Multi Brand Luxury Stores: A Retail Revolution in Reverse

Multi-Brand Luxury Concept Stores: A Retail Revolution In Reverse

------------------------------------------------------------------------------------------------------------An assessment of the emerging niche fashion retail format and its potential retail value for the socio-economically heterogeneous Indian luxury fashion market --------------------------------------------------------------------------------------------------------------

2014 Prerika Rao | RAO12376244

--------------------------------------------------------------------------------------------------------------MA Strategic Fashion Marketing London College of Fashion | University of the Arts London

---------------------------------------------------------------------------------------------------------------

Rao, P. (2014) Multi Brand Concept Stores: A Retail Revolution In Reverse

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Rao, P. (2014) Multi Brand Concept Stores: A Retail Revolution In Reverse

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DECLARATION OF ORIGINALITY

This is to certify that I am the sole author of this thesis and that no part of this thesis has been published or submitted for publication.

Furthermore, I certify that, to the best of my knowledge, this thesis does not infringe upon anyone’s copyright nor violate any proprietary rights and that any ideas, techniques, quotations, or any other material from the work of other people included in the thesis, published or otherwise, are fully acknowledged in accordance with the standard referencing practices.

I hereby declare that this is a true copy of my thesis, including any final revisions, as approved by my thesis supervisor, and that this thesis has not been submitted for a higher degree to any other University or Institution.

Name: Prerika Rao Date: 28.11.2014

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ACKNOWLEDGEMENT After more than six months of intensive research, my MA research project has finally come to fruition and I would like to take this opportunity to express my gratitude towards the people who have lent their expert advice, guidance and ongoing support towards its successful completion.

I would specifically like to extend my heartfelt gratitude towards Mr. Jonathan Chippindale, Ms. Michaela Christine Wolf, Ms. Tena Strok, Mr. Matteo Montechhi, Mr. Devanghsu Dutta, Ms. Sujata Assomull Sippy, Ms. Julie Leymarie and Ms. Lipi Begum - the industry experts, academicians and concept store proprietors, both in the United Kingdom and in India, who graciously agreed to help me with my primary research despite their busy schedules. Their expertise and industry insight has gone a long way in the development of my research postulation given the highly qualitative nature of my research questions. I would also like to express sincere gratitude towards Ms. Namrata Kedar and Ms. Mithila Karnik who assisted me with the observation of Indian concept stores given my inability to do so due to physical remoteness. Moreover, I would like to thank the Indian luxury consumers who enthusiastically participated in my research survey and for their valuable insight that helped me gain a better understanding of the changing Indian luxury consumer socio-psychological demographic.

I would like to sincerely thank my dissertation supervisor, Ms. Karinna Nobbs for her ongoing guidance throughout the research process and for her invaluable advice that has helped me streamline my research and for patiently addressing all my queries despite an extremely demanding professional schedule.

Lastly, but in no way least importantly, I would like to thank my family, friends and university peers for their professional, emotional and physical support throughout the research process which has been instrumental in the successful completion of this research project.

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ABSTRACT The global luxury fashion retail industry is witnessing a radical realignment in terms of retail and marketing functions, driven by the shift of power from the retailers to the consumers, uncertain market economies and growing demand for online and technological innovation in the core value offer (Baker, 2003; Chevalier & Gutsatz, 2012; D'Arpizio, 2014; Kapferer & Bastien, 2010; Okonkwo, 2007; Tungate, 2009). Physical multi brand luxury fashion retail segment has been specially affected by this evolution, struggling to match its retail value at par with the industry innovations and customer expectations through the physical stores that are lacking in a cohesive value across the product merchandise, store environment and customer services and a seamless, value intensive online transition as compared to single brand luxury retailers and online pure players (Chevalier & Gutsatz, 2012; Bank of America Merrill Lynch, 2011; Danziger, 2011; Dorman, 2013).

This is especially true for the Indian multi brand luxury retail industry, perceived as risk intensive by global luxury retailers given monumental overhead costs, strict government regulations on FDI (Foreign Direct Investment) and heavy import duties (Euromonitor, 2014). In this scenario, a growing demand is being witnessed for specialist, niche luxury retail concepts to create a differential value for the empowered new luxury consumers, both at a global level, and more specifically for the value oriented and highly discerning Indian luxury consumers (Atwal & Jain, 2012).

This report aims to evaluate the emergence of the niche retail format of multi-brand luxury concept stores (Doran, 2011; Tungate, 2012), and its differential retail value proposition specifically from the perspective of the Indian luxury retail industry. The author has first evaluated the changing dynamics of the global and Indian multi brand luxury fashion segment to identify the existing value gaps in terms of retail innovation and value proposition. Based on this, the retail value of concept stores has been analysed through existing academic theories pertaining to individual retail elements, broadly categorised into store design, environment, provision for third space (Nobbs, et al., 2012), product curation, niche communications and additional value services within a wider framework of customer value generation for new consumers as advised by Shaw et al. (2011). The author has further evaluated the retail value proposition of existing concept stores in India against these assessment parameters to identify the retail development gap and the corresponding scope for future development.

Based on the theoretical framework, the author has then undertaken interpretivist and inductive qualitative primary research (Carson, et al., 2001) developed on the basis of the social relativism and subjective nature of the research topic, to substantiate the secondary academic research observations. In depth interviews with luxury industry experts, fashion marketing academicians and concept store owners in UK and India along with store observations of two idenitifed concept stores each in London, United Kingdom and Mumbai, India have been conducted by the author to gain detailed perspective on the observed phenomenon from professionals directly engaged with contemporary luxury fashion retail sector. The author has further conducted a targeted survey with 31 identified progressive Indian luxury consumers to triangulate the qualitative primary research findings and obtain direct customer feedback on the evolving luxury consumption preferences and the perceived value of luxury concept stores.

A comparative analysis of the secondary and primary research findings have led the author to conclude that the global luxury industry has evolved dynamically in the past decade and is influenced today by the growing consumer confidence and power, macro digital innovations and an imperative market demand for a

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distinctive luxury purchase experience. In India, the complex nature of the local market and a highly value oriented luxury consumer demographic make it even more imperative for physical multi-brand luxury retailers to provide an additional value on top of the utilitarian luxury product component, a holistic store experience and an engaging on-going relationship which has been observed to be missing. Niche luxury concept stores have been identified as an important value generation retail format for the emerging luxury market as they provide a differential value across the individual retail elements and create a sense of personalised, exclusive luxury environment for the value seeking consumers through a strong store ideology that resonates with the target demographic. The scope for niche luxury retail formats has been found to be even more marked for the Indian luxury consumers who still prefer to shop overseas for a more enriched luxury experience, even with the emergence of local concept stores which have yet to attain a strong economic viability and brand equity market as compared to their global counterparts.

Positioned on this assessment, the author has developed an implications framework for Indian multi-brand luxury fashion retailers and existing concept stores proprietors, taking into account the research findings in terms of important considerations for local retailers based on overall industry analysis and perceived retail value gap based on comparative format analysis, expert opinions and customer feedback. This has led the author to postulate value development reccomendations which are three-tiered: (a) Strong store concept that is understood by the cutomers and provides perceivable value to their luxury purchase experience (b) Cohesive implementation of this core concept across individual store retail elements with emphasis on creating experiential WOW moments (Shaw, et al., 2011), having curated product collections reflecting consumer’s balanced tarditional-western aesthetics and exceptional store staff service (c) Greater social media and technological innovation at par with global standards for deeper customer engagement.

The report concludes with an overview of research limitations which are primarily a small research sample and lack of extensive academic resources due to highly segmented nature of research and with directions on future research which the author has proposed should look into the tangible and intangible value measurement of niche luxury retail formats to better assess the format’s retail value and analysis of the internationalisation of existing concept stores such as Dover Street Market and 10 Corso Como.

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CONTENTS ----------------------------------------------------------------------------------------------------------------------------------------------Cover Page 01 ----------------------------------------------------------------------------------------------------------------------------------------------Declaration of Originality 03 ----------------------------------------------------------------------------------------------------------------------------------------------Acknowledgement 04 ----------------------------------------------------------------------------------------------------------------------------------------------Abstract 05 ----------------------------------------------------------------------------------------------------------------------------------------------Contents 07 ----------------------------------------------------------------------------------------------------------------------------------------------Index of Figures, Diagrams, Images & Tables 10 ----------------------------------------------------------------------------------------------------------------------------------------------Index of Appendices 14 ----------------------------------------------------------------------------------------------------------------------------------------------1. Introduction 15 ----------------------------------------------------------------------------------------------------------------------------------------------(15) 1.1 Research Background 1.2 Research Rationale

(16)

1.3 Aims & Objectives

(16)

1.4 Research Methodology

(17)

(17) 1.5 Report Outline ----------------------------------------------------------------------------------------------------------------------------------------------2. Literature Review 20 ----------------------------------------------------------------------------------------------------------------------------------------------2.1 Introduction (20) 2.2 Multi Brand Luxury Fashion Retail

(20)

2.3 Concept Stores Overview

(23)

2.4 Concept of Conceptual Retail

(25)

2.4.1 Retail Value Proposition of Concept Stores

(25)

2.4.2 Differential Retail Elements

(27)

2.4.2 Value Measurement

(31)

2.5 Multi Brand Luxury Retail in India

(33)

2.5.1 Industry Overview

(33)

2.5.2 Indian Luxury Consumer

(34)

2.5.3 Scope for Niche Retail

(34)

2.6 Findings & Limitations (35) -----------------------------------------------------------------------------------------------------------------------------------------------

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------------------------------------------------------------------------------------------------------------------------------------------3. Research Methodology 37 ------------------------------------------------------------------------------------------------------------------------------------------(37) 3.1 Introduction 3.2 Research Philosophy & Approach

(37)

3.3 Research Design

(37)

3.4.1 Research Framework

(37)

3.4.2 Research Objectives Correlation

(40)

3.4 Research Methods & Analysis

(41)

3.4.1 Secondary Research

(41)

3.4.2 Primary Research: Expert Interviews

(41)

3.4.3 Primary Research: Store Observations

(42)

3.4.4 Primary Research: Consumer Survey

(43)

(43) 3.5 Research Ethics ------------------------------------------------------------------------------------------------------------------------------------------4. Cross-Cultural Value of Niche Luxury Retail: Research Findings 44 ------------------------------------------------------------------------------------------------------------------------------------------4.1 Introduction (44) 4.2 Multi Brand Luxury Retail Macro-Environment

(44)

4.2.1 Luxury Industry Evolution: Key Trends

(44)

4.2.2 New Luxury Consumer

(44)

4.2.3 Scope and value of niche retail formats

(44)

4.3 Retail Value Proposition of Concept Stores

(45)

4.3.1 Differential Retail Elements

(45)

4.3.2 Overall Peak Ends of Experience

(45)

4.4 Indian Luxury Industry

(45)

4.4.1 Macro-environment Analysis

(45)

4.4.2 Indian Luxury Consumer Profile

(45)

4.5 Case for Concept Stores in India

(46)

4.5.1 Value of Niche Retail Formats

(46)

4.5.2 Comparative Value Assessment: Indian Concept Stores

(47)

4.5.3 Nice Luxury Value Development Considerations

(47)

4.6 Summary of Findings (47) -------------------------------------------------------------------------------------------------------------------------------------------

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------------------------------------------------------------------------------------------------------------------------------------------5. Conclusion 49 ------------------------------------------------------------------------------------------------------------------------------------------5.1 Introduction (49) 5.2 Research Observation

(50)

5.2.1 Multi Brand Luxury Retail Macro-Environment

(50)

5.2.2 Differential Retail Value Proposition of Concept Stores

(51)

5.2.3 Indian Luxury Industry

(51)

5.2.4 Case for Concept Stores in India

(51)

5.3 Managerial Implications

(52)

5.3.1 Implications Development Framework

(52)

5.3.2 Proposed Recommendations

(52)

5.4 Limitations

(53)

5.5 Proposed Future Research Directions

(53)

5.6 Concluding Statement (54) ------------------------------------------------------------------------------------------------------------------------------------------References 54 ------------------------------------------------------------------------------------------------------------------------------------------Appendices 63 -------------------------------------------------------------------------------------------------------------------------------------------

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INDEX OF FIGURES, DIAGRAMS, IMAGES & TABLES

Figures (F) F. No.

Title

2.1, 2.2

Preferred offline shopping destinations for luxury consumers in home country and overseas

21

2.3

Multi Brand Luxury Fashion Concept Stores Value Proposition Assessment Framework

28

2.4

Experience Realms Matrix

31

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Diagrams (D) D. No.

Title

Page

1.1

Inter-relationship between luxury multi brand retail and marketing functions for concept stores

17

1.2

Primary Research design Onion

18

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Images (I) I. No. 2.1

Title

Page

Evolution of Concept Stores

26

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Tables (T) T. No.

Title

Page

2.1

Experiential Value of Observed Concept Stores

32

2.2

Literature Review Findings & Limitations

35

3.1

Primary Research Framework

38

3.2

Expert Interview Participants

41

4.1

Key Primary Research Findings

47

5.1

Conclusions & Implications Framework

49

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INDEX OF APPENDICES

S No.

Title

1

Growing Preference For Online Luxury Retail

2

Maslow’s Hierarchy of Needs

3

Concept Stores Evolution Timeline

4

Luxury Retail Value Chain

5

New Customer Value Development

6

Niche Retail Value Measurement KPIs

7

Indian Luxury Market Growth

8

Indian Luxury Market PEST Analysis

9

Primary Research Philosophy Table

10

Interview Design Template

11

Interview Transcriptions

12

Interview Coding Analysis

13

Store Observation Design Template

14

Store Observation Grid

15

Comparative Store Analysis Grid

16

Survey Design Template

17

Survey Responses

18

Survey Analysis Table

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1. INTRODUCTION 1.1 Research Background Organized luxury sector is witnessing a radical shift across retail and retail marketing operations in the wake of the strengthening online market place, the power redistribution to the brand savvy consumers, rising middle class with higher disposable income, emergence of masstige brands (Kapferer & Bastien, 2010), democratisation and corporatization with luxury conglomerates like LVMH, Richemont S.A. and Kering acquiring previously family owned luxury businesses (Tungate, 2009; Okonkwo, 2007).

While this paradigm shift has helped luxury brands and businesses to adapt to the changing consumer preferences, it has also led to dilution of the luxury brand equity, the sense of exclusivity and rarity that customers aspire to achieve, the hedonistic element pivotal to luxury consumption (Kapferer, 2013). The situation is further compounded for bricks and mortar multi brand luxury establishments as they struggle to remain relevant given stiff competition from online pure players like Net-a-porter, in store branding controlled by individual luxury brands and subsequent loss of homogeneity in brand communications, factors that threaten the very existence of such establishments as consumers opt for online retailers, luxury brands’ e-commerce portals or the highly experiential single brand outlets (Saviolo, 2003; Chevalier & Gutsatz, 2012).

The emergence of multi brand luxury concept stores, in this context, is a trend of vital importance as it heralds a new era of multi brand luxury retailing, one that is driven by restoring the magical and fantasy component of luxury retailing (Kapferer, 2013) in a contemporary, postmodern setup that provides an element of surprise to the visitors while providing a sense of exclusivity with specially curated collections and targeted direct marketing as opposed to mass marketing (Morris, 2011). The rise of experiential, value intensive concept stores like Dover Street Market, Colette, 10 Corso Como among others and their subsequent rapid market penetration, to the extent where today they are considered as luxury retail landmarks in their respective cities, points towards a growing market for niche luxury retail formats that offer a more personal luxury shopping experience to the memorable experience seeking consumer (Doran, 2011; Dowdy, 2008).

In comparison to the wider global luxury industry evolution, the Indian luxury fashion retail sector still remains in its nascent stage even as the consumer demographic is maturing and evolving at par with the global consumer empowerment, aided by their travel overseas that acquaints them with the more experiential luxury formats along with the digital and media tools they have at hand that has led to an overall increased customer knowledge and sophistication (Atwal & Jain, 2012; Euromonitor, 2014). The existing luxury retail formats, however, are struggling to match this maturing consumer market, restricted by stringent government regulations, heavy import duties, and relatively high cap on foreign direct investment (FDI), specifically for multi brand retail at 51% (Deloitte, 2014).

Moreover, the comparative value of luxury retail outlets in the country as compared to other new markets like China is significantly lower and most luxury brands are adopting a blanket retail strategy without taking into account the local socio-cultural denominators that directly affect the Indian consumer’s luxury consumption preferences (Atwal & Jain, 2012). The lack of luxury flagships, experiential retail formats, stores in cash rich Tier II cities, multi-channel integration, country specific online luxury communications are some of the factors that bear testimony to this luxury retail value gap in the country (Atwal & Jain, 2012; Kesari & Srivsatava, 2012).

This retail value gap has created an imminent market requirement for a more targeted luxury retail approach which can justify the higher prices commanded by retailers given higher overhead costs owing to heavy import duties levied by the Indian customs department (Kesari & Srivsatava, 2012). This can be attained by providing an additional value to the customers which is specific to their luxury consumption defined by an inherent balance between traditional Indian ethos and contemporary western aesthetic that cannot be found in luxury stores overseas, thus creating a sustainable luxury market within the country (Atwal & Jain, 2012; Chevalier & Gutsatz, 2012). Though this has been attempted to a certain extent, most notably by multi brand concept stores like Bombay Electric and Le Mill (Strut120, 2012), by creating a differential retail value proposition through their central concept and subsequent retail elements augmentation, there is still a perceivable disparity on a whole for the large part in terms of experiential retail environment innovation, service penetration and communications customisation when compared to the highly evolved niche multi-brand format in Europe, North America, Japan and Singapore. With the rise in luxury consumption in the

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country, projected at a robust 30% YOY growth (The Economic Times, 2014) and an evolving generation of luxury shoppers, there is huge potential for luxury concept stores in the country which is yet to be met.

1.2 Research Rationale As has been outlined in the previous section, luxury fashion concept stores, as a retail evolution phenomenon, have a sustainable value for the postmodern, empowered new luxury consumers and can fill a market gap in terms of a more personalised and experiential physical luxury retail format. However, the value of such stores has yet to be analysed in depth to assess their differential retail value proposition and identify the individual successful elements of their retail value chain in terms of store design, product curation, customer engagement through in store service, ongoing niche communications and the overall distinguishing luxury experience that sets them apart from the other prevalent luxury retail formats (Chevalier & Gutsatz, 2012). While extensive research has been carried out on the changing face of single brand luxury retail and marketing by theorists and analysts, there is a dearth of literature on the evolution of multi brand luxury retail and concept stores, as will be highlighted in the coming sections.

In specific context of the multi brand Indian luxury retail segment, author’s primary area of focus, there is an even more marked absence of organised evaluation of the niche luxury retailing trend. While there have been extensive assessment on the local market growth and development and the evolution of the Indian luxury consumer, a comparative assessment of the ground level retail strategy of offline luxury retailers in general and exiting concept stores in particular is yet to be undertaken.

This research paper has attempted to undertake an extensive primary and secondary research to analyse the trends and dynamics affecting the global, and in turn Indian multi-brand luxury retail sector to identify the scope for a more segmented luxury retail approach as is being practiced by the concept stores. This is to assess the differential value proposition of such retail formats that can be adapted for the local consumer for higher market penetration, which in turn can provide greater retail value to the retailers to offset the risks and challenges faced in the country leading to lower profit margins and uncertain long term sustainability. A comparative analysis of existing niche retail formats in the country, as per the identified value generation framework, has then been conducted to identify perceived value gaps and ensuing managerial implications to infromand value generation and enhancement recommendations for the local Indian luxury retailers and existing concept stores proprietors.

1.3 Aims & Objectives 1.3.1 Research Aim To analyse the differential value proposition of multi brand luxury fashion concept stores as a niche retail format within the macro luxury retail environment and subsequently ascertain their potential retail value for the socioeconomically heterogeneous Indian luxury market to develop managerial implications and recommendations for local niche fashion retailers.

1.3.2 Research Objectives (a) To assess the changing dynamics of macro multi brand luxury fashion environment with respect to evolving luxury customers, emerging trends and retail innovations, and the ensuing implications for multi brand luxury retailers in the physical retail space (b) To analyse the niche retail format of multi brand concept stores and their differential retail value proposition within the evolving multi brand luxury retail segment through an assessment of their niche retail strategy w.r.t retail concept, physical form and perceived value functions (c) To ascertain the potential retail value of multi brand concept stores for the Indian luxury retail market through an assessment of the Indian macro luxury environment, existing retail formats, competitive forces and the evolving luxury consumer demographic

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(d) To evaluate the retail value proposition of existing multi brand luxury concept stores in India as per the identified value augmenting functions of the niche retail format in order to develop managerial implications and strategic recommendations for local niche fashion retailers

1.4 Research Methodology Overview 1.4.1 Secondary Research Overview Given the multi-disciplinary nature of the research topic, the author first undertook extensive secondary research to assess existing literature covering different areas of study including global and Indian luxury industry analysis and corresponding multi-brand luxury retail sector assessment; experiential & sensorial branding (Pine & Gilmore, 2011; ob , 2001), multi-channel luxury retail integration, innovations and diffusion of innovations (Rogers, 1983), atmospherics (Kotler, 1973), luxury merchandising and multi brand distribution formats (Chevalier & Gutsatz, 2012), and specialized luxury marketing communications (Atwal & Williams, 2009).

The following Venn diagram (Diagram 1.1) illustrates the interrelation within these variables as the constituent functions of a multi brand concept retail setup, the study of which is essential to establish a preliminary framework to assess the success of concept stores as retail entities and their transferability across geographical borders, specifically drawing comparison between their functions in the global and Indian context, as per the previously stated research objectives.

Geographical Location

Objective Functional

Subjective Experiential

Collective Symbolic

Objective Functional: Product mix Merchandising Multi brand distribution format Subjective Experiential: Concept innovation & diffusion Experiential & sensorial branding Store atmospherics Multi Channel Integration Collective Symbolic: Social media community Specialized communications

New

Diagram 1.1: Inter-relationship between multi brand luxury retail and marketing functions for concept stores; Source: Author’s own with adaptation from (Berthon, et al., 2009), Aesthetics and Ephemerality: Observing & Preserving the Luxury Brand

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1.4.2 Primary Research Overview Based on key findings from the secondary research and identified limitations, the author then conducted further interpretivist qualitative primary research analysis as per the identified research objectives. This research was undertaken over a course of the development of the report and included in depth interviews with industry experts, concept store owners and academicians in UK and India to gain a comparative insight on the overall macro level luxury industry trends and micro retail elements that segregate the niche retail format’s value proposition from the rival formats and its subsequent value for the customers. The author also undertook a comparative observation analysis of two identified concept stores in London, United Kingdom: Dover Street Market and Celestine Eleven and in Mumbai, India: Bombay Electric and Le Mill, to assess the degree of innovation in retail value development by the Indian concept stores. In addition, a supplementary quantitative survey analysis with 31 identified progressive Indian luxury customers was conducted to triangulate the findings from expert interviews and store observations (Saunders, et al., 2009). The secondary and primary research findings were then correlated to arrive at conclusions and managerial implications outlined in the concluding section of the report. The primary research methodology has been discussed in detail under the research methodology section, developed based on the below illustrated research onion (Diagram 1.2).

Diagram 1.2: Primary Research design Onion Source: Adapted from Saunders, M. et Al. (2007) Research Methods for Business Students. Pearson Education Ltd.

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1.5 Report Outline Based on the above outlined aims and objectives and corresponding secondary and primary research focus, this research report analyses the macro and micro environment considerations for niche multi-brand luxury fashion concept stores in the coming sections to arrive at key findings and managerial implications and subsequently inform the strategic recommendations for niche luxury retailers in India.

Following the current section that provides the reader an overview of the research context, rationale, aims & objectives and methodology, the coming section details the literature review undertaken by the author as per the identified research objectives. Beginning with an overview of the macro global luxury fashion industry and multi-brand luxury retail sector to identify the prominent trends defining the market place and corresponding considerations for luxury retailers, the section then evaluates the emergence of concept stores, defining the niche retail format as per existing academic theories and postulating a composite definition to give the reader a succinct description of the format. This is followed by a chronological assessment of the emergence of concept stores, outlining the format evolution process and key examples of concept stores to highlight different forms and functions of the format. A detailed analysis is then presented on the retail value proposition of the concept stores as a function of the value offering for new luxury customers (Shaw, et al., 2011) based on the optimisation of the individual retail elements of the luxury value chain (Chevalier & Gutsatz, 2012). Based on the global macro industry and micro concept analysis, the next sub section within literature review then looks at the dynamics of multi brand luxury retail in India in terms of current scenario, challenges, existing retail formats, Indian luxury consumer demographic and a brief assessment of existing concept stores to identify scope for development. The section concludes with a brief summary of findings as per each research objective and key literature review limitations.

The next section on research methodology outlines the development of primary research framework. A brief introduction on the research framework development leads into the research philosophy incorporated by the author and justification for the same. This is followed by an overview of the research design process, outlining the primary research matrix to give the reader an overview of the nature of the research, research tools developed as per identified objectives, corresponding sample and data analysis techniques employed. The research methods and data analysis tools employed are discussed in detail in the next sub section as per the nature of method employed, corresponding sample selection and analysis technique used. The section concludes with a brief statement on the author’s compliance with the research ethics and regulations as set by University of the Arts London The findings from the primary research conducted have been next discussed in the findings section, categorised as per the research objectives set by the author: overall global luxury industry analysis, value proposition of concept stores, Indian luxury industry development and scope for niche retailing, and the comparative assessment of the niche retail segment in India. The section concludes with a brief overview of the primary research findings and limitations of the employed research methods.

The concluding section of the revisits the secondary and primary research findings to develop informed concluding observations about each research objective. This leads to the managerial implications section, developed based on individual research objective conclusions and the corresponding proposed recommendations for Indian luxury retailers. The report concludes with an overview of overall research limitations and suggestions for future research to be undertaken pertaining to the research area.

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2. LITERATURE REVIEW 2.1 Introduction Based on the key areas of study outlined in the research overview section, the author undertook extensive secondary research of existing literature on the multi brand luxury retail strategies and trends, emergence of concept stores on a global level, their differential value proposition and the Indian luxury retail industry with the aim of developing an assessment framework for further primary research.

This section analyses the operations of concept stores within the wider fields of contemporary luxury sector, multi brand luxury marketing and retail strategies and glocalisation of said strategies (Kapferer & Bastien, 2010).

The coming sub sections elaborate the findings from the literature review based on these criteria. An overview of the multi brand luxury fashion retail sector provides an insight into the changing socio-technological dynamics within the sector and highlights the significance of unconventional retail models in creating value for the increasingly online and postmodern consumers (Simmons, 2008). This is followed by an in depth analysis of the emerging phenomenon of concept based multi brand luxury retailing and prominent concept stores from around the world within the specialty retail stores category (Chevalier & Gutsatz, 2012) to identify their Emotional Selling Proposition (ESP) ob , 2001).

The next sub section elaborates upon the form and function of concept stores, assessing the retail and marketing tactics employed by such establishments against established theoretical frameworks in terms of product range curation (Chevalier & Gutsatz, 2012), store design and ensuing environment (Pine & Gilmore, 2011; Spence, 2014), niche marketing communications (Smith & Taylor, 2004; Lea-Greenwood, 2013) and the overall experiential and sensorial stimulation that sets such stores apart from other retail formats (Pine & Gilmore, 2011; ob , 2001). Based on this analysis, the Indian luxury sector and the evolving consumer demographic is studied next specifically in context of the prevalent multi brand luxury retail formats and existing concept stores in the country to identify the retail development gap compared to previously discussed global formats and scope for niche retail concepts. The section concludes with a brief synopsis of findings from the literature review and the outline of identified areas for further primary research to be undertaken.

2.2 Multi Brand Luxury Fashion: From the Era of Department Stores to the Rise of Concept Stores Traditionally luxury fashion consumption has been a privilege of the few, an elitist activity safe guarded by the haute couturiers and specialist maisons that lent the elusive realm everyone aspired to achieve but only few could afford (Castarède, 2007). However, as mentioned in the introduction, with the rise of the affluent middle class and a new breed of consumer demographic that is demanding rather than deferential, and increasingly empowered by the online revolution (Baker, 2003), the luxury industry has undergone radical change, forced to give up its reluctance to embrace online operations and facing relative loss of control (Danziger, 2011).

Even as the luxury markets recover from economic sluggishness in the western countries, they are fast approaching a mature phase in non-traditional, lucrative markets including Russia, Japan and China given devaluation of local currencies, economic crackdowns and changing consumer preferences (Mintel, 2014). This is evident by the slowing growth rates across the world, ranging between 2-6% for European, American and Asian-Pacific markets and more alarmingly, negative growth in major economies such as Russia, with a loss rate of 4-6% (D'Arpizio, 2014). This, despite the rise in average individual disposable income globally (Mintel, 2014); can be attributed to the changing dynamics of luxury consumption with the evolving perceptions of what construes luxury today. In a bid to make luxury more accessible and to target wider consumer demographic, luxury has lost its lustre, stripped away of the exclusivity that makes it special (Thomas, 2008; Tungate, 2009).

The scenario is further complicated for largely offline luxury retailers with online luxury retail sales growing at twice the rate of offline sales and influencing over 28% of offline luxury sales (McKinsey, 2014). While most luxury companies now have an online presence, consumers are increasingly opting for online pure players like Net-a-porter, Mytheresa.com and My-wardrobe.com as these websites give them the opportunity of extensive research and cross comparison as well as offering additional incentives like editorial style guides, special sales and exclusive designer collections, often missing from the luxury brand websites (McKinsey, 2014) (Appendix I).

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Multi brand retail channel, specifically in the form of department stores, has been an undeniably important distribution format within the luxury sector since the early 19th century, with the establishment of Harrods in London in 1834 and Le Bon Marché in Paris in 1838 (Whitaker, 2011). The subsequent emergence of iconic shopping landmarks like Selfridges, aleries Lafayette, Le Printemps, Macy’s, Barneys and Bloomingdale’s through the early 20th century can even be credited with revolutionizing luxury retail, housing prominent luxury brands under one roof and in an exciting new environment with thematic window displays, seasonal events and a seemingly endless variety at consumer’s disposal for the first time at one destination, in a way heralding the democratization of the luxury industry (Chevalier & Gutsatz, 2012; Whitaker, 2011). To this date, multi brand luxury outlets and department stores remain a major revenue generation channel, accounting for the either the largest or a significant volume of sales percentage in offline luxury revenue projections across the world (Figure 2.1, 2.2).

