote them.

On the light of the above, the worse mistake a brand could do is to think that just because they have wealth, this means that luxury products and services might automatically attract them, like any other person who can afford them. The UHNWI are on the contrary a very difficult but very large and potentially very faithful population, for whom a new meaning of engagement, in-person interaction and relationship has to be set.

Several times in my career I have experienced close negotiations with this niche audience and even recently, during a long stay in Palm Beach with two big clients of my portfolio, I had different opportunities to deal with these fascinating new people. One clear thing I really learned from these meetings: you have to go beyond a sophisticated way of approach and start, first of all, building trust. Once trust is gained and they have the clear perception that “you really know what you do”, then they open up and become approachable. But this is just the beginning, because here it comes the real secret: build a community.

A community? Aren’t UHNWI already a community? Well, in actual facts they are as they are all characterized by the same income qualities, but often they seek for human touch and approach as they tend to be extremely lonely.

A luxury brand, in general, focuses its approach to its consumer target, building everything in the relationship between the brand and the client and communicating seasonally on new collections.

A largely affordable street wear brand, on the contrary, like also a pop star or an actor, needs to build a group of fans, where the communication is not only “vertical” between the brand and the consumer but also “horizontal” among the clients in order to keep the conversation about the product hot enough even in those moments in which the brand has nothing specific to promote or the singer is in between two albums.

With big surprise of many of you, the right technique to be used to deal with UHNWI comes from the opposite pole of the product offer and teaches a great lesson: again, build a community.

A very high end luxury company does not have the power to generate every two minutes a credible and incredible object but still needs to keep the rich fans warm enough to not lose them in front of the competition. So how to handle these apparently “dead” moments? Surprisingly these are the perfect moments in which, if you have built a great community among your consumer targets, you can already sell what you even do not have yet.

A good example of this? Have a look of the Paris Haute Couture Fashion week. Till a couple of years ago, not only just a few brands were having their Haute Couture shows but the atmosphere in town was boring and sleepy during those days.

Now, on the contrary, the Haute Couture week is the hottest moment in which you can visit Paris due to an incredible number of dinners, fabulous parties, beautiful people and cars in the street and elegant clients who dress up in evening gowns, important jewelry and high heels since 8am. And why is this happening? Simply because Chanel, Dior, Saab are masters not only in fashion but also in creating communities of extremely rich fans who not only are invited to the shows but who receive a full week treat, made by tea times, flowers in hotel rooms, private appointments to re-see the collection or simply by informal chat moments in which the customers can meet among them selves, share and exchange their passion for the brand, heating each other up in front of the show pieces “that-you-must-absolutely-have” and feeling, therefore a community. The UHNWI land.

Alessandro Maria Ferreri is the CEO of The Style Gate

CHANEL Haute Couture Spring Summer 2018