The FINANCIAL — “The fact that Georgia does not have luxury brands and the local designers are not famous worldwide does not mean that there are no clients interested in luxury service,” Denis Morisset, former CEO of fashion houses Pierre Balmain and Giorgio Armani and COO at Ralph Lauren, told The FINANCIAL.
Denis Morisset shared his unique 25-year luxury experience with Georgian fashion industry representatives last Thursday. A one-day master class, supported by The FINANCIAL, was held in Tbilisi at the initiative of the Luxor Management company. 40 people attended the master class including guests from Azerbaijan, Armenia, Kazakhstan and Ukraine. The next master class will be held in Moscow on 31 October, 2014.
At the moment Denis Morisset is a business consultant and executive director of the business school ESSEC MBA in international brand management in the sphere of luxury. Morisset was also, between 1993 and 1999, the President and CEO of Group Sac, the second largest shoe company in France. Since 2011, Denis has conducted a detailed study of the luxury market in Asia.
During the four sessions of the master class, guests learnt the secrets to the success and profitability of luxury companies, learnt about the key problems of the industry, as well as how to resolve them.
In between the different parts of the event, as well as during the evening degustation of different wines from partner company Schuchmann Wines, participants had the opportunity to network with colleagues in an informal atmosphere and in so doing strengthen business contacts.
“For example, in China there are no local Chinese luxury brands but there is a lot of interest from people to learn from luxury brands. What I am teaching here is some of the best practices of real luxury brands but in particular when it comes to service it is not something that money can buy and it is not necessarily only the privilege of luxury brands. A lot of brands can enhance their aspirational elements, can develop strong emotional engagement with their clients, can develop loyalty just by learning how to deliver great service. Of course luxury brands are still normally very good at delivering service but we can see a lot of brands which are premium brands, aspirational brands or retailers who are selling premium aspirational products, believe me, they have a lot to learn if they want to enhance the shopping experience from luxury brands. You do not need to be a luxury brand to benefit from good service,” he added.
“Each region, each country has its own culture and in luxury the culture is absolutely key. In Georgia I have identified that people are mostly interested in how to implement luxury service. A very important element for me is destination marketing.
We are living in a world which is global. Tbilisi today has touristic potential. In that sense Georgia in the future will more and more compete with other countries to attract tourists from different markets. Of course there are different categories of tourists but many of them spend money and need good accommodation.
Learning how to offer them good service can be very useful for Georgia. I live in China now because my wife is Chinese, so I am very close to the phenomenon of Chinese consumers, as well as Chinese tourists. Their curiosity and desire to travel has no limit. If you want to attract them and I am talking now about a huge population, which is just starting to travel, you should meet their needs. And Chinese consumers need good service.
If I were the official involved in developing tourism in Georgia, I would develop the marketing of my country and be able to be relevant to the expectations of this kind of tourist. You do not need to be a five star hotel to offer the best service.
Service is not something which is necessarily limited to high luxury brands,” Morisset said.
Q. Which are the countries that provide the best service?
A. Japan is probably the country where cultural service is the most important. It is really a cultural hospitality and world service, a mix of service and hospitality. There are a lot of best practices to learn from Japan, I would encourage everyone who wants to learn good service to visit Japan.
In America there is a cultural service, which is less sophisticated maybe but extremely efficient. I still think that going to the U.S. is also a good way to understand the business of service, because it really is a business there.
Selling has become strategic. 30 years ago very few brands were interested in selling the product. They were relying on the distributors to do that. Now there is incredible competition. Even if luxury brands have everything, unique luxury has become such a competitive market that everyone is trying to get their part of the cake.
Almost all of the luxury brands are doing a great job of creating a perfect product. But the only thing they can do to be different is to provide as perfect a service as they can. The experience that the customer gets in the store is what makes the luxury brands different. Good service can become a very important element of gaining the loyalty of the client and of course this will reflect in your PNL (the financial term for Profit & Loss) and in your profit.
