Boutiques look to in-store events to attract customers without cutting pricesWhen the going gets tough, the tough get going. Or, in the case of luxury retailers, they plan cocktail parties.

As it turns out, the opening of a temporary Hermes Hamptons store that we told you about a few days ago is not an isolated incident; instead, it’s a high-profile part of a larger trend. With fewer people able to afford their products, and some of those that can balking at the idea of conspicuous consumption, stores are having to do more to attract customers than they ever have in past memory.

The most obvious way to increase purchases would be to cut prices, but when a huge part of a brand’s image is their prohibitive price points and exclusive reputation, doing things that a big-box retailer like Best Buy would do to to attract customers isn’t what’s on their mind. Keeping the brand’s mystique intact is essential in order for them to keep doing business when the economy picks back up, and destroying the brand’s image of exclusivity now would probably be the luxury retail equivalent of throwing the baby out with the bathwater. In order to survive long-term, stores like Saks need you to be willing to still pay full price when things are back to normal and we’re not all afraid of losing our jobs.

So instead of blowout sales, some designers have opted instead to try a few gimmicks (let’s face it, that’s what they are, even if they’re fabulous, champagne-drenched gimmicks) to increase foot traffic in their stores. You’ve seen some evidence of the brands’ tactics on this site – trunk shows, designers visiting boutiques, cocktail parties, and charity events – and it seems to be an area to which more and more labels are shifting their marketing dollars. Hermes is sponsoring a tour of Hermes photography through its Chinese stores in addition to opening its first temporary store for vacationers, Jimmy Choo has partnered with various high-profile charities to host events (and encourage orders from donors), and YSL has already tried opening temporary stores for special collections.

And I guess whether or not all of this sounds good to you depends on what your relationship with luxury goods is. I’m not a huge fan of any particular brand over all others, so having cocktails at a boutique would probably only appeal to me for its open bar possibilities. I’d love the opportunity to meet pretty much any high profile designer, but mostly I think I’d shy away from these things. I liked working retail in college and I like blogging now because I’m one of those people that only wants to go shopping when no one else is present. I can’t tell you the last time I set foot in a mall on a weekend, but I’m all about some Tuesday morning browsing.

I’m not as antisocial as I sound, I promise, but I just don’t see shopping as a social opportunity or a lifestyle choice. Maybe if I had copious amounts of disposable income my attitude would be different, but I still kind of doubt the long-term ability for in-store events to create new revenue opportunities. It’s not like the high-rolling customers that are going to be invited to these events have never been to a wine-and-cheese party before, or a charity event, for that matter. Their novelty is bound to wear off eventually, but maybe by the time it does, the economy will have corrected a little bit and we can just go back to buying stuff we want just because we’d like to have it and it can afford it. Although I wouldn’t be opposed to making cocktails a permanent fixture of the shopping experience.

Via WWD

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  • http://www.purseblog.com/ Megs Mahoney Dusil

    I think the gimmicks work to get people out and then hopefully buying. I love meeting designers, but I also am not a huge fan of big crowds. So I am rather torn!

  • dimon

    Amanda,

    You are really a very thoughtful person and I think, an excellent writer. I have enjoyed your recent editorials on the current luxury market.

    Last Sunday afternoon I visited with an old friend who is a senior executive with Le Printemps in Paris. A lot of Americans know Galerie Lafayette, well Printemps is nearly the same but a bit chicer. Anyway, she told me that the Printemps executives had been provided the most recent (disastrous) statistical information about the US high end chains (Neimans/Bergdorfs, Saks, etc) because their earnings are public information. She told me that in Le Printemps handbags and shoes in the very high end were finished. Nobody in Europe is buying the $2000.00 + bags or the $1000.00 shoes. The only area where sales continue to grow is in name brand jewelry because it is timeless, can be handed down generations and is discreet although costly. Interesante, non?

  • me

    I like the idea of trunk shows and meeting the designer, but cocktails may be pushing it. If lowering prices is Best Buy offering drinks is car dealership hot dog day. I’m not a fan of shopping crowds either. I like a crowd at the concert of a great indie band because everyone is having fun together and like many of the same things but I hate shopping in one.

  • Kaytey

    Dana Thomas recently wrote a really great book called « Luxe & Co, comment les marques ont tué le luxe. » If you can read French, I highly recommend it. It talks about how the high-luxury houses have often secretly had up to 90% of their bags made in China, and then finished in France or Italy, to make costs low while maintaining a “Made in Italy/France” tag. It’s ridiculous.

    Their profit margins have been far too wide, far too long. If they were as high-quality as they claimed to be they might be worth the price. I think lowering the prices in this case could be beneficial to them, maybe as a sign of change?

    Or do people really not care about quality/cost ratios in comparison to the “look how much money I spent factor”?

  • http://graduationday.wordpress.com Amanda Mull

    @dimon: Thank you for your kind words! Your friend’s observations are very interesting, and from what I’ve observed personally, very right. Jewelry might also be doing better than other categories because it’s known to hold its value better and represents less of a depreciation risk, but that’s just conjecture on my part.

    @Keytey: Thomas’s book was also published in English under the name “Deluxe: How Luxury Lost Its Luster.” I really recommend it to anyone that regularly consumes luxury goods. It definitely helped change some of my buying patterns and look at certain things in a different way (I found the section on perfume particularly interesting). It also gave me a new level or respect and admiration for Hermes. I would love it if the recession resulted in a serious price correction (I think we’re in need of one), but it appears that the brands are willing to make every last ditch effort to not do that.

  • dimon

    Kaytey:

    I think you opened up the proverbial “can of worms”. “Look how much money I spent” has always had an allure for certain customers and in order for that to be visible the brand must be recognisable, hence the logo covered bag. Some brands that I like are the opposite of that. My friend from Printemps noticed my purple sunglasses that I slipped on her 12 year olds face and said I can see they are good quality but whats the brand? Marni from two or three seasons ago. You really have to look hard to see the label on the inside branch.

    Amanda:

    You are very welcome. I wish some of my fashion magazines employed a few more sensible writers that are current on the economy. And, you are correct about the depreciation factor. If you buy Cartier or Tiffany today in 25 years it will still make a lovely gift to your daughter. How will that “it” bag look in 25 years?
    Keep up the good work.

  • Merve

    I have to agree with you all. Im now more interested in jewellry or antique jewellry as it keeps its value and is timeless. The other day i was going through an amazing antique dealers site and he has edwardian and georgian rings emeralds and diamonds that average about 2k – 3k pounds. Now im seriously rethinking dropping a 2 grand on a seasonal handbag. Whats the point right now?

  • hazel

    Nothing like a bit of liquor to get wallets open =P

  • Ping

    I have to agree with most of the comments. I have been buying more jewelry rather than bags lately. That said, I think the “classic” bags such as Hermes’ birkins and kellys will still retain their values and i’m saving those for my daughter.

  • Kate W.

    Ping is correct in that ‘classic’ bags will hold their value or even increase in value…My mother bought a classic chanel bag for about a 1000 dollars in bergdorf’s in 2002…now that same bag costs over 1700…

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