Figure 2.1, 2.2: Preferred offline shopping destinations for luxury consumers in home country and overseas Source: Luxury Goods Retailing – International Report, Mintel, 2014

However the disruptive evolution of the luxury industry has not left the multi brand retail segment unaffected, having a detrimental effect on most established multi brand retail formats. The sector is witnessing sharp decrease in footfalls with 5.9 million less visitors in UK alone as compared to 2009 (Verdict, 2014) and declining sales volume amidst the rise of online retail and the emerging ‘showrooming concept’ (Dorman, 2013) wherein the physical stores are being treated as showrooms for browsing, while the consumers are increasingly shopping online for products browsed to obtain best deals.

Today, with luxury in the hands of the consumers, it is of surmount importance to develop retail and marketing strategies that cater to the changing consumption patterns of new consumers (Baker, 2003) who are marketing and IT literate, have a postmodern ‘less is more’ outlook towards materialistic purchases and are looking for additional value in products, shopping experiences and brand communications in a heterogeneous market place (Baker, 2003).

Traditional drivers of luxury purchase decision, social image and self-esteem, are being discarded with the rise of individualistic identities and luxury is now perceived as a means of self-actualization as consumers increasingly shop for enriching experiences and legacies more than the actual products (Shaw, et al., 2011; Chevalier & Gutsatz, 2012).

The luxury market is evolvling at a dynamic pace, influenced by the need of constant retail channel innovations across offline and online platforms to keep ahead of the competition curve; the social media disruption that has changed the nature of brand communications from autocratic one-to-many advertorials to democratic many-to-many word of mouth conversations (Smith & Taylor, 2004); customer expectation of seamless shopping experiennce across multiple retail channels and the increasing demand for exclusivity in products and services as opposed to mass luxury (Tungate, 2009) (Deloitte, 2014; Niemeier, et al., 2013).

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As a proactive response to this power shift, luxury brands are now striving to create a differential value for their consumers in order to regain the prestige associated erstwhile with them. Notable examples include Burberry adopting advanced digital innovations across its retail formats for a seamless omni-channel shopping experience (Moore & Birtwistle, 2004), Prada embracing art community in a bid to establish itself as a connoisseur brand with an art heritage associative image (Ryan, 2007), limited edition collection launches, in store and online customization and personalization services and greater emphasis on experiential store environments (Chevalier & Gutsatz, 2012; Tungate, 2009; Okonkwo, 2007).

However multi brand luxury retail has not been able to embrace this change quite as effectively, caught between the current trends of emerging low cost fashion chains and rising mass luxury brands in addition to the above mentioned challenges faced by offline luxury retailers (Tungate, 2009). Many single brand luxury retailers have been able to reposition themselves with strategic tactics aimed at recreating the luxury value for the customer by the way of magical store environments, personalized services, product differentiation, multi-channel and social media integration (Danziger, 2011; Kapferer & Bastien, 2010; Corbellini & Saviolo, 2009). In contrast, for most multi brand retailers it has been a slower reinvention process as they struggle to attain a cohesive branding and communications strategy; be it in store design, merchandise selction, visual merchandising or PR and promotional activities. With established brands controlling in store branding and merhcandising supply chain to a large extent, it becomes difficult for the multi brand retailers to develop a strong brand identity for the store and a distinctive shopping experience for their customers (Chevalier & Gutsatz, 2012; Tungate, 2012). Apart from a few notable exceptions like Selfridges, Harrods and Saks 5 th Avenue that have been successful in effecting a successful transition to contemporary retail destinations, aided majorly by their pre-existing prestigious image and influence over stocked brands, most traditional multi brand retail formats are now witnessinng drop in sales and customer footfalls. This has been evident strongly in the case of big players like Harvey Nichols and Liberty among others, reporting loss in revenues over the last five years (Jones Lang Lasalle, 2012).

In this scenario, the emergence of a new conceptual format of luxury retailing is of special relevance, with a niche, micro retailing strategy that has been billed to be the way forward for the multi brand luxury retail industry by leading market analysts, academicians and trend watchers (Chevalier & Gutsatz, 2012; Deloitte, 2014; Jones Lang Lasalle, 2012; Kapferer, 2013). Tungate (2009) states that taking luxury back to its original form is imperative to sustain and rebuild the loss of perceived luxury value for most brands, through rarest materials, limited items and return to a single door availability (Tungate, 2009, p. 2). The rise of concept stores, an evolved format of the specialty luxury store that caters to a niche market segment by providing highly specific product selection, intimate shopping experience and a sense of belonging to an exclusive community based on the target niche demands and preferences (Chevalier & Gutsatz, 2012; Dowdy, 2008; Tungate, 2012), and their consequent popularity bears testimony to this statement.

Independent specialty multi brand outlets have been in operation within the industry for much of the organized retail history, described by Chevalier & Gutstaz (2011) as a more upscale and niche version of chain department stores with a more limited, carefully curated product selection, the luxury and the creative statement of the products bringing something special to the store (Chevalier & Gutsatz, 2012, p. 46). However, such stores have mostly operated on a small scale, as standalone outlets and their significance as a retail format has been relatively under explored. While there has been some research on the concept of micro retailing in general (Baker, 2003; Chevalier & Gutsatz, 2012; Hines & Bruce, 2001; Simmons, 2008), an in depth analysis of the growing preference of such stores among the new luxury consumers, young affluents with extensive knowledge of luxury and an appetite for accessible exclusivity (Danziger, 2011), has yet to be undertaken. The importance of such stores can be gauged by the fact that specialty stores are major contributors to offline luxury sales volume (Fig 2.1, 2.2), accounting for equal sales compared to standalone luxury brand outlets in most countries and even surpassing in several cases (such as in the Italian luxury market).

The emerging format of concept stores within the specialty store segment is of special significance given their innovative strategy in terms of product curation, retail operations and marketing communications, which has established them as an attractive option for the internet savvy and largely online luxury consumers, projected to be at almost 100% of all luxury consumers (Danziger, 2011).

The coming sub sections will analyse this relatively new retail format in detail. An in depth analysis of the emergence and history of concept stores followed by observational analysis of successful concept stores from across the globe will establish the key success parameters of the format on a global level which will be then analysed in further detail

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against the existing academic frameworks of luxury retail management (Chevalier & Gutsatz, 2012), experiential retailing and marketing (Pine & Gilmore, 2011), emotional branding ob , 2001), niche marketing communications (Lea-Greenwood, 2013; Smith & Taylor, 2004), omni-channel integration (Dorman, 2013) and overall retail innovation.

2.3 Concept Stores Overview: A Retail Revolution in Reverse As has been discussed in the earlier sub section, luxury retail was revolutionized in the early 20 th century with the rise of department stores which provided customers a veritable range of products under one roof with a hitherto missing democratic and sensorial shopping experience through themed shopping windows, seasonal interior décor, unintimidating store personnel etc. (Tungate, 2012). However this democratization of luxury industry led to the dilution of the perceived luxury equity with readily available, lower priced products and online luxury retail websites.

Stripped away of it’s unattainable element to a great extent, especially in case of fashion products, the luxury industry has been struggling to recreate the aspirational value for customers who typically seek a distinguished product, service and experience when shopping for luxury products (Kapferer, 2013; Tungate, 2009). This has led to a reverse retail disruption within the luxury industry, one that is aimed at creating a virtual sense of exclusivity, termed by Kapferer (2009) as creation of abundant rarity, where luxury retail and marketing strategy is aimed at providing customers with a sense of ‘exclusive to them’ product, service and experience through segmented and niche retail formats (Kapferer, 2013, p. 457). This in turn has led to the evolution of niche luxury retail formats that aim to cater to the highly segmented luxury market by providing super niche (Shaw, et al., 2011) retail strategies targeted at small, fragmented consumer segments within the luxury macro environment.

The emergence of luxury concept stores is a noteworthy development within the niche luxury retail space, providing a departure from the standard format retail spaces for a more democratic and sensorial shopping experiences (Chevalier & Gutsatz, 2012; Danziger, 2011; Tungate, 2009). While this niche retail format is being adopted by both single brand and multi brand luxury retailers, as per the scope of this research thesis, only multi brand luxury concept stores have been analyzed as a differential value offering for new luxury consumers in contrast to other multi brand luxury retail formats.

The emergence of concept stores has been relatively under documented by luxury retail and marketing academicians and experts, often clubbed with pop up stores, guerilla stores and single brand flagship stores given similarities in value offering in terms of experiential retail space and additional lifestyle services (Chevalier & Gutsatz, 2012; Kapferer & Bastien, 2010; Okonkwo, 2007; Tungate, 2009). However their significance as a form of an independent luxury retail format has not been clearly defined and assessed. Danziger (2011) defines concept stores as multi brand spaces proposing a unique retail concept with strong idenitities, ususally combining art space, cool electronic gadgets, a bookstore, an antique homewear section, a groovy restaurant as well as the must have fashion items of the season (Danziger, 2011, p. 204). A more elaborate overview by Dean (2003) describes concept stores as antithesis of the megastores with intimate yet challenging environments that push the conventional boundaries of retail space, provide highly individualistic merchandise, in the offing creating a lingering experience that comes first and followed prefereably by the purchases (Dean, 2003, p. 52). Concept stores have been termed as stores that provide a socializing experience in addition to selling fashion products (Stevens, 2012), have a small retail format with a consistent and curated ambience (Popescu & Popa, 2012) and provide an immersive experience encompassing emotional and sensorial cues across product merchandise, store design and store environment (Doran, 2011).

In order to succintly outline the value function of concept stores, the author proposes the following definition based on analysis of individual elements integral to the retail operations of concept stores; Concept stores are niche retail formats that incorporate a cohesive conceptual premise through every point of contact with customers, across their retail space and brand communication channels, which is aligned with the lifestyle aspirations of the target niche customer base and is aimed at recreating this lifestyle within the retail environment on an ongoing basis through a sensorial and emotionally enriching experience every time the customer interacts with the store, either physically in store, through brand communication media or online through the official website and social media platforms.

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Within the specific context of multi brand luxury fashion retail segment, such stores aim to provide a differential value to the evolved luxury consumers, who according to Maslow’s hierarchy of needs (Maslow, 1943) (Appendix II), are increasingly opting to buy into a luxury lifestyle that complements their individualistic aspirations as opposed to the earlier drivers including social status and peer image (Danziger, 2011; Hines & Bruce, 2001; Okonkwo, 2007). This value offering has been analyzed in table 2.1 based on Shaw et al’s 2011) three key elements of engaging post modern customers; through heuristics elements, subconscious value generation and emotional engagement for positive mood effects and a favourable peak end of customer’s experience across all interaction points (Shaw, et al., 2011, p. 13).

The value proposition of concept stores will be analyzed in greater detail in the coming sub section on the form and function of concept stores.

Multi brand concept stores, as a niche luxury retail format, are not entirely a recent development. Specialty independent luxury boutiques, which in many ways can be described as the predecessors of concept stores, have been a fixture on the luxury retail map for most part of the modern retail history, providing intimate luxury shopping environment to the discerning consumers, often as travel destinations, be it in the cobbled streets of Naples or alongside the azure coasts of the French Riviera (Chevalier & Gutsatz, 2012; Tungate, 2012).

The emergence of strategically conceptualized retail entities in accordance with changing luxury consumer profile and preferences, however can be traced to 1991 with the establishment of 10 Corso Como in Milan (Klein, 2005). The largely editorial retail space aimed to recreate the pages of a luxury magazine within the physical confines of a retail store and was established by gallerist Carla Sozanni, sister of Vogue Italia editor Franca Sozanni as an alternate to the initmidating luxury stores in the city (Johnstone, 2005; Trebay, 2000). Despite a relatively early entry in the luxury retail segment, the concept store format remained largely under explored through the next decade, possibly due to the decline in luxury consumption through the decade in the established western luxury markets given the rise of mass fashion brands and the still nascent stage of retail expansion in emerging markets (Bank of America Merrill Lynch, 2011). With the rise of the empowered internet generation and corporatization and consequently democratization of luxury brands by luxury behemoths like LVMH, Kering (formerly PPR) and Richemont (Kering Group, 2014; Richemont Group, 2012; Smyyth LLC, 2011), the market was ripe for the revival of the alternate luxury retail innovation ushered in by 10 Corso Como, when in 1997 French entrepreneur Colette Rousseau opened Colette along with her daughter Sarah Andelman in Paris. The store was established with the aim of providing a socializing luxury experience in an informal chic setting aided by an engaging store edit: an inimitable mix and match of high fashion, of-the-moment streetwear, kitsch lifestyle paraphernalia, engaging store events and an experiential water bar serving over 100 brands of water (Business of Fashion, 2013). The next major concept store to open doors amidst the rapidly evolving luxury retail space was the now landmark Dover Street Market in 2005 (Business of Fashion, 2012), established by non-conformist designer Rei Kawakubo and epitomizing her theory of beautiful chaos with a novel approach to consumerism combining a street market feel and dishevelled store layout with some of the most dynamic luxury labels in a five level townhouse (Ceallaigh, 2011).

Taking cue from the favourable market reception and success of these landmark stores, the past decade has witnessed the emergence of a number of multi brand concept stores across the globe, catering to the evolving demands of the luxury consumers by providing a differential value offer through their retail space. A few prominent examples of such multi brand concept stores include LN-CC (Late Night Chameleon Café, London) with an immersive sensorial experience through product inspired acoustics, visual effects and ambient design; The Corner (Berlin) providing a bespoke atelier space to an otherwise street style oriented city; Oki Ni (London) with an offline showcase only space for limited edition menswear; Zao Store, Gallery and Garden (New York), an experimental fashion laboratory commercially combining art with fashion; Pool Ayoama (Tokyo) with a sensorial space reconstructed within an erstwhile apartment building pool; Celestine Eleven (London) providing customers an eastern philosophy based wellness experience; Otoko Jakarta) catering to the ‘refined gentlemen’ in the country; The Redundant Shop (Singapore) with a non-brand merchandise selection produced in collaboration with artists, designers and craftsmen, and The Hipster (New York) which as the name suggests, caters to the alternate lifestyle of the new age hipster

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generation (Bonet, 2005; Dean, 2003; Doran, 2011; Dowdy, 2008; Hipshops, n.d.; Klein, 2005; Luna, 2005; Morris, 2011; Stevens, 2012; Trochu, 2014; Valette, 2005).

The global evolution of the concept stores over the last two decades has been charted by the author through a pictorial timeline (Image 2.1) to provide a succint summary of the development of the niche retail format demonstarted through eight specific examples of pioneering concept stores and their value proposition within the wider theoretical framework as established in the next section on form and function of concept stores (Appendix III). The timeline was developed as a part of the secondary online archival research (Seale, et al., 2007; Thompson, 2010) to identify the concept stores best representing categoric retail innovation within the niche segment. Based on the degree of innovation through their retail concept, subsequent media awareness and consumer reception gauged through density of media articles since conception and social media penetration (Lea-Greenwood, 2013), the stores chosen to be analyzed were 10 Corso Como, Colette, Dover Street Market, LN-CC, The Corner, Oki Ni, Pool Ayoama and The Redundant Shop. The next sub section analyses the form, function and the retail and marketing strategy of concept stores as a niche retail format to develop a comprehensive analytical framework to inform the subsequent primary research on the topic as presented in the coming chapters.

2.4 Concept of Conceptual Retail: Differential Retail Value of Multi Brand Luxury Concept Stores As has been outlined in the previous section, concept stores adopt a niche luxury retailing strategy catering to highly targeted market segments based on their lifestyle choices, personal ideologies and luxury consumption patterns through a distinctive experiential value offering across all points of engagement – pre-purchase branding communications, in store experience and post-purchase retention communications (Shaw, et al., 2011), a specialized luxury retail value chain for postmodern luxury consumers’ retail journey (Baker, 2003; Chevalier & Gutsatz, 2012).

This section analyses the retail value proposition of multi brand luxury concept stores as an indicator of their unique Emotional Selling Proposition (ESP) ob , 2001) through an assessment of their distinctive form & function and subsequent viability as a sustainable retail format in terms of brand equity, customer retention and financial functions.

The coming sub section analyses the form and function of concept stores through an assessment framework developed using key existing theoretical frameworks on contemporary experiential, emotional and niche luxury retailing strategies for the dynamically evolving luxury fashion retail industry (Chevalier & Gutsatz, 2012; ob , 2001; Kapferer & Bastien, 2010; Pine & Gilmore, 2011; Tungate, 2009; Hines & Bruce, 2001). The retail viability of concept stores has been then briefly evaluated as a balance function of Return on Investment(ROI)/Return on Customer(ROC) (Hines & Bruce, 2001) followed by proposed framework for further evaluation to be undertaken as part of primary research taking into account the limitations of exisiting literature review analysis and to substantiate undertaken theoretical analysis with ground-level industry and customer findings.

2.4.1 Retail Value Proposition of Concept Stores Chevalier & Gutstaz (2012) outline the multi-brand luxury retail process as an integral function of three individual retail elements: memorable store architecture & design, strategic product buying & merchandising and personalised in-store service with niche marketing communications; stressing upon cohesion and interrelatory function of these strategic elements for an optimal multi brand luxury retail offering for customers (Chevalier & Gutsatz, 2012, pp. 4345) (Appendix IV). Describing the postmodern consumer’s retail experience preference, Shaw et al 2011) state that for retailers to develop a strong retail equity, it is essential for them to provide a distinctive, positive and memorable mind space experience to their customers across all points of contact. They segregate this experience into three stages: Pre-Experience (based on retail offering), Experience Intent (based on store environment) and Experience Memory based on service & communications); a cyclical experience spectrum which if optimized through Heuristic ‘WOW’ moments and sub-conscious & emotional engagement tactics, can postively influence customers through memorable peak ends of overall retail experience (Shaw, et al., 2011, p. 18) (Appendix V).

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Image 2.1 Evolution of Concept Stores 1991-2014 Source: Author’s own with inputs from above stated sources Image 1: 10 Corso Como Store – Store Front, Interiors Source: www.theblondesalad.com, www.retaildesignblog.net Image 2: Colette Store – Victor & Rolf ‘My First Car’ Store Front at Colette, Colette Underground Water Bar; Source: www.en.colette.fr; www.retaildesignblog.net Image 3: Oki Ni Store – Store Front, Open Format Interior Source: www.scrapbook.citizenciitizen.com Image 4: Dover Street Market Store – Artist Jamie Reid designed Store Front VM, Women’s Space Interior Source: www.searchingforstyle.com, www.tarabernerd.com Image 5: The Corner Store – Store Entrance, Gentlemen Alcove Interior Source: www.retaildesignblog.net, www.oliviapalermo.com Image 6: Late Night - Chameleon Café (LNCC) Store – Store Entrance, Reading Room Source: www.tmagazine.blog.nytimes.com, www.selectism.com Image 7: The Redundant Shop – Storefront, Collaborative Design cum Showcase Interior Space Source: www.redundantmagazine.wordpress.com, www.is.asia-city.com Image 8: Pool Aoyama store – Converted Pool Interior, Pop Up Retail Space Source: www.timeout.jp, www.superfuture.com

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Since concept stores as multi brand niche luxury retailing format are intrinsically premised upon providing an optimal, distinctive retail experience across individual elements of the luxury retail chain process, in order to analyse their overall retail value proposition, the author has developed an assessment framework incorporating salient elements from above stated theoretical parameters (Figure 2.3). The overall multi-brand luxury retail value chain as a function of store environment development, product merchandising and ongoing service & communications (Chevalier & Gutsatz, 2012) has been linked with proposed experience optimization for postmodern consumers through memorable heuristics and positive subconscious and emotional engagement across these retail value chain elements. Each retail element is further underpinned by relevant academic theory, encompassing retail store design & atmospherics (Dean, 2003; Dowdy, 2008; Niemeier, et al., 2013; Nobbs, et al., 2012; Kotler, 1973); multi brand retail product merchandising (Kapferer & Bastien, 2010; Tungate, 2009; Tungate, 2012); evolved luxury customer service (Baker, 2003; Okonkwo, 2011; Tungate, 2009); sensorial branding ( ob , 2001); experiential retail management (Pine & Gilmore, 2011) and in-store and ongoing niche fashion marketing communications (Hines & Bruce, 2001; Ryan & Jones, 2012; Smith & Taylor, 2004).

While a niche retail format should ideally incorporate the three key identified value offerings – Heuristics, Subconscious & Emotional engagement for a differential retail value propsoition; in actual practice, multi brand luxury fashion concept stores function around a core value proposition comprising either individual value offerings as outlined above or a combination of them based on their target niche market segment, catering to this niche segment’s specific luxury aspirations and preferences (Chandan, 2013 Kapferer & Bastien, 2010; Vernet & Wit, 2007). This in turn defines the different forms of concept stores in contemporary luxury retail market and their ensuing functions.

2.4.2 Differential Retail Elements This section analyses each of these value proposition offering in detail based on the review of existing academic literature with examples of corresponding retail elements as witnessed through the online archival research of prominent concept stores across the globe (Appendix III). Based on this evaluation and identified core value offerings of prevalent multi brand luxury fashion concept stores and peak ends of experience, their existing forms and ensuing functions has been tabulated in the concluding section.

A. Heuristics ‘WOW’ Moments Shaw et al. (2011) state that an integral part of value development in physical retail environment, is the presence of heusitic elements that evoke a strong visceral response (Tungate, 2009) from the vistors, the WOW moments that remain with the customer even after leaving the store and positively affect the perception of the store in the customer’s mind which plays a major part in their future retail store consideration (Shaw, et al., 2011, p. 22). Chevalier & Gutsatz (2011) advocate that this overtly experiential element can be introduced in a physical store through an innovative store design, awe inducing store environment and a unique lifestyle offering in store which they might not normally associate with a retail store, identified by research academicians as the Third Space (Nobbs, et al., 2012) (Chevalier & Gutsatz, 2012, p. 67).

Store Design – Concept stores intrinsically function on the premise that the retail space is an extension of the central concept and accordingly, incporporate design slements and features that aim to enagge with customers first and foremost upon entering the store (Dowdy, 2008). For example Dover Street Market (London), in words of the founder, Rei Kawakubo, is a modern version of Kensington Market; eclectic, street style department store in a six storey Georgian building with a juxtaposition of elegance with kitsch created through concrete floors, tills housed in corrugated-iron shacks, Portaloo dressing rooms and constant store design innovation through the six monthly ‘Tachiagri’ store redesign for continuous surprise element Ceallaigh, 2011; Smith, 2014; Tungate, 2012). Pool Aoyama (Tokyo) is another example of an experiential store design at play, housed in a disused residential swimming pool in trendy Minato district; keeping unconventional location choice intact through sunken concrete shop floor, stillstanding pool ladders, glass mezzanine centre space, retro tile job and unpainted chlorinated walls (Freshness Mag, 2014) (Appendix III).

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Figure 2.3: Multi Brand Luxury Fashion Concept Stores Value Proposition Assessment Framework Source: Authors own with inputs from Chevalier, M. & Gutsatz, M., 2012. Luxury retail management: how the world's top brands provide quality product and service support. Singapore; Chichester [England]: Wiley. ; Shaw, C., Dibeehi, Q. & Walden, S., 2011. Customer Experience: Future trends and insights. Houndmills [England]; New York: Palgrave Macmillan and above stated academic sources

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Store Environment – The overall feel of the store, manifested through its individual retail elements, specifically in concept stores, plays a major part in communicating the differential concept at play, it is the unspoken communication of the ideology through individual retail elements of the store and can greatly influence the customers level of awareness while in store and even afterwards, creating a strong sense of identity in their minds, again influencing their future visit and purchase decisions (Danziger, 2011). Concept stores are able to create a strong store environment that resonates with their concept, be it a progressive store like LN-CC (London) with a highly sensorial yet unintimidating space that creates a sense of incredulity in the minds of customers, a destination for fashion innovation experience (Dazed Digital, 2010; LN-CC, 2010) or the oriental bazaar like environment of 10 Corso Como (Milan), a melting pot of cosmopolitan shoppers seeking offbeat fashion, music and art in a mini lifestyle emporium (Johnstone, 2005; Trebay, 2000) (Appendix III).

Third Space – A retail trend that has emerged in recent years is the idea of the third space, a place that is not related to work or at home, a mini environment within a retail space in this context that lets people relax, browse and meet other people without the pressure of necessary purchase (Nobbs, et al., 2012, p. 926). Such spaces serve as a psychological stimulant, creating a spotive association in the minds of the customers about the retailer (Mikunda, 2006). Third space, or an additional lifestyle area within the retail store, has been observed by the author to be an integral offering by most concept stores, be it multiple lifestyle spaces within the same store as is the case with 10 Corso Como (Milan) which houses options like an art gallery, a bookshop, a café, and a three suite boutique hotel within its premises (Trebay, 2000; Tungate, 2012; Vernet & Wit, 2007) or a singular entity that has a strong added value for the visitng customer like an experiential water bar at Colette (Paris) that serves over 500 varieties of bottled water (Colette, n.d.) (Appendix III).

B. Subconscious Engagement According to Shaw et al. (2011), a strong retail association is created in the minds of the consumers when the retail offer affects them at a more subliminal, sub-conscious manner, a non-overt engagement that is bound to have a more lasting impression than direct engagement tactics that in some cases might appear too deliberate and forced (Chevalier & Gutsatz, 2012, p. 67). Chevalier & Gutsatz claim that retail elements like the spatial layout of the store and the presence of sensorial cues are vital in building this subliminal store brand message as they create an aura bout the store that has subtle branding connotations (Chevalier & Gutsatz, 2012, p. 120).

Spatial Layout – The layout of the store in terms of level segregation, spatial ambience and product display arrangement can positively effect customers by providing a subtle congruency between their self perception about lifestyle spaces and the store ideology, engaging their visceral senses as opposed to overt feelings (Hines & Bruce, 2001). Concept stores often create a strong sense of sensorial harmony in their stores with elements elements such as the ’Uniqueness is rarity’ approach of Oki-ni through ultra minimal store space designed by 6A architects, lack of store front VM and elevated inner space for stage illusion towards street, a marked absence of usual shop fixtures to reflect Oki-Ni (Surrey) ideology of new age consumerism (Dean, 2003; Vernet & Wit, 2007). In terms of product arrangement, LN-CC (London) has a pioneering concept of non retail display, an exhibition like arrangement with suspended mannequins and a noted lack of regular rails, printed hangers and dangling labels (Kilcooley-O'Halloran & Scarlett, 2013; Revel, 2012) (Appendix III).

Sensorial Cues – ob (2007) stresses upon the importance of individual sensorial cues in store, the visual, aural, tactical, olfactory and gustatory cues that engage the customer’s individual senses and, if incorporated strategically, can create a distinguishing harmonious experience that is truly exceptional ob , 2001, p. 87). In case of concept stores, such sensorial engagement is often marked through a very strong emphasis on and individual sensorial cue. Be it visual, aural & olfactory cues of artists in action within The Redundant Shop (Singapore), a first-hand glimpse of the products being created in store (Choo, 2014; The Redundant Shop, 2013) or the exaggerated sense of natural ambient lighting created by The Corner (Berlin) through strategically placed 18 French windows (Dowdy, 2008) (Appendix III).

C. Emotional Engagement Emotional engagement, in words of Shaw et al. (2011) is of paramount importance for a store to create a lasting relationship with its customers, especially today when customers are looking for a one to one attention when they vsiit a store and want to feel looked after rather than just another cash generator and as such should be primary

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consideration for all retailers (Shaw, et al., 2011, p. 70). This engagement can be created through attention to product collection offered in the store based on the target customer preferences, personalised communication channels both in store and ongoing and a personalised store service where the customer feels justified to pay a premium in return of personal attention (Chevalier & Gutsatz, 2012).

Product Collection: The product collection offered in multi brand retail stores is of utmost significance as a differentiator for the customer, the primary consideration when they make a choice to buy from such stores and has to provide a value that they will not get elsewhere or online (Danziger, 2011). What concept stores have been extremely successful in doing, is the creation of a sense of abundant rarity (Kapferer, 2013) through their product collections. A sense that the products being offered by the store are personally curated for the customer based on their preferences and are something the customer is unlikely to find elsewhere (Dean, 2003). For instance Dover Street Market offers customers exclusive collections from Chalayan, Lanvin, YSL, Rick Owens etc; has the biggest Azzedine Alaia collection in London and has routine special collaborations like the ongoing re-constructing Louis Vuitton pop-up and rare collections like furniture by Hedi Slimane along side all 14 collections of Comme des Garcons (Hirschmiller, 2014); Smith, 2014; Tungate, 2012). The Redundant Shop (Singapore) offers ideological & sustainable collaborative product collections from upcoming indie labels like Colombian design studio Diamantina & La Perla, Melvin Ong, Handsome & Co. along side curated goods reflecting the parent magazine’s editorial sections - architectural, design, style, gadget & rides, and vintage finds alongside ‘created in’ store products (Choo, 2014; The Redundant Shop, 2013) (Appendix III).

Communications – A luxury retail store should primarily look at creating a pull rather than push factor through its communications, their emphasis should be on creating a word-of-mouth community of opinion leaders and influencers that will influence the customers on a more personal level (Smith & Taylor, 2004). Social media platforms and niche PR activities are tools that can create a sense of community and exclusivity for luxury brands (Lea-Greenwood, 2013; Ryan & Jones, 2012). What concept stores have been successful in doing, for the most aprt, is creating targeted communication channels both in store and through online platforms that work towards a non retail soft sell and which in turn helps in a postive brand association formation. Other startegy adopted by such stores is hosting exclusive events which gives the customers a sense of belonging to a select group, adding to the prestige factor associated with such stores (Vernet & Wit, 2007). For example Oki-ni (Surrey) has dedicated self owned online media channels – Styled for men’s lifestyle editorials, Mix Series for collaborative playlists, Special Reviews for new collections & fashion news with emphasis on community building communications (Oki-Ni, n.d; Smith & Taylor, 2004). 10 Corso Como and Colette are known for their private events like the 1 day Apple Watch pop-up at Colette during the recently concluded Paris Fashion Week (Luxury Daily, 2014) and exclusive fashion parties at 10 Corso Como with the whos who of fashion industry in attendance (Vernet & Wit, 2007) (Appendix III).

Service – Sales staff and in store service is a crucial retail element for any luxury brand to create a postive recall association, especially given the rise of the new luxury consumer who wants to have a personal relationship when buying luxury and the growing trend of bespoke, customisation and personalisation (Kapferer & Bastien, 2010; Okonkwo, 2007; Tungate, 2009). This personal attention to service and provision of additional value services is an integral offer of concept stores, often the proprietors of such stores being at hand to personally direct the customers and offer advice. They in turn, are aided by an expert sales staff that is knowledgeable about the products in store and is courteous and unobtrusive for enhancing the essential retail experience (Dean, 2003; Doran, 2011). For customers visiting 10 Corso Como, it is a pleasant experience to engage directly with founder Carla Sozzani as she talks them through the store’s merchandise selection while shoppers at Oki-ni are intrigued by an unconventional staff-customer dynamic where the sales personnel are there as style advisors and buying facilitators, the actual retail transaction taking place through online platform available in store as a multi channel integration tactic (Business of Fashion, 2011; Vernet & Wit, 2007) (Appendix III).