Q. You have experience in working with the Giorgio Armani and Pierre Balmain fashion houses, which seem to be perfect in terms of the service they provide. Do you still have some advice for them?
A. Everything is not as perfect as it seems to be. They really know how to manage a brand well, but retail, service – there is more room for improvement than people think. The big brands are still learning as the service is never perfect.
You can produce a product which is perfect but you can’t provide the perfect service as it changes according to different customers. A brand should be constantly in the process of developing and improving its service.
Yves Saint Laurent five years ago was still losing money. For a new designer, even if he has a lot of talent, to be a Coco Chanel in 2014 he must be very lucky, one must have a lot of support.
Q. What are the main challenges for luxury retailers?
A. The main challenge is how to be relevant to different groups of consumers, culture, age bracket and education, how to be relevant to evolving representation of luxury service. Globalization is a challenge.
Another challenge is time pressure. Luxury customers almost always have business activities and stress. They are often cash rich, but time poor. They may be as demanding as before in terms of service, but they expect faster service delivery. As luxury service is more and more defined and influenced by the customers, luxury brands should meet their needs. To give good service makes you a friend of your customer. This does not always mean buying fast. Sometimes the element of leisure is what feels luxurious. For example, we might want to spend the afternoon shopping in a boutique, or purchase something and wait for it to be custom made. These are things that some customers deem positive uses of their time. But having to work to find a product, gather information or receive good service are all frustrating experiences that ultimately leave the customer dissatisfied.
Luxury was purchased or experienced in the past in an ordinary way by exceptional people. Today, luxury should be purchased or experienced in an exceptional way by ordinary people. Understanding the current shift of consumers towards experience and how it can impact luxury retailing, understanding the different facets of luxury shopping experience, can help every luxury brand to overcome these challenges.
What’s very important is emotional pleasure, magic feelings, the five senses, heart, fun, entertainment. In short, a brand should create an emotional link to the customers.
Q. You mentioned an emotional engagement with the customers. What does it mean and how can luxury retailers create durable emotional engagement?
A. Let’s draw a parallel – human beings love relationships. The line of developing a love relation is as follows: first meeting, initial impression; meet more to get to know each other’s character; get to know his/her past life, childhood; get to know his/her living environment; get to know his/her family; ensure you have common values; test how you can face problems together. After you pass through all these stages you decide whether to develop a durable relationship, maybe get married or break up.
The same happens between clients and brands. Actions and behaviours that help create a privileged customer relationship. Not just what the sales advisors do, but how they do it to increase a client’s satisfaction, building a personal relationship, it is about creating a positive emotion, but also a one-to-one relation, to touch the client’s heart. For example, recognize a customer, remember his/her name and call the customer by their name, eye contact, warm welcome and farewell.
Q. What are the future trends of good service?
A. Technology is transforming service delivery. Future trends are related to mobile/tablet, kiosks (to facilitate store navigation), digital signage (Perch technology), facial recognition, interactive fitting rooms, DFID, virtual/augmented reality (virtual store visits, beacon, Google glasses etc.).
The brands should train sales associates on brand digital presence and social media initiatives. They should be given instant access to the information and inventory that the customers are exposed to online elsewhere. Using in-store technology is useful for elevating sales associates’ expertise and helping them convey better the authenticity of the product. Use the digital to reinforce the novelty and efficiency and convenience of the shopping experience.
Q. What are the main steps of the sales process in a store?
A. Imagine a couple dancing rock and roll. One has to be the leader in the dance yet he cannot manipulate the body of his partner. He must adapt his leadership to his partner and he must show empathy. The customer should remain the king but he should be led by the sales associate.
First welcome the customer. Then find out what customer is looking for and really needs, then lead him. Show customers that your knowledge can help them. Assess the customer’s budget and manage it well. Optimize the last moment and leave the customer with the best impression. That’s all!
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