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CEO Talk | Marigay McKee, Fashion and Beauty Director, Harrods

Imran Amed, Editor — Sun, 09 Jan 2011 17:19:32 +0000

Marigay McKee, Fashion and Beauty Director, Harrods | Source: Harrods

LONDON, United Kingdom — Later this month, Luxury Briefing will hold its 14th Luxury Briefing Conference, an annual gathering of the industry’s great and good in London. Called Future Luxe, this year’s conference will explore the luxury industry of the future and incorporate a new format designed to foster more networking and interaction amongst the attendees. The speakers — including writer Dana Thomas, Soho House CEO Nick Jones, and WGSN founder Marc Worth — come from all quarters of the luxury sector, and will tackle a wide range of issues to make sense of an industry that is engulfed with change.

Amongst the most significant developments in the luxury sector in recent years has been the rapid evolution of the luxury consumer. We have witnessed shifting attitudes and buying behaviour of luxury consumers in established markets like Europe, America and Japan and the rise of luxury consumers in emerging markets, especially China. We have seen the emergence of the ‘aspirational’ luxury consumer, but also the rise of the ultra-high net worth consumer, each of whom have different expectations when consuming luxury products and services.

One of the undisputed global leaders in luxury customer service is London’s iconic luxury department store, Harrods, which has years of experience in serving different types of consumers, with different levels of spending power, from different parts of the world. In advance of the Luxury Briefing Conference, BoF caught up with Marigay McKee, Fashion and Beauty Director of Harrods and one of the store’s most important ambassadors, to get an exclusive sneak peek of a panel of influential women who will discuss luxury retailing of the future.

BoF: At the FT Business of Luxury conference last June in Los Angeles, you said that 400,000 people come through the doors of Harrods 1 million square foot building every week. A growing number of these shoppers are Chinese tourists. Can you tell us how you specifically serve the Chinese luxury consumer?

MM: The majority of our customers live in Central London, however, we also have a high percentage of international clients from across the country and across the globe.

Chinese visitors constitute a well established proportion of Harrods international customer base and numbers continue to grow significantly every year. At Harrods the trend is for the highly brand conscious Chinese shopper to seek out the very latest, limited edition, and or exclusive products. Fashion, beauty, accessories and fine jewellery from luxury brands including Hermès, Chanel, Louis Vuitton and Dior are amongst the preferences, and Harrods works closely with these brands to provide the exclusive and special edition goods these shoppers desire when they visit.

We continually tailor our service offering by working closely with Chinese tour operators to accommodate pre-booked groups, as well as by providing bespoke concierge services for customers. We are looking to expand on Chinese speakers and also have a Chinese Hospitality Manager to ease their shopping experience in store.

As well as the long-standing international reputation of our brand, our loyalty programme Harrods Rewards, an international Enewsletter, Chinese and Mandarin translations on Harrods.com and advertising in high end Chinese publications all contribute to the Chinese visitor’s attraction to the Knightsbridge store. Multi-lingual staff, later summer opening hours, worldwide shipping and our Global Blue tax free shopping service are also vital to the overall experience we offer all our international visitors and homegrown customers alike.

BoF: It is my understanding that Harrods plays particularly close attention to a small cadre of ultra high net worth clients who account for a very significant percentage of Harrods sales. How do you treat these UHNW customers differently?

MM: We do have a lot of high net worth clients who value an enhanced product offer, a great mix, excellent service and exclusivity on tap. We have special parking services, hospitality services and an excellent department for personal shopping called By Appointment run by a team of service focussed experts. Creating a personal rapport and valued relationship with our customers ensures they return. The CRM programme and team have greatly aided us in this arena as it is outstanding.

BoF: This past year, Harrods expanded its online function to launch new ecommerce categories which are set to grow healthily in the future. What makes the online experience at Harrods.com stand out? How do you integrate your online business with your retail business?

MM: Harrods is the World’s most famous Department Store. And there’s nothing like a trip to the store. However, with one physical location, the web is a vital tool in reaching shoppers on a global level, to match the power of the brand. We are just beginning on a journey to develop a site that matches the experience in store.

There is an intense interest and a significant investment in developing Harrods.com to add revenue and prestige to the site, as well as making it visually and aesthetically a ‘go to’ tool for research and shopping.

This year we introduced the Shoe Boutique on harrods.com, home to the latest collections and trends for women and men from leading International designers. This has been a key sales driver. As Harrods is just a unique destination, a large majority of our clients, especially the fashion regulars like to come in and experience the reality of the fashion bustle in store.