D. Peak Ends of Experience – Experience Realms Shaw et al. (2011) state that in order for the luxury retailer to create an exceptional identity for themselves, it is advisable to create a harmonious overall experience through the individual engagement tactics of heuristics, subconscious and emotional engagemnt, creating peak ends of experience that are distinct from what the customer will experience in another retail setting (Shaw, et al., 2011, pp. 74-76). Pine & Gilmore (2011) state that retail has taken shape of a theatre stage and that value adding experiences are the ones that are most likely to stay with the consumers longest (Pine & Gilmore, 2011, p. 30) (Figure2.4).

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Figure 2.4: Experience Realms Matrix Source: Pine, B.J. & Gilmore, J.H., 2011, The Experience Economy.

Boston [Mass.]; London: Harvard Business Press

Based on the above discussed individual retail elements, this subsection briefly analyses the overall experience of the eight observed concept stores to idenitfy their form of customer engagement and experience offered as per the four realms of Pine & ilmore’s Experience Matrix (Figure 2.4) which in turn defines their concept form (Table 2.1).

As observed through the table, depending on the realm of experience offered, the observed concept stores can be classified broadly into five categories – a) A lifestyle emporium which is a curated version of the department store with a strong central aesthetic reflected across store design and merchandise; b) A social destination that offers the customer a distinctive platform to engage with likeminded individuals in a relaxed setting and an on trend store edit; c) An innovative experience destination through in store technological innovation and sensorial engagement; d) A luxury atelier along the lines of old luxury maisons with exclusive collections and bespoke services and e) An alternative luxury destination promoting a particular ideology in conjunction with the luxury offering.

2.4.3 Concept Store Value Measurement While there have been multiple value measurement frameworks proposed by academicians and trade experts for the luxury retail sector in general, the value assessment parameters for the niche retail formats, specifically concept stores, are difficult to set given the lack of quantitative information regarding their financial performance and the lack of qualitative customer engagement assessment frameworks. A detailed value assessment analysis of concept stores is outside the scope of this research paper. However, based on the assessment of existing measurement frameworks as proposed by luxury fashion academicians and experts, the following broad assessment categories have been identified; A. Quantitative Measurement Chevalier & Gutsatz (2011) advocate tailor made approach to quantitative measurement of niche luxury retail operations, citing the use of less used KPIs(Key Performance Indicators) such as number of customers in loyalty programs, time between customer visits in store and amount of time spent in store over the more obvious KPIs like average size of in-store transactions, number of store visits and number of units purchased. The rationale being that often such indicators do not give the true value of the store performance due to the highly segmented target market and consumers who might not visit the store that often but still may be loyal customers of the store and this loyalty is of more importance when considering the longevity value of such niche stores (Chevalier & Gutsatz, 2012, p. 140) (Appendix VI). Ryan & Jones (2012) advocate the use of additional digital KPIs such as online website traffic generation and store-online conversion to assess the performance of stores that might not have substantial physical

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retail sales but might have considerable online sales as is the case with many concept stores like LN-CC and Oki-ni (Ryan & Jones, 2012, p. 28). Additional KPIs such as store attraction coefficient and percentage of repeat customers have been proposed by Hines & Bruce (2001) for the luxury fashion sector to assess the specific functional value of the physical store as opposed to retail sales along with an overall Return on Customer as opposed to Return on Investment value assessment framework (Hines & Bruce, 2001, p. 197). An optimal mix of this value measurement KPIs depending upon the initial retail and marketing goals set by proprietors of concept stores should be the assessment criteria, superseding direct sales growth and volume generation which might be a slower process for niche retail formats due to higher initial overhead costs and lesser profit margins (Chevalier & Gutsatz, 2012).

Store

Peak Ends of Experience

10 Corso Como (Milan)

Sense of rarity; cultural immersion, personal engagement, Active Absorption – Educational being part of exclusive group Passive Immersion – Esthetic (Appendix III)

Lifestyle Emporium

Colette (Paris)

‘Cool’, quirky sensorial & social Passive Absorption – Entertainment experience in store and online Active Immersion - Escapist (Appendix III)

Social Destination

Oki-Ni (Surrey)

Dover Street Market (London)

The Corner (Berlin)

LN-CC (London)

The Redundant Shop (Singapore)

Pool Aoyama (Tokyo)

Experience Realm

Sensorial engagement, being part of progressive community, innovative omni-channel Active Immersion - Escapist shopping experience (Appendix III) ‘Where fashion becomes fascinating’distinctively Active Absorption – Educational experiential; social actualization Passive Immersion – Esthetic through non-conformism (Appendix III) Glamorous, luxurious, personalised & unintimidating; Passive Immersion – Esthetic being part of fashion headliners of Berlin (Appendix III) Acute sense of exclusivity underground luxury community; Active Immersion - Escapist highly sensorial (Appendix III) Ideological & social engagement; sense of self-actualization through Active Immersion - Escapist patronage of young design labels Active Absorption – Educational (Appendix III) Highly experiential; youthful casual luxury; sense of belonging Active Immersion - Escapist to forward thinking community (Appendix III)

Form

Experiential Outlet

Lifestyle Emporium

Luxury Atelier

Experiential Outlet Alternative Luxury Destination

Experiential Outlet

Table 2.1: Experiential Value of Observed Concept Stores Source: Author’s own with inputs from Appendix xx, Pine, B.J. & Gilmore, J.H., 2011, The Experience Economy. Boston [Mass.]; London: Harvard Business Press

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B. Qualitative Measurement Qualitative measurement feedback is of special importance for concept stores as eventually the success of a concept stores depends on the reception of the concept offered by the target customers and as such special consideration should be given to the development of special value assessment frameworks for the online word-of-mouth generation, in-store customer experience feedback, media awareness through quality rather than quantity of PR coverage generated and customer interactivity and engagement on the social media platforms of such stores (Chevalier & Gutsatz, 2012; Hines & Bruce, 2001; Okonkwo, 2007; Ryan & Jones, 2012).

Overall a balanced quantitative-qualitative approach has been advocated by researchers and academicians as a hoilitic value assessment framework for the retail functions of the niche luxury retail formats, discounting the initial sales figures and sales vloume generation in favour of customer and media awareness to account for the slower growth curve of such stores (Chevalier & Gutsatz, 2012).

2.4 Multi Brand Luxury Retailing in India: Macro Environment and Micro Trends 2.4.1 Industry Overview India has a long standing tradition of luxury, a rich heritage of local artisanal luxury products tailor made for the affluent, be it an intricately embroidered Kashmiri Pashmina or a thousand thread count handloom silk sari (Atwal & Jain, 2012). There has also been a demand for international luxury brands long before their entry in the market, with brands like Cartier and Vacheron Constantin catering to the bespoke luxury requirements of the erstwhile princely state rulers, counting them among their biggest customers (Bothra, 2013). In this way the Indian luxury market is not a recent development and has been present for the better part of the last century. However the luxury industry today in the country is significantly different from the past in that it is characterized by a growing market share of international luxury labels alongside the homegrown luxury brands by Indian designers and standalone retailers. There is talk today about the new-found spending power of the Indian consumer which has made the market a lucrative one for international retailers, a huge potential market for luxury (Kesari & Srivsatava, 2012). There is market buoyancy attested by the fact that the Indian luxury market is growing steadily at a considerable CAGR of 18% with the luxury fashion market growing at 30% with an overall 25% increase in the luxury footprint of international retailers over the past three years and a market value estimated to reach USD 14 billion by 2016 (Appendix VII). This is despite the Indian luxury market being relatively small in the global context, a mere 1% of international luxury sales volume (KPMG-Assocham, 2014).

Despite this positive outlook, the market has not evolved to its full potential, dogged by considerable risks, challenges and lower profit margins owing to stringent government regulations, heavy import duties, infrastructural limitations, complex market demographic and high overhead costs of operating in the Indian retail sector (Dutta, 2013) (Appendix VIII). Compared to other markets, the value development of luxury retail format remains subpar with a marked absence of experiential retail formats, customised offering to meet local consumer demand and a deeper market penetration (Atwal & Jain, 2012). Multi-brand luxury retail, as an organized retail function, is highly underdeveloped in the country given the even higher perceived risks in terms of political restrictions, economic overheads, social perceptions of lower value offering as compared to counterparts and technological sluggishness as has been highlighted through a PEST analysis on the industry (Appendix VIII).

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2.4.2 Indian Luxury Consumer There is a substantial increase in luxury consumer base in India, projected to include over 150,000 HNIs (high net worth individuals) with a net worth of $600 billion and 3.1 million households earning more than USD 1 Million (KPMG-Assocham, 2014). The Indian luxury consumer, as has been briefly outlined earlier, is increasingly value discerning and driven by an individual sense of luxury defined by the local traditions and an appetite for contemporary luxury trends (Kesari & Srivsatava, 2012). There is a growing demand for exceptional luxury experiences that are at par with the global luxury retail trends and there is a dawning of a new luxury realm shifting from overt to subliminal luxury consumption (Kesari & Srivsatava, 2012). While there are pockets of wealth in the country that are driven primarily by conspicuous occasion based luxury consumption and preference for flashy, logoed branded items; there is an increasing number of consumers, especially in the bigger cities, who are empowered by their education, global travels and internet and are demanding for an exceptional value to justify the higher prices commanded by luxury items in India due to political and economical regulations (Atwal & Jain, 2012). There is also a growing market of non conformist luxury consumer, someone who wants to relate to luxury in a new way that is intrinsically individual and not for social image, a major driver of luxury consumption by Indians in the past (Dutta, 2013). The Indian luxury consumer segment is also highly engaged online and is looking for the same level of engagement from local luxury brands across their communication channels which surpasses mere functional value and wants to be part of an enlightened community of likeminded luxury consumers, and educated conversation around lifestyle driven luxury consumption (Atwal & Jain, 2012).

2.4.3 Scope for Niche Retail Formats Given the above analysis of the Indian luxury industry and the target consumer segment, it is evident that there is a value gap in the luxury retail segment based on what the luxury brands are currently offering and what the consumers are demanding, a demand for value oriented luxury experience that is exclusive and adds value to their lifestyle (Bothra, 2013). This retail value gap in terms of product selection availability, experiential retail development and perceived product exclusivity has been the major reason for the evolved and affluent Indian consumers preferring to shop overseas for international luxury labels, shopping in the country mainly for home grown luxury labels. This has further impacted the sales margins of international luxury brands as customers can shop from the same brand in a much more experiential and personalised setting and get a wider product variety at lesser prices as opposed to what they are getting in the country (Atwal & Williams, 2009).

In light of this value development gap, the niche format of luxury retail, such as concept stores, is of special value for the Indian market as it intrinsically incorporates the above mentioned retail elements desired by the new age luxury consumer, a curated product selection, exclusivity, experiential environment and the scope for adaptability according to regional socio-economic dynamics given the smaller scale of operations, something which is difficult for the bigger luxury brands to do (Chevalier & Gutsatz, 2012). This is of special relevance for the multi brand luxury retail segment in India which remains highly underdeveloped and there is a serious dearth of value providing multi brand luxury stores in the country. While there are home grown multi-brand luxury stores such as Kimaaya, Ogaan and Ensemble, in function for the better part of last two decades, multi brand stores offering a balanced western and Indian luxury offering are limited in number (Bothra, 2013). Specifically, experiential luxury concept stores, as a niche luxury retail format has been largely underexplored in the country. While a few luxury concept stores have been set up in the country over the past five years, notable among them being Le Mill, Bombay Electric, Moon River, Bungalow 8 etc.

(Strut120, 2012), their retail value for the new Indian luxury consumer is yet to be assessed. However, based on secondary online observation of these stores, the author postulates that their retail value proposition, while pioneering in the Indian context, has scope for further development in particular retail value chain aspects when compared to their international counterparts is not a strongly defined or developed as is the case of their international counterparts. This comparative assessment has been undertaken as part of the primary research analysis, detailed in the coming chapters.

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2.5 Findings & Limitations Based on the literature review conducted in the prior sections, the identified relevant academic theories and corresponding key findings correlating to the research objectives stated in the beginning of the report have been tabulated to provide a brief summary of salient observations made through the secondary research and the limitations observed by the author pertaining to each research objective. (Table 2.2) As is evident from this evaluation, there are several limitations to the existing literature on the evolution of multi brand luxury retail sector and the retail value proposition, specifically in context of the Indian luxury retail industry. In addition, comparative assessment of niche luxury retail formats in India has yet to be undertaken as a research study.

In order to gain a practical perspective from the industry and consumers on the above stated research objectives and elements and to substantiate literature review findings for composite sector analysis, exploratory primary research was undertaken by the author which has been detailed in the coming chapters.

Research Objective

RO1 - To assess macro multi brand luxury fashion environment & identify implications for physical luxury retailers

RO2 - To analyze niche retail format of multi brand luxury concept stores & their differential retail value proposition

RO3 - To ascertain potential retail value of concept stores for Indian luxury retail market through assessment of local macro luxury environment

Research Topics

Academic Theories – Key findings

Luxury Retail Value

Democratisation, Power Shift (Kapferer & Bastien, 2010)

Offline-online balance

Imperative Multi Channel Integration (Ryan & Jones, 2012)

New Luxury Consumer

Post Modern sustainable value seeking (Saw et al., 2011) , New Consume r Model (Baker, 2003)

Retail Trends & Innovations

Online integration, personalization, customization, experiential environment (Kapferer & Bastien, 2010; Tungate, 2009)

Niche Luxury Retail Format Overview

Increasing value of segmented luxury retailing (Chevalier & Gutsatz, 2011)

Retail Value Proposition

Cohesive Luxury Value Chain (Chevalier & Gutsatz, 2011) New Consumer Value Development (Shaw et al, 2011) Experiential Retail (Pine & Gilmore, 2011) Retail Value Proposition Framework Author’s own)

Value Measurement

Qualitative focus (Chevalier & Gutsatz, 2011) Format specific KPIs (Chevalier & Gutsatz, 2011; Hines & Bruce, 2001) Online value measurement KPIs (Ryan & Jones, 2012)

Macro Environment Analysis

Complex luxury retail environment (Bothra, 2011; Atwal & Jain, 2012) Risk intensive market entry & growth (Dutta, 2013)

Luxury Consumer Profiling

Growing and evolving, own notion of luxury (Bothra, 2013; Kesari & Srivastava, 2012) Demand for exclusive luxury experience (Atwal & Glyn, 2012)

Rao, P. (2014) Multi Brand Concept Stores: A Retail Revolution In Reverse

Limitations

Lack of extensive text on evolution of multi brand retail space

Lack of extensive text on value proposition of niche retail formats; lack of qualitative value measurement frameworks

Lack of organized study on multi brand retail segment

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RO4 - To comparatively evaluate retail value proposition of existing Indian multi brand luxury concept stores in India & accordingly develop implications for local niche luxury retailers

Retail Value Gap

Retail space innovation (Dutta, 2013) Market specific luxury offer (Atwal & Jain, 2012)

Retail Value Generation

Creation of additional value to offset higher prices (Atwal & Jain, 2012)

Comparative niche luxury retail format overview

NA

Retail Value Proposition (India)

Strategic considerations for multi brand niche retailers

NA

NA

Lack of organized study on niche retail formats, their value proposition; lack of proposed strategy for niche luxury retailing

Table 2.2: Literature Review Findings & Limitations Source: Author’s own with inputs from Literature Review

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3. RESEARCH METHODOLOGY 3.1 Introduction As has been established in the previous section, there is limited literature on both the multi brand luxury sector as an organized retail entity and the emerging trend of concept stores and its implications on the luxury market dynamics.

Furthermore there is a marked lack of assessment of the multi-brand luxury retail sector in India, the value of niche retail formats in the country and the value proposition of existing niche luxury retail concept stores. In this scenario, the author proposes to undertake extensive primary research to gauge the relevance and effectiveness of concept stores from managerial, customer and industry perspective. The coming sub sections detail the proposed research design and methodology to this effect.

A brief overview of the nature of research undertaken and the wider research philosophy in terms of the ontology and epistemology of the research area provides the basic framework based on which the research design has been then detailed with the corresponding research data collection methods employed by the author and the subsequent data analysis techniques used to evaluate the collected data. The chapter concludes with a statement on the research ethics taken into consideration and complied with by the author as set by the University of the Arts London.

3.2 Research Philosophy & Approach Luxury retail is inherently a socio-economic enterprise, prominently dependent on macro and micro environment variables ranging from stakeholder expectations to consumer preferences (Hennigs, et al., 2012). This is especially true for the research undertaken within the scope of this report, where the nature of knowledge gathered (Crotty, 1998), i.e. the socio-economical implications of multi brand concept stores, has been ascertained through external factors including consumer perceptions and industry positioning. The author developed her primary research based on a research philosophy that has interpretivist epistemological and constructionist ontological orientation and the nature of research conducted was inductive driven by the lack of extensive existing research on the area of interest (Bryman & Bell, 2011; Easterby-Smith et al., 2012) (Appendix IX) As mentioned above, given limited secondary data, the author adopted an inductive research approach where primary research on the ground level managerial functions and associated cognitive consumer perceptions for concept stores informed the secondary research for specific variables like experiential marketing, store atmospherics etc. for holistic research findings (Bryman & Bell, 2011).

3.3 Research Design As the research undertaken is multi dimensional and highly specific in nature, requiring analysis of different industry variables and from differing perspectives of the management, customers and industry analysts, the author undertook co-relational multi method qualitative research method for an in depth analysis of the industry and consumer perceptions (Saunders, et al., 2007). In addition the author undertook supplementary quantitative research primarily as a measure of providing statistical evidence for qualitative findings through data triangulation (O'Donoghue & Punch, 2003), thus adopting a mixed method complex research strategy (Saunders, et al., 2007).

3.3.1 Research Framework In order to analyse the composite elements of the identified research objectives, the author developed a primary research framework to identify relevant research methods, samples and analysis techniques (Table 3.1). Based on the research objective, a relevant research method was adopted which was justified by the nature of data expected to be collected through the method and its significance in relation to the research objective. Corresponding research sample was then identified based on judgement and opportunistic sampling techniques (Carson, et al., 2001) and data analysis techniques were developed for effective evaluation of the data depending on the nature of the data collected. The individual research objective led construct has been discussed in detail in the coming sub-section.

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Research Objective

RO1 - To assess macro multi brand luxury fashion environment & identify implications for physical luxury retailers

Research Method

Qualitative Expert Interviews

Research Method Justification

Obtaining in depth practical insight from professionals and academicians directly engaged with research topic elements

Research Sample

Sampling Technique

Research Analysis Technique

Judgment Sampling

Coding

Two UK based luxury marketing specialists (UE1, UE2) One UK based luxury marketing academician (UA1) One UK based multi brand luxury concept owner (US1)

Two UK based luxury marketing specialists (UE1, UE2) One UK based luxury marketing academician (UA1)

RO2 - To analyze niche retail format of multi brand luxury concept stores & their differential retail value proposition

Qualitative Expert Interviews Qualitative Covert Non Participant Store Observations

Obtaining in depth practical insight from professionals and academicians directly engaged with research topic elements Substantiating secondary archival research with firsthand observation of accessible stores

One UK based multi brand luxury concept owner (US1) Two India based luxury marketing specialists (IE1, IE2) One UK based luxury marketing academician with core research focus on Indian market (IA1)

Judgment Sampling Opportunistic Sampling

Coding Direct Observational Analysis

One India based multi brand luxury concept owner (IS1) Two multi-brand luxury concept stores in London (Dover Street Market, Celestine Eleven)

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Two UK based luxury marketing specialists (UE1, UE2)

RO3 - To ascertain potential retail value of concept stores for Indian luxury retail market through assessment of local macro luxury environment

Qualitative Expert Interviews QuantitativeQualitative Luxury Customer Survey

Obtaining in depth practical insight from professionals and academicians directly engaged with research topic elements

One UK based luxury marketing academician (UA1)

Obtaining direct customer feedback to substantiate secondary and primary findings on Indian luxury consumer sociopsychological profiling

One UK based luxury marketing academician with core research focus on Indian market (IA1)

Two India based luxury marketing specialists (IE1, IE2)

Judgment Sampling Opportunistic Sampling

Coding Statistical Analysis

One India based multi brand luxury concept owner (IS1) 31 Early Adopter Indian Luxury Consumers

RO4 - To comparatively evaluate retail value proposition of existing Indian multi brand luxury concept stores in India & accordingly develop implications for local niche luxury retailers

Qualitative Expert Interviews Qualitative Covert Non Participant Store Observations QuantitativeQualitative Luxury Customer Survey

Obtaining in depth practical insight from professionals and academicians directly engaged with research topic elements Substantiating secondary archival research with firsthand observation of accessible stores Obtaining direct customer feedback to substantiate secondary and primary findings on Indian luxury consumer sociopsychological profiling

Two India based luxury marketing specialists (IE1, IE2) One UK based luxury marketing academician with core research focus on Indian market (IA1) Two multi-brand luxury concept stores in Mumbai, India (Bombay Electric, Le Mill)

Coding Judgment Sampling Opportunistic Sampling

Direct Observational Analysis Statistical Analysis

31 Early Adopter Indian Luxury Consumers

Table 3.1: Primary Research Framework

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3.3.2 Research Objective Correlation A. To assess macro multi brand luxury fashion environment & identify implications for physical luxury retailers Given the global luxury industry specific nature of the data to be collected, the author decided to conduct in depth interviews with two luxury retail industry professionals, one luxury retail research academician and one luxury concept store owner in United Kingdom to gain qualitative insight on the evolution of the luxury industry through direct retailer perspective, expert industry opinion and academic research overview on the topic. The sample for the interviews conducted was chosen using judgmental sampling technique wherein the experience and professional profiles of the prospective participants were observed by the author to arrive at an ideal sample for optimal data findings (Carson, et al., 2001). Data collected was analysed using qualitative coding technique to identify key trends in opinions expressed across the interviews conducted in relation to identified research area elements (Easterby-Smith, et al., 2012).

B. To analyze niche retail format of multi brand luxury concept stores & their differential retail value proposition As the nature of the research objective spanned the global and Indian luxury sector, and ties in with the research objective on comparative value of concept stores in India, the author conducted in depth interviews with two luxury retail industry professionals, one luxury retail research academician and one luxury concept store owner in United Kingdom and India each to gain a comparative feedback on the niche retail format. The sampling technique employed was again judgemental with corresponding coding as data analysis technique. In addition to the expert interviews, the author also conducted store observations of two concept stores based in London, United Kingdom as part of an observational analysis to gain firsthand perspective on the differential retail operations of such stores and to further substantiate the secondary archival store observations conducted as part of the literature review (Easterby-Smith, et al., 2012).

C. To ascertain potential retail value of concept stores for Indian luxury retail market through assessment of local macro luxury environment Given the India specific nature of the research objective, the author decided to conduct primary interviews with the above mentioned industry experts, store owner and academician in India to gain an insight on their perception of the Indian luxury macro environment and key trends which was supplemented by additional interviews with the UK based industry experts and academician to evaluate the comparative perception of the Indian luxury industry as observed by the natives and the international peers, again employing judgemental sampling and coding analysis techniques. As one of the research objective elements was to identify the Indian luxury consumer evolution, the author conducted a customer survey with 31 progressive Indian luxury consumers to better understand the evolution, assessed based on direct customer feedback on their changing luxury consumption and association. The sample for the survey was chosen using opportunistic sampling technique where the author reached out to the online fashion institute communities in India to target an inherently fashion forward target demographic (Carson, et al., 2001). Data collected was analysed using statistical analysis with coding technique employed for the subjective survey questions (EasterbySmith, et al., 2012).

D. To comparatively evaluate retail value proposition of existing Indian multi brand luxury concept stores in India & accordingly develop implications for local niche luxury retailers As the research objective in question aims to address the core area of interest of the research, that of the value of niche retail formats in India, comparative value of existing concept stores in the country and the value development implications for local retailers based on prior conducted research, special consideration was taken by the author to have a well rounded research sample which consisted of the Indian industry experts, academician and an Indian concept store owner for expert interviews, 31 Indian luxury consumers for the customer survey and two Indian stores for a direct observation. This was to ensure that a multi-faceted data was collected to develop a holistic research postulation based on industry assessment, proprietor insight, direct observation and customer feedback. Judgmental and opportunistic sampling techniques were employed based on research sample with coding, observational analysis and statistical analysis of data collected.

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3.4 Research Methods & Analysis 3.4.1 Secondary Research As has been outlined in the research methodology overview in the introductory chapter, the author undertook extensive literature review of academic course books, journals, newspaper articles, fashion magazine articles, trade reports, luxury industry conference proceedings and relevant online websites of the observed concept stores and their social media platforms to inform the assessment framework development for further primary research (Saunders, et al., 2009). The findings from the secondary research have already been presented in the literature review chapter.

3.4.1 Primary Research: Expert Interviews As has been outlined in the previous subsection, the author conducted in depth expert interviews in UK and India to inform the research objective postulations and gain an in depth insight of the industry with professionals directly engaged with it on an ongoing basis. The mode of conducting the interviews was in person where possible with interviews conducted over phone, Skype and email due to either physical remoteness, in case of Indian experts, or intensive work schedule (Carson, et al., 2001), in case of one UK industry expert. The interview questions were designed based on the relevant research objectives for each expert sample, as per the primary research framework (Table 3.1). In accordance of the established research ethics, the participants were requested to sign an interview release form giving their consent on the use of the information collected (Saunders, et al., 2007). The profiles of the interviewees along with the date and time of the interview has been tabulated below (Table 3.2). While no express desire for anonymity was stated by any of the participants, as a measure to maintain confidentiality, the findings from the interview have been presented with individual interviewee referred with a reference abbreviation, stated next to their name in the table below. The interview questions design has been detailed in a tabular format in the appendices (Appendix X). The interviews were analysed using a coding table (Appendix XI) Sample

Name

Industry Expert (UK)

Jonathan Chippindale (UE1)

Industry Expert (UK)

Michaela Christine Wolf (UE2)

Industry Expert (India)

Devangshu Dutta (IE1)

Position

Chief Executive Officer: Holition Luxury Marketing Consultancy, London

Independent Luxury Marketing Consultant, London

Chief Executive Officer: Third Eyesight Retail Consultancy, New Delhi

Experience Over 25 years’ experience as luxury marketing director, working with leading luxury brands & academic institutions. Previously Marketing Director, De Beers Group. Strong knowledge of consumer markets in United States, Europe, Middle East and Asia-Pacific Over 15 years’ experience as communications & marketing specialist working with luxury brands to create omnichannel marketing and customer relationship Management strategies.

Previously Head of Communications, George Jensen Over 30 years’ experience as interdisciplinary retail strategist specializing in market entry and growth strategy development for established luxury brands and startups. Regular Panel Speaker at luxury retail forums in India

Rao, P. (2014) Multi Brand Concept Stores: A Retail Revolution In Reverse

Mode

In Person 05.11.2014

Telephonic 05.11.2014

Email 01.11.2014 to 14.11.2014

Justification

Mr. Chippindale graciously agreed to meet in person at Holition Office, Holborn, London

Due to an intensive work schedule, Ms. Wolf requested for a phone interview

Due to an upcoming seminar, Mr. Dutta felt an email interview was best. The researcher sent across interview questions and followed up subsequently for further clarifications

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Industry Expert (India)

Academician (UK)

Academician (India)

Concept Store Owner (UK)

Concept Store Owner (India)

Sujata Assomull Sippy (IE2)

Luxury Branding Consultant: Genesis Group, New Delhi

Course Leader & Senior Lecturer in Fashion Marketing: London College of Fashion, London

Over 10 years’ experience as luxury brand consultant working with international luxury brands looking to enter Indian market. Former Editor of Harper's Bazaar India and leading luxury columnist

Skype 02.11.2014

Teaching and research expertise in marketing management for fashion, lifestyle and luxury products, digital marketing and online retailing

In Person 28.10.2014

Lipi Begum (IA1)

Lecturer & PHD Researcher: London College of Fashion, London

Teaching and research expertise in fashion marketing and cross-cultural consumer behavior in emerging markets. Postdoctoral research focus on buying behaviors of urban Indian women

In Person 05.11.2014

Tena Strok (UO1)

Founder & Owner: Celestine Eleven Store, London

Luxury fashion entrepreneur since 2013. Previously over 7 years’ fashion styling and fashion artist management experience as Director of StudioStrok

In Person 08.11.2014

Co-Founder: Le Mill Store, Mumbai

Luxury fashion entrepreneur since 2011. Previously over 9 years’ experience as luxury marketing manager with L’Or al Luxury, spearheading India launch campaigns of Lancôme, Armani and Kiehl’s cosmetics

Skype 10.11.2014

Matteo Montecchi (UA1)

Julie Leymarie (IO1)

Due to physical remoteness, Ms. Sippy being in India, a Skype interview was arranged

Mr. Montecchi graciously agreed to meet in person at London College of Fashion Campus Holborn, London

Ms. Begum graciously agreed to meet in person at London College of Fashion Campus Holborn, London

Ms. Strok graciously agreed to meet in person at Shoreditch House, Shoreditch, London

Due to physical remoteness, Ms. Leymarie being in Morocco, a Skype interview was arranged

Table 3.2: Expert Interview Participants

3.4.3 Primary Research: Store Observations As has been outlined in the previous sub section, the author personally undertook direct store observation of two concept stores in London to assess their retail value proposition as per the earlier developed value assessment framework (Carson, et al., 2001). The particular stores were chosen based on two considerations – evaluation criteria of two different identified forms of concept stores to obtain wider format understanding and specific evaluation of the store/s whose proprietor the author conducted interviews with. This was to assess the proposed and perceived value of the concept store (Chevalier & Gutsatz, 2012). Given physical remoteness to the second set of concept stores in Mumbai, India, the author sought assistance of a professional acquaintance, an Indian fashion blogger and fashion communications graduate, to conduct the store observation with a pre store visit briefing through Skype and post store Skype follow up to ensure similarity was maintained in the manner of store observation conducted (Van Kleef, 2005).

The template for store observations was designed based on the corresponding research objective (Appendix XII) with

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a cross comparative observational analysis grid to evaluate the comparative value of Indian concept stores (Appendix XIV) 3.4.3 Primary Research: Store Observations Based on the research objective elements that called for a direct customer feedback, the author finally conducted a supplementary quantitative survey with 31 progressive Indian luxury consumers, the sample being between the ages of 21-35 and predominantly females reflecting the staggered gender ratio within the Indian fashion industry, the primary area of sample selection (Neve, 2009). The survey template design as a correlation of relevant research objectives has been indicated in the appendices (Appendix XV). The data collected was assessed through a combination of statistical analysis of objective questions and qualitative coding of the subjective questions (Carson, et al., 2001) (Appendix XVII).

