Examining New Digital Opportunities for Luxury

Marie Driscoll: Thank you. I’m glad to be here. Gabriella Bock: Excellent. Well, it’s great to have you here. And I know that you are back in the states after attending several retail conferences over the last month. Most recently, that was the World Retail Congress event in Rome, which I guess, quickly, for people who haven’t heard of the World Retail Congress event and what they do, could you give us a little bit of background on that event? Marie Driscoll: World Retail Congress has been around for about 15 years. It’s an annual meeting, though, of course, during COVID, they were postponed. Of course, I was scheduled to speak in 2020 in April, at Rome, and it took us two years to get there and we did. It’s a group of senior executives worldwide that are in retail, retailers in some brands, and subject matter experts, consultancies, analysts, the media. It’s not a super large event. Over the course of three days, there probably were around a thousand people. So, it’s a great time to get insights and great conversations with retailers and brands of all sorts, from all around the world. Gabriella Bock: That sounds like a great event. It sounds like there’s definitely a lot of opportunity, as you said, to connect more one-on-one. And going to those more big events like the NRF Big Show event, they’re always so busy and so crowded, and sometimes can get lost and miss out on some of those more intimate conversations. Marie Driscoll: I was there in Amsterdam in 2019. And during both events, they provided store tours, which this year, it was in Rome and it was an incredible opportunity to go through many stores in Rome. And prior, in stores in Amsterdam. I’m familiar with Rome. I’ve gone back and forth to Rome probably 10 times in the last 20 years. Not so much with Amsterdam. So, the channel check there was very interesting, but the channel check in Rome, phenomenal. And we had a store tour of Bvlgari, of Rinascente, and Fendi, as well as many other stores, IKEA. It was amazing. And I have to say Rome was busier than New York City. Gabriella Bock: Amazing. Marie Driscoll: Rome was really busy, so people were back out. In the stores, you had to wear a mask, but you did see that Europe was traveling again. There were people, there were lots tourists, and people out and about. Gabriella Bock: That’s great. Yeah. I was going to ask because I know the Italian government had just started easing those remaining COVID restrictions. So, that’s great to hear that people were back in stores and shopping in brick-and-mortar once again. And well, Marie, every time I see you, you’re always wearing the best outfits. So, did you get to do any shopping while you were in Italy? Marie Driscoll: Oh, naturally. And Italy is such a great place for fashion. Unfortunately, I lost my credit card. Gabriella Bock: Oh, no! Marie Driscoll: So, that was a good thing. I lost it buying a coat in Rinascente, and that was fine. So, I got one or two takeaways, and then I just was on a shopping diet, but it was an amazing trip. It was amazing to hear all the speakers and… Deborah Weinberg, our CEO and founder, gave a presentation on the metaverse. I moderated a panel on luxury. So, we were very involved and then we attended lots of panels, and we had the opportunity to meet new clients and to see old friends. And it really was a great retail event. And there was a contest among students. And the students that won the contest, it was based on their way of taking a fast fashion brand and being more sustainable, and they had a great solution. And of course, we wrote up the event over the three days. And so please, I urge everyone here who’s listening to reach out check out our website, get the research, because, we have detailed descriptions of the winners and the events, the day events. Gabriella Bock: Wow, that’s amazing. I would love to hear more about the contest and maybe some of those sustainable solutions that were presented for fast fashion. Marie Driscoll: Yeah. So, it really was a rental and recycling, and ultimately, they brought in a live streaming component. And that was the winner. Gabriella Bock: Cool. Marie Driscoll: Yeah. Very cool. Gabriella Bock: Amazing. Marie Driscoll: Yeah. And very creative young 20 year olds. Gabriella Bock: Yeah. I am more and more impressed with the Gen Z every day, with how much importance they are placing on sustainability and ethics and transparency and really being the generation that’s pushing the needle forward in making the world just a better and more equitable place. So, hats off to Gen Z. And at the event, I know you did moderate a panel on seizing opportunities within the new markets and channels. So, I would love to hear some of your big takeaways from that session. Marie Driscoll: Yeah. So, it was a wonderful session. We had Alibaba represented, luxury at Alibaba, a new company, and I believe it’s the first company that it’s a luxury NFT metaverse company, COLT + RANE, the CEO and founder, George Yang, was there. And then we had [Jasmina 00:09:56] from [Shalu 00:09:56] Group. Shalu group is from the- Marie Driscoll: Shalou Group is from the UAE. She spoke about the luxury market there, which is really growing. Marie