February 6, 2014
Denise Incandela has an impressive pedigree in luxury retail, marketing and ecommerce. She was with Saks for 15 years launching saks.com in 2000 to its estimated $600 million-plus in annual sales and was a potent force behind Sak’s omnichannel strategy and its digital, social and mobile focus.
That said, it was a clarion call to hear Ms. Incandela tell the Luxury FirstLook: Strategy 2014 audience that retailers ought to direct their attention to where 80 percent of their sales are occurring and making the store experience more meaningful for luxury clients. Online is over-penetrated at luxury retailers such as Saks and Neiman Marcus relative to retailing generally, representing about 20 percent of sales, versus about 6 percent, according to figures from the Census Bureau.
And online sales have been growing at about four times the rate of traditional retail, reflecting the ecommerce channel’s obsessive customer focus, attention to shopping experience and ability to meet the consumer’s demand to shop anywhere anytime.
Channeling focus
An omnichannel strategy provides retailers with a single view of the consumer, and supports segmentation efforts based on purchases in all channels.
Since consumers have different behavior dependent on channel, retailers can develop targeted marketing and advertising employing mobile and social media to drive traffic and sales.
Organizationally, omnichannel needs to integrate and collaborate across all channels to drive efficiencies, support full price sales and better inventory management.
According to Ms. Incandela, mobile is not getting enough attention.
Just this past holiday, an estimated 20 percent of sales were driven by tablets and 10 percent by smartphones, yet marketing budgets generally are not allocating for mobile.
Regarding investing in rapidly changing technology, Ms. Incandela provided astute advice, “You really want to invest, make sure the mobile platforms are good, you don't need to be first, being a fast follower is good enough, on marketing, though, be best.”
Ms. Incandela ruminated on what the store of the future might look like.
“It’s a great time to be a brand and have your own retail store,” she said.
The executive sees more leasing in department stores, similar to Europe, which fundamentally changes the business model.
“Make your store as experiential as possible,” Ms. Incandela said. “Look at Burberry and Apple.”
Retail has not been transformed yet and here she echoed IBM CEO Ginni Rometty by saying that “information will be transformative for retailers, information is a key differentiator.”
Combine the information-rich online platform – data mining – with the geographic-specificity of mobile and the high touch service of a bricks-and-mortar retailer, now that is something I can believe in.
If retailers do not use the data that the Internet offers and personalize their product and service offering, online will continue to pressure retail margins and commoditize brands with price visibility and a repeat of the department store wars of the ‘90s.
Linens and things
Federico Pratesi, president of Pratesi Linens, and Rebecca Miller, U.S. executive vice president of Pratesi Linens, also shared their vision for Pratesi in the 21st century at Luxury FirstLook: Strategy 2014.
This 107-year-old family business will set out to conquer home and likened its path to Hermes, a bit of a stretch, but in truth the brand has a wealth of stories to tell given its longevity and the product is true quality with an “uncompromising attention to detail.”
The path beyond a family entrepreneurial business is wrought with dynamics and nuances to many to enumerate, but as Ms. Miller stated, “Change requires courage, discipline, process, structure and talent” and she brings a rigor to the process.
Ms. Miller has some great ideas for heightening Pratesi’s visibility, including strategic alliances and partnerships with interior designers and hoteliers, the real estate and travel industries, and yachts and plane operators.
Home is a positively trending category, attracting many apparel and fashion brands as they extend their reach to adjacent product categories seeking growth. Look at Kate Spade and Diane von Furstenberg in tabletop and Vera Wang in sheets, to name a few.
Still, Pratesi is an authentic luxury brand with good guardrails in the person of Ms. Miller as it navigates a roadmap to “owning the home.” Pratesi’s claim to “Made in Italy” is a very valuable plus, too.
Marie Driscoll is founder/CEO of Driscoll Advisors, New York. Reach her at marietdriscoll@gmail.com.
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