3.5 Research Ethics Saunders et al (2009) highlight the importance of carefully observed research ethics as integral part of the development of a sound research analysis, stating, ‘Research ethics therefore relates to questions about how we formulate and clarify our research topic, design our research and gain access, collect data, process and store our data, analyse data and write up our research findings in a moral and responsible way’ (Saunders, et al., 2009, p. 137). In accordance with the guidelines and research ethics established by the author’s professional institution, University of the Arts, London (University of the Arts London, n.d.), due care was taken in collection and presentation of secondary and primary research data by the author. The secondary data presented in the literature review section was accessed through permissible use of academic books, journals, trade reports, websites and conference proceedings and were cited and referenced to in the report as per the university recommended Harvard referencing system. The primary data collection methods employed by the author were undertaken with due consent of the participants: in case of expert interviews, interview release forms were duly signed by the participants and for customer survey, an explicit consent of participation was acquired by the author through an online form (Appendix XVI). The primary research participants were made aware of the purpose and objectives of the research project and any implicit restrictions were clarified before starting the interview/survey. Consumers for the survey were chosen through convenience sampling with no bias in the data collection process through probing or swaying of consumer decisions throughout the survey questionnaire (Saunders et al, 2007). Due consideration was also given to the reliability, construct, internal and external validity of the data during the research design and data collection process (Saunders et al, 2009). The data collected through the undertaken research will be kept confidential in its anonymity as per the code of research ethics (Saunders et al, 2007). Care was taken by the author to comply with the all the other ethics and health, and safety concerns and the research involved no interaction with minors as part of the research sample (Easterby-Smith et al, 2012).

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4. CROSS CULTURAL VALUE OF NICHE LUXURY RETAIL – RESEARCH FINDINGS 4.1 Introduction Based on the primary research conducted by the author, the research findings were assessed as per the identified research objectives, evaluating the industry expert feedback, store observation data and customer feedback to arrive at a composite triangulated primary research finding (Easterby-Smith, et al., 2012) for each identified research objective element. The following subsections evaluate these findings as per the individual research objective starting with an assessment of the overall multi brand luxury environment leading into the retail value proposition of niche concept stores on a global level and the local Indian luxury macro environment and value considerations for niche luxury retailers in the country. The section concludes with a summary of the primary research findings.

4.2 Multi-Brand Luxury Retail Macro Environment Research Sample and Method: UK industry expert, academician, store proprietor interviews 4.2.1. Evolution Trends In terms of the evolution of the luxury industry, the experts opined that key trends shaping the current luxury scenario are the shift of power towards the consumer due to democratisation of the sector (UE1), the rise of digital luxury space (UA1), the growing preference for utilitarian luxury consumption as opposed to materialistic hedonism (UE2) and an overall constant state of change and innovation that is affecting the retailers, driving them to constantly innovate to create sustainable value for the constantly evolving customer (IS1) (Appendix XII) 4.2.2. New Luxury Consumer In words of industry expert UE1, “In context of Maslow’s hierarchy of needs, the customer is constantly moving upwards, where earlier they were buying into luxury for images, now it is about smartness, knowledge and education.”

This is the key sentiment found to be reflected by all interviewees and the notion of conspicuous consumption was dismissed as the luxury buying motivation. Instead the drivers of new luxury consumer’s retail motivation were cited as utilitarian (UE2), value driven (UA1) and a search for a deeper, more personal engagement for a more enriching luxury experience (US1) (Appendix XII) 4.2.3. Scope and Value of Niche Luxury Retail Formats In a macro environment described as ‘changing at slower speed than the ever evolving consumer, who have the immense power of digital tools at their disposal’ UE2), the general consensus of the experts interviewed was that retail formats that seek to engage the customer on a more personal, a more meaningful way are of special value in a luxury environment that is looking to create new ways of reengaging the customer, especially for physical retailers.

The interviewed academician UA2) felt that ‘when it is extremely convenient for people to shop online and even have a memorable experience with the rise of the technological innovations, there has to be a very specific reason for them to visit a physical store. If I want to buy wine, I will buy it online, but if I find a special wine club with services of a mixologist and personal tasting sessions, then that will be an incentive to visit.’ Appendix II)

4.3 Retail Value Proposition of Concept Stores Research Sample and Method: UK & Indian industry expert, academician, store proprietor interviews; UK store observations

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4.3.1. Differential Retail Elements In terms of value creation, most experts felt that concept stores, in general have been successful in a generation of a cohesive retail environment, in terms of merchandise that is an edited version of the mainstream brands (UE2), a relaxed atmosphere that encourages the customer to visit the store not just to shop but to browse and spend long hours there which in turn are beneficial from a financial perspective for the retailer (UA1), strong experiential environment that creates awe and hence long term recall value (UE1, IE2) and a sense of niche community building and exclusivity that adds value to their overall retail concept (UE2, UA1, IA1) (Appendix XII). A strong cohesive retail environment was observed by the author through the store observations where the central concept was reflected through individual retail elements; in case of Dover Street Market the edginess of the founder was found to be reflected through unconventional design elements such as tin shacks, portaloo changing rooms and a music selection personally overseen by Rei Kawakubo, as notified to the author by a sales staff. In Celestine Eleven, the central ideology of holistic wellness was found to be incorporated in the core fashion collections, supplementary services such as yoga classes, organic juice bar and a store environment recreating the ambience of a Zen monastery (Appendix XIV).

4.3.2. Overall Peak Ends of Experience The experts felt that such stores are able to create a memorable experience, often through an emotional or experiential engagement that has a sustainable value in terms of repeat visits and positive word of mouth generation. Also, often, such stores propagate a shared ideology of luxury reflecting the target customers’ personal lifestyle which creates a strong resonance surpassing the usual sterile luxury-client relationship (US1, IE2). Overall the experience realms created by such stores were deemed to range between Active and Passive Immersion through creating an engaging store environment. (Appendix XII). The store observations were found to be an inadequate way to gauge the peak ends of experience as repeat visits in an informal setting would be more conducive to gauge the holistic experience.

However the initial sense of awe at the life-size installations at Dover Street Market and a feeling of extremely helpful store staff at Celestine Eleven were two memorable experiences the author documented from the store observation visits (Appendix XIV).

4.4 Indian Luxury Industry Research Sample and Methods – UK & Indian industry expert, academician and Indian store proprietor interviews.

4.4.1. Indian Luxury Industry When asked about the Indian luxury industry, the UK based interviewees felt that Indian luxury retail has typicality unlike other markets in terms of growing consumer base and demand, yet an unclear vision by retailers of the specific nature of this demand (UE2). Indian experts felt that the market needs to be realigned with the growing sophistication of the consumers and to adapt to the local luxury demand which it has not been able to do so far (IE1, IE2). In words of industry expert IE1, “Indian market is growing more organically than other new luxury markets and is not being given over automatically to global brands; there is still a strong desire for home-grown luxury or luxury that is adapted to their taste.’ The experts were unified in their opinion that the market has high entry and growth level risks and challenges which are still curtailing a more organic development of the industry within the country (IE1, IE2, IA1, IS1).

4.4.2 Indian Luxury Consumer Profile Research sample and methods – UK & Indian industry expert, academician and Indian store proprietor interviews; consumer survey

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The general outlook when asked about the Indian luxury consumer was a distinctive demographic with strong innate sense of cultural identity that informs their fashion choices UE1). In words of industry expert IE2, “The Indian woman has the most complex wardrobe in the world and one of the most editorial sense of style that spans traditional, modern, western, Indian and everything in between.’ Described as someone with deep rooted sense of traditional pride (UE1), rapidly maturing (UA1), value driven and not shy of bargaining (IA1) and increasingly experimental (IS1). The consumer survey presented a slightly different picture. When asked about their luxury buying motivation, 50% of the correspondents stated that a strong design aesthetic was of vital importance, following a utilitarian value and ahead of a more individualistic need of lifestyle oriented luxury purchases. However the trend of festive buying and peer impressing seemed to be on decline with only 9% correspondents stating that they bought luxury products as per the latest trends and for weddings. (Appendix XVIII)

4.5 Case for Concept Stores in India Research Sample and Methods – Indian industry experts, academicians, store proprietors interviews, comparative store observation, and customer interviews.

4.5.1 Value of Niche Formats When asked about the perceived value of niche formats like concept stores for the Indian market, interviewed experts felt that the format was specially viable for the Indian market given its one to one customer engagement which has been missing from the Indian luxury retail space (IE2) and an experiential offering that has yet to be witnessed along the lines of global luxury stores IE1). In words of industry expert IE2, ‘Such stores can offer the customer a carefully curated consumption constellation that reflects their own individualism and thus becomes an extension and inspiration of their style persona.” Appendix XII). When asked what the perceived value of such stores was, 56% of the customers felt that the store environment and experiential space was something that prompted them to visit such stores followed by 53% of correspondent stating that exclusivity across products, services and communications was the major driving factor. (Appendix XVIII) 4.5.2 Comparative Value Assessment: Indian Concept Stores The retail value proposition of existing Indian concept stores was found to be under developed according to the experts interviewed. Industry expert IE1 said, “Such stores in the country have not been able to innovate their concept and their offering, which to begin with, might have been experiential, has now become outdated.” Industry expert IE2 felt that “Most so called concept stores in India are just a haphazardly put together retail idea without follow through in terms of product merchandise selection, value services, customer engagement, the general feeling in such store is that of a little bit of everything and an absence of a strong store edit along the lines of international stores such as 10 Corso Como with a chic, magazine like ambience or Colette with a quirky store atmosphere and products to match. There are a few exceptions like Le Mill and Bombay Electric, however the full potential of the format has yet to be realised’ (Appendix XII). The comparative assessment of the two Indian concept stores, Le Mill and Bombay Electric against the earlier assessed UK stores, Dover Street Market and Celestin Eleven, highlighted that best developed retail element of the Indian stores is the product merchandise and consideration has to be given to further develop store environment design, lifestyle third space, in store service and employed communication channels in terms of social media and word of mouth generation which has to be further developed. Comparatively, Le Mill and Bombay Electric were found to be more experiential and evolved in the segment as opposed to their counterparts,, a fact corroborated by the customer survey. When asked about a concept store they though provided an exceptional experience, 07 out of 31 correspondents replied with Le Mill and 09 stating Bombay Electric as their concept store of choice in India, stating their product merchandise, ambience and ethos as differentiators that set them apart from other stores in the segment.

When asked to rank the comparative value of the individual retail elements of Indian concept stores compared to

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international counterparts, the highest average ranking provided was to product display and curation, with crucial elements like store design, communications etc. ranking below 5 on a scale from 1 to 10, indicating the perceived overall less defined shopping experience in the Indian concept stores.

4.5.3 Niche Luxury Value Development Considerations When asked about strategic considerations for the niche luxury retailers in terms of value generation for local customers, the interviewed experts felt that the key requirements were to introduce a strong experiential element within the store environment, either through sensorial design or lifestyle space (IE1, IE2). This was advocated as a method of creating a strong perceived value for the retail space that would actively encourage customers to visit the store. Emphasis was also placed on having a balanced mix of western and Indian merchandise in store and not a predominant non-Indian or Indian collection stock as most of these stores do, to offer a more complete retail offering.

The importance of a well informed and well trained sales staff was also found to be crucial by the experts and an area that needs to be vastly worked on. This was also corroborated by the store observations which placed the sales staff knowledge and customer engagement as one of the less developed retail value chain element. Overall a relatively passive retail experience realm was observed to be offered by such stores and a requirement to move towards actively engaging the customers through communication channels and in store experiences was identified as a major consideration (Appendix XII, XIV).

4.7 Summary of Findings The key summary of findings from the primary research analysis has been presented in a tabular format below, highlighting the individual findings from each research method for each research objective, Research Objective

Interview Findings

Observation Findings

RO1 - To assess macro multi brand luxury fashion environment & identify implications for physical luxury retailers

Growing consumer confidence is leading to power shift in luxury sector that has created need for targeted consumer retail strategies

NA

RO2 - To analyze niche retail format of multi brand luxury concept stores & their differential retail value proposition

Concept Stores are able to create an added value for the cash rich, time poor consumer through a cohesive retail value based on a resonating central concept

The central concept of observed stores resonates strongly through their retail elements while the overall experience ranges in different realms as a composite function of these retail elements

Survey Findings

NA

NA

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Salient Findings

Key to market growth is through matching consumer’s rate of innovation and taking the innovation a step further for continued interest

Constant innovation across in store retail elements, store concept and communication channels is crucial to remain relevant and experiential for such stores – something that they have managed to accomplish

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RO3 - To ascertain potential retail value of concept stores for Indian luxury retail market through assessment of local macro luxury environment

Macro luxury environment is among the most challenging ones in the world but is still lucrative given customer confidence and demand. There is a need to address this demand in non conventional ways to add value to their local luxury consumption

RO4 - To comparatively evaluate retail value proposition of existing Indian multi brand luxury concept stores in India & accordingly develop implications for local niche luxury retailers

While there is a definite market for concept stores in India, the retail implementation of exiting concept stores does not address this demand optimally in most instances.

Retailers have to rethink their strategy to cater very specifically to the consumer

NA

There is a growing personal sense of luxury and its value, driven by its utilitarian and experiential rather than social value

Complexity of macro Indian luxury sector adds to viability of niche retailing to justify higher prices through lasting luxury relationships

While product merchandising, curation and core ideology seems to be relatively value generating, other retail elements of Indian concept stores have to be further developed to cater effectively to the Indian consumers – a consideration for local retailers

The consumer awareness about local concept stores is either limited or lukewarm apart from awareness of a couple of more successful concept stores, indication of the low level of success of such stores in majority.

Niche retail value development is justified for Indian market given very specific demand for alternate luxury. This isn’t being met right now and is an important area of consideration for local retailers

Table 4.1: Key Primary Research Findings

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5. CONCLUSION 5.1 Introduction Based on the academic theories and secondary research framework developed in the Literature Review chapter and the corresponding key findings from the primary research analysis, this Chapter outlines the key conclusions from the research undertaken, presented as a cross comparative set of hypotheses for each research objective set in the beginning of the report founded upon secondary and primary research considerations. This concluding analysis forms the basis for the managerial implications for niche multi brand luxury retailers in India taking into account macro global and Indian luxury environment dynamics and the micro sector trends and innovations defining the multi brand luxury retail in a global space and their corresponding ramifications for the complex socio-economical Indian luxury landscape (Atwal & Jain, 2012; Kesari & Srivsatava, 2012). This analysis has been briefly outlined in Table 5.1. The limitations faced by the authod during the course of the research are outlined next under the limitations sections followed by proposed direction for future research pertaining to the area. The chapter and report comes to an end with a final concluding statement on the research area.

5.2 Research Observation 5.2.1 Multi-Brand Luxury Retail Macro Environment Analysis The global multi brand luxury retail sector is being influenced by the loss in prestige value of luxury, online predominance and democratisation of the industry which while single brand luxury retailers have been able to overcome given a smaller and tighter retail format that is easy to control and innovate, for multi brand luxury retailers it is a daunting task given the inherent disparate nature of their retail (Kapferer & Bastien, 2010; UE1; UA1). In this scenario, developing niche luxury retail strategy can provide the central cohesive store identity that is increasingly missing from such formats and lead to greater customer engagement in store and online, which is a especially problematic area for multi brand retailers (Vernet & Wit, 2007; UE2) 5.2.2 Retail Value Proposition of Concept Stores The emergence of concept stores is testament to this new value generation for the empowered new consumers (Baker, 2003) and incorporates a tightly edited retail strategy that reflects the central ideology across product curation, store environment design, service and communication (Chevalier & Gutsatz) to engage customers on multiple levels: through heuristic WOW moments, subconscious engagement and emotional resonance (Shaw et al, 2011), which together create a memorable overall experience that can be placed within the experiential realm matrix as proposed by Pine & Gilmore (2011). This value creation has been observed to be of sustaining value based on secondary archival research and primary observation research of concept stores from around the world (Appendix III, XIV) 5.2.3 Indian Luxury Industry Evolution The Indian luxury retail industry, despite growing with healthy figures, remains a complex entity (Bothra, 2013) and international as well as local retailers remain uncertain about an optimum retail strategy to effectively meet the demand of the distinctive Indian luxury demographic that is characterised by a strong desire of locally adapted international luxury offering that caters to their strong cultural pride and a value oriented approach to consumerism (Atwal & Jain, 2012; UE1, IE1, IE2, IA1). This has created a gap in the market in terms of experiential and Indian consumer specific which is yet to be fulfilled.

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5.2.4 Case for Concept Stores in India Multi-brand luxury concept stores can effectively fill this gap by providing that additional value and experience missing from existing Indian retail formats and creating a sense of exclusivity and rarity (Tungate, 2009; IE2).

However the concept stores, barring a few examples like Bombay Electric and Le Mill, that have emerged in the recent past have failed to do so, riddled by a confusing concept, unclear store design, lack of trained sales staff and missing multi channel integration, some of the key elements inherently required for a successful niche retail value offer (IE2, Appendix XIV). The scope of improvement and further development is immense, which has been discussed in form of managerial implications in the coming section.

5.3 Managerial Implications Based on the above conclusions and interrelatory research, the implications for local niche luxury retailers have been identified through a tabular cross analysis of the literature review and primary research findings.

Research Objective

Literature Review Thoery/Findings

Primary Research Findings

Implications & Considerations

Key to market growth is through matching consumer’s rate of innovation and taking the innovation a step further for continued interest

Given complex retail environment of multi brand luxury retail segment, requirement to create differential value for future growth through incorporation of innovations experienced by customers through other retail formats

Constant innovation across in store retail elements, store concept and communication channels is crucial to remain relevant and experiential for such stores – something that they have managed to accomplish

Niche retail formats such as concept stores address this demand of innovation in multi- brand retail through cohesive retail value proposition that creates emotional, subconscious and overall experiential engagement points for customers

Democratisation, Power Shift (Kapferer & Bastien, 2010)

RO1 - To assess macro multi brand luxury fashion environment & identify implications for physical luxury retailers

RO2 - To analyze niche retail format of multi brand luxury concept stores & their differential retail value proposition

Imperative Multi Channel Integration (Ryan & Jones, 2012) Post Modern sustainable value seeking (Shaw et al., 2011) , New Consume r Model (Baker, 2003) Online integration, personalization, customization, experiential environment (Kapferer & Bastien, 2010; Tungate, 2009) Increasing value of segmented luxury retailing (Chevalier & Gutsatz, 2011) Cohesive Luxury Value Chain (Chevalier & Gutsatz, 2011) New Consumer Value Development (Shaw et al, 2011) Experiential Retail (Pine & Gilmore, 2011) Retail Value Proposition Framework Author’s own)

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Complex luxury retail environment (Bothra, 2011; Atwal & Jain, 2012) Risk intensive market entry & growth (Dutta, 2013)

RO3 - To ascertain potential retail value of concept stores for Indian luxury retail market through assessment of local macro luxury environment

Growing and evolving, own notion of luxury (Bothra, 2013; Kesari & Srivastava, 2012) Demand for exclusive luxury experience (Atwal & Glyn, 2012)

Complexity of macro Indian luxury sector adds to viability of niche retailing to justify higher prices through lasting luxury relationships

In order to cater to a highly evolved consumer demographic finding retail value gap in local market compared to international counterparts and unjustified higher retail prices, it is essential to create a strong additional value to existing retail offer to reverse fashion drain (Atwal & Jain, 2012) from the country and sustain long term luxury retail entities

Niche retail value development is justified for Indian market given very specific demand for alternate luxury. This isn’t being met right now and is an important area of consideration for local retailers

Due to lack of existing assessment of concept stores in India, existing retailers and retailers looking to adopt the niche luxury retail format need to undertake extensive consumer research to identify local luxury preferences and accordingly create strong retail concept for deep customer resonance over period of time with constant innovation to stay fresh

Retail space innovation (Dutta, 2013) Market specific luxury offer (Atwal & Jain, 2012) Creation of additional value to offset higher prices (Atwal & Jain, 2012)

RO4 - To comparatively evaluate retail value proposition of existing Indian multi brand luxury concept stores in India & accordingly develop implications for local niche luxury retailers

NA

Table 5.1: Concluding Research Analysis.

5.4 Limitations The author was restricted in the research undertaken given the small sample size of interviews conducted due to unavailability of professionals contacted, a relatively small sample of stores observed due to time constraints and lack of empirical and secondary data pertaining to specific research objectives of concept store value measurement and strategic recommendation development. This has limited the scope of this research and made it very specifically qualitative in nature (Easterby-Smith, et al., 2012).

5.5 Proposed Future Research Directions Given the above stated research limitations, the author recommends further development of the research objectives and hypothesis by increasing the sample size of concept stores observation, a quantitative framework development for value assessment of concept stores which can be used as business development measure and an analysis on the value of internationalisation and expansion of such stores, as has been observed for Dover Street Market and 10 Corso Como

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(Dean, 2003) in terms of the balance between additional business generation and loss of the exclusive retail strategy integral to the functioning of such stores in India and globally.

5.6 Concluding Statement As has been established through the secondary and primary research observation through the course of this report, the international luxury retail sector is evolving at a dynamic pace and there is a constant requirement for the retailers to innovate and update their core offering to stay ahead of the competition curve. Online fashion commerce is on the rise contrasted with a desire for less conspicuous, sustainable luxury consumption witnessed by the growing sophistication of the luxury consumers worldwide. This means that while there is an expectation of digitally enhanced and experiential retail destinations in the offline space, there is also an expectation of a more personally fulfilling shopping experience in alignment with individual lifestyle aspirations as a means of self actualisation. In addition, there is a growing demand for tailor made and personalised luxury offering and service as a justification of the high prices commanded and a need for an ‘abundant rarity’ to differentiate oneself and as an ascertainment of one’s personality.

Multi brand luxury concept store, as a niche luxury fashion retail format, is a recent retail phenomenon that has emerged as an alternative retail strategy to address this multi-faceted luxury demand of the post modern, digitally savvy consumers and has been successful to a great degree in creating a market niche to offset the growing preference of online channels of luxury fashion commerce. Such stores have been found to be especially relevant for the highly heterogeneous Indian luxury fashion industry and can even be considered as the way forward for an industry that is still grappling to arrive at an optimal retail and marketing strategy amidst higher operational and investment risks. As has been established, the format of such stores in India is yet to develop to its full potential and much has to be developed in terms of experiential, digital, service and core product development and innovation to optimally create an economically viable and sustainable long term format. Essentially, a tailor made retail and marketing strategy driven by the local consumer demographic and preferences is the need of the hour along with adapting the successful elements of the international concept stores that draw Indian consumers, balanced with an India specific retail identity that creates an additional value over said counterparts and single brand luxury stores overseas.

Initiative has been taken by a few retailers, noteworthy among being Bombay Electric and Le Mill, in terms of understanding the local demand and custom catering to this specifically. This needs to be further developed and strengthened, specifically within the retail realms of experiential store design development, provision for lifestyle nonretail spaces, highly educated store staff and an engaging ongoing brand communication strategy for optimising customer evangelism and ensuing profitability in terms of store equity development and economic profitability. If developed strategically, the niche retail format of multi-brand concept stores can prove to be a happy medium in a complex market environment and even precede international luxury labels and local designers in terms of customer retention and loyalty, becoming important drivers of future economic growth within the Indian luxury fashion industry.

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APPENDIX I

Image: Growing Preference for Online Luxury Retail

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APPENDIX II

Diagram: Maslow’s Hierarchy of Needs

Source: Adapted from Shaw, C., Dibeehi, Q. & Walden, S., 2011. Customer Experience: Future trends and insights. Houndmills [England]; New York: Palgrave Macmillan.

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APPENDIX III

Image: Concept Stores Evaluation Timeline

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APPENDIX IV

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APPENDIX V

Figure: Shaw et al (2011) New Customer Value development

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APPENDIX VI

Graph: Niche Retail Value Measurement

Source: A.T. Kearney, “Achieving Excellence in Retail Operations’ Study, 2010

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APPENDIX VII

Graph: Indian Luxury Market Growth

Source: KPMG-ASSOCHAM Indian Luxury Retail Summit 2014 Conference Proceedings

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APPENDIX VIII

PEST Analysis: Indian Luxury Industry Political



Liberalisation of government regulations in FDI, allowing up to 100% FDI in single brand retail, multi-brand cap at 51% (Euromonitor, 2014)



High import duties for international luxury products with a recent increase to the tune of 10% on non essential luxury items (KPMG, 2013)



Political red tape and corruption in terms of retail space development negatively affecting retail development (Majumdar, 2009)



Recent political unrest due to change in government with negative impact on industrial performance (the Economic Times, 2014)

Economic



Steady rise in disposable income and rise of increasingly affluent middle class (Third Eyesight, 2013)



Reviving market post the economic turbulence in 2013, growth projections at 18% CAGR to reach USD 16 Billion by 2016 (KPMG, 2014)



High overhead costs for new retail development and double price parity and lower profit margins due to heavy import duties ranging from 20-150% (Third Eyesight, 2013)

Social



Rise in luxury consumption and aspirational middle class with appetite for diffusion luxury lines and premium brands perceived as luxury items (Third Eyesight, 2014)



Value oriented approach to luxury and demand for balanced traditional and western luxury offering (Atwal & Jain, 2012)



Increasing consumer sophistication and demand for innovative, exclusive luxury, customization and personalization of products (Bothra, 2013)



Preference for western luxury shopping overseas due to higher prices in the country and greater exclusivity association (Atwal & Jain, 2012)

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Technological



Growing online luxury consumption with nearly 100% of luxury consumers being avid online surfers (KPMG-ASSOCHAM, 2014)



Lack of technological innovation and sore design innovation to match luxury customer requirements (Atwal & Jain, 2014)

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APPENDIX IX

Research Philosophy Grid

Bryman, A. & Bell, E. (2011) Business research methods. 3rd ed. Cambridge; New York, NY, Oxford: Oxford University Press

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APPENDIX X Interview Design Template

Interview Sample

Research Objective

Research Topics – Academic Theories

Script Questions

Democratisation, Power Shift (Kapferer & Bastien, 2010) New Consume r Model (Baker, 2003)

RO1 – Multi Brand Luxury Industry Analysis

UK Based Industry Experts

RO2 – Concept Store Retail Value Proposition

RO3 – Indian Macro Luxury Industry Analysis

Online integration, personalization, customization, (Kapferer & Bastien, 2010; Tungate, 2009)

1.

According to you, what are the key trends influencing luxury retail today?

Cues – Luxury consumer profile, value of physical retail, scope for physical retailers

2.

Cohesive Luxury Value Chain (Chevalier & Gutsatz, 2011)

How effectively do you think multi brand luxury retail segment has adapted to these changing luxury dynamics Cues – Multi-channel performance of department stores, scope for niche formats

3.

New Consumer Value Development (Shaw et al, 2011)

What is your perception of the niche retail format of concept stores and their value proposition for empowered consumers?

Cues – Heuristics, subconscious, emotional engagement, successful examples

4.

Experiential Retail (Pine & Gilmore, 2011)

How do you think the retail value of such formats can be assessed as compared to other luxury retail formats Cues – Qualitative/Quantitative KPIs

5.

How would you evaluate the evolution of non-traditional luxury markets, specifically the Indian luxury Industry Cues – Consumer profiling, challenges, scope for niche luxury retail

Retail Value Proposition Framework Author’s own) Indian demand for exclusive luxury experience (Atwal & Glyn, 2012)

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Democratisation, Power Shift (Kapferer & Bastien, 2010) New Consume r Model (Baker, 2003)

RO1 – Multi Brand Luxury Industry Analysis

UK Based Academician

RO2 – Concept Store Retail Value Proposition

RO3 – Indian Macro Luxury Industry Analysis

Online integration, personalization, customization, (Kapferer & Bastien, 2010; Tungate, 2009)

1.

According to you, what are the key trends influencing luxury retail today?

Cues – Luxury consumer profile, value of physical retail, scope for physical retailers

2.

Cohesive Luxury Value Chain (Chevalier & Gutsatz, 2011)

How effectively do you think multi brand luxury retail segment has adapted to these changing luxury dynamics Cues – Multi-channel performance of department stores, scope for niche formats

3.

New Consumer Value Development (Shaw et al, 2011)

What is your perception of the niche retail format of concept stores and their value proposition for empowered consumers?

Cues – Heuristics, subconscious, emotional engagement, successful examples

4.

Experiential Retail (Pine & Gilmore, 2011)

How do you think the retail value of such formats can be assessed as compared to other luxury retail formats Cues – Qualitative/Quantitative KPIs

5.

How would you evaluate the evolution of non-traditional luxury markets, specifically the Indian luxury Industry Cues – Consumer profiling, challenges, scope for niche luxury retail

1.

According to you, what are the key trends influencing luxury retail today?

Cues – Luxury consumer profile, value of multi brand retail, scope for standalone retailers

2.

How do you think your store has a differential positioning in the wider physical luxury retail space Cues – Ideology & ESP, target customer

Cohesive Luxury Value Chain (Chevalier & Gutsatz, 2011)

3.

In your opinion, how is the retail value offered by your store distinctive for the customers Cues – Store design & environment, merchandise selection, service, communications

New Consumer Value Development (Shaw et al, 2011)

4.

How would you describe your experience and challenges as standalone luxury retailer Cues - Sustainable demand, financial performance, qualitative feedback

5.

What are your immediate and long term plans for the store Cues – Additional services, expansion

Retail Value Proposition Framework Author’s own) Indian demand for exclusive luxury experience (Atwal & Glyn, 2012) Democratisation, Power Shift (Kapferer & Bastien, 2010)

RO1 – Multi Brand Luxury Industry Analysis UK Based Luxury Retailer

RO2 – Concept Store Retail Value Proposition

Online integration, personalization, customization, (Kapferer & Bastien, 2010; Tungate, 2009)

Experiential Retail (Pine & Gilmore, 2011) Retail Value

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Proposition Framework Author’s own)

New Consumer Value Development (Shaw et al, 2011) RO2 – Concept Store Retail Value Proposition

India Based Industry Experts

RO3 – Indian Macro Luxury Industry Analysis

RO4- Comparative Analysis of Indian Niche Luxury Formats

1.

How would you define the present day Indian luxury industry and what are the key trends shaping it Cues – Macro & micro influencers, luxury consumer profile, scope for local retailers

2.

What is your perception of multi brand luxury retail segment in India Cues – Viability, challenges, single brand vs. multi brand

3.

What is your perception of the niche retail format of concept stores and their value proposition for empowered consumers?

Cues – Heuristics, subconscious, emotional engagement, successful examples

4.

In your opinion, what is the value of such niche formats for the Indian luxury market Cues – Differential value for consumer, examples, comparative value

5.

What is your opinion on the retail value of such formats from the local retailers perspective Cues – Qualitative/Quantitative KPIs,

1.

How would you define the present day Indian luxury industry and what are the key trends shaping it Cues – Macro & micro influencers, luxury consumer profile, scope for local retailers

2.