BoF: You will be speaking on a panel of influential women in luxury at the Luxury Briefing conference later this month. As you look to the future of luxury, what are your priorities for Harrods both in the short-term and over the next 5 years?

MM: Luxury is evolving at a very fast pace and real luxury is becoming even more discerning and sought after. We’ve seen huge growth coming from the power brands of the last decade but also renewed growth in heritage and couture classics. To really stand out we have to have a point of difference, a real wow factor in store, a unique exclusive factor and outstanding service levels in an unparalleled environment.

The formula to success varies from brand to brand from business to business but desirable aspirational luxury is here to stay and dream investments are on most people’s wish lists guaranteeing the need for a luxury store to fulfil them.

BoF is pleased to be an official media partner of the Luxury Briefing Conference to be held on 20-21 January, 2010 in London. A few tickets are still available to attend the conference in person. For further details, please visit the registration page and see the full itinerary here.

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CEO Talk is an ongoing series of discussions with fashion entrepreneurs and business leaders. Previous interviews are listed below:

Friday Column | Whither or Wither Luxury?

Lauren Goldstein Crowe — Fri, 19 Dec 2008 00:01:25 +0000

Prada S/S 2009 campaign photographed by Hedi Slimane, courtesy of Prada

LONDON, United Kingdom — At the Luxury Briefing Conference held in London last month, Claire Kent, former Morgan Stanley analyst and current luxury goods consultant, spelled out her thoughts for the future of luxury.

“Regardless of the credit crunch there was growing fatigue about luxury brands,” she said. “People want a redefinition of luxury. People don’t want to be buying the same brands as the people they have working for them.”

So, what are the key elements of the new luxury?

Brands need to focus on innovation, creativity, individuality and service. (She noted that it’s been hard to convince the sharpest minds to mind the shop floor, something that may change with the number of layoffs we’ve seen.)

The ‘It’ handbag, she says, is over. Carrying a bag because Gwyneth Paltrow carries one means that you don’t have your own point of view, stylistically speaking. This of course is why people started following celebrities in the first place — because it was easy. But now we’re going to have to fend for ourselves.

For evidence of this impending change in attitude, she pointed to the car industry where the groovy people (Ok, some of whom may be celebrities) are driving cars not much bigger than their dogs, while the SUV has become a symbol of shame.

Aside from better-made things, there are a few sectors Kent sees as ripe for rapid expansion. The categories are hers, the reasons why are mine. (Budding luxury entrepreneurs, take note):

1. Jewellery. Although we’ve sent the big groups and the watch brands get more active in this area, the vast amount of jewelry sold is still unbranded and comes from mom-and-pop shops, not big chains.

2. Men’s Shoes. Where, oh where, is the Christian Louboutin of men’s footwear?

3. Men’s Grooming. Yes, there are more men’s products on the market than 10 years ago, but none dominate.

4. Eco Luxury. Along with Eco everything else.

5. African Culture. Obama, Obama, Obama. Did someone say Obama?

6. High-end Food. Because once you experience the difference, it’s impossible to go back. Just like with Louboutins.

According to Kent, one element is a return to craft. Her big problem with fashion apparel is that, if it’s not based on craft, these days it’s simply too hard to compete with the Zara’s of the world. Therefore, luxury consumers will become more discerning and spend more per item, but buy fewer items. It is the ‘masstige’ brands that will suffer most.

And, based on personal experience, I have to agree with her. It is increasingly hard for me to justify a designer purchase. The fact that I know margins have been improving (for the brands, not for the consumers) does nothing to quell those fears. So this winter the few things I bought from anyplace outside of Zara and its ilk, I bought from Bamford & Sons.

The brand is owned by the family that made its money selling JCB diggers (or tractors) and also produces the Daylesford Organic range of foods — clearly a family with their finger on the pulse of what luxury shoppers want. I was particularly impressed by the men’s offerings and I thought I’d tell my boyfriend never to shop anywhere else. Now I am not so sure.

For the prices, one would expect it all to be of impeccable quality. But within a month, the tassel on a pair of £400 Bamford boots I bought fell off and a £225 cashmere scarf I bought my boyfriend was looking a bit worse for wear.

The quality versus price conundrum is a tough one for designers. They’re supposed to be selling a vision, but Kent, and I, think that increasingly people are going to want value for money — in the old fashioned sense of the word.

This should make second lines all the more important. If brands will still have value in the credit crunch future, it holds to reason that consumers will shift down to Marc by Marc Jacobs before landing where I am, at COS (Collection of Style, the upper end of H&M).