Driscoll: Christina Fontana, a long-time colleague, associate at Alibaba, was on the panel as well. Marie Driscoll: So you know, we had these three different points of view. I mean, during COVID, luxury took on an entirely new complexion, didn’t it, because people were at home more. People certainly weren’t traveling internationally. Before COVID, a lot of luxury purchases were purchased on holiday, on trips, when people went to international destinations. When people travel, they’re in la-la land and they bring home souvenirs, and adults bring home luxury purchases that they might not make in their own backyard. When all of a sudden for two years you weren’t traveling internationally, consumers opted to buy luxury in their own national market. We saw that in America, you saw that in China, and you saw that in the UAE. Marie Driscoll: The markets that were really hurt were where so much of luxury had been bought. I mean, the United States has a lot of luxury shoppers or a lot of luxury transactions, because people come to America and they buy luxury products because it’s easy to shop here. We have great inventory terms, we have great assortments from all over the world, but people also go to London. They go to flagship cities around the world to buy luxury. With international travel really curtailed, international cities really were penalized in terms of their luxury spend. Gabriella Bock: Are we seeing that picking back up with the travel retail industry? Marie Driscoll: Yeah. Well, so travel retail is picking up, right? Travel retail is its own channel. It occurs really in the airport. Also, flagship destinations like New York and Rome and [Inaudible 00:14:44] are seeing a pickup in luxury as people travel there. What happened domestically here during COVID is, once people came out of the initial dealings of COVID, the first three or four months, they started shopping locally. Many of the luxury brands, which are European-based, were having trouble keeping up with local demand here in the United States. You would go into an Inez and you couldn’t get a scarf or a bracelet. You couldn’t even get a bag. The bags are always hard to get. Gabriella Bock: Sure. Yeah. I know over COVID we saw greater adoption of digital. Luxury was notoriously slow to adopt ecommerce and digital sales. Marie Driscoll: Right. Gabriella Bock: I am curious. With that, and especially we’re hearing about luxury and fashion brands incorporating more digital strategies into their marketing and engagement efforts and then having to sell online, but then there being more shoppers locally, it’s all a pretty quick shift, right? Marie Driscoll: It has been, really. It feels like it’s an about-face, right? Because really when COVID happened, it was like the lights were turned off in stores in mid-March 2020. The lights were just turned off. For the first few months, people didn’t think about anything but, “Is my family safe? What’s happening with my job? How is my health?” Once we hit June, July, August and we started to live with what we were living with, live with the pandemic, people said, “All right, it’s time to buy something. I haven’t bought anything in a while. Plus, my money is accruing. I’m not spending money to get to work. I’m not spending money on entertainment. I’m not spending money.” People found that their savings were increasing, and every now and then they splurged on a handbag. Marie Driscoll: Luxury, you know, one of the things about luxury is a lot of it is clienteling. They’re a natural for doing one-to-one selling digitally. As the whole world, as you and I went to Zooming to maintain our business, right, a luxury brand could go to Zooming one-on-one with the sales associate and with the client, and maintain that relationship, show new product, order things together, and that in fact was happening. I know of cases … this is anecdotal … but where women would call up, “I want an incredible piece of fine jewelry,” and someone would go and pick it up. The store was really closed, but it was there to be sold from, right, kind of like curbside pickup. Marie Driscoll: It’s like luxury was able to pivot that way. For a number of years, luxury was coming around to digital. It’s not all on board, because you’ve got to balance a sense of exclusivity and limited supply with being online and access, and inclusivity. One of the ways the luxury industry has gotten around this, similar to what Nike is so famous for, is by collaborations and drops, right? Gabriella Bock: Sure. Marie Driscoll: You can be available to everybody, but there’s just a limited amount, and that keeps and builds brand heat. That’s what luxury brands have been doing. Gabriella Bock: Yeah. I wanted to ask, because I’m seeing luxury all over TikTok when we’re talking about exclusivity. I just want to know, is this reflective of reality? Gen Zers, are they after luxury and high fashion and making these purchases as much as the TikTok influencers would have us believe? Marie Driscoll: They’re the next generation, and so luxury brands are seeding, seeding demand at this point that will be fruitful, that will bear fruit, over the next three, five, ten, fifteen years, right? Luxury, these young consumers are on TikTok, they’re in the metaverse, and