What is your perception of multi brand luxury retail segment in India Cues – Viability, challenges, single brand vs. multi brand

Retail Value Proposition Framework Author’s own)

3.

What is your perception of the niche retail format of concept stores and their value proposition for empowered consumers?

Cues – Heuristics, subconscious, emotional engagement, successful examples

Indian demand for exclusive luxury experience (Atwal & Glyn, 2012)

4.

In your opinion, what is the value of such niche formats for the Indian luxury market Cues – Differential value for consumer, examples, comparative value

5.

What is your opinion on the retail value of such formats from the local retailers perspective Cues – Qualitative/Quantitative KPIs,

Experiential Retail (Pine & Gilmore, 2011) Retail Value Proposition Framework Author’s own) Indian demand for exclusive luxury experience (Atwal & Glyn, 2012) Market specific luxury offer (Atwal & Jain, 2012) Creation of additional value to offset higher prices (Atwal & Jain, 2012) Cohesive Luxury Value Chain (Chevalier & Gutsatz, 2011)

RO2 – Concept Store Retail Value Proposition

New Consumer Value Development (Shaw et al, 2011) Experiential Retail (Pine & Gilmore, 2011)

Indian Based Academician

RO3 – Indian Macro Luxury Industry Analysis

RO4- Comparative Analysis of Indian Niche Luxury Formats

Market specific luxury offer (Atwal & Jain, 2012) Creation of additional value to offset higher

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prices (Atwal & Jain, 2012) Experiential Retail (Pine & Gilmore, 2011)

RO2 – Concept Store Retail Value Proposition India Based Luxury Retailer

RO3 – Indian Macro Luxury Industry Analysis

1.

How would you define the present day Indian luxury industry and what are the key trends shaping it Cues – Macro & micro influencers, luxury consumer profile, scope for local retailers

2.

How do you think your store has a differential positioning in the wider physical luxury retail space Cues – Ideology & ESP, target customer

3.

In your opinion, how is the retail value offered by your store distinctive for the customers Cues – Store design & environment, merchandise selection, service, communications

4.

How would you describe your experience and challenges as standalone luxury retailer Cues - Sustainable demand, financial performance, qualitative feedback

5.

What are your immediate and long term plans for the store Cues – Additional services, expansion

Retail Value Proposition Framework Author’s own) Indian demand for exclusive luxury experience (Atwal & Glyn, 2012) Market specific luxury offer (Atwal & Jain, 2012) Creation of additional value to offset higher prices (Atwal & Jain, 2012)

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APPENDIX XI Interview Transcriptions UK Industry Expert I Release Form

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UK Industry Expert I Transcription Interviewee: Jonathan Chippindale (UE1) Interviewer: Researcher (R) Mode of interview: In Person Date: 05.11.2014 Release Form Signed: Yes

Topic: Luxury Industry Overview R. According to you, what are the key trends influencing luxury retail today?

UE1. The notion of luxury has completely changed and is continuing to change – categorized by transfer of power. One of the biggest trend I see, what everyone is seeing a lot over past years is that of customization and personalization where brands are trying to interpret customers ideas and preferences rather than telling them what they should buy. Digital is another one, the online revolution that is reflecting the cultural shifts of the society, placing the customer ahead of the brands in many cases as they are the ones often innovating at much faster speed than the traditional luxury brands, especially on social media. If you’re Louis Vuitton you don’t take radical risks, you take strategically planned small steps in the right direction. Using ROI calculators to identify what the safe bets are and putting cash behind the safe bets. So between the luxury brands and the new emerging digital consumer, the consumer is probably innovating lot faster than brand because of digital tools they have, the brands then have to try and understand where the change and innovation is and accordingly develop their retail and marketing strategy.

R. Talking about the customer taking the front seat, how would you describe the new luxury consumer?

UE1 Well I think it has been a radical shift in power, the customers are calling the shots today. This has been due to their increasing sophistication. Talking about Maslow’s hierarchy of needs, consumers in general have been steadily moving up the pyramid, where earlier they were buying into luxury for image, more expensive being more desirable in most cases. Now it’s about knowledge, smartness and education. We did a project with Louis Vuitton in Selfridges a while back and it was funny how we observed that the Chinese consumers who came into the LV section in Selfridges to shop were only interested the LV logo and did not care about the brand, in many cases did not know much about it either! That will change. Chinese consumer in future won’t go to Louis Vuitton, instead they will find some cool little niche handbag store in Notting Hill making 18 items a year, form a relationship with the handbag maker and will go back with a cool story on finding this hidden place they discovered – that’s where it’s all going to go.

R. You mentioned earlier, online space changing luxury retail scape. How is that happening?

UE1. With digital one way linear conversation doesn’t work. Consumers are smarter than before. Kate Moss be a genuine role model but in new digital world there are loads of role models even more important, they maybe one of your best friends with flair of mix and match to create individual looks. What digital has done, ironically, is to make people more individual. There has been a lot of conversation on digital turning people into herds of people, I reject that, in fact it has made us more individualistic. Rather than all of us following that or all following that, we follow a bit of that and bit of that that makes up our personality and we all have different conversations with different organizations online about leisure, retail, health, sport, news, that’s what makes us, us.

That’s what brands are failing to get their brains about. This is the ultimate shift of power. Brands are struggling with social media because they don’t understand it, again that’s fine. Bigger brands tend to do worst jobs. It’s all about having to concede control.

Consumers are becoming retailers in their own right through platforms like Nuji, bloggers are becoming Suzy Menkes. Famous journalists are being hired by brands to create stories about their brands, like Net-a-porter. Not about brands shouting their own ideas but about using their idea for lots of other ideas. Social media is a melting pot and often context is missing. Luxury brands are jumping, to get cool, trendy. What is the point of social media with these brands, what are they trying to do.

R. What are your thoughts on this shift towards online and the ensuing implications for physical retailers?

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UE1. I personally refuse to make any distinction between online and offline, that is old school retail trying to control conversation.

When people talk to me about omni channel I see old habits reengineered for digital people with different teams telling people what they should be doing. For me omni channel is retail, that’s today’s retail. Retail today is stores online and mobiles and pop ups and other things. The answer to how people reengage in store, the same customer will work across all three channels, what will change is how that customer will work with, depend on the mood, the need, the price points.

I do think luxury brands have to be careful about their online strategy. If Burberry taught us anything, it was that if you push out your brand too far, you dilute your brand equity. I’m not advocating that luxury brands should not concentrate on digital space, that they should not engage in social media, pull everything in, no ecommerce, but what I’m saying is that luxury is not about democratization, it’s about understanding really interesting experiences that really motivate customers, manifested in terms of amazing store, product, conversation, amazing reaction from friend when you wear a product, in the end it is about experience.

And all the marketing conversation has to lead up to that. Digital media can be inhuman. Ironically brands like ASOS are doing their social media exceptionally well, engaging with their customers on a much more personal level than most physical stores. If you went shopping in Regent Street, most likely you would have a rough time with sales team as they just find sizes and take money, and don’t really engage with you. Everyone talks about physical retail but physical retail is not with the store staff, not always. Every now and then you come across a great sales staff but that is very rare to find, staff that integrates customers into their brand.

R. How about the perceived loss of luxury value, what do you think is causing that and how can the aspirational value of luxury be restored?

UE1. I think it is spreading your message and product too wide. There are a lot of people aspiring for Ferrari but not a lot who can afford it, that in a way makes Ferrari a luxury brand, the price point and exclusivity that one works up to rather than what is available quite easily. There is an issue with lowered price points to grow, but often the challenge then becomes how to grow.

Either you sell more or you increase your price. Either through market share or value growth. Over last decade, luxury has been able to expand not because of sales figures but because they have been expanding to new markets, adding consumers to their sales lists. At some point, we are not far off that, all of the new markets will be saturated, there will then be fight for market shares.

When consumers across the world become educated, going back to Maslow’s hierarchy, looking for more individual associations, interesting products and not going with the herd and when every luxury markets is opened, it will be interesting to see what happens then. What I think is that it is crucial to make an aspirational offering that draws people in. Apple have created a niche through design and good marketing that has created a strong bond, they don’t discount. Ferrari doesn’t have a sale. You can’t have cut price luxury, you devalue what you are all about. Creating a premium through design and marketing, that’s what is important, an aspiration that can’t be spread too wide. By definition it’s not luxury if it becomes ubiquitous.

Topic: Multi Brand Luxury Retail Segment R. Talking about the multi brand luxury sector, how do you think that is faring today?

UE1. It is a very complex market, one that is hard to evaluate. I’m personally very interested in multi brand operations. How do you try to get your own personality clashing with underneath brands? I don’t see a strong value development. Selfridges says that in 10 years no one will buy products in store, it will be all online and physical store will only be for experience. But personally for me Selfridges is all about windows, inside it is like buckets of clothes thrown together with no cohesion. It is always easier to sell one unique selling points than 30 selling points which Selfridges has to do. Multi brand has to communicate about a much wider variety and cohesion across that is difficult to manage as opposed to a Hermes or a Burberry for whom it is an easier task.

Disparate nature of multi brand doesn’t help. Pure players have created a personal dialogue channel, almost like girlfriend to girlfriend, which is more difficult for other multi brand stores to do given their vastness.

R. Talking about pure players, why do you think they are doing better then and how can other multi brand outlets match that value proposition?

Well they have a very strong customer engagement strategy, as we were talking about ASOS earlier. Also brands like ASOS and Net-a-porter are not flogging products through social media, its more community oriented stories, more soft sell, as opposed to the most department stores who mostly have a one way dialogue still. For pure players, website is product promotion but rest is about

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fun and excitement and experience of being the ASOS or Net-a-porter customer. There is this really powerful customer relationship, it’s about hanging out together and chatting about fashion. Net-a-porter is behaving like a magazine, curating other people’s products. It is difficult to provide additional value, why would one buy from Net-a-porter and not Burberry? For the physical stores, it is a very delicate balancing point. They need to create an additional value than mere products. They have to offer something different than single brand stores. I guess they are no different to the pure players in a way. So they could decide to have a Selfridge’s relationship with their customer, or a Harrods relationship and not just flog product. It’s just that they are choosing not to I guess, maybe they will change that. Everyone is adapting to new dynamics. Most of these outfits are run by salesman that directly looking for sales, so the social media teams will have KPIs, a very commercial way to do it, with less emphasis on qualitative feedback. It has to be much more pull than push though.

Topic: Concept Stores R. What is your perception of the niche retail format of multi brand concept stores and their value proposition for empowered consumers?

UE1. I think such format fits in very neatly with the notion that consumers becoming more educated, sophisticated and less inclined to just wear Burberry. With the larger luxury brand stores are being visited by mostly a certain segment of label obsessed consumers, then that can only mean that there is a strong rise in the concept of niche luxury. I can only see that going higher and higher. Like Jimmy Choo, who started as a little atelier, even if they have grown bigger than they can handle it today. What I see important is return to craftsmanship. Earlier it was immaculately dressed sales staff with cut glass accent selling you products, it was all about products. Now there is a rise in atelier brands. There is a shoe shop in Chelsea, when you walk in you see a guy making shoes. They don’t hold stock but have a design consultation with you and you come back in 3 months, pay them thousand pounds and get a custom made shoe. The idea of artisanal makers is really important. These are not coming out of a factory or a sweatshop, it is much more personal, one to one and a much better story when asked about the product. That personalisation and customization, the experience that is missing from the bigger stores.

R. Can you think of some examples of such stores, which you think are doing especially well and why?

UE1. For me, I’m more drawn by single brand concept stores as I think they are the one innovating more. I personally love Hermes, they are wonderfully playful. Most brands are too severe, old school, like an empire, too corporate. They make me laugh, they create a lifestyle, even if the product is not the best according to me but I do buy their products, they are always prepared to innovate. Intellectual ideas are always better received than a brand telling me to like a handbag. Dover Street Market has an eclectic arty feel that works. Blurring line between art gallery and retail shop, which works well for a certain kind of customer. But it is mostly single brand according to me, multi brand stores need to find a central look and feel and the other brands have to fit into that. I don’t think that happens too often.

R. What are your thoughts on the expansion of such stores, like Dover Street Market has done, opening stores in New York and Ginza?

UE1. If the expansion is carefully managed and controlled and the value offering is changed for the new market, I think it can work well, though it has to be limited to a very small number of stores otherwise. Location is everything for these brands. The bigger brands are often faceless, what is the Chanel identity, what is the Dior persona? These smaller stores have a distinct personality that resonates with customers according to me. And spreading too much will lead to in the loss of that personality.

Topic: Value Measurement of Concept Stores R. In terms of sales generation and customer engagement, how do you think the retail value of such formats can be assessed as compared to other luxury retail formats, given that such stores often take longer to reach their break-even point even if they receive overwhelming public response?

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UE1. Well it depends on sales platform and the initial goals set by the retailer. But I do think no matter what business model, creative ideas are better than prosaic ideas. If the idea is strong, and is constantly innovated, it will lead to sales generation.

Understanding the customer is very important and so qualitative measurement is very important, especially in the beginning stage.

But I guess the investors will only look at figures. To be honest I can’t answer this with preciseness as this is not my area.

Topic: Evolution of Indian luxury industry R. As I am specifically looking at Indian luxury market and the scope of such niche formats there, I lastly want to ask you what is your perception on the Indian luxury Industry, how is it changing?

UE1. Well I think India has always been a very complex market. It always had that mix of local traditional sense of luxury along with the western idea adoption. Bespoke and customization has always been the keywords, Indian luxury consumers don’t blindly buy into brands, for the most part. It is a very global population, yes there is a vast gap between the rich and the poor but there is also a very large population that travels frequently and lives overseas. Modern Indian woman has a strong sense of culture yet is exposed to different ideas coming from west. She is slightly old fashioned but deliberately so. When I think of India, it is complex designs, detailed shape as opposed to European minimalism. Taking whole thing together, it is difficult to pair the complexity of ethnic Indian design with modern European aesthetics. I don’t see the crossover yet, either from the international luxury brands or the nontraditional Indian luxury retailers. Very few brands managed to blur that boundary between old India and modern west.

R. And how do you think concept stores, niche luxury formats can add value to the market?

UE1. Taking what I just said into consideration, there is definitely a market for more niche concepts that cater to this very specific luxury demand. India has a strong sense of its own design and fashion, unique and individuality and there is a demand for a balanced luxury offering that takes into consideration these elements. Rather than the high street or the luxury malls, it would definitely be more successful operate as an ambassadorial lounge, as a store not everyone is going to, again as a point of a narrative when the consumer talks about her shopping to her girlfriends.

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UK Industry Expert II Release Form

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UK Industry Expert II Transcription Interviewee: Michaela Christine Wolf (UE2) Interviewer: Researcher (R) Mode of interview: Telephonic Date: 05.11.2014 Release Form Signed: Yes

Topic: Luxury Industry Overview R. According to you, what are the key trends influencing luxury retail today?

UE2. I think the weakening luxury market as we are witnessing, has put increased pressure on luxury brands to rethink their retail strategy to differentiate them from competition. There has been a huge impact of geopolitical and economic uncertainties like the recent Ukraine crisis, the Russian economy crash and weaker consumer confidence in Europe. Coupled with the disrupted retail model where lot of brands finding it difficult to cope up with the changing consumer and their multi-channel expectations, this has called for extreme innovation by these brands, to give up their rigid structures and to redesign their offering in a more value intensive way. iven how Chinese continue to be the biggest luxury consumer and the big brands’ over reliance on them is a matter for concern as the Chinese economy is heading for a slowdown from what we are seeing. Digital, innovative luxury is th e way forward but we are not seeing that implemented successfully in most cases.

R. How do you think the luxury consumer has evolved as you mentioned them driving the luxury market?

UE2. I think luxury as a hedonistic choice is giving way for more value oriented buying. More and more consumers are opting for investment pieces as opposed to seasonal trend items which is again influenced by the uncertain economies along with a general slowdown in overt materialistic consumption as a socio-psychological life choice. This is especially evident in the western markets, in Europe and North America, as the notion of a more socially aware lifestyle is setting in. As I said earlier, Chinese consumers are driving a major chunk of luxury consumption. There is an increase in gifting culture as motivation for luxury buying as more and more consumers are turning to luxury for special occasions, returning to the older consumption pattern and buying every day is taking a backseat. Another change I have noticed is the rise of tourism driven luxury consumption, again tying in with this notion of carefully planned luxury consumption. Holidays are being designed specifically around destinations with distinctive luxury stores, be it to an exclusive glassware atelier in Naples or a trip to Switzerland designed around the trip to Breitling factory in Grenchen to get the customised Chronometer.

R. You mentioned earlier, the changing retail environment due to digital disruption, how has that affected physical retailer and their value for the customers?

UE2. I think Physical stores will always be important as they sell the brand values and brand experience in a very personal way which has been in most cases missing from the online platforms of these luxury brands. The ability to provide a personalised offering which caters to the individual shopper and sells the brand’s aspirational lifestyle is very difficult to replicate online. Stores are important for one to one services and brand experiences as having a physical touch point with the brand helps to convey the brand message through a very personal channel. Having said that while the customer needs to have a physical touch point but the same customer also needs to be online. And they are getting a different value from online players like Net-a-porter, that sense of personal engagement which is disappearing from many luxury physical stores, they are also getting jaded about shopping in crowded spaces so while they go in physical store for the experience, they don’t want to wait in lines and go shop for the product online where they can compare it from different websites and get a better price. This has to be understood and ways have to be created by physical retailers to integrate the online with offline within their own brand to cater to the consumption channel preference.

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Topic: Multi Brand Luxury Retail Segment R. Talking about the multi brand luxury sector, how do you think that is faring today?

UE2. I think it is difficult to assess the segment’s performance. There are department stores that are still going strong and then there are others like Harvey Nichols who are struggling with management changes and business model disruption. Then there are smaller stores like Browns which are creating a special niche in the market. I think such stores are creating more value for their customer as opposed to the bigger department stores as they are keeping the offering personal and are offering a certain kind of product selection in a certain environment which many department stores are not doing. Then of course players like Net-a-porter, MyTheresa etc. are prospering, mainly due to their strong online engagement with their customers and exciting new designers they are working with which the customers can’t find in physical space

Topic: Concept Stores R. What is your perception of the niche retail format of multi brand concept stores and their value proposition for empowered consumers?

UE2. I think such stores are definitely a valuable option for the customers as I was saying earlier with Browns. They offer a limited range of carefully edited merchandise, and more than simple fashion they promote a lifestyle and attitude which consumers are gravitating towards increasingly as it adds a value to their lifestyle and is not another place for a mere materialistic luxury purchase. The fact that such stores often have a very distinctive ideology that is designed based on the target customer’s lifestyle preference makes them resonate stronger with this target. Often, they are also a lifestyle destination offering services and places to socialise in, for example gallery spaces and bars. Overall I think, they bring value to the shopper’s experience and personal lifestyle.

R. What are specific retail elements of such stores that create that distinctive value proposition for the customer?

UE2. I think foremost is their product merchandise, they often showcase new and emerging designers as well as promoting an edited version of mainstream luxury brands, which lends a sort of exclusivity to shopping from such stores. There is also more attention to the store design, such stores are designed to enhance and visualise the brand values and brand experience. Also the fact that communications by such stores is often kept very unobtrusive, with emphasis on word of mouth from individuals and trend setters and more social than one way brand to consumer, enhances their status as a recommended store rather than an advertised store. Then like I said, they often have a lifestyle area reflects the store’s lifestyle value offering which enhances their overall image perception. Retail offerings shouldn’t be pure sales techniques but should be places for like-minded individuals to meet and socialise in, additionally it is financially beneficial as it keeps people in the store for longer and makes the store more of a destination outside of pure retail.

R. Can you think of some examples of such stores, which you think are doing especially well and why?

UE2. Well I can think of the usual suspects, Dover Street Market, Colette, Browns. These are the ones that are doing an exceptional job of bringing together a very unique point of view, that of their founders, with a well selected merchandise and offering it in an environment which resonates with the customer, be it the cheeky Colette store or the eclectic DSM environment.

R. What are your thoughts on the expansion of such stores, like Dover Street Market has done, opening stores in New York and Ginza?

UE2. I think there is only value in keeping such stores to single door availability. The concept promotes rarity and an unusual, almost installation style, shopping format. Shoppers get an edited and relevant selection of merchandise. Furthermore they become shopping destinations not ‘shopping normality’. Once chains start to emerge it negates the attraction of the concept store.

Topic: Value Measurement of Concept Stores

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R. How do you think the retail value of such formats can be assessed, given that such stores often take longer to reach their breakeven point even if they receive overwhelming public response?

UE2. I think it is important to have qualitative feedback measurement framework in place as ultimately the success of such stores very much depends on the customer perception. Yes there has to be the usual KPIs like customer footfalls, Customer conversion/retention etc. depending upon the on the marketing plan and execution strategy of the brand but equally important are qualitative assessment indices to evaluate the word-of-mouth generation, customer engagement in store and online, social media effectiveness etc. to get direct understanding what the customer feels and how he or she is responding to the concept offered.

Topic: Evolution of Indian luxury industry R. As I am specifically looking at Indian luxury market and the scope of such niche formats there, I lastly want to ask you what is your perception on the Indian luxury Industry, how is it changing?

UE2 I can’t claim to know much about the Indian market as I haven’t had opportunity to engage much with it, but from what I have observed from conversations with peers and general industry reports is that the industry is a very complicated one and requires a very well thought out luxury retail strategy to prosper. Especially for international brands who are not familiar with the local consumer demographic. I really won’t be able to comment on how it has evolved compared to earlier but I would think it follows the general global evolution to an extent in terms of more discerning customers and greater economic pressures.

R. Talking about emerging markets in general then, how is the consumer changing and how viable is niche luxury retail format for targeting them as opposed to big brands?

UE2. I think the obsession with big brand is slowly fading and consumers now expect merchandise which is rare and collated especially for their tasters and lifestyle and is special and beautiful (almost like art). This fits in with the niche formats offering, a departure from the regular luxury stores and can work very well for these markets.

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UK Academician I Release Form

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UK Academician I Transcription Interviewee: Matteo Montecchhi (UA1) Interviewer: Researcher (R) Mode of interview: In Person Date: 28.10.2014 Release Form Signed: Yes

Topic: Luxury Industry Overview R. According to you, what are the key trends influencing luxury retail today?

UA1. If you think about last decade, luxury brands had to learn how to maintain their level of exclusivity against the growth of scale, they were in a situation where they were not really exclusive, and luxury became very mainstream in early 2000s. They had to learn how to go back to roots, maintain exclusivity but still keep growing at global scale. Also the rise of emerging markets, which have actually are now emerged like China and multiple areas in Asia. This posed a lot of opportunities as well as challenges. How can they operate on an international level while still maintain their value. And of course the online channels, how can they integrate online channels within their whole communication strategy and also when the online channel becomes the distribution channels, what products to sell and how to integrate the overall experience. It has been a revolution, after the recession, the market has bounced back well, it is healthy and growing, it’s not just china anymore and there are new interesting pockets of wealth that needs to be targeted. At the same time, the market is in a period of transition, its changing influenced by how people think of fashion and luxury. At the moment it’s more about a lifestyle choice than something that is brand driven, bling etc., something that is treasured. Other trend shaping the industry is the return to authenticity, craftsmanship and also social and environmental sustainability – points that provide a story behind the product, an added status value while also the sense of supporting a good cause.

R. How do you think the luxury consumer has evolved over the last decade or so?

UA1. Going back to traditional definition of luxury, of absolute exclusivity, I think the top level luxury consumers want to have access to products that are not available to everyone, to have the exclusivity reinstated in their luxury options. There is a growing preference, necessity even, by consumers to own really unique products, not necessarily the most expensive ones but products that are different from everyone else have. Then there is also a segment of consumers with an aspiration for luxury, where they want to imbibe the lifestyle but can afford to do so only trough small accessories and occasion buys. But even for them the aspiration of owning an exclusive piece is paramount. I think its interesting balancing these two ends – the top end that brings in creativity, differentiation to the luxury offering and the other end that looks at expansion through diffusion lines, technological innovation for customer engagement, social media community initiatives etc. to reach out to potential customers, the idea being that the aspirational elements drive the everyday sales and hence are crucial for the brands to not lose sight of that. Overall the fashion consumer has become more sophisticated and knowledgeable and a lot of this is because of online access to information.

R. How can this exclusivity that you think is crucial, be reinstated by the brands?

UA1. I think it is important to not lose focus on business strategy; you need the top level to maintain the success of lower end of market. You need exclusivity, capsule collection, couture. Key is to redevelop it through innovation, heritage, quality, and craftsmanship – the core essence of luxury. I think heritage is very important. Going back to the craft behind. It is difficult, since the luxury market is so concentrated and cost intensive, there has to be financial assurance for steps towards reinstating exclusivity which often are not manifested in short term sales figures, making it difficult for smaller brands to focus on the same. But then again it is not really luxury if it is accessible is it?

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R. And how do you think the online space affecting the luxury industry as a whole?

UA1. I think it is something that has made luxury more accessible, again we were talking about intermediate level of luxury, on one side retailers have opined for longest time that online is not experiential enough for customers but we have to think about the pockets of wealth around the world with relatively less accessibility to the physical stores. Online is a very effective means of reaching out to these customers. Also people are more accustomed to buying online now and also feel safer compared to below to do so, so its not as much an issue now as it was in past. I think the example of net-a-porter has demonstrated that online can provide an additional value to customers which is not there in either branded stores or department stores, the engagement through products and targeted communications. There is a question about how to balance the two channels, it is different, we are moving towards a generation of people that, unless you give them a very specific reason to come to the store, why would they be both ered to basically waste time. Think about that people have to work longer hours, have more pressure, why spend time in crowded spaces which add on to their fatigue. Online is convenient. There are interesting mechanisms of getting products delivered. You really need to have a reason to go to the store, that is what luxury retailer have to think about what is the reason to come to my store apart from buying the product because they can buy the products online cheaper, faster and more conveniently.

Topic: Multi Brand Luxury Retail Segment R. How effectively do you think multi brand luxury retail segment has adapted to these changing luxury dynamics UA1. With department stores, they are established, they survive and prosper because of their reputation and heritage and they are luxury brand themselves. Harrods, for example is luxury brand selling luxury brands. The key is to put together, what we call in marketing lexicon, consumption constellations, different products complimenting each other for target niches, the idea of the customer. And customer service. Those are the areas that they have to invest in. but this is a channel that is shrinking down especially after the recession, with department stores cutting orders, discounting products and as a luxury brand you need to have a very tight control over your distribution and you can’t allow this to happen. So basically the format as a market entry/growth route for luxury brands has become less attractive. Also online has further complicated things, it becomes complex for multi brand stores to have an effective online strategy given brands selling in their own stores, selling through department stores, selling through their websites, selling through department store websites. So they might question the viability of investing resources in the channels given the unclear ROI, however the whole segment is slowly moving towards the direction as online channels in luxury itself is very positive. There will always be conflict between distribution channels that has to be resolved first though.

R. Given these challenges, how important do you think is the value of physical retail space within the segment and how can this value be further enhanced?

UA1. I think yes, and many luxury brands are very good at incorporating the experiential aspect but what I think is missing is a functional component often to the experience building measures. For many years we have been talking about theatre retail, third space, flagship as a platform for customer engagement. I think the brands are doing well in that case, when you enter a wellconstructed space; you really have the feeling of the brand. The environment around you tells a story, a narrative. I think the problem is how do we create, yes it is all great, we are targeting the sensorial part of experience, how to cater to the utilitarian part, at the end of the experience how are we providing a lasting value through this experience, be it in terms of service, lifestyle enhancement or actual product innovation as opposed to previous merchandise. When there is a concrete reason for the customer to go to the store rather than for just an experience without a value.

R. And how do you think such a value can be provided?

UA1. I wish I knew. I was thinking about this the other day, specifically about music retail, how CDs, records etc. are disappearing from the high street. But then there are some standalone music retailers that are doing well, as they are providing additional value services like workshops, vintage records specialists etc. if I would think I want music, I would most probably get it from iTunes, but if I want a deeper engagement, an additional service, I would like to have a store like this that provides not just a good experience but also a special, personal service that I wouldn’t get online. Something like that should be considered by luxury retailers, adding additional functional services along with the product and the experience. I can buy wine online but if I need an expert consultation, I will visit a store with wine specialists. Styling can be one thing, but what beyond that. Burberry has

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done this through technological innovation. But still this is emotional. How do you provide something more functional, that I think is the key consideration for retailers.

Topic: Concept Stores R. What is your perception of the niche retail format of multi brand concept stores and their value proposition for empowered consumers?

UA1. I think that it is definitely a format of different value. Such stores put together a collection of products that add value to the target customer. You go there and you know that you will get what you personally gravitate towards to, almost a personal label curation to taste your luxury choices, in an environment that is more personal, less sterile and often with a distinctive experience element. It cannot be just a random collection of products that cannot work. If you want to run a successful concept store, you need a very strong creative direction. A very, very strong personality is of utmost importance. Often you see, it’s funny, with stores branded as concept stores, you don’t understand the concept. You can’t just say you are a concept store without a value concept that is actually catering a niche market demand. In terms of the established names, I get that it’s difficult to innovate and come up with constant new ideas; most places are struggling in this regard. The concept has to be strong otherwise there is a danger that concept gets tired. I do think that they have been innovative with retail environment, which I think is crucial for their longevity.

R1. Talking about individual retail elements in terms of store design, product curation, marketing communication etc., how do you think such stores provide a differential value?

UA1. Store design I think is very important and has to go hand in hand with product, relationship between two is of utmost importance. Concept stores often do this well. Like Victoria Beckham‘s store which she says is an extension of her personality.

That strong identity has to be reflected. Also it has to evolve continuously to remain fresh. Like I said earlier, such stores often have a very tight collection selection criteria based on the central concept, so that works well for the target customer. I think it is still about personal one to one engagement than a community sense for most luxury customers, which concept stores can directly address with their targeted communication channel unlike bigger and online brands. Then also the presence of a lifestyle space adds value when we are looking for more than just products, when we want more than to be bombarded by products but just savor the environment in a relaxing way, in an unintimidating setting. Have a meal, coffee, drink take your time. Use that as destination, browse around and purchase on an impulse.

R. Can you think of some examples of such stores, which you think are doing especially well and why?

UA1. Of the top of my mind, it is the usual suspects, Dover Street Market, Colette – Dover Street because it was one of the first, has a strong reputation, and is consistent between product and ideology, also between mono brand and department store they have a different value offering, unusual for the customer, a reason for them to visit. Colette is very interesting with the lifestyle it offers.

They match store environment to product ranges to store concept well. I saw a brand in Harrods and in Colette; in Harrods it lost all its value given imbalance between their aesthetics, traditional environment, dark lighting hampered the edgy brand’s essence.

In the lighter environment of Colette, it was interesting to see how the product shone through. I think this is what good about such stores; their environment is very carefully matched to the products stocked. But sometimes, in my personal opinion, I think it is interesting yes, but where is the utility, something new.

