Business View Magazine | Volume 8, Issue 12

8 BUSINESS VIEW MAGAZINE VOLUME 8, ISSUE 12 a luxury brand. “In watches, the idea was to increase prices and continue to develop rich merchandising, but when the [Chinese economy] boom ended many companies and brands had to reconsider their price and product architecture,” says Francesca Di Pasquantonio, managing director of equity research at Deutsche Bank. “Many brands in the category have never recovered.” If you do not happen to be a luxury heritage label backed by a multinational corporation, another strategy is required: Experiential retail. Experiential retail Experiential retail offers additional experiences beyond browsing and buying. In the context of luxury retail, when something of significance cannot be delivered upon – in short, an inventory flow with little precision, a limited selection, uncertain deliveries, and shortage of materials – it must be replaced. This Christmas, luxury brands need to consider simple experiential strategies to protect themselves from these sudden pitfalls. In a competitive market where luxury retailers are competing for custom without the assurance of certainty, a luxury brand must attempt to differentiate. Experiential retail helps us to do this. The benefits of experiential retail make it an essential Christmas marketing tool. Consumers A luxury customer does not expect compromise–on the quality of materials, on the variety of a range, or with significant delays in the delivery of the product – on the quality of materials, on the variety of a range, or with significant delays in the delivery of the product. It is why the forecasts for pandemic-related losses for the luxury sector were second only to hospitality, cited at around $450 - $600 billion in sales. This leaves luxury retailers with two choices. To capitalise on the Christmas market, you can ignore the complexities and simply increase prices to cover for any shortfall on profit aims and projections. But the price hike deployed by luxury retailers in China between 2010 and 2014 serves as an example of aggressive increases and their potential consequences. Unless you have a loyal customer base born of several decades of marketing, price hikes can kill