this is where brands need to go to get discovered. Where does a brand … Marie Driscoll: First, and this is where brands need to go to get discovered. Where does a brand get discovered? And brands align themselves with celebrities, with influencers, with sports figures and where they are is where they’re discovered. For the last two years, as a culture worldwide we’ve spent more li more time online so we’re discovering more things online and we’re actually on some level living more online. Gabriella Bock: Yeah. Speaking of that, we touched upon the Metaverse a bit and I wanted to know because we’re hearing about the NFT drops and these very limited experiences. And I wanted to know in your thoughts, do you think there are real transactional opportunities or are we kind of right now just thinking of the Metaverse as more of a marketing channel? Marie Driscoll: Well, we’re seeing real transactions occur. There is stats that show at least a billion and a half dollars worth of transactions last year. But it is a marketing vehicle. It’s very much in the early stages but like the media industry is really in a state of rapid evolution, you see what’s happening with TikTok, where are people discovering things? The Metaverse will be a place for discovery. So it will be a place for advertising. Georgie O Armani put his clothes on actors and actresses in movies and at the Academy Awards because then that’s where people discovered a brand that wasn’t yet known. And so what brands are doing is just being where the next generation of shoppers are. Gabriella Bock: Yeah, I love that analogy. I did want to know, so we’re talking about discovery and what kind of transact… Are we talking about purchasing digital products? Marie Driscoll: Right. Digital assets. Gabriella Bock: Do you think in the future, do you envision someone walking into a virtual store and being able to go in and look at a blazer for example that they like and try it on virtually and actually be able to purchase that jacket and have the real physical item shipped to their home. Do you think that’s something we’ll see? Marie Driscoll: Yes, think some of the obstacles right now are just the headsets that you have to wear to walk to a place and that’s an obstacle that technology will address over time. But already you can get a 3D visualization of what things look like on you. And every day the technology improves so that you can get a better sense as to how product flows and shimmers. There’s a lot of work to be done in that regard but yeah, I can envision that. Gabriella Bock: Amazing. It would be so cool. I know Gucci they’re doing their new Tokyo world. I just think it’d be so amazing to be able to zap into the Metaverse and go on a shopping excursion in Rome and then hop on over to Tokyo and have these very branded immersive shopping experiences without having to leave your home- Marie Driscoll: And kind of feel like you are wearing the clothes. Gabriella Bock: Yeah. Marie Driscoll: It’s one thing to kind of see an image of you but to feel like it’s on you totally different. Gabriella Bock: Yeah, absolutely. Absolutely. Well, so I know you also attended Shoptalk US just, what was it I saw you a week prior to the World Retail Congress. Marie Driscoll: Yes. Shoptalk, wasn’t that March 27th to March 30th? Gabriella Bock: Yes. Marie Driscoll: So we were and you were at NRF and that’s where there were 10,000 people there or more I think maybe there were 15 or 16000 people there. But the original expectation was 40,000 and while the sessions, most of the sessions occurred, there were some sessions that were canceled for the NRF. But you missed a lot of the vendors on the big floor, whereas by Shoptalk. And of course that was because of Omicron, but by Shoptalk, we were over Omicron and it really was we’re back to like some degree of normalcy. At Shoptalk we had to wear mask. Remind me, were we wearing mask in the event? Gabriella Bock: At Shoptalk? No. And it was so strange. Marie Driscoll: Right. Right. Because we wore it to the plane. We wore it. I know I had to wear it in the cab to the plane, but once we were there, right. And it was amazing to see and it was incredibly crowded, wasn’t it? Gabriella Bock: Yeah. It was packed to the brim. Marie Driscoll: Right. It feels like years of being six feet apart, it felt really packed. I think that if we hadn’t had COVID, it might not have felt quite as packed, but they had an incredible turnout and there was lots to discuss there. And I think one of the key takeaways there was physical retail is important. Physical retail didn’t go away. It is really important. It’s part of the way the consumer shops. It’s just one facet and physical retail can be the discovery phase, or it can be the transaction phase, or it can be the return phase. It could be the pick up a curbside phase. But physical retail counts. And you really only had to see that by going through COVID and once we got halfway through it, seeing how people returned to the stores, right? Gabriella Bock: Oh, yeah, absolutely. I think there was so many people say, even before COVID physical retail is dead. The store is dead, it’s to total BS. But I would even say with just an observation of how many of us were forced to shop