R. What are your thoughts on the expansion of such stores, like Dover Street Market has done, opening stores in New York and Ginza?

UA1. From the business perspective, I think it is wise to bank on the strong reputation in a strategic way. It is about the right location, right offering and not too many stores - right balance between expansion and notion of exclusivity.

Topic: Value Measurement of Concept Stores

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R. How do you think the retail value of such formats can be assessed, given that such stores often take longer to reach their breakeven point even if they receive overwhelming public response?

UA1. I think it is a difficult format to run; the problem is that concept should be strong which in many cases it is not. A balance of quantitative-qualitative indicators is essential to understand the market perception. Quantitative will give overview of performances, qualitative will give an idea of market reception and areas for improvement. It is as in general business, a mix of two but with niche formats, it is especially important to understand consumer feedback on a much deeper and individual level as the target is a super niche segment and more than ROI measures, which might not be positive in the short run, it is the qualitative assessment that will help the retailers understand if it is a sustainable format and worth further investment. Sales and profits always follow, having a feel on how your customers are feeling, listening, getting qualitative information is vital. Do they try on in the store, does it get to that stage, are they finding concept relevant, is it resonating. Sales assistants need to be trained to really read the customers well to gauge their response to what is offered.

Topic: Evolution of Indian luxury industry R. As I am specifically looking at Indian luxury market and the scope of such niche formats there, I lastly want to ask you what is your perception on the Indian luxury Industry, how is it changing?

UA1. I think the market is maturing at a very rapid speed as we were saying earlier. Consumers are far more product conscious than brand conscious today. In the past they were oriented towards logo but now it is more towards lifestyle choices, making it challenging for brand owners to adapt their retail strategy, taking into account socio cultural elements and not a blanket strategy as has been practiced. Customers are also becoming more interested in home grown luxury brand. I’m not so familiar with what’s happening in India but I believe that is the case, an alternative market is developing.

R1. Do you think the niche format of concept stores will work well for this changing market and how should it be adapted locally?

UA1. I think yes, it addresses the changing requirement and is definitely a viable format. In terms of adapting locally, I think the interaction of space with product should be designed keeping in mind regional cultural influences, with localized elements; product range has to reflect local tastes. Cohesion should be maintained. Also it is important to balance collections with larger, more recognizable brand along with the less known ones with for initial awareness.

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UK Store Proprietor I Release Form

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UK Store Proprietor I Transcription Interviewee: Tena Strok (US1) Interviewer: Researcher (R) Mode of interview: In Person Date: 06.11.2014 Release Form Signed: Yes

Topic: Luxury Industry Overview R. According to you, what are the key trends influencing luxury retail today?

US1. I think the industry is changing and there is also a lot of opportunity for further change, a lot of opportunity for growth and change. I feel as if retailers haven’t really tapped into what the consumer wants today which is essentially, I think, to buy into luxury in a new way. Go against the stigma that luxury sector epitomizes, sterile intimidating atmosphere. Retailers are going to wake up to the fact now that consumers don’t necessarily like such environments when looking at luxury shopping. The fact is that they actually want different environment than what we are used to. What we are used to is the Prada YSL experience, where you often feel intimidated; you can’t comfortably browse as you feel the need to purchase if you are in a store for long. That’s not what really the luxury sector is about; it’s about idolism and aspiration and to have that aspiration you have to have access to that lifestyle even if it’s just a glimpse. This aspiration then grow into dreams which in turn can turn into reality and mean future loyal customers. By cutting off a consumer you don’t deem to be a luxury customer, you’re cutting off potential market. The sector is undergoing a change to reflect this, as a lot of retailers start adapting to this shift towards customer oriented retail.

R. What is your take on the online versus offline retail space, how is it evolving and what is the value of physical retail?

US1. It’s a really fair point. I think the physical retailers will always have is the experiential aspect, essentially you get to curate like in an art gallery, a sensory experience, engaging our five senses. Making customers have an experience they advent had before that warrants their spending the premium price. You can’t really justify the price points unless you can provide the whole additional experience. This is the advantage for physical stores, if a customer feels connected and enchanted by the experience, they will be more willing to spend extra money, even impulse buys just because they are feeling good. It is difficult to replicate this online. The upper hand they have is the impulsive drunk shopper which we can’t compete with. Each entity has its advantages but I do think with the sensorial environment of physical stores is something that is a strong differentiator.

Topic: Concept Store Value & Target Customer R. How do you think your store has a differential positioning in the wider physical luxury retail space, what is the store ideology and ESP? US1. Our Ideology is offering the customer an alternative point of view on luxury – it isn’t just something you buy, a 700 pound handbag, but it extends deeper and far wider than that. It encompasses mental, emotional and intellectual side and spiritual side, which is something we are very attached to, the sense of enhanced being, catering to the person in more ways than one, that was at the heart of the project. The idea comes from another type of theology, the concept of eastern mind-body dynamics of lifestyle wellness, the principles it encompasses which strongly influences the product selection, the fact that we offer, in addition to core fashion products, healthy lifestyle products, especially in the food segment, like herbal supplements, super foods, cold pressed juices, through a health bar in the store along with wellness services Reiki, acupuncture alongside the 1000 pound dress. It is saying that all these have as much effect on our state of consciousness as that dress. When you buy something you love, your state of consciousness rises, the positive vibration effects your overall mood, the eastern ideology of enhancing this whole experience with an ever higher state of consciousness is what is at the heart of our offering – a holistic sense of wellness you achieve rather

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than a materialistic small lived pleasure of buying a luxury product. This has been influenced by our experiences of the model of wellness and we wanted to bring this into the luxury market which hasn’t been incorporated in a luxury selling before that is the point of difference. And we are having a bit of a laugh with the fashion side, it is funny buying that handbag does affect your state of consciousness but there are other tools that affect it in much deeper level. We also are trying to propagate a socialistic luxury outlook, much along the lines of Russell Brand’s political and social theology. Russell is a close friend of the store and we are inspired by the way he’s trying to raise awareness about the irony of mindless consumption – which is what we are also trying to drive across, but obviously on a much smaller scale. We are catering to the new consciousness that is dawning, there is a different general sense of lifestyle, people are becoming open to larger sense of reality and lifestyle, and you might wonder what does this has to do with the shop, but that is what the idea was – even if we sell stuff, that desire to positively impact and reflect the shift in consciousness is what we are trying to do.

R. Who is your target customer?

US1. Essentially any woman between 18-60, who wants to look after herself better, start experimenting with lifestyle alternatives from other cultures, is really into fashion at the same time and wants to keep up with trends but also have a parallel individualistic desire for wellness and identity inspired by that. Basically anyone who is looking to expand her channel of perception and engage with luxury in a more conscious way. Every human being has narrow waking awareness, focusing on what’s in front of you; bound by physicality, through expansion of consciousness you start to occupy higher mind space. Through what we offer, we cater to someone who wants to go in that direction through yoga , meditation etc. Anyone who has an experimental outlook to life and wants to incorporate the same in their lifestyle through luxury and fashion side as well.

Topic: Differential Retail Elements R. In your opinion, how is the retail value offered by your store distinctive for the customers in terms of the retail elements like store design, product curation, sensorial elements?

US1. Our point of difference is basically providing an unintimidating, understated luxury experience. The store is designed to make customer feel comfortable. Our staff are trained to make the customer feel at ease and at home. That is how we aim to be different. When it comes to product curation, we work with designers that we feel are doing something well and doing something differently, alternative luxury which is the backbone of the store. Our central ideology of raising consumer’s social and psychological awareness extends into our fashion merchandise selection. All the brands we work with are alternative in their design aesthetic, obviously they have high quality standards, for example Meadham Kirchhoff, who have a political standing that comes across through their collection. They cause huge spectacles in industry but they are also much respected for meticulousness and quality in their designs which is as good as Gaultier. We stock brands that adhere to the high luxury quality and taste levels but for customers who want to buy more than just a well-made garment, an ideology that is reflected through what they wear.

R. Are there additional services for the customers, something to compliment the store ideology?

US1. Yes, like I said before, we have classes and sessions of Reiki, acupuncture, massage, energetic cellular healing which is an exciting concept which is being pioneered in UK at the moment. We do workshops on eastern theories and practice, group sessions, discussions, talks, lectures, daily yoga classes in our basement Yoga studio. We also have beauty therapies for the customer who isn’t very experimental but still wants luxurious pampering treatment. We also have occasional art exhibitons in our yoga studio by artists, photographers who are friends of the store.

R. What about the online channels, what are the online tools used?

US1. We have a fully functional e-commerce website manned from store. It’s a small job as its not obviously net-a -porter but it’s great because customers worldwide, who have visited the store and found something they didn’t find elsewhere, they can order online and we can ship it off to them. But also it’s a portal for our social media, which is becoming an integral part of our marketing strategy as it reflects our ethos and ideologies to potential customers and also just people interested in our ideas which we are discovering is surpassing retail side of things. A lot of our Instagram followers you see follow us our new thought movement approach.

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Topic: Retail experience

R. Talking about your experience as a niche luxury retailer, how has been the feedback so far?

US1. It has been very strongly positive so far. One thing we are overwhelmed by is the amount of time people spend in our store at times. I think it’s because they feel comfortable and happy in the space; also our staff makes them feel at home. We are also discovering that people are responding very positively to the environment we have created. There is opportunity for expansion and longevity; it has been a good investment.

R. Please feel free to not answer this question if it is confidential information, have you reached your break even point, having opened in 2013?

US1. No, we haven’t reached there yet, but we are not far off which is promising as we have just passed year one and most companies take two years and we are hopeful of making it well ahead of that.

R. How do you evaluate the store performance, what is the balance between statistical analysis and customer feedback evaluation?

US1. It’s a funny question. Our investors are primarily concerned with figures, that’s the only way for them. For us, doing the job every day, it is very much about the customer’s feedback, it’s about where we sit in the market. It is about being compared to our contemporaries like Brown’s, when you know they’ve done it right and they’ve got to where they are through ingenuity and brilliance compared to stores that try and don’t make it. To be compared to them is huge compliment and testament to our progress. It is about seeing super satisfied customers, it sounds a clich but that’s what it’s really about as these are your ambassadors, they are the people with repeat visits. At the moment we do not have a procedure in place to evaluate this feedback but we are realizing the importance of doing so. We get a lot of feedback from online customers about their experience, delivery, but not documented from the ones who come in store, with them it is more just a general feel we get through our interactions with them. But this is what we are looking to develop in near future.

R. What have been the main challenges that you have faced so far.

US1. So many, oh boy! There have been a lot. Financial would be the very first. Our overheads in luxury sector were so high with really high risks. You have a selling window at full price and 80000 pounds worth of stock to sell in 4 months which was very daunting. It took us few seasons to really start selling but you have no choice, unless you start at lower price points but we couldn’t have received half the brand awareness through media articles if we hadn’t open with well-established names like JW Anderson or Chalayan, it wouldn’t have happened if the story ideology wasn’t reflected through well respected brands. It was a huge risk, but it eventually paid off. Another challenge has been staff; it took a while to get the right team which I think is crucial to a store’s success. Now we have the most incredible team we could have dreamt of, it is my imagination come to life but it was a lot of trial and error to get there.

Topic: Future Plans R. Lastly what are your immediate and long term plans for the store?

US1. The plan is to collaborate with Soho house in next two years, franchise in one of their new spaces. They open a member’s only house twice a year and have huge plans of expansion over the next 5 years. We have a very strong relationship with them and our plan is really to franchise a small Celestine Eleven into a few houses, in Tokyo and Los Angeles as of now. Not opening too many stores but to strategically expand with a collaborator who not only adds value financially but also with shared ideology.

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India Industry Expert I Release Form

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India Industry Expert I Transcription Interviewee: Devangshu Dutta (IE1) Interviewer: Researcher (R) Mode of interview: Email Date: 01.11.2014 – 14.11.2014 Release Form Signed: Yes

Topic: Indian Luxury Industry Overview R. How would you define the present day Indian luxury industry and what are the key trends shaping it in terms of macro and micro influences?

IE1. Luxury retail in India in recent years has been driven by the unleashing of entrepreneurial energies in the last 20 years that has created “new money” which is critical to feeding the luxury boom, and also for some of these entrepreneurs to emerge as potential franchise or JV partners in India for global luxury brands. In parallel, the growth of modern retail real estate in the form of shopping centres has provided platforms for single-brand and multi-brand luxury stores to grow beyond 5-star hotel shopping arcades. A few issues dogging the luxury market in India are:    

The addressable market is still relatively small.

The operational cost (salaries, marketing & real estate) is higher and yet to be justified by amount of business being generated There is a lack of enough appropriate real estate for luxury brand clusters High import duties on finished products and the need to add a margin for the Indian partner/franchisee add two layers of costs, while the prices need to be maintained on par with other markets

However, the income and consumer base growth in India is neither as sharp nor as much as it was in China. Also, Domestic brands and bespoke products have always been a choice available not only to a privileged few, but to a mass audience. The boundaries between various segments of luxury/designer goods have been blurring globally, as brands have diffused variants of their name into products across multiple price in a bid to expand their addressable market. In a market that is developing familiarity with international brands, luxury brands run into head-on competition with mid-market brands that are perceived by the new-money consumer as premium. If the driver to buy an international brand is to satisfy the need for social esteem, and the consumer can do so with a lower priced brand that is what is likely to happen.

R. How about the Indian luxury consumer, what are your thoughts on their changing preferences?

IE1. Unlike booming China in the 1990s and 2000s which faced a vacuum of “esteem-driven” brands that was rapidly filled by international brand, India has never had a choice vacuum. There has always been a demand for home grown luxury, be it designers or the notion of tailor made products which are much cheaper in the country compared to other markets. Indian luxury consumer has a very value oriented approach towards luxury; they want something that is value for money along with high prestige value.

But also there is a growth in consumers looking for exceptional, exclusive pieces outside the realm of Louis Vuitton, Gucci and Dior. So when it comes to luxury buying, they look for something that will set them apart from the crowd but is also justified in terms of price and is noticeable as a premium product by their peers. This combination of value, prestige and hedonism is what drives Indian luxury consumer.

R. What about the Indian customer shopping overseas for western luxury brands, what are the major reasons for that and how can local retailers counteract that?

IE1. Overseas luxury shopping by Indian consumers is driven by three factors, the non-availability of a brand in India (thus adding to its exclusivity), a more complete and updated product range being available and lower prices. Most luxury brands are addressing the latter two factors to encourage shopping at their stores in India, by ensuring that Indian stores are up-to-date and priced more or less on par with stores elsewhere, even if the import duties create a short-term hit on the company’s margins. Not much is being done currently to address the first factor, that generation of exclusivity through experience and product in the country

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Topic: Multi Brand Luxury Industry R. What is your perception of multi brand luxury retail segment in India?

IE1. I think it is a relatively undeveloped format in the country. This is due to many factors, such as;   

Higher government regulations in terms of FDI caps which restricts international players to come to India Higher overhead costs due to requirement of larger spaces, complicated product buying process Unclear market demand as customers are mostly going to either a luxury brand store or a luxury mall to shop, the volume of customer going to The Collective, for example, in comparison, is still very low to justify India entry of international multi brand stores

R. What about the Indian multi brand luxury stores, how would you evaluate their value?

IE1. The operations of such stores are too small and are yet to be assessed. For the most part, such stores serve an extremely concentrated market segment, majorly the direct social circle of the proprietors, not a lot of customers go to these stores as they collections they have are too scattered without a strong luxury value. Also, often such stores have higher prices as they do not have the scale of operations to absorb the high import duties etc. on international brands which they stock. The difference gets passed on to the customer. There is a lack of bigger format multi brand stores, which, in my opinion, would fill a gap in the market in terms of an experiential luxury environment and larger collection offering much along the lines of international department stores.

But the infrastructural challenges are very high for such a format to develop in the country.

Topic: Value of Niche Luxury Concept Stores R. Given the challenges and shortcomings you have mentioned for the earlier question, hat is your perception of the niche retail format of concept stores and their value proposition for empowered Indian consumers?

IE1. I think there is definitely a market for such stores. Concept stores began coming up in India 2-3 decades ago, to fill the gap at the retail front-end. Due to the general lack of large-format premium department stores, companies that wanted to communicate their full product range and brand experience were forced to create stores that offered an additional value to the customer. So “concept stores” are not a recent import into India with the entry of luxury brands. We see stores like Kimaaya, Ogaan, which have been functioning since 1990s. Having said that, and relating to my earlier answer about Indian multi brand stores, such stores have not been able to keep up with the retail innovation being witnessed and have become outdated in their luxury offering. If we talk about the modern idea of concept stores, something like Dover Street Market, that is an exciting format; it engages the customer in more than one way, through the store, the collections, the engagement, the whole experience. The physical experience of buying a luxury brand remains important, because experience is a significant portion of the value – not only the experience of the product after the purchase, but also the purchase experience itself. So in that relation, there is definitely a scope for niche formats like these for Indian consumers who would get the same exclusivity, product range and a story that they get overseas, within the country.

Topic: Retail Value Proposition of Concept Stores for Indian Luxury Consumers

R. What can be the specific retail value of such stores in terms of individual retail elements, like store environment, product selection etc.?

IE1. I believe the market in India is evolving more organically than the other new money markets, and is not being given over automatically to the largest global brands alone, but shared by smaller, niche brands that justify higher prices through a truly superlative product and experience. In fact, experience — vague as that may sound — is key to differentiating luxury, more than the tangible product being consumed. It’s not just the person’s own direct sensory experience, but also the prestige and status granted by others around her or him that creates the luxury experience. Concept stores can tap into this luxury demand very effectively, through engaging store environment, products that are truly unique from the usual luxury suspects in the market and very importantly, in creating that sensorial experience through the store environment, something we don’t see in the bigger luxury stores. There are no luxury flagships, no innovative pop ups in the country. Concept store can fill that gap very effectively. Also as

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mentioned, the social aspect of luxury is very important for the Indian consumer and the small niche community such stores build around themselves is a value proposition which is very attractive for such consumers. That sense of belonging to a select few is a very strong prestige association and effective buying motivation.

R. What do you think of the existing concept stores in the country and their value with respect to the elements you have mentioned in the last response?

IE1. Like I mentioned earlier, the older concept stores like Kimaaya, Ogaan, and Kitsch have become outdated and are not really providing a differential value. There are a lot of so called concept stores emerging, but one is doubtful of their holistic offering.

Apart from few examples, often such stores are a hastily put together idea and not strategically planned initiative. There is lack of cohesion across their ideology and the actual luxury offering. The product collections are haphazardly selected, there is no clear central luxury idea and their online presence is abysmal at best.

R. What are the few examples of the relatively better positioned concept stores?

IE1. I can’t think of anyone that is truly successful. There are a few interesting concepts, Bombay Electric with its focus on nontraditional Indian luxury for example. But then again, there is a lack of continuity in their message and service in store in terms of kind of products being displayed and staff knowledge. Surely, with such intangible notions of experience, power and prestige, luxury brands should be among the most influential in the market. They should be pioneers that set the tone for change in improving retail management practices, upping customer service standards, driving quantum leaps in quality. ·

Topic: Value Development

R. How do you think such stores can develop a stronger value offering, along the lines of their international counterparts?

IE1. Essentially they have to research their target market very carefully and accordingly develop a retail format that intrinsically meets this demand. They have to assure that the product being offered is not easily available or else why will the customer pay higher premium. The essence of exclusivity is of utmost importance. The service in store is also of great importance. Often the sales staff in such stores is not well equipped with information on the products which is counterproductive. Also there is a serious lack of the more experiential store environment, which has to be introduced for the customers be actually impressed. These are the few things that I can think of hand.

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India Industry Expert I Release Form

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Industry Expert I Transcription Interviewee: Sujata Assomull Sippy (IE2) Interviewer: Researcher (R) Mode of interview: Skype Date: 02.11.2014 Release Form Signed: Yes

Topic: Indian Luxury Industry Overview R. How would you define the present day Indian luxury industry and what are the key trends shaping it in terms of macro and micro influences?

IE2. I think the Indian luxury industry is a very complex and competitive marketplace dominated by a select few big groups like Genesis, The Sachdeva Group etc. who control most of the western luxury distribution in the country on one hand and big Indian designers like Sabyasachi, Suneet Varma and Tarun Tahiliani who have the resources to function with high overhead costs. For the smaller players, it is extremely difficult to sustain their growth as there are considerable overheads in terms of among the highest real estate rentals in the world, lack of organised retail space, infrastructural challenges and to top it all monumental import duties and government taxes. Coupled with a very complex luxury mind-set of the Indian consumer, luxury retailers, in most cases, struggle to find an optimal retail strategy to prosper in the country.

R. How about the Indian luxury consumer, what are your thoughts on their changing preferences?

IE2. Indian consumers have their own notion of luxury which is very different from what the western perception is., the western idea of luxury is still relatively new in the country. There is a strong emphasis on combining the traditional notion of luxury with a more contemporary western philosophy. Indian women want to embrace traditional design along with a western aesthetic and have, what I think, the most multifaceted wardrobe in the world. Consumers are increasingly very discerning and don’t ape western luxury heedlessly. The notion of Indians liking bling is grossly exaggerated. Yes there is a huge market for heavily oriented festive wear but there is an existing market of Indian designers for that. For more routine luxury consumption, Indians are looking for a more toned down luxury product that is still intricately made and has a special value. The notion of customization is very important for Indian luxury consumers, we have a long standing tradition of bespoke, tailor made luxury and we expect that from the luxury brands, a service that is often missing from most luxury stores. Indians are also increasingly travelling a lot more and are acquiring a more global luxury taste, and want this to be catered to when shopping in India. Internet has also played a big part in empowering the customer, giving them the option of ordering from practically anywhere in the world without the high local prices and has made them more educated and sophisticated.

R. What about the Indian customer shopping overseas for western luxury brands, what are the major reasons for that and how can local retailers counteract that?

IE2. Indian luxury sector is not evolved in terms of store experience and strong product collections. Consumers shop abroad for these and also for the aura of exclusivity, the idea of having an Alaia dress that is not available in India is a strong motivator.

Topic: Multi Brand Luxury Industry R. What is your perception of multi brand luxury retail segment in India?

IE2. There is still lack of organised multi brand retail formats in the country, mainly due to the higher infrastructural risks and challenges associated with the retail channel. We do not have multi brand department stores along the lines of Selfridges or Saks in the country. This is unfortunate as such stores can fill an important gap in the market, department stores are among the most visited luxury destinations by Indians when they shop overseas.

R. What about the Indian multi brand luxury stores, how would you evaluate their value?

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IE2. I don’t see a lot of Indian multi brand stores doing a good job in terms of retail and marketing strategy. When it comes to Indian wear, yes there are stores like Ogaan, Ensemble etc. who have a strong selection of labels. But in terms of store experience, of matching that international standard of retail, they are not providing the same value. The store edit is everywhere; there is no clear direction to what is being offered and to whom. Single brand stores, be it international or local, in my opinion, provide a much stronger experience to the customers and are preferred destinations in most cases.

Topic: Value of Niche Luxury Concept Stores R. Given the challenges and shortcomings you have mentioned for the earlier question, hat is your perception of the niche retail format of concept stores and their value proposition for empowered Indian consumers?

IE2. I think there is definitely a very strong value to such retail formats, especially given what I have said earlier about the lack of experiential store environment and the balance between Indian and western luxury offering by most existing stores. Stores that curate the best of international and local luxury and offer a memorable shopping experience will find a huge traction within the luxury market. And concept stores do exactly this, so yes, it is definitely a very strong value proposition given that it is strategically executed. Given the prohibitive rules and regulations negatively affecting luxury store performance, such stores can position themselves differently by creating a niche customer engagement format, something will provide longevity to their retail function.

Topic: Retail Value Proposition of Concept Stores for Indian Luxury Consumers

R. What can be the specific retail value of such stores in terms of individual retail elements, like store environment, product selection etc.?

IE2. I think, basically like I said before, it is a strong cohesion across the retail elements. Be it the store design, the product curation, customer engagement, store staff, social media engagement; having a strong central idea that is reflected across all these creates a valid reason for the consumer to visit the store and also creates repeat custom and brand loyalty as customers associate such stores with their own lifestyle. So if a store offers consumer a carefully edited selection of the best of western and Indian luxury fashion, a carefully preserved Kanjeevaram silk sari alongside an immaculately manufactured Mary Katrantzou dress, in a lifestyle setting reflecting the customer’s own lifestyle choices, with a store staff that can talk to them intelligently about the preservation process of the Kanjeevaram, that will go a long way in building a very strong store association for th e customer.

Along with this, such stores also have additional value services that give the shopper another reason to visit the store and not go to overseas destinations. Be it exclusive events, art exhibitions, book readings, the creation of the sense of this small tight knit community is a very smart way to target the experience and value seeking Indian consumer.

R. What do you think of the existing concept stores in the country and their value with respect to the elements you have mentioned in the last response?

IE1. I don’t see a lot of so called concept stores particularly offering a differential luxury value to their customer. Store design editing is all over the place, there is not the right balance between Indian and western collections, often Indian dominating western and not complementing it. Also there is no strong concept, like the editorial sense one gets at 10 Corso Como or the edgy fashion of Colette, there is lack of a strong store identity. Then the social media by such stores is dismal to say the best. Technological innovation in terms of sensorial design elements as seen in the Prada Epicenter store or LN-CC in London is another area that should be looked into.

R. What are the few examples of the relatively better positioned concept stores?

IE1. Le mill is only one that is trying to push the boundary with a strongly edited label selection and a personality that comes across, a deconstructed notion of luxury along with the artisanal Indian luxury offering. But even there, often the service is not at par with the concept and a strong experiential environment is missing.

Topic: Value Development

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R. How do you think such stores can develop a stronger value offering, along the lines of their international counterparts?

IE1. I think first consideration should be to get the product curation balance right. Stores that offer a product range reflecting the varied Indian wardrobe are required. There should be the right balance between the western and Indian labels and it should also complement the store ideology. Having the best of international and local luxury brands catering to a specific style will do very well. Other is developing sensorial elements through store design and product display format. Touch and feel is very important for Indian consumers and developing strong visual, sound and tactical cues will help elevate the whole shopping experience. Then the personalization and customisation missing from most luxury stores, that is something that can be offered as an additional service.

Talking about additional services, such stores should also adopt the global concept stores’ notion of a lifestyle space, a caf or a bar or a gallery that engages with the customer on amore subliminal level. Also it is very important for the service to match up to the overall store offering, knowledgeable, well presented, sociable staff personnel are an integral requirement, especially in such formats where the customer-store engagement is very one-to-one. The communications of such channels also have to be strongly realigned, they should be more soft sell than hard sell product promotions and focus on creating a small community of likeminded individuals through editorial content as a word of mouth tool.

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Indian Academician I Release Form

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Indian Academician I Transcription Interviewee: Lipi Begum (IA1) Interviewer: Researcher (R) Mode of interview: In Person Date: 05.11.2014 Release Form Signed: Yes

Topic: Indian Luxury Industry Overview R. How would you define the present day Indian luxury industry and what are the key trends shaping it in terms of macro and micro influences?

IA1. If you look at statistics, it seems luxury industry in India is growing; it is expanding and getting bigger. The consumers in India are evolving and buying more luxury products. Luxury has really penetrated in the country. As this is not my area of research I would not be able to comment in detail on the trends within the industry but I do see a shifting focus towards home grown luxury and saturation of the market. Also the infrastructural constrictions have kept the local industry still underdeveloped on the other hand compared to other luxury markets.

R. As you have extensively studied the modern Indian fashion, what are your thoughts on their changing preferences?

IA1. I think in the past 10 years, people have become more selective in their luxury preferences and also their frequency of purchase has increased. With more and more people entering the higher income bracket, they are looking to supplement their lifestyle choices with quality purchases and these new international brands have given them a chance to do exactly that, and not just buying from Indian designers for weddings which was what luxury was restricted to for most consumers earlier. Consumers have become extremely discerning; quality has become of utmost important. Consumers are willing to spend more on the product.

Not just traditional upper class, middle class is also increasingly gravitating towards luxury, starting with more affordable accessories and fragrances and slowly working towards higher priced items. In that sense, there is definitely more consumption. I don’t know to what extent they are spending more but they are definitely consuming more. enerally luxury products other than griffe lines are being consumed more.

R. What about the luxury preference of Indian consumers?

IA1. I think compared to other new markets, Indians have been relatively less brand obsessed and more brand aware. At least this is true for local labels. Yes with the coming of international brands, there was a rise in prestige buying and pockets of consumers spending huge amounts on Louis Vuittons and Guccis to show off. However this is not the case in general. Indian mentality is different, people are discerning, getting a bargain or a quality product is still a virtue. In UK if you bargain buy, it is not considered good, in India it is a matter of pride, bargain hunts are prided upon, even the rich people talk about bargain buys.

People are becoming brand conscious and are also looking for new brands. If an Indian brand is offering good service, something stylish, value for money they are willing to purchase that too. It is not just the big blingy brands they are after, anything that compliments their identity is preferred.

R. What about the Indian customer shopping overseas for western luxury brands, what are the major reasons for that and how can local retailers counteract that?

IA1. I think it was more the case earlier with less range and brands in India, but now with luxury brands increasing presence, people are buying more in the country. Though for people who travel a lot, things like exchange rate, exclusive factor is a big consideration and such people still prefer to shop more overseas. I think the key is to have more ranges, more depth, and better experience within the country retail formats. To counteract the exclusivity factor. Also it is important to combine international and local brands for greater variety, offer something for every preference.

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Topic: Multi Brand Luxury Industry

R. What is your perception of multi brand luxury retail segment in India?

IA1. I think single brand is still predominant given a stronger brand image and identity and also better service provided. I think multi brand format hasn’t been fully developed yet which is also due to greater infrastructure challenges in the country in terms of FDI regulations, licensing and planning issues, higher overhead costs due to requirement of bigger spaces and also lack of cohesion in existing formats in terms of overall product curation, with a very disjointed variety of brands, central theme etc. Also it is more prestigious for buyers to be seen as patronizing single brand stores – people saying oh I shop all the time at Bottega rather than Collective. I think the multi brand retailers have to offer something extra to counteract this. I think multi brand format will work if its more carefully managed, it is more selective about products offered and is developed in line with local customer preferences for brands and experience rather than aping the western formats. The role of buyers is very important I think. The aesthetics have to complement each other and be cohesive across brands, not go for just popular brands or brands that presumable sell more, the key is to develop an offering that provides value to the target customer. Picking brands fitting with their own retail values and have a seamless experience. However the segment has yet to develop to its full potential. Indian consumers generally like to mix and match with high street and luxury and also visit from one end of market to another. Confined luxury spaces are not traditionally the best fit for this shopping practice. But it’s more to do with infrastructure issues I guess. Also for local retailer to open multi brand stores is a risky venture as the product merchandising would be a difficult thing to manage, getting the best brands would be difficult due to government regulations and it would take them longer to establish themselves given how consumers are more driven towards single brand stores. Having said that, if such stores can think of an additional value, which is provided in international stores and which consumers seem to cherish, there is definitely a scope. Not sure why this has not been developed enough, there are some cases but not developed enough.

