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What recent events in Japan will mean for luxury brands

May 11, 2011 by Bob Phibbs — CEO, The Retail Doctor

Before the news about Bin Laden, people were talking a lot about the effects from the tragic events in Japan. Of course there is a human side which we are all very concerned about, as well as a business side. Tiffany & Co reduced their first-quarter earnings forecast because fully one quarter of their stores are located in Japan.

The Wall Street Journal ran a story which said in part, "(Luxury sales in the) U.S., by far the largest luxury market in the world, will rise 8 percent this year. Sales in Japan, the second-largest luxury market, are expected to fall 5 percent as the country recovers from the earthquake and subsequent tsunami earlier this year."

And of course, the rise of China will become more significant in the next few years as well.

So if travelers from Japan, the fourth largest in-bound market to the U.S., will be less, what should U.S. luxury retailers do?

Change the way they do business.

Here are two pointers from my quick guide to selling luxury:

Know All The Brands.
Whether you sell cars or cashmere, the new luxury buyer is a player; their connections, brains, talent or looks got them their money. Salespeople must notice the brands that these customers are already wearing, from the Jimmy Choo shoes on their girlfriend's feet to the Omega Seamaster watch on his wrist.

Luxury customers appreciate talking to people who know the difference in feel, in smell, in taste and in service. If they don't sense this shared appreciation, luxury customers won't respect any advice or goodwill-building the employee has to offer.

Get Up Off The Floor, This Isn't Britain.
In the olden days in Britain, if you were serving someone of "station" you were to hide your personality, speak when spoken to, and leave your thoughts at the door. Many luxury retailers modeled their service after this example. But now good service demands face-to-face contact, open opinion. The modern player values real people.

Throw out the old way to sell and embrace the new.

About Bob Phibbs

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