online during the pandemic. And what I’m seeing is that people are even more enthusiastic about shopping in retail spaces now. We’re not all converted to being solely e-commerce. I’m seeing people, even at my local mall here in Tulsa, Oklahoma, the mall is packed on the weekend, absolutely packed. There are people everywhere. So people are still going out. They still want to experience physical, tangible, shopping, and make an event out of it. Gabriella Bock: And I definitely haven’t seen that change and even with virtual events people are happy to go to events now. They were saying it’s the death of the event. Everything will be virtual. No, we want to go to the conferences. We don’t want to do virtual conferences. We want to see each other and connect. And that definitely hasn’t gone away. Marie Driscoll: But no, people are social people. Not everybody. There’s some people that really are happy on their own. And for them buy online, pick up at a locker is fine. And this is where physical retail really has a lot on its plate. Amazon did a great job in anticipating every pain point of digital shopping and made it simple. In the real world, in the physical world my reason for shopping or a consumer’s reasons for shopping varies. Sometimes it’s efficiency, sometimes it’s need, sometimes it’s social, sometimes it’s discovery and really this is where you need sales associates with emotional intelligence that can respond to or read a consumer’s face and get that this person is here on a mission and another person wants to be romanced. Tell me the story of the brand. And that is where the physical retail location has to do all of these things. And that’s a lot because you’re pivoting from doing one to another, with every single consumer that.. Marie Driscoll: … pivoting from doing one to another, with every single consumer that walks in the door. Gabriella Bock: Yeah, absolutely. And you’ve even, I’ve seen some of those, some stores have the baskets, I would like to be helped or I am just here on a mission. I just want to shop. So even things that are simple as that can definitely help with that experience. I did want to know, Marie, between both of the events that you recently… So the World Retail Congress and Shop Talk US, were there any noticeable differences about some of content and topics that were top of mind or did it seem aligned across the board? Marie Driscoll: Well, so I will… At Shop Talk, there was talk about authenticity, personalization… Authenticity, being true to what your brand is, what your retail mission is and communicating that, and that authenticity bleeds into social purpose. But at Shop Talk, it was more about authenticity and recognizing the consumer and what they wanted and having, not just talking about sustainability, but really being sustainable. Whereas at World Retail Congress, it was really purpose, that companies needed to have a purpose. And if the purpose aligned with, on a social level, a values level, with your employees, the culture and consumers, that would make you successful. Gabriella Bock: Interesting. Marie Driscoll: Yeah. And I think that at World Retail Congress purpose very much was a big takeaway. But then, we had a conversation about luxury, we had a conversation about the metaverse. We had conversations about live streaming and investing, lots of different conversations and personalization, but big piece, purpose. And at Shop Talk, Shop Talk was so many sessions. I think a big piece was retail is back, profits are important. That’s a big takeaway. Today we’re talking on Friday, April 29th, last night, Amazon reported earnings, or actually they reported losses. It’s the first loss in seven years. And the stock market is penalizing them. Now, granted the stock market has been very volatile for the last few months as we look at a different interest rate environment, but profits matter. And it’s not like a company has to be profitable today, but at Shop Talk, the audience includes lots of venture capital, private equity in terms of the retail ecosystem and these investors and investors in stocks as well are saying, “We want to see a path to profitability.” It matters. Gabriella Bock: Sure. Yep. At the end of the day, you have to keep the lights on. Marie Driscoll: Yeah. Gabriella Bock: Great. Well, hey, are you attending anymore events? Can we expect to see you at Shop Talk Europe? Marie Driscoll: So  our CEO, will be at Shop Talk Europe. I’m not going to be there. Deborah has a string of events. She’s going to be at RICE probably next week or the week after. So check out our website for events. I am not doing much traveling. I have plans to be at the Lead in July. Gabriella Bock: Excellent. Well, we will have to look into that one. Otherwise we will hopefully see you, hopefully again before NRF and if not, certainly at NRF next year. And I do appreciate you coming on, taking the time to share some of your observations and experiences from the last couple of events you’ve attended this year and your enthusiasm for physical retail. So I appreciate your time, Marie, and I hope to chat with you again soon. Marie Driscoll: Me too. I do too. Marie Driscoll: I really appreciate the opportunity and I love being a part of the Rethink Retail Network.