Topic: Value of Niche Luxury Concept Stores R. Given the challenges and shortcomings you have mentioned for the earlier question, hat is your perception of the niche retail format of concept stores and their value proposition for empowered Indian consumers?

IA1. Concept stores can definitely offer a differential value to the new age customer, someone who is looking for more than a very direct transaction and wants a deeper engagement with the store. I think it is especially viable for Indian market. In addition to qualitative factors, given the immense population of India, even if such stores are reaching out to 1% of target market, that is still a substantial statistic and even higher taking into consideration potential future customers, substantial sales.

Topic: Retail Value Proposition of Concept Stores for Indian Luxury Consumers R. What can be the specific retail value of such stores in terms of individual retail elements, like store environment, product selection etc.?

IA1. Going back to my earlier point about Indian consumers being very discerning and in search for quality products, I think niche formats can provide an additional value to them. Also Indian consumers generally expect a high level of service when they spend in luxury stores, as we are more used to household help, people doing things for us. The service in most luxury stores is not at par with the Indian expectations. I think smaller niche stores can provide value in that aspect, where there is one to one personal attention towards each customer given lesser customer density in store at any given time. Also they can create a facsimile of exclusivity which we don’t see in larger stores which often have a very limited range, which prompts customers to prefer shopping for western brands overseas. Curated collections in concept stores which are not repetitive can provide that same exclusivity in the country. People can say that they went to this store to buy this dress, the same way they would say for overseas purchases.

R. What do you think of the existing concept stores in the country and their value with respect to the elements you have mentioned in the last response?

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IA1. I can’t comment on this with much conviction as I haven’t followed the Indian luxury retail space or the emergence of concept stores closely. I would argue, based on the general luxury retail in India, the experiential value of such stores is not at part with the international stores but then again as this is more form what I have heard than seen, I can’t claim this to be 100% true.

Topic: Value Development

R. How do you think such stores can develop a stronger value offering, along the lines of their international counterparts?

IA1. Again I can’t comment on this very informatively given my limited knowledge. I would say basically to have a strong concept that resonates personally with the local customer and not mindlessly copy the western format. Also integrate all the individual elements in a seamless way for a holistic experience. But this is a very general answer. You will have to observe the operations of such stores very closely to form an opinion on the required development.

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Indian Store Proprietor I Release Form

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Indian Store Proprietor I Transcription Interviewee: Julie Leymarie (IS1) Interviewer: Researcher (R) Mode of interview: Skype Date: 10.11.2014 Release Form Signed: Yes

Topic: Indian Luxury Industry Overview R. According to you, what are the key trends influencing luxury retail today?

I think Indian luxury retail is typical in its functions in that there is a lot of chaos and a lot of uncertainty in terms of what works and what doesn’t. Even with bigger luxury brands, we have seen that there is no identified retail model that works well. It is a very hit and miss market and being intuitive is probably more effective than being logical. There is a lot of risk involved with retailing in India in general and it is intensified further for luxury brands. The usual like FDI regulations, sky high rentals and uncertain customer ROI to balance these out. Then there is a huge tendency of consumers to shop overseas as Indian consumers usually must pay 20 percent to 30 percent more for luxury items to cover import duties, which make them buy high-end items during trips abroad, rather than patronizing local stores. There is also a growing inclination towards online luxury retail, be it local websites like Pernia’s Pop-Up Shop or international ones like net-a-porter as they have greater options, at more value for money prices.

Amidst all this, it is very challenging to find a retail strategy that works well and that effectively caters to the highly compound market space. There is also a lack of truly innovative multi brand luxury stores in the country, something that drove us to open Le Mill.

Topic: Concept Store Value & Target Customer R. How do you think your store has a differential positioning in the wider physical luxury retail space, what is the store ideology and ESP? IS1. Essentially Le Mill is a platform for local artisans filtered through a Western sensibility for the modern Indian woman who likes to mix and match and experiment with her wardrobe and wants to have a deeper association with her style choices than a mere materialistic pleasure value. When my partner Cecilia and I went abroad, be it Paris, New York, we would find items which when we looked at the label, said made in India, the same product however we could not find in India. This kind of fashion drain is what we are looking to reverse by engaging with local craftsmen, upcoming designers to create products at par with the ones being imported. So while there are Indian luxury stores offering traditional design wear and doing it very well, our focus is on a more contemporary Indian fashion offering developed using the traditional and intricate techniques but in an aesthetic that compliments the target consumer’s everyday lifestyle. Paired with this is a very carefully selected range of international labels that we feel suit the Indian women’s sensibilities, combining their love for flair and elegance at the same time and also non fashion product ranges like handmade furniture, vintage décor items etc., in essence products that compliment not just the wardrobe but the whole lifestyle we are targeting at. That I think is the ESP of Le Mill, this traditional and modern balance across lifestyle items for the modern woman.

R. Who is your target customer?

IS2. An Indian woman who is confident in her ethnicity while being modern, who wants a style identity that is her own and is a reflection of her personality. Someone who is an opinion leader among her peers and a purveyor of fine living, who is looking for lifestyle buys to reflect this individualism and is not driven by trends necessarily. Also she has a strong sense of pride in her culture and wants to promote the local crafts.

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Topic: Differential Retail Elements R. In your opinion, how is the retail value offered by your store distinctive for the customers in terms of the retail elements like store design, product curation, sensorial elements?

IS2. Talking about store design, we wanted to create a deconstructed luxury vibe to offset the beautiful items, and we were lucky enough to have access to the cotton mill which houses Le Mill today courtesy of my business partner’s parents-in-laws. The 15,000 square-foot space has been redesigned to cater to modern sensibilities with a spare but sensual look. This has worked well for us as generally luxury stores have this sterile environment in the country and this lighter, airier space has helped our customers to feel more relaxed while shopping with us. It’s the perfect backdrop for the store’s sharply focused fashion offerings As I mentioned earlier, our product selection is driven by restoring the Indian craftsmanship to the designs offered by working with craftsmen, and housing and financing young Indian designers. We are creating a store that celebrates everything that is made in India but hasn’t been available in India before. There was no one we felt was really representing a young, modern aesthetic in this town, and we wanted to help create and showcase it. We have brands, sizes and silhouettes which are suited to the Indian body, Indian lifestyle and Indian functions; fashion, jewellery, furniture, home décor, specially designed textile collections in the store from a mix of home grown labels, our in store lines and progressive international designers and labels like Carl Hansen & Son, Gervasoni, 3.1 Phillip Lim, Alexander Wang, Mawi, Shourouk and Tom Binns, among others, and gift items and tableware.

We also have regular capsule collections in store and pop ups in collaboration with other stores, like the recent one we did in New Delhi at En Inde, this contemporary Indian jewellery boutique.

We are lucky to have a really dedicated staff committed to our mission and as gung ho as we are, which has been a big influence in our success.

R. Are there additional services for the customers, something to compliment the store ideology?

IS1. We have a flower and catering service which we provide to our customers and we have special sessions with local artisans which our customers are invited to, to give them a sense of how what they are buying is being made, to make them more connected to their purchase. We also have an organic café for our health conscious customers.

R. What about the online channels, what are the online tools used?

IS1. We have a fully functional e-commerce website and we ship worldwide. We are also actively engaged across social media with our customers while at the same time also connecting to them through our blog where we invite people from the industry to share their opinion on what they think is of interest.

Topic: Retail experience R. Talking about your experience as a niche luxury retailer, how has been the feedback so far?

IS1. It has been tremendous and we are awed by the response we have received so far, not only from local but international shoppers as well. When we won the Farfetch Superstore Award that was the cherry on the top, a validation of our efforts. However at the end of the day, it is the customers’ that have validated our decision to start Le Mill. People go to Merci in Paris and may not buy anything, but they go because they want to hang out there. They like the way it feels. We think and hope people feel like that about Le Mill. We want people to come spend time here.

R. Please feel free to not answer this question if it is confidential information, have you reached your break-even point, having opened in 2013?

IS1. Yes we did, two and a half years into our business which was very promising given the highly niche nature of our business, with 60% of our business being generated by a roster of 50 women.

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R. How do you evaluate the store performance, what is the balance between statistical analysis and customer feedback evaluation?

IS1. Like I said earlier, customer feedback is of vital importance as that is how we keep innovating to function successfully. Of course the business side of it has to be taken into consideration as well and we believe a balanced approach works best. I’m afraid I won’t be able to discuss our measurement process in detail given its confidential nature.

R. What have been the main challenges that you have faced so far.

IS1. There have been many. Mainly having to reach out to a target niche that was shopping abroad predominantly. The irony is that Singapore and Hong Kong are 30 per cent more expensive than what we are selling in my store, and our clients are still shopping in Singapore and Hong Kong. Our margins are also slimmer than for retailers abroad, as we try to absorb import duties to ensure price parity between our stock and those elsewhere. The market base is limited, but growing and that validates the challenges.

Topic: Future Plans R. Lastly what are your immediate and long term plans for the store?

We have plans to open stores in other Indian cities, like Delhi and Bangalore. There is lots of wealth in third- and fourth-tier cities where there are no shops. We are less testing waters; trying to reach out to the Delhi consumer and introduce him and her to Le Mill. We had a lot of requests from customers based in Delhi who shopped at Le Mill, to come to their city

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APPENDIX XII Interview Coding Analysis Research Objective

Participants

Research Topics

Comments

UE1 – Transfer of power to consumers UE2 – Utilitarian Function Luxury Retail Value

UA1 – Loss of exclusivity US1 – Constantly changing UE1 – No distinction

UE1 UE2 – Physical creates experience Offline-online balance RO1 - To assess macro multi brand luxury fashion environment & identify implications for physical luxury retailers

UA1 – Enabling consumers worldwide UE2 US1 – Cant match physical UE1 – Evolving as per Maslow’s hierarchy UA1 UE2 – Cautious buying New Luxury Consumer UA1 – Seeking utility US1 US1 – Exploring alternate luxury UE1 - Personalization, Customization UE2 – Lifestyle space Retail Trends & Innovations UA1 - Return to craftsmanship US1 – Intimate luxury development UE1 – Additional Value Creation UE2 – Specific market demand

UE1 RO2 - To analyze niche retail format of multi brand luxury concept stores & their differential retail value proposition

UA1 – Strongly experiential UE2

UA1

Niche Luxury Retail Formats Overview

US1 – Shared ideological luxury IE1 – Lucrative format for small retailers IE2 – Additional value generation IA1 – Experiential

US1

IS1 – Deeper engagement

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UE1 – An experience that stays with customer UE2 – Holistic, ideological luxury offering

IE1

UA1 – Lacks utility US1 – Higher engagement

IE2 Retail Value Proposition

IE1 – Addressing value gap IE2 – Scope for personal relationship

IA1

IA1 – Holistic luxury experience IS1 – Ideological luxury

IS1

UE1 – Qualitative focus UE2 – Qualitative and quantitative in balance UA1 – Mix, emphasis on qualitative US1 – More quantitative due to investors Value Measurement IE1 – Mix of qualitative – quantitative IE2 – Difficult to determine IA1 – Difficult to determine IS1 – Qualitative focus UE1 – Maturing UE2 – NA

UE1

UA1 – NA UE2

Macro Environment Analysis

IE1 – Growing but challenges IE2 – Lacks cohesive vale

RO3 - To ascertain potential retail value of concept stores for Indian luxury retail market through assessment of local macro luxury environment

IA1 – More consumption

UA1

IS1 – Difficult market space UE1 – Strong sense of traditional pride

IE1

UE2 – NA UA1 – Maturing

IE2 Luxury Consumer Profiling IA1

IE1 – In search of value IE2 – Complex luxury preference IA1 – Value oriented

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IS1 – Looking for enriching experiences

IS1

UE1 – NA UE2 – NA UA1 – NA Retail Value Gap IE1 – Product variety, store experience IE2 – Lack of balanced western-traditional offer IA1 – Homogenous environment IS1 – Local luxury development UE1 – NA UE2 – NA UA1 – NA Retail Value Generation

IE1 – Experiential format IE2 – Additional value in store IA1 – Personalized retail IS1 – NA IE1 – Not at par with international stores

RO4 - To comparatively evaluate retail value proposition of existing Indian multi brand luxury concept stores in India & accordingly develop implications for local niche luxury retailers

IE1

Comparative niche luxury retail format overview

IE2 – Edit all over the place IA1 – Lack of strong concept IE1 – Exclusive products, experiential retail

IE2 Retail Value Proposition

IE2 – Strong personal connection IA1 – Value enhancement across retail functions

IA1 IE1 – Develop local market oriented concept Strategic considerations for multi brand niche retailers

IE2 – Reflect modern Indian woman’s wardrobe IA1 – Provide value unavailable elsewhere

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APPENDIX XIII Store Observation Design Template

Sample

Research Objective

Stores Observed

Research Topics – Academic Theory

Observation Elements

Retail Concept

Heuristics Store Design – Theme, Features Store Environment – Ambience Lifestyle - Third Space Retail Format

Multi Brand Luxury Concept Stores, UK

RO2 – Concept Store Retail Value Proposition

Dover Street Market, London (LS1)

Retail Value Proposition

Subconscious

Heuristics

Spatial Ambience – Store layout, product display

Subconscious Engagement Celestine Eleven, London (LS2)

Sensorial Design – Sensorial Cues

Emotional Engagement Peak Ends of Experience Emotional Product Merchandise – Theme, Categories & range, special collections Service – Staff, additional services Communications – In-store, Social Media, Marcomms

Peak Ends of Experience

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Retail Concept

Heuristics Store Design – Theme, Features Store Environment – Ambience

Multi Brand Luxury Concept Stores, India

RO2 – Concept Store Retail Value Proposition

Le Mill, Mumbai (IS1)

Retail Format

Lifestyle - Third Space

Retail Value Proposition

Subconscious

Heuristics

Spatial Ambience – Store layout, product display

Subconscious Engagement Bombay Electric, Mumbai (IS2)

Sensorial Design – Sensorial Cues

Emotional Engagement Peak Ends of Experience Emotional Product Merchandise – Theme, Categories & range, special collections Service – Staff, additional services Communications – In-store, Social Media, Marcomms

Peak Ends of Experience

Retail Format

Retail Concept LS1, LS2; IS1, IS2

Multi Brand Luxury Concept Stores, UK & India

LS1 RO4- Comparative Analysis of Indian Niche Luxury Formats

LS2 IS1 IS2

Retail Value Proposition

Value Gap

Heuristics Subconscious Engagement Emotional Engagement Peak Ends of Experience

Retail Value Gap

Rao, P. (2014) Multi Brand Concept Stores: A Retail Revolution In Reverse

Heuristics Store Design – LS1, LS2; IS1, IS2 Store Environment – LS1, LS2; IS1, IS2 Lifestyle – LS1, LS2; IS1, IS2

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Value Gap

Subconscious Spatial Ambience – LS1, LS2; IS1, IS2 Sensorial Design – LS1, LS2; IS1, IS2 Value Gap

Emotional Product Merchandise – LS1, LS2; IS1, IS2 Service – LS1, LS2; IS1, IS2 Communications – LS1, LS2; IS1, IS2 Value gap

Peak Ends of Experience LS1, LS2; IS1, IS2 Value Gap

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APPENDIX XIV Store Observation Grid Store: Dover Street Market Location: Dover Street, London, United Kingdom Retail Concept: Eclectic, art led approach to consumerism combining dynamic street market feel with quirky, design-led department store environment

Value Offering

Heuristics WOW Moments

Observation Area

Observation Elements

Store Design

1.

2.

Theme Salient Features

Store Environment

1.

Experiential Ambience

1.

Third Space

Lifestyle Offering

Spatial Ambience Subconscious Engagement Sensorial Design

Product Merchandise

1.

2.

Store Layout Product Display

1.

Sensorial Cues

1.

2.

Categories & Range Special Elements

Observations

1.

2.

Beautiful chaos, artful dishevelment Concrete floors, tills housed in corrugated-iron shacks, Portaloo dressing rooms; six monthly ‘Tachiagri’ store redesign for continuous surprise element

1.

Rarefied, democratic luxury experience imbibing bustle of street markets to offset exclusive product ranges

1.

Organic Rose Bakery, shop front windows as gallery spaces for street onlookers; retail space in art installation format

1.

Six levels according to different lifestyle offerings; each designer section adapted by designer to suit collection on offer Central focus on products with enhanced spotlights, individual displays, nonlinear alignment to highlight each product, uncluttered, rarefied display sections

2.

1.

Strong visual & tactical cues through life size installations, unconventional design fixtures, rarefied ambient lighting

1.

Exclusive collections from classic luxury brands alongside progressive, upcoming designers; menswear, womenswear, childrenswear, décor items, knick knacks, jewellery Special collaborations like ongoing Louis Vuitton pop-up; all 14 collections of Comme des Garcons; biggest Azzedine Alaia collection

2.

Emotional Engagement Service

Communication

Peak Ends of Experience

Experience Realm Store Form

1.

2.

1.

2.

3.

Staff Additional Services In-store Online & Social Marcomms

1.

2.

Engaging, highly trained staff Omni-channel integration

1.

2.

DSM Werk magazine Highly integrated social media Emphasis on WOM

3.

Where fashion becomes fascinating’- distinctively experiential shopping; social actualization through non-conformism; fashion edutainment with store communications, cultural exhibits etc.

Active Absorption, Passive Immersion - Lifestyle Emporium

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STORE OBSERVATION GRID Store: Celestine Eleven Location: Shoreditch, London, United Kingdom Retail Concept: An eastern philosophy inspired luxury retail store offering holistic wellness luxury options to the experimental luxury consumers

Value Offering

Observation Area

Observation Elements

Observations

Store Design

1.

2.

Theme Salient Features

1.

Experiential Ambience

1.

Calm space, Zen like environment, feeling of being in an unintimidating environment with luxury of lengthy browsing

1.

Third Space

1.

1.

2.

Store Layout Product Display

2.

Yoga Studio also functioning as art exhibition space; Organic health foods and juice corner Spread over two level, ground level for fashion products, rare books, health bra; underground yoga studio Arranged as per store color palette, uncluttered, lack of stacks of clothes, individual displays

1.

Sensorial Cues

1.

Lighting and background music to create illusion of eastern yoga studio, muted, lullabylic

1.

Alternative luxury labels with strong design ideology, established designers and upcoming names Womenswear, jewelry, organic beauty products, alternate fashion books and magazines In store collection designed in collaboration with actor Russell Brand

1.

Heuristics WOW Moments

Store Environment Lifestyle Offering

2.

1.

Subconscious Engagement

Spatial Ambience

Sensorial Design

Product Merchandise

1.

2.

Emotional Engagement

Service

Communication

Categories & Range Special Elements

2.

3.

1.

2.

Staff Additional Services

1.

1.

2.

3.

In-store Online & Social Marcomms

1.

2.

2.

3.

Minimal, sparse store design to create soothing environment of a yoga studio Exposed light bulbs, organic design product racks, soothing pastel colour palette, eastern art murals

Very warm, helpful staff; knowledgeable about product merchandise, upcoming events, social media platforms Yoga classes, Reiki sessions, beauty treatments, wellness workshop

Sales staff as store spokesperson Developing social media, high interaction on Instagram Emphasis on WOM and community PR activities like workshops, yoga classes

Peak Ends of Experience

Relaxing, enriching luxury experience; high social engagement; sense of belonging and validation from fellow experimental customers

Experience Realm Store Form

Active Absorption, Active Immersion - Alternate Luxury Destination

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STORE OBSERVATION GRID Store: Le Mill Location: Breach Candy, Mumbai, India Retail Concept: Providing artisanal Indian craftsmanship missing from home grown labels with western, minimalistic aesthetic for highly individualistic Indian woman, housed in a converted rice mill

Value Offering

Observation Area

Observation Elements

Observations

1.

Heuristics WOW Moments

Store Design

1.

2.

Theme Salient Features

2.

Store Environment

1.

Experiential Ambience

1.

Inviting, non-sterile luxury environment compared to luxury stores in the country

1.

Third Space

1.

Flower Shop, Organic Café

1.

1.

2.

Store Layout Product Display

2.

Spread over split level 15000 sq. ft. space, juxtaposition of vastness with arranged alcoves to create stylistic intrigue Conventional display format of clothes rails and mannequin store fronts

1.

Sensorial Cues

1.

No perceivable sensorial cues, standard background music and store lighting

1.

1.

Categories & Range Special Elements

Artisanal Indian brands, designers alongside classic & unconventional international labels Womenswear, accessories, jewelry, furniture, décor items, In store furniture collection, special collaborations with local craftsmen

Lifestyle Offering

Subconscious Engagement

Spatial Ambience

Sensorial Design

Product Merchandise

2.

Emotional Engagement

Deconstructed luxury to offset elegance of minimalistic designs Neutral color palette, existing elements from rice mill compound, monochromatic accents to offset vibrant collection sections

Service

Communication

1.

2.

1.

2.

3.

2.

3.

Staff Additional Services

1.

In-store Online & Social Marcomms

1.

2.

2.

3.

Warm and inviting, not very knowledgeable about international brands and craftsmen collaborations NA

NA Developing social media, scope for further development Emphasis on WOM and exclusive PR events with VIP clients

Peak Ends of Experience

Exclusive products reflecting self-identity, cool factor of shopping from it store of town

Experience Realm Store Form

Passive Immersion with scope for Active Immersion through development of additional services and lifestyle space in store , community building PR events – Luxury Atelier

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STORE OBSERVATION GRID Store: Bombay Electric Location: Colaba, Mumbai, India Retail Concept: Eclectic Indian luxury for consumers looking for home grown luxury options in a contemporary format

Value Offering

Observation Area

Observation Elements

Observations

Store Design

1.

2.

Theme Salient Features

2.

3.

Non perceivable central theme Vibrant interior murals, lush greenery, ample ambient lighting Stone paved, picturesque courtyard with wicker furniture, tree lights

1.

Experiential Ambience

1.

Soothing, organic interiors in an unintimidating, inviting setting

1.

Third Space

1.

Courtyard as venue for lifestyle events, music soirees etc., however no regular third space

1.

2.

Store Layout Product Display

1.

2.

Spread over single level, divided in utilitarian function Conventional display format of clothes rails, mannequin and store front VM playing on the heritage Victorian architecture of the building and surroundings

1.

1.

Sensorial Cues

Unreleased sound tracks by renowned composer Talvin Singh; Rare Prints by acclaimed photographer Bharat Sikka; Incense Sticks around the store as visual, aural and olfactory sensorial cues

1.

1.

2.

Categories & Range Special Elements

Progressive eclectic Indian brands, womenswear, accessories, vintage bric-a-brac, rare books Capsule collections by upcoming designers; patronage to lesser known brands and designers

1.

2.

Staff Additional Services

2.

1.

2.

3.

In-store Online & Social Marcomms

1.

2.

3.

1.

Heuristics WOW Moments

Store Environment

Lifestyle Offering

Spatial Ambience Subconscious Engagement Sensorial Design

Product Merchandise

Emotional Engagement

2.

1.

Service

Communication

Courteous and helpful but relatively less informed about labels range and merchandise Not evident to the visitor, staff unaware of any specific value services

Not evident to the visitor Developing social media, scope for further development Emphasis on WOM and exclusive PR events with VIP clients

Peak Ends of Experience

Sense of patronising Indian luxury and upcoming designers, being a part of a fashion intellectual community

Experience Realm Store Form

Passive Immersion with scope for Active Immersion through development of additional services and lifestyle space in store – Lifestyle Emporium

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APPENDIX XV Comparative Store Analysis Grid Value Offering & Elements

LS1

LS2

IS1

IS2

Retail Concept

Eclectic lifestyle consortium

Wellness and Luxury

Artisanal Indian with contemporary western

Eclectic Indian Luxury

Heuristics Store Design

High consideration

Medium consideration

High consideration

Medium consideration

Store Environment

Seamless

Relatively seamless

Relatively seamless

Relatively Seamless

Lifestyle Offering

Present and value oriented

Present and value oriented

Present and value oriented, scope for further development

Underexplored, scope for further development

Spatial Ambience

Highly developed

Scope for stronger ambience

Scope for stronger ambience

Scope for stronger ambience

Sensorial Design

Strong visual & aural cues

Strong aural & olfactory cues

None perceivable

Strong visual, aural & olfactory cues

Alternate luxury, curated and exclusive

Holistic, sustainable luxury, curated, lesser known brands

Rare designer brands, lesser known western brands for added exclusivity

Eclectic home grown luxury brands, lesser know Indian brands for alternate luxury seekers

Service

Highly engaged and knowledgeable

Highly engaged and knowledgeable

Less engaged and knowledgeable

Highly engaged but less knowledgeable

Communications

Strong interpersonal

Strong interpersonal

VIP client oriented

Interpersonal with scope for development

Active Absorption

Active Absorption

Passive Immersion

Active Immersion

Passive Immersion progressing towards active immersion

Passive Immersion progressing towards active immersion

Subconscious

Emotional

Product

Peak Ends of Experience

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APPENDIX XVI Survey Design Template Sample

Research Objective

Research Topics – Academic Theory

Survey Questions

Q2: What does luxury, specifically related to fashion, mean to you?

Luxury Consumer Profiling Luxury association RO3 – Indian Macro Luxury Industry Analysis

Consumption motivation

Q3. What is your motivation for buying luxury products?

Q4: Where do you generally shop for luxury products and why?

Consumption patterns Retail format preference Store Experience Importance Preferred Communication Channels

Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

Indian early adopter luxury fashion consumers

Q1: Based on the video on concept store with withheld identities seen before, which concept stores do you think are in India?

Luxury Consumer Sophistication Retail Awareness RO4- Comparative Analysis of Indian Niche Luxury Formats

Niche Retail Format Relevance Consumer Awareness Perceived local retail sophistication

Rao, P. (2014) Multi Brand Concept Stores: A Retail Revolution In Reverse

Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the retail elements within Indian luxury concept stores, compared to their international counterparts

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APPENDIX XVII Survey Responses Survey Template - Page 1

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Survey Template - Page 2 Age & Gender

Q1: Based on the video seen before, which concept stores do you think are in India?       

I II III IV V None of them All of them

Q2: What does luxury, specifically related to fashion, mean to you?

Q3. What is your motivation for buying luxury products?        

Obtaining the ‘It’ product of the season Being a trend setter with fresh off the runway pieces Impressing family/friends/social acquaintances Splurging for special occasions Quality purchases to last for a lifetime Affinity towards specific brands and their design aesthetic Complementing a specific lifestyle Other (please specify)

Q4: Where do you generally shop for luxury products and why?

       

Single brand luxury stores in India Single brand luxury stores abroad Multi brand stores in India Multi brand stores abroad Luxury department stores abroad Airport Duty Free Shops Online Websites (Indian) Online Websites (Non-Indian)

Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?     

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Media articles in online and physical fashion magazines and online blogs In store magazines/brand controlled media channels Paid advertisements Through friends/colleagues/family members

Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

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Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

      

Exclusive products Affinity to the store ideology (For eg. ethical fashion products/ local design labels) Distinctive shopping experience Sense of belonging in a like-minded luxury consumer’s community Exclusive events, sample sales etc.

Additional Lifestyle Services (Café/Bar, Library, Spa etc.)

Other (please specify)

Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts

      

Store Design Product Display Store Staff Knowledge Staff Service Technology Additional Services Social Media Interactivity

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Survey Response - Respondent 1 Age & Gender: 31; Female Started: Monday, November 10, 2014 3:05:55 PM Last Modified: Wednesday, November 12, 2014 2:42:44 PM Q1: Based on the video seen before, which concept stores do you think are in India?

I II III Q2: What does luxury, specifically related to fashion, mean to you?

Exclusive Q3. What is your motivation for buying luxury products?

Splurging for special occasions Quality purchases to last for a lifetime Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores in India Airport Duty Free Shops Online Websites (Non-Indian) - Don’t travel much outside so try to get exclusive items online and rest from experiential single brand stores Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

8 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

   

Social Media Channels (Facebook, Twitter, Instagram, YouTube, Pinterest) Media articles in online and physical fashion magazines and online blogs Paid advertisements Through friends/colleagues/family members Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Louis Vuitton Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

Exclusive products Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

6

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Product selection

1

Store Staff Knowledge

2

Product Display

4

Staff Service

8

Technology

3

Additional Services

7

Social Media Interactivity

5

Survey Response - Respondent 2 Age & Gender: 24; Female Started: Wednesday, November 12, 2014 1:57:25 PM Last Modified: Wednesday, November 12, 2014 2:06:52 PM Q1: Based on the video seen before, which concept stores do you think are in India?

III Q2: What does luxury, specifically related to fashion, mean to you?

Immaculately tailored clothes Q3. What is your motivation for buying luxury products?



Affinity towards specific brands and their design aesthetic Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores abroad - Just tend to shop more when abroad on holiday Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

6 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?



Media articles in online and physical fashion magazines and online blogs Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Le Mill. Because it brings together an aesthetic that is not the typical Indian idea of luxury Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?



Affinity to the store ideology (For eg. ethical fashion products/ local design labels) Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts

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Store Design

7

Product selection

4

Store Staff Knowledge

6

Product Display

1

Staff Service

8

Technology

3

Additional Services

5

Social Media Interactivity

2

Survey Response - Respondent 3 Age & Gender: 32; Male Started: Tuesday, November 11, 2014 11:20:30 PM Last Modified: Tuesday, November 11, 2014 11:26:12 PM Q1: Based on the video seen before, which concept stores do you think are in India?

III Q2: What does luxury, specifically related to fashion, mean to you?

Convenience Q3. What is your motivation for buying luxury products?



Quality purchases to last for a lifetime Q4: Where do you generally shop for luxury products and why?

 

Multi brand stores abroad - For the quality and ease Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

4 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

  

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) In store magazines/brand controlled media channels Through friends/colleagues/family members Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Shoppers Stop – NA Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

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 

Distinctive shopping experience Exclusive events, sample sales etc.

Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

3

Product selection

1

Store Staff Knowledge

5

Product Display

8

Staff Service

7

Technology

6

Additional Services

4

Social Media Interactivity

2

Survey Response - Respondent 4 Age & Gender: 27; Female Started: Tuesday, November 11, 2014 6:42:16 PM Last Modified: Tuesday, November 11, 2014 6:50:03 PM Q1: Based on the video seen before, which concept stores do you think are in India?

III V Q2: What does luxury, specifically related to fashion, mean to you?

Trends, future forecast, bench marking, experience, details, quality, brand!

Q3. What is your motivation for buying luxury products?

