“At Harrods, all things are possible” says executive director of the store Michael Ward in the first session of day 2 of the 5th Mint Luxury Conference. And it is no idle claim either. “We have in the past year arranged for a cream tea on the Great wall of China and provided a small orchestra alongside, as well as sold a gentleman in Africa, a zebra.” This is apart from the emerald studded shoes and crystal bathtub they claim to have sold in the past.
The 1 million square feet Knightsbridge, London store with 5000 employees and 22 restaurants, Ward says “represents 40% of the retail luxury industry of India.”
Extravagant, aristocratic and eccentric as its very British reputation is, Ward points out that it is also a retail space devoted to building sales records. During their January sales in 2012, he says Harrods sold enough coifferies to build to the height of not one or two, but 52 Petronas Towers. They sell one £50,000 handbags a week and more ipads than many stores in the UK.
The difference, Ward says is devotion not to margins, but to the experience of shopping.
“We are increasingly being taken to the land of the average- when we go online to a store like Amazon, we are told if you read this book, then you will like this. Or if you listen to this music, you will like this. But customers don’t want more of the same, they want the different. And this is repeated all along high street -- a poor environment. Products are today engineered for margins, and not for exquisite taste.”
Ward narrates the theatrics of putting a customer on a list for a Birkin bag and the drama of finally receiving it. Tapping into these – the “wonderment” of shopping – he says, is what distinguishes stores from the online space.
“We want customers to go ‘wow’ and hopefully we achieve it” he says.
The top 1%, Ward says, defining the target segment, holds 21% of the world’s wealth. “The rich are getting more demanding.” Harrods has, to cater to this segment, developed a CRM system, a personalized magazine that currently has a higher circulation than the (British) Tatler or Harpers’ Bazaar magazines, provide exclusive sales previews and have even launched their own retail degree to provide the quality of education that Harrods feels luxury retail demands.
“We fly our executives down to Italy to discover how the Bottega product is made, a retailer should know why Chanel’s 2.55 bag is called 2.55, why Chanel no. 5 and not 1 or 2. Because knowledge is credibility; it is about authenticity and what is important to the customer.”
Harrods, Ward says, remained unaffected by the recession by refusing to cut costs. “It’s a knee jerk reaction to cut costs. The worst thing to do is to cheapen the product and cheapen the environment,” ward says.
Harrods also has made an effort to get onto the social media space because: “it allows us to engage with customers in a playful way. The luxury market itself is young and evolving. The story of luxury will continue.”