Private stores, more intimate events, and elaborate gifting are just some of the lengths in which luxury brands seek to lure in the Very Important Customer, who post-pandemic has become more of a focus for companies seeking to gain more traction with this highly elusive spender, but what does cultivating that relationship actually mean for brands?
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Change is afoot in the elusive world of ultra-luxury. When Chanel announced in June that it planned to cater to its Very Important Customers (VICs) more specifically by opening “very protected boutiques to service clients in a very exclusive way,” the news added to a growing trend of luxury brands expanding the services already offered to private clients.
In December, Italian designer Brunello Cucinelli opened up a dedicated store in New York for private clients. And British luxury department store Harrods also introduced its “Residence” concepts in Shanghai and Beijing, spaces that are solely invite-only for its biggest spenders. Chanel’s stores, which will begin opening in key locations in Asia, are expected in 2023.
These private stores are part of a larger movement by luxury companies to further attract VICs, who post-pandemic have become more of a focus, due to their increased disposable income that would normally have been spent on luxury travel, hospitality and experience. But what does cultivating a relationship with a VIC actually mean for brands and how can they ensure they are actually engaging with each customer in a meaningful way?
For Andrew Wolmark, an industry veteran with more than 20 years in luxury hospitality and events, the most important thing is to consider the relationship between brand and customer, and how best to build an emotional connection
“We work with a plethora of luxury brands, each of which have very different types of customers. So, what we create for each brand is totally unique,” said Wolmark, Chief Experience Officer at QX, the brand experience agency arm of luxury lifestyle service, Quintessentially. “Within each of their audiences – whether it’s for press, influencers, or VICs – the most important element is always to build the right emotional connection from the beginning.”
“The VIC experience that we specialise in is an individualised approach to a group experience,” he explained. “Whether that's a fashion show, corporate retreat, or another event, we develop a personalised approach through activities – be it hotel choice, gifting, or a bespoke experience based around the main show that's going to appeal to a particular passion point. We help our clients to build that connection.”
Even before the pandemic, Wolmark had seen an increase in demand from luxury brands for QX’s guest management services. “I think that more and more brands are looking to take this approach because group events aren't viable. The pandemic has proven that a large group of people at one kind of cover-all event is not always the answer. To build that emotional connection with their customer, brands need to offer something more bespoke and with an individualised element to it.”
Indeed, maintaining that connection is something that we have all seen luxury brands strive for over the past two years, particularly during the early stages in the global COVID-19 pandemic when luxury companies had to close all their stores and pivot their customer relationship management to a more personalised approach through digital means.
“VICs were always an under the radar focus for the brands before. It was always kept relatively secret in a way in terms of what they offered or what they did to accommodate this type of customer,” said Robert Burke, Chairman and CEO of Robert Burke Associates, a consultancy specialised in working with fashion and luxury brands.
But now, the difference is how visible the long-held practices of gifting, intimate events and elaborate experiences are now on show on social media. When China extended its lockdown in Shanghai earlier this year in March, brands like Louis Vuitton and Cartier rushed to send their VICs complimentary meals and desserts from the finest restaurants the city had to offer, which its recipients posted about on WeChat.
Chanel Fine Jewelry Boutique at 18 Place Vendome, Paris. Credit: Courtesy
“The customer wants to be able to say, I’m part of this exclusive experience, or I got an invitation to travel to this runway show,” said Burke, noting the efforts of brands like Givenchy which flew guests to a Venice gala, and Gucci, which hosting dinner parties with its CEO Marco Bizzari and Kering Chairman and CEO Francois-Henri Pinault.
“These are all like bragging rights to the consumer, you know, especially in the age of social media,” added Burke. “Being part of this inner circle identifies who they are and how important they are. And it's just more public.”
But beyond getting an invite to an intimate gathering, or a private showroom appointment, how can luxury brands ensure that they are really connecting with their VICs, who are reported to make up a significant portion of sales?
“The ask from brands now is a money can't buy experience,” said Wolmark. “That's interesting because money can buy most things. These VICs already have capital, but what we offer all our brand clients is something that their customers and they would not have been able to come up without us.”
“I see that as a really positive thing because ‘money can't buy’ doesn't mean priceless or so expensive that you can't buy it. ‘Money can't buy’ means something that is interesting, appealing, and personalised to that individual -- because it's appealing to their passion points”.
“Brands want us to help them engage with a high-value audience,” he said. “They understand their audience, but they want to re-engage with and retain them -- and how do you do that? By adding value to that customer's world, and life. How do you keep them coming back? By making it memorable -- if they go out the following weekend and tell their friends that a brand gave them the most incredible experience, that is what they are going to really connect with emotionally.”
“The smaller, the more personalised, the better,” said Burke. “Brands used to spend half a million or a million dollars taking ads with a fashion magazine or newspaper and now they’re spending their money cultivating the customer and they’re getting very, very strategic and much more creative about what they're offering the customer and it's even more exclusive.”
“The customer wants to be able to say, I’m part of this exclusive experience, or I got an invitation to travel to this runway show,” said Burke, noting the efforts of brands like Givenchy which flew guests to a Venice gala, and Gucci, which hosting dinner parties with its CEO Marco Bizzari and Kering Chairman and CEO Francois-Henri Pinault.
“These are all like bragging rights to the consumer, you know, especially in the age of social media,” added Burke. “Being part of this inner circle identifies who they are and how important they are. And it's just more public.”
But beyond getting an invite to an intimate gathering, or a private showroom appointment, how can luxury brands ensure that they are really connecting with their VICs, who are reported to make up a significant portion of sales?
“The ask from brands now is a money can't buy experience,” said Wolmark. “That's interesting because money can buy most things. These VICs already have capital, but what we offer all our brand clients is something that their customers and they would not have been able to come up without us.”
“I see that as a really positive thing because ‘money can't buy’ doesn't mean priceless or so expensive that you can't buy it. ‘Money can't buy’ means something that is interesting, appealing, and personalised to that individual -- because it's appealing to their passion points”.
“Brands want us to help them engage with a high-value audience,” he said. “They understand their audience, but they want to re-engage with and retain them -- and how do you do that? By adding value to that customer's world, and life. How do you keep them coming back? By making it memorable -- if they go out the following weekend and tell their friends that a brand gave them the most incredible experience, that is what they are going to really connect with emotionally.”
“The smaller, the more personalised, the better,” said Burke. “Brands used to spend half a million or a million dollars taking ads with a fashion magazine or newspaper and now they’re spending their money cultivating the customer and they’re getting very, very strategic and much more creative about what they're offering the customer and it's even more exclusive.”