  

Being a trend setter with fresh off the runway pieces Quality purchases to last a lifetime Affinity towards specific brands and their design aesthetic Complementing a specific lifestyle Q4: Where do you generally shop for luxury products and why?

Single Brands luxury stores in India Airport Duty Free Shops - Single brand luxury stores provide a more holistic experience the brand wants to deliver. there is no mixing of different brands, and you just see 1 message all across Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

5

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Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?



Media articles in online and physical fashion magazines and online blogs Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Nirav Modi, Delhi boutique.... just opened up. Looks brilliant.

Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

  

Exclusive products Distinctive shopping experience Sense of belonging in a likeminded community Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

6

Product selection

7

Store Staff Knowledge

8

Product Display

4

Staff Service

5

Technology

3

Additional Services

2

Social Media Interactivity

1

Survey Response - Respondent 5 Age & Gender: 32; Female Started: Monday, November 10, 2014 7:53:51 AM Last Modified: Monday, November 10, 2014 8:21:02 AM Q1: Based on the video seen before, which concept stores do you think are in India?

  

I II III Q2: What does luxury, specifically related to fashion, mean to you?

Something that is exclusive and has a distinct quality Q3. What is your motivation for buying luxury products?



Quality purchases to last for a lifetime Q4: Where do you generally shop for luxury products and why?

 

Single brand luxury stores in India Multi brand stores abroad

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

- Find sizing a huge issue in India!

Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

6 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

 

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Through friends/colleagues/family members Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Shiven & Narresh store.....great customer service and amazing customisation Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

  

Exclusive products Affinity to the store ideology (For eg. ethical fashion products/ local design labels) Additional Lifestyle Services (Café/Bar, Library, Spa etc.)

Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

1

Product selection

2

Store Staff Knowledge

4

Product Display

5

Staff Service

3

Technology

7

Additional Services

8

Social Media Interactivity

6

Survey Response - Respondent 6 Age & Gender: 28; Female Started: Monday, November 10, 2014 7:08:02 AM Last Modified: Monday, November 10, 2014 7:16:42 AM Q1: Based on the video seen before, which concept stores do you think are in India?



None of them Q2: What does luxury, specifically related to fashion, mean to you?

Having the luxury to be comfortable in what you wear!

Q3. What is your motivation for buying luxury products?

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

Complementing a specific lifestyle Q4: Where do you generally shop for luxury products and why?

 

Multi brand stores abroad - Range, pricing Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

10 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?



Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

None Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?



Distinctive shopping experience Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

5

Product selection

8

Store Staff Knowledge

1

Product Display

7

Staff Service

4

Technology

2

Additional Services

3

Social Media Interactivity

6

Survey Response - Respondent 7 Age & Gender: 23; Female Started: Monday, November 10, 2014 6:23:28 AM Last Modified: Monday, November 10, 2014 6:28:16 AM Q1: Based on the video seen before, which concept stores do you think are in India?

IV Q2: What does luxury, specifically related to fashion, mean to you?

High quality and exclusive clothing.

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Q3. What is your motivation for buying luxury products?

 

   

Quality purchases to last for a lifetime Affinity towards specific brands and their design aesthetic Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores abroad Multi brand stores abroad Luxury department stores abroad - Cheaper pricing for the same goods without added taxes.

Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

7 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

  

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Media articles in online and physical fashion magazines and online blogs Through friends/colleagues/family members Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

The Collective – Only store with wide range of international luxury brands Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

 

Exclusive products Distinctive shopping experience Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

2

Product selection

6

Store Staff Knowledge

5

Product Display

4

Staff Service

7

Technology

3

Additional Services

1

Social Media Interactivity

8

Survey Response - Respondent 8 Age & Gender: 25; Female Started: Sunday, November 09, 2014 11:14:22 PM Last Modified: Sunday, November 09, 2014 11:30:33 PM

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Q1: Based on the video seen before, which concept stores do you think are in India?

III Q2: What does luxury, specifically related to fashion, mean to you?

It is difficult to define luxury. However, luxury signifies a high quality product that when you buy it, you feel special, or of a higher class. A product could be coined as a luxury product due to its price point, aesthetics, symbolic meaning, etc.

Q3. What is your motivation for buying luxury products?

 

   

Splurging for special occasions Affinity towards specific brands and their design aesthetic Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores abroad Luxury department stores abroad Online Websites (Non-Indian) - Greater variety, better experience Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

7 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

 

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Media articles in online and physical fashion magazines and online blogs Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

A store that immediately comes to mind is Sabyasachi's huge, elaborate concept store that opened recently in Mumbai. I am sure the size of the store, with the exquisite decor and grand products will make this a surreal shopping experience for customers.

Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

  

Exclusive products Distinctive shopping experience Additional Lifestyle Services (Café/Bar, Library, Spa etc.)

Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

3

Product selection

2

Store Staff Knowledge

1

Product Display

4

Staff Service

5

Technology

7

Additional Services

6

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Social Media Interactivity

8

Survey Response - Respondent 9 Age & Gender: 35; Female Started: Tuesday, November 04, 2014 8:02:49 PM Last Modified: Sunday, November 09, 2014 9:26:48 PM Q1: Based on the video seen before, which concept stores do you think are in India?



None of them Q2: What does luxury, specifically related to fashion, mean to you?

Better quality of the product. Something that defines the brand and its ethos. Timeless beauty and nothing that will easily go out of style.

Q3. What is your motivation for buying luxury products?

  

Splurging for special occasions Quality purchases to last for a lifetime Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores abroad - The entire experience is something truly memorable, something that is lacking in India and also in multi brand stores Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

4 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?



Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

The Sabyasachi store even if it’s a designer brand I think gets me in a very traditional, surreal feel whenever I enter the store. In the very entrance you see beautiful bunch of chandeliers hanging from one corner of the ceiling and then you come across a wall full of vintage plates and paintings. The fragrance of incense sticks coming from one corner of the room where the huge Kali Maa painting hangs and some old classical Indian music playing in the background is what I love about the store. The merchandise also pretty much matches to the entire store ambience. Also the staff there is well experienced and knows what exactly the customer is looking for. Overall I would rate the store experience 10 on 10. It is by far my most favourite stores in Bombay when it comes to value for luxury goods.

Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?



Exclusive products Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

5

Product selection

6

Store Staff Knowledge

3

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Product Display

8

Staff Service

7

Technology

1

Additional Services

4

Social Media Interactivity

2

Survey Response - Respondent 10 Age & Gender: 27; Male Started: Sunday, November 09, 2014 7:55:37 PM Last Modified: Sunday, November 09, 2014 8:00:29 PM Q1: Based on the video seen before, which concept stores do you think are in India?

IV Q2: What does luxury, specifically related to fashion, mean to you?

Luxury and fashion are two sides of the same coin. Luxury to me is a faithful association with a brand.

Q3. What is your motivation for buying luxury products?

 

   

Splurging for special occasions Quality purchases to last for a lifetime Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores abroad Multi brand stores abroad Airport Duty Free Shops - Attractive pricing, more variety and exclusivity Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

8 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

 

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) In store magazines/brand controlled media channels Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Louis Vuitton and Burberry. Their staff is active and the display is very elaborate Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?



Exclusive products

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Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

2

Product selection

3

Store Staff Knowledge

1

Product Display

6

Staff Service

4

Technology

5

Additional Services

8

Social Media Interactivity

7

Survey Response - Respondent 11 Age & Gender: 23; Female Started: Sunday, November 09, 2014 3:52:45 PM Last Modified: Sunday, November 09, 2014 4:04:34 PM Q1: Based on the video seen before, which concept stores do you think are in India?

IV Q2: What does luxury, specifically related to fashion, mean to you?

It means to have the resources to buy top brands like Gucci, Armani etc.

Q3. What is your motivation for buying luxury products?

 

  

Impressing family/friends/social acquaintances Quality purchases to last for a lifetime Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores abroad Multi brand stores in India - For getting items that not everyone has. Indian multi brand stores for mainly Indian designers which are not available abroad Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

8 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

  

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Media articles in online and physical fashion magazines and online blogs Through friends/colleagues/family members Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Debenhams in Mumbai provides a distinctive shopping experience since it has a huge variety of great brands with latest trends from not only India but also UK.

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Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

  

Exclusive products Distinctive shopping experience Sense of belonging in a like-minded luxury consumer’s community Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

8

Product selection

5

Store Staff Knowledge

7

Product Display

2

Staff Service

3

Technology

6

Additional Services

1

Social Media Interactivity

4

Survey Response - Respondent 12 Age & Gender: 27; Male Started: Saturday, November 08, 2014 3:48:43 PM Last Modified: Saturday, November 08, 2014 3:59:21 PM Q1: Based on the video seen before, which concept stores do you think are in India?

III Q2: What does luxury, specifically related to fashion, mean to you?

Luxury to me means a mode of making your consumers feel at home. Its about fulfilling ones aspirations and wants.

Q3. What is your motivation for buying luxury products?

 

  

Quality purchases to last for a lifetime Affinity towards specific brands and their design aesthetic Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores abroad Luxury department stores abroad Airport Duty Free Shops - Indian stores do not give you a complete experience. Hence, I prefer shopping when travelling Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

9

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Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?



Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Hermes. Straight from their packaging to in store aesthetics, it all binds the brand ethos together and projects a very distinctive identity to its consumers.

Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

 

Distinctive shopping experience Sense of belonging in a like-minded luxury consumer’s community Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

3

Product selection

4

Store Staff Knowledge

2

Product Display

5

Staff Service

1

Technology

7

Additional Services

8

Social Media Interactivity

6

Survey Response - Respondent 13 Age & Gender: 25; Female Started: Saturday, November 08, 2014 3:15:52 PM Last Modified: Saturday, November 08, 2014 3:29:55 PM Q1: Based on the video seen before, which concept stores do you think are in India?

IV Q2: What does luxury, specifically related to fashion, mean to you?

Exclusive shopping experience Q3. What is your motivation for buying luxury products?

 

 

Affinity towards specific brands and their design aesthetic Complementing a specific lifestyle Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores in India Single brand luxury stores abroad

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

- For the wide variety and strong store experience missing from multi brand outlets Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

6 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

 

Media articles in online and physical fashion magazines and online blogs In store magazines/brand controlled media channels Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Burberry – It is an incredible experience given their technology, super attentive staff and social media activities Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?



Distinctive shopping experience Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

2

Product selection

1

Store Staff Knowledge

4

Product Display

3

Staff Service

6

Technology

5

Additional Services

7

Social Media Interactivity

8

Survey Response - Respondent 14 Age & Gender: 34; Female Started: Friday, November 07, 2014 11:54:14 AM Last Modified: Friday, November 07, 2014 12:03:28 PM Q1: Based on the video seen before, which concept stores do you think are in India?



None of them Q2: What does luxury, specifically related to fashion, mean to you?

Heritage Design Q3. What is your motivation for buying luxury products?

 

Affinity towards specific brands and their design aesthetic Complementing a specific lifestyle

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Q4: Where do you generally shop for luxury products and why?

    

Single brand luxury stores abroad Multi brand stores in India Multi brand stores abroad Online Websites (Non-Indian) - Based on what I’m looking for; for exclusive products prefer overseas, Indian stores for heritage designs Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

10 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

 

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Media articles in online and physical fashion magazines and online blogs Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Le Mill, Mumbai It is still comparatively lacking in terms of a holistic experience compared to Western and Japanese concept stores.

However, I think Le Mill is trying to achieve a consistency, unlike a store like Bungalow 8 or Bombay Electric which I feel offers nothing extra beyond aesthetics.

Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?



Distinctive shopping experience Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

5

Product selection

8

Store Staff Knowledge

7

Product Display

4

Staff Service

6

Technology

3

Additional Services

2

Social Media Interactivity

1

Survey Response - Respondent 15 Age & Gender: 24; Female Started: Thursday, November 06, 2014 11:07:16 AM Last Modified: Thursday, November 06, 2014 11:17:57 AM Q1: Based on the video seen before, which concept stores do you think are in India?

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

All of them Q2: What does luxury, specifically related to fashion, mean to you?

The concept of luxury seems to be fading but for me it means customization or personalised high quality products.

Q3. What is your motivation for buying luxury products?

 

    

Quality purchases to last for a lifetime Affinity towards specific brands and their design aesthetic Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores in India Single brand luxury stores abroad Multi brand stores abroad Luxury department stores abroad - No specific reason, depends where I get best variety, prices etc.

Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

10 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?



In store magazines/brand controlled media channels Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Designer stores like Shantanu & Nikhil etc. making shopping for luxury clothing an experience rather than just another shopping trip.

From the customer service to personalization , the experience is definitely a luxurious one Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

   

Exclusive products Distinctive shopping experience Exclusive events, sample sales etc.

Additional Lifestyle Services (Café/Bar, Library, Spa etc.)

Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

6

Product selection

7

Store Staff Knowledge

3

Product Display

1

Staff Service

2

Technology

5

Additional Services

4

Social Media Interactivity

8

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Survey Response - Respondent 16 Age & Gender: 21; Female Started: Thursday, November 06, 2014 10:35:49 AM Last Modified: Thursday, November 06, 2014 10:43:23 AM Q1: Based on the video seen before, which concept stores do you think are in India?



None of them Q2: What does luxury, specifically related to fashion, mean to you?

An item that has a unique and timeless fashion and excellent quality.

Q3. What is your motivation for buying luxury products?

   

Being a trend setter with fresh off the runway pieces Quality purchases to last for a lifetime Affinity towards specific brands and their design aesthetic Complementing a specific lifestyle Q4: Where do you generally shop for luxury products and why?

   

Single brand luxury stores abroad Multi brand stores in India Luxury department stores abroad - For exclusive products and best Indian designs Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

10 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

 

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Media articles in online and physical fashion magazines and online blogs Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Le Mill – It is the only that has a deep range of international and national labels which are not available everywhere Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

 

Sense of belonging in a like-minded luxury consumer’s community Additional Lifestyle Services (Café/Bar, Library, Spa etc.)

Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

2

Product selection

8

Store Staff Knowledge

7

Product Display

6

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Staff Service

3

Technology

5

Additional Services

1

Social Media Interactivity

4

Survey Response - Respondent 17 Age & Gender: 26; Female Started: Thursday, November 06, 2014 9:38:26 AM Last Modified: Thursday, November 06, 2014 9:52:03 AM Q1: Based on the video seen before, which concept stores do you think are in India?



None of them Q2: What does luxury, specifically related to fashion, mean to you?

Comfort which is custom made.

Q3. What is your motivation for buying luxury products?



Splurging for special occasions Q4: Where do you generally shop for luxury products and why?

  

Single brand luxury stores in India Single brand luxury stores abroad - If I like a brand I would just go to that particular store than go to a multi brand store.

Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

8 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

  

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Media articles in online and physical fashion magazines and online blogs Paid advertisements Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

None of them in India are distinct Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

    

Exclusive products Distinctive shopping experience Sense of belonging in a like-minded luxury consumer’s community Exclusive events, sample sales etc.

Additional Lifestyle Services (Café/Bar, Library, Spa etc.)

Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts

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Store Design

4

Product selection

2

Store Staff Knowledge

5

Product Display

1

Staff Service

6

Technology

3

Additional Services

7

Social Media Interactivity

8

Survey Response - Respondent 18 Age & Gender: 26; Female Started: Thursday, November 06, 2014 3:23:18 AM Last Modified: Thursday, November 06, 2014 3:34:33 AM Q1: Based on the video seen before, which concept stores do you think are in India?

I II Q2: What does luxury, specifically related to fashion, mean to you?

Good material and fit, Unique style Q3. What is your motivation for buying luxury products?

  

  

Obtaining the ‘It’ product of the season Quality purchases to last for a lifetime Complementing a specific lifestyle Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores abroad Airport Duty Free Shops - For getting exclusive products and for competitive prices Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

8 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

 

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Media articles in online and physical fashion magazines and online blogs Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Rohit Bal Prive: The service is great and the interiors are beautiful

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Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

  

Distinctive shopping experience Sense of belonging in a like-minded luxury consumer’s community Additional Lifestyle Services (Café/Bar, Library, Spa etc.)

Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

8

Product selection

6

Store Staff Knowledge

4

Product Display

2

Staff Service

7

Technology

1

Additional Services

3

Social Media Interactivity

5

Survey Response - Respondent 19 Age & Gender: 25; Female Started: Wednesday, November 05, 2014 11:34:49 PM Last Modified: Wednesday, November 05, 2014 11:43:21 PM Q1: Based on the video seen before, which concept stores do you think are in India?

I Q2: What does luxury, specifically related to fashion, mean to you?

Luxury happens when fashion is overthought and overdone. At times its quality and at times it's purely personal.

Q3. What is your motivation for buying luxury products?



Affinity towards specific brands and their design aesthetic Q4: Where do you generally shop for luxury products and why?

 

Multi brand stores in India - It's easier to make a choice there.

Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

6 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?



In store magazines/brand controlled media channels

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Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Dior. It's classy, well defined, art and most importantly has a rich history for being a true successful luxury brand.

Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?



Exclusive products Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

4

Product selection

8

Store Staff Knowledge

2

Product Display

1

Staff Service

3

Technology

7

Additional Services

5

Social Media Interactivity

6

Survey Response - Respondent 20 Age & Gender: 26; Female Started: Wednesday, November 05, 2014 11:09:54 AM Last Modified: Wednesday, November 05, 2014 11:25:04 AM Q1: Based on the video seen before, which concept stores do you think are in India?



None of them Q2: What does luxury, specifically related to fashion, mean to you?

High end brands offering comfort and style Q3. What is your motivation for buying luxury products?

  

  

Splurging for special occasions Quality purchases to last for a lifetime Affinity towards specific brands and their design aesthetic Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores in India Single brand luxury stores abroad - For getting the best in terms of collections, prices and experience Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

7

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Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?



Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

None!

Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

 

Exclusive products Sense of belonging in a like-minded luxury consumer’s community Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

1

Product selection

5

Store Staff Knowledge

4

Product Display

6

Staff Service

7

Technology

2

Additional Services

3

Social Media Interactivity

8

Survey Response - Respondent 21 Age & Gender: 22; Female Started: Wednesday, November 05, 2014 7:04:20 AM Last Modified: Wednesday, November 05, 2014 7:14:02 AM Q1: Based on the video seen before, which concept stores do you think are in India?

I Q2: What does luxury, specifically related to fashion, mean to you?

Increases my hedonistic value Q3. What is your motivation for buying luxury products?

   

Being a trend setter with fresh off the runway pieces Quality purchases to last for a lifetime Complementing a specific lifestyle Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores in India - For their design strength

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Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

6 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?



Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Ensemble – Best brands and super attentive staff Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

 

Affinity to the store ideology (For eg. ethical fashion products/ local design labels) Sense of belonging in a like-minded luxury consumer’s community Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

1

Product selection

8

Store Staff Knowledge

2

Product Display

5

Staff Service

3

Technology

6

Additional Services

4

Social Media Interactivity

7

Survey Response - Respondent 22 Age & Gender: 24; Female Started: Tuesday, November 04, 2014 8:05:21 PM Last Modified: Tuesday, November 04, 2014 8:23:23 PM Q1: Based on the video seen before, which concept stores do you think are in India?

III IV Q2: What does luxury, specifically related to fashion, mean to you?

Comfort, elegance and poise Q3. What is your motivation for buying luxury products?



Splurging for special occasions

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

Quality purchases to last for a lifetime Q4: Where do you generally shop for luxury products and why?

   

Single brand luxury stores in India Single brand luxury stores abroad Multi brand stores abroad - For experience available at international stores, exclusivity and heritage brands in India Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

7 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?



Through friends/colleagues/family members Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Stuart Weitzman - For its exquisite display of products Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?



Exclusive products Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

7

Product selection

3

Store Staff Knowledge

2

Product Display

4

Staff Service

5

Technology

6

Additional Services

1

Social Media Interactivity

8

Survey Response - Respondent 23 Age & Gender: 24; Female Started: Tuesday, November 04, 2014 6:32:31 PM Last Modified: Tuesday, November 04, 2014 8:13:31 PM Q1: Based on the video seen before, which concept stores do you think are in India?

I III

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Q2: What does luxury, specifically related to fashion, mean to you?

Quality and exclusivity Q3. What is your motivation for buying luxury products?

  

  



Splurging for special occasions Quality purchases to last for a lifetime Affinity towards specific brands and their design aesthetic Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores in India Luxury department stores abroad - For the amazing experience and iconic value of places like Selfridges, Harrods and for convenience of shopping in India Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

8 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

  

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Media articles in online and physical fashion magazines and online blogs In store magazines/brand controlled media channels Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Thanks in Mumbai is really cool, haven't seen any store like that in India at least. It is interior is completely different.

Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

  

Exclusive products Distinctive shopping experience Exclusive events, sample sales etc.

Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

4

Product selection

5

Store Staff Knowledge

3

Product Display

7

Staff Service

8

Technology

1

Additional Services

2

Social Media Interactivity

6

Survey Response - Respondent 24

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Age & Gender: 22; Female Started: Tuesday, November 04, 2014 8:07:46 PM Last Modified: Tuesday, November 04, 2014 8:12:42 PM Q1: Based on the video seen before, which concept stores do you think are in India?



None of them Q2: What does luxury, specifically related to fashion, mean to you?

Originality and well-crafted High quality materials Q3. What is your motivation for buying luxury products?



Quality purchases to last for a lifetime Q4: Where do you generally shop for luxury products and why?

 

Single brand luxury stores abroad - Because the experience of shopping in such stores is unmatched in India. Also prefer wider variety in these stores which is not there in multi brand stores Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

7 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

 

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Through friends/colleagues/family members Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

I have not been shopping in Luxury stores in India, but I have a nice memory of Hauz Khas village in Delhi. A lot of little shops from creatures, with an atmosphere of a very lively and creative 'village' for the youth of Indian and western design.

Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

 

Distinctive shopping experience Additional Lifestyle Services (Café/Bar, Library, Spa etc.)

Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

1

Product selection

7

Store Staff Knowledge

2

Product Display

3

Staff Service

6

Technology

4

Additional Services

5

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Social Media Interactivity

8

Survey Response - Respondent 25 Age & Gender: 34; Female Started: Tuesday, November 04, 2014 5:59:43 PM Last Modified: Tuesday, November 04, 2014 7:09:04 PM Q1: Based on the video seen before, which concept stores do you think are in India?



None of them Q2: What does luxury, specifically related to fashion, mean to you?

A lot of pampering and being taken care of in every single detail.

Q3. What is your motivation for buying luxury products?



Complementing a specific lifestyle Q4: Where do you generally shop for luxury products and why?

     

Single brand luxury stores abroad Multi brand stores in India Multi brand stores abroad Luxury department stores abroad Airport Duty Free Shops Online Websites (Non-Indian) - Depends on what I’m looking for, shop almost everywhere based on where I am and what I want and the prices Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

10 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

  

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Media articles in online and physical fashion magazines and online blogs Through friends/colleagues/family members Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Moon River – The aesthetic ideology of the store, that of understated lifestyle luxury appeals to me and so does their product selection Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

 

Exclusive products Sense of belonging in a like-minded luxury consumer’s community Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

5

Product selection

1

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Store Staff Knowledge

6

Product Display

7

Staff Service

3

Technology

4

Additional Services

8

Social Media Interactivity

2

Survey Response - Respondent 26 Age & Gender: 24, Male Started: Tuesday, November 04, 2014 6:42:35 PM Last Modified: Tuesday, November 04, 2014 6:59:18 PM Q1: Based on the video seen before, which concept stores do you think are in India?

 

I V Q2: What does luxury, specifically related to fashion, mean to you?

Sumptuous living.

Q3. What is your motivation for buying luxury products?

  

  

Impressing family/friends/social acquaintances Splurging for special occasions Complementing a specific lifestyle Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores in India Airport Duty Free Shops - For personal service and familiarity with store staff; prices Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience whe n purchasing luxury products, either in the same visit or in the future.

8 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?



Media articles in online and physical fashion magazines and online blogs Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Gucci and Emporio Armani luxury store in Palladium Mall Mumbai. The store environment is rich and thus it provides luxury experience in contrast to other retail stores.

Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

 

Affinity to the store ideology (For eg. ethical fashion products/ local design labels) Distinctive shopping experience

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Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

1

Product selection

6

Store Staff Knowledge

2

Product Display

5

Staff Service

4

Technology

3

Additional Services

8

Social Media Interactivity

7

Survey Response - Respondent 27 Age & Gender: 24; Female Started: Tuesday, November 04, 2014 6:44:03 PM Last Modified: Tuesday, November 04, 2014 6:56:28 PM Q1: Based on the video seen before, which concept stores do you think are in India?

 

I II Q2: What does luxury, specifically related to fashion, mean to you?

Luxury fashion products to me is an extension of my own style Q3. What is your motivation for buying luxury products?



Affinity towards specific brands and their design aesthetic Q4: Where do you generally shop for luxury products and why?

  

Single brand luxury stores abroad Online Websites (Non-Indian) - Better deals in terms of price Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

7 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?



Media articles in online and physical fashion magazines and online blogs Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Le Mill , I like the brand ideology

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Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?



Distinctive shopping experience Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

4

Product selection

8

Store Staff Knowledge

2

Product Display

1

Staff Service

3

Technology

5

Additional Services

7

Social Media Interactivity

6

Survey Response - Respondent 28 Age & Gender: 21; Female Started: Tuesday, November 04, 2014 5:58:47 PM Last Modified: Tuesday, November 04, 2014 6:11:04 PM Q1: Based on the video seen before, which concept stores do you think are in India?



All of them Q2: What does luxury, specifically related to fashion, mean to you?

Literally a luxury, something that enhances my lifestyle when I can afford it, but not a necessity.

Q3. What is your motivation for buying luxury products?



Affinity towards specific brands and their design aesthetic Q4: Where do you generally shop for luxury products and why?



Single brand luxury stores abroad Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

7 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?



Media articles in online and physical fashion magazines and online blogs Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Alter Ego- in Jaipur. They are fun , crazy and I love the stuff.

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Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?



Exclusive products Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

2

Product selection

8

Store Staff Knowledge

4

Product Display

1

Staff Service

6

Technology

3

Additional Services

7

Social Media Interactivity

5

Survey Response - Respondent 29 Age & Gender: 20; Male Started: Tuesday, November 04, 2014 12:43:02 PM Last Modified: Tuesday, November 04, 2014 12:58:26 PM Q1: Based on the video seen before, which concept stores do you think are in India?



All of them Q2: What does luxury, specifically related to fashion, mean to you?

High quality and craftsmanship Q3. What is your motivation for buying luxury products?

 

   

Being a trend setter with fresh off the runway pieces Quality purchases to last for a lifetime Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores abroad Luxury department stores abroad Online Websites (Non-Indian) - For getting exclusive items no one else has Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

9 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?



Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest)

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  

Media articles in online and physical fashion magazines and online blogs In store magazines/brand controlled media channels Through friends/colleagues/family members Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Le Mill – They are the only ones offering a similar experience as the international concept store Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

  

Exclusive products Affinity to the store ideology (For eg. ethical fashion products/ local design labels) Exclusive events, sample sales etc.

Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

8

Product selection

7

Store Staff Knowledge

6

Product Display

1

Staff Service

2

Technology

3

Additional Services

4

Social Media Interactivity

5

Survey Response - Respondent 30 Age & Gender: 25; Female Started: Tuesday, November 04, 2014 2:52:35 AM Last Modified: Tuesday, November 04, 2014 3:04:23 AM Q1: Based on the video seen before, which concept stores do you think are in India?

 

I III Q2: What does luxury, specifically related to fashion, mean to you?

Luxury to me is a lifestyle that goes much beyond just fashion. It is a lesson is quality, class and an unmatched ethos—a statement that definitely allows you to distinctly stand out.

Q3. What is your motivation for buying luxury products?

 

  

Quality purchases to last for a lifetime Affinity towards specific brands and their design aesthetic Q4: Where do you generally shop for luxury products and why?

Single brand luxury stores in India Single brand luxury stores abroad Online Websites (Non-Indian)

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

- For greater variety, strong brand message, better service of individual brand stores Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

6 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

 

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Media articles in online and physical fashion magazines and online blogs Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Le Mill, mainly because their roster of extremely niche luxury labels such as Isabel Marant, Mary Katranzou, Alexander Wang and the like which only true connoisseurs have an affinity for. A far cry from the Guccis and LVs most Indians are obsessed with.

Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

 

Sense of belonging in a like-minded luxury consumer’s community Exclusive events, sample sales etc.

Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

4

Product selection

5

Store Staff Knowledge

3

Product Display

1

Staff Service

7

Technology

2

Additional Services

6

Social Media Interactivity

8

Survey Response - Respondent 31 Age & Gender: 30; Female Started: Monday, November 03, 2014 9:36:55 PM Last Modified: Monday, November 03, 2014 9:52:14 PM Q1: Based on the video seen before, which concept stores do you think are in India?

None of them Q2: What does luxury, specifically related to fashion, mean to you?

Luxury fashion, to me is a piece that is thoughtful, exquisitely crafted, of exceptional quality and that is not trendy, common or easily available. Not always prohibitively expensive, but can tend to be so.

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Q3. What is your motivation for buying luxury products?

 

Quality purchases to last for a lifetime Affinity towards specific brands and their design aesthetic Q4: Where do you generally shop for luxury products and why?

  

Single brand luxury stores abroad Multi brand stores in India Online Websites (Non-Indian) - When I was living in India, I shopped at Le Mill, a multi brand store, mostly because prices were in line with international prices and the store belongs to a close friend, whose taste is in tune with mine, so I normally found great pieces I liked. While living abroad, I prefer to visit mono brand stores, for wider choice and good service.

Q5: On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

10 Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

  

Social Media Channels (Facebook, Twitter, Instagram, Youtube, Pinterest) Media articles in online and physical fashion magazines and online blogs Through friends/colleagues/family members Q7: Can you name one luxury concept store in India that according to you, provides a distinctive shopping experience compared to other stores in the same segment. Please elaborate why so.

Le Mill, mostly because the owner is a close friend and is mostly always there when I am looking to buy. If she isn't then the manager looks after me very well and allows me to take multiple pieces home, for a day or two, until I decide what I want and have time to deliberate Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

 

Exclusive products Sense of belonging in a like-minded luxury consumer’s community Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following elements within Indian luxury concept stores, compared to their international counterparts Store Design

5

Product selection

6

Store Staff Knowledge

2

Product Display

3

Staff Service

8

Technology

1

Additional Services

7

Social Media Interactivity

4

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APPENDIX XVIII Survey Analysis Table

Q1. Based on the video seen before, which concept stores do you think are in India?

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Q3. What is your motivation for buying luxury products?

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Q4: Where do you generally shop for luxury products and why?

Survey Analysis

Q5. On a scale from 1 to 10 (1 being least influential and 10, most influential) how influential is the overall store experience when purchasing luxury products, either in the same visit or in the future.

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Q6: How do you like to receive notifications about new luxury product launches, luxury brand news, general luxury industry updates, events etc.?

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Q8: What, according to you, is the added value of shopping from special luxury retail formats such as concept stores?

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Q9: On a scale from 1 to 8 (being underdeveloped and 8 highly developed) how would you rank the following e

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