China is Number 1 In Luxury Watch Demand

Omega is a favorite luxury watch brand in China.

China has surpassed the U.S. as the country with the highest demand for luxury watches based on Internet searches, according to a survey released Wednesday.

China represents 23 percent of all watch-related searches, according to the WorldWatchReport, published by Digital Luxury Group. Gaining the most attention in China is Omega (20.2 percent of searches there), followed by Longines (18.9 percent) and Rolex (10.5 percent).

It is the first since the survey began in 2004 that the U.S. wasn’t number one based on these digital criteria.

In addition to the growth witnessed in China (up 7.8 percentage points), countries such as Japan (3.5 pp), India (0.6 pp), and Russia (0.5 pp) saw significant increases over last year, according to the survey. Most western markets remained stable or even saw market share drops, such as in the U.S. (down 9.2 pp), Germany (-1.7 pp), and Italy (-1 pp).

I don’t understand how exactly this virtual demand translates into real demand much less actual sales, but it no doubts shows that Asian consumers have an extremely strong interest in luxury watches and that luxury watch brands moving into China are doing the right thing.

Rolex and Omega are the top two brands in demand, but the lead that Rolex held over Omega in prior years is narrowing. The difference in demand between the two brands is 2.3 percentage points, against 8.4 in 2009—mainly explained by Omega gaining market share in China while Rolex reinforced its positioning in the stagnant West, according to the study.

Among the more than 1,300 individual watch models tracked by the WorldWatchReport, the top three models are Omega’s Seamaster, Rolex’s Submariner and Rolex’s Daytona, according to the survey.

Global searches related to counterfeits and replicas experienced a decrease, representing 1.85 percent of total luxury watch searches compared to 4.5 percent last year. Among the 40 brands analyzed, the demand for replica sport watches is the highest, with Rolex representing 51 percent of the total demand for counterfeits worldwide, followed by Breitling (9 percent) and TAG Heuer (5.3 percent).

The WorldWatchReport measures and benchmarks more than 50 digital indicators to analyze the performance of 40 luxury watch brands across 20 international markets.

Curiosity Killed the Cat but Gives Birth to Great Sales

This is one of a series of articles by Mónica Arias of Excellence Consulting, a luxury sales and marketing consulting firm based in Buenos Aires, Argentina. These articles will focus on ways that sales and marketing professional in the jewelry and luxury industries can improve their techniques.

How important is it to be curious in the sales profession? It’s very. and for many reasons.

To start, because the more questions you ask your customers, the more chances you will have to gather information about them. This will reflect in more “tailored” or “suitable” options to offer from which they can choose from. No secret here: asking open questions is one of the golden rules in this profession.

But, how do you do it without being “salesy” or sounding pushy? By interacting with your clients in a natural manner—bearing in mind that you need to make them feel comfortable with you, way before making a demonstration. The situation, of course, will vary depending on the sales context itself, but the rule applies to almost all sales situations: first make connection with your clients, then, and only then, start displaying some options according to what you captured could match their wishes or desires.

Secondly, being curious and asking open questions will ease your way to even something more challenging and magical: you could make your client feel a new need or sudden desire to acquire something he did not even think of. Many salespersons stop questioning clients after they closed the sale, or when they are about to, because they do not feel comfortable with a continuous “post sales” dialogue. However, more often than not, you can sell extra items by simply maintaining a natural flow of questions.

Asking open questions is a way to nourish your relationship with clients and provide something they will adore: excellent service.

You will be noticed, acknowledged and remembered by your clients. Your job is not only selling or reaching your goals, but also having in mind that they need to be assisted in the most appropriate manner, even if the sale does not occur. They need to feel your kindness and professionalism all the time, and you must always go the extra mile in order to give good advice and serve them with high quality standards.

Some sales consultants do not believe that curiosity should be applied to the sales profession. They argue that being curious in the sales process may lead to misunderstandings. Although it is true you are not supposed to ask intimate questions or look as if you were trying to interfere in your customers´ private lives, I think it all depends on other factors rather than the questions themselves: you have to pay close attention to your tone or voice, how you look at your clients straight to their eyes, the way in which you listen to them with your full attention, the manner in which you address your clients, the way you gesture and so many other details which make curiosity look like a poor term to apply after all.

If you love sales, you need to keep curiosity alive because, as it happens with all professionals, you must have you skills updated. You will have to read new books, refresh your vocabulary, search the web for online courses and articles and enrich yourself with new materials. In other words: Never disregard curiosity. It may have killed the cat but will it certainly help you give birth to great sales and your best performance.

Mónica M. Arias
Excellence Consultant: Helping you discover how to reach your next level through excellence.
contacto@monicaarias.com.ar
Copyright 2011

Excellence: The Experience Your Customers Deserve

This is the first in a series of articles by Mónica Arias of Excellence Consulting, a luxury sales and marketing consulting firm based in Buenos Aires, Argentina. These articles will focus on ways that sales and marketing professional in the jewelry and luxury industry can improve their techniques.

So much has been said