This makes the recent decision of Zac Posen to shutter its Contemporary line all the more puzzling. The company only recently brought in a team to produce it, but they’ve all been fired. The remaining 70 percent of employees have been told they will be taking a 15 percent pay cut and, as for bonuses, forget it.

To be fair, the decision wasn’t made purely on market decisions. An expected influx of cash from their backer, Ron Burkle, never materialised. As with many other brands, Zac’s fashion show sponsors have backed out, putting his runway show, like many others, in jeopardy. Will the world weep? Doubtful. I think that everyone, from the buyers to the editors to the consumers were sick of the fashion show circus.

It’s hard to know what to do — particularly for the majority of luxury goods executives who have never had to live through times like these before. But I wonder if, finally, we’re about to see a return to an idea of luxury that’s more, well, luxurious.

The Business of Fashion welcomes Lauren Goldstein Crowe, our new Friday columnist.

Luxury Briefing Conference | Exploiting the potential of new markets

Imran Amed, Editor — Thu, 23 Oct 2008 23:10:39 +0000

LONDON, United Kingdom – By now, it is well known that Japan, Western Europe and North America are already well into recessionary mode, but emerging markets have not been spared either. In India, so the wisdom goes, people spend for occasions but during this year’s Diwali Festival, usually brisk sales of diamonds have stalled, as consumers tighten their belts. In China, at a major luxury goods fair in Shanghai, accessibly-priced merchandise moved, but the most pricey items sat on the shelf.

Perhaps more than ever before, luxury businesses need to seize new business opportunities in emerging markets, but the market context there is changing so fast, it is hard to keep up with it all.

James Ogilvy has convened a great set of speakers to provide their perspectives on the opportunities presented by emerging markets against the backdrop of global economic doom and gloom at the annual Luxury Briefing Conference. Sheikh Majed al-Sabah of Villa Moda, Chris Colfer of Dunhill, and Tyler Brule of Monocle are amongst the experts scheduled to speak.

I am honoured to have the opportunity to present my own points of view on “What work’s where?”, focusing on case studies from in India and China.

For tickets to the annual Luxury Briefing Conference, contact Luxury Briefing. For a complete agenda and further information, please click here.

Q&A | James Ogilvy, Publisher of Luxury Briefing

Imran Amed, Editor — Sun, 20 Jul 2008 21:09:22 +0000

LONDON, United Kingdom - James Ogilvy noticed something in 1996: there was no dedicated business publication for the wider luxury industry. So he conceived of Luxury Briefing, a monthly publication which is read by leaders and senior executives in luxury companies from fashion to cosmetics to gourmet food to design to media. Since then, James and his team have launched a website and a series of annual conferences that dig into the issues that impact businesses across the luxury spectrum.

James comes into contact with idea makers and opinion leaders from different parts of luxury and knows the topics and concerns on these executives’ minds. I caught up with James to benefit from this unique industry-wide vantage point and to learn about an exclusive Luxury Briefing offer for readers of The Business of Fashion.

BoF: What was the genesis of Luxury Briefing and why did you set it up to begin with?

JO: At the time we started – 1996 – the luxury industry was beginning to expand rapidly. We saw an opportunity to provide a central information resource and we are still here today!

The one thing that people require in good times and bad, and wherever the find their business leading them, is information. What we identified initially was a lack of connection between the different sectors, when in fact that there is both much to be learned and much to be gained from co-operation.

BoF: You are constantly in contact with all of the movers and shakers in the Luxury business worldwide. What are they saying about the current economic environment and prospects for the industry over the next 1-2 years?

JO: Those charged with running the leading brands are careful in what they say but they know this is a long-term game and that there will be ups and downs. Having said that some brands are still turning in very strong results, such as Burberry which has just announced it is up 26% in Q1.

BoF: Apart from the economy, what are the other top-of-mind issues for today’s Luxury executive?

JO: There are two key ones, I think: firstly, the whole online question. The luxury industry has been very slow to take full advantage of this and the majority are still well behind the curve. They are still to figure out what Web 2.0 is all about while others are talking about Web 3.0!

The second issue is emerging luxury, which is the theme of this year’s Luxury Briefing Conference in November. There will undoubtedly be huge opportunities for certain brands and certain products but there are big questions to answer about how much it will cost and how long it will take.

BoF: Tell us a bit about the special offer LB has set up for readers of The Business of Fashion and how they can go about tapping into this.

JO: Luxury Briefing is normally available only by subscription but we are happy to send out a current issue on request to BoF readers as well provide access to the closed off part of our website,. Just give us a call (+44 1 3333 60606) or drop us an email (subscribe@luxury-briefing.com).