Luxury and upscale retail are undergoing some significant changes as the holiday shopping season kicks off and a new decade approaches.
Nordstrom is one example of that. The retailer recently delivered earnings that beat analysts’ expectations for the recently completed financial quarter, even as its net sales declined year over year. However, the retailer is hoping to see new growth via brick-and-mortar store efforts in the coming months and into the 2020s.
For instance, the new Nordstrom New York City store offers several different food and beverage locations, as well as the ability for shoppers to order food and have it delivered to them while they shop. The seven-floor store is Nordstrom’s biggest location ever. Bloomberg reports that it offers a bevy of innovative options intended to entice customers into spending more time shopping. It includes a skincare service called the FaceGym, where people can try “signature muscle manipulation techniques.”
Salespeople wear headsets so they can order food for shoppers anywhere in the 320,000-square-foot location. The retailer has also installed a bar in the shoe department, aptly called the shoe bar, where customers can try cocktails while shopping for footwear.
Meanwhile, luxury brand Burberry has teamed up with Tencent in China to offer a “social retail” store to take advantage of China’s online shopping trend and capture more of the luxury market in the country, according to a report by Reuters.
Tencent plans to open the store in the first half of 2020 in Shenzhen in China’s so-called technology hub. The plan is to create a space that mixes physical with digital. Tencent, which has the popular WeChat Pay platform as well as the social media platform Weibo, will offer one-stop shopping for Burberry items in one of the world’s most important luxury markets.
“Social media is becoming such an important part of the luxury customer journey, particularly in the inspiration phase, and retail needs to keep pace with this,” said Burberry Chief Executive Marco Gobbetti in a statement. “China was the obvious place to start as it is one of the leading hubs for innovation and technology and Chinese consumers are some of the highest users of social media.”
As luxury and upscale retailers try to build growth via stores and physical spaces – to say nothing of eCommerce – a recent deal also promises to have a big impact in this sector in 2020 and beyond.
With a move that will enable greater access to luxury shoppers in the United States, LVMH recently reached an arrangement to purchase Tiffany & Co. for $16.2 billion or $135 a share in cash. The boards of Tiffany and LVMH approved the deal and the transaction is forecasted to close in the middle of next year, subject to regulatory approvals and approval from Tiffany’s shareholders.
The fashion company noted in a statement, as reported by the outlet, that “the acquisition of Tiffany will strengthen LVMH’s position in jewelry and further increase its presence in the United States.” It also noted that it would “transform LVMH’s watches and jewelry division and complement LVMH’s 75 distinguished houses.”
LVMH has amassed a sizable luxury brand portfolio in various retail sectors, from perfume to fashion. Its famous brands include Dom Perignon, Moët & Chandon, Louis Vuitton and Givenchy.
Last year, the global jewelry market rose 7 percent and was worth roughly €18 billion. Tiffany is said to be one of the biggest jewelers in the world, alongside LVMH-owned Bulgari and Cartier.
Luxury extends to the automotive sector as well, and a recent move there shows the appeal of the online channel and new ways of shopping. Luxury and performance car maker Porsche will begin testing a new program that allows customers to do the majority of their car shopping online, according to a recent report.
“Physical and digital retail experiences have to work hand in hand, yet stay typically Porsche. Offering our customers an enhanced digital option for acquiring a Porsche makes this experience even more accessible and more convenient,” said Detlev von Platen, member of the executive board for sales and marketing at Porsche AG.
Most of the more arduous parts of car-buying, including obtaining financing and calculating payments, will be handled online, but customers will still have to come into the dealership to complete final signatures and take possession of the car.
Expect more changes in luxury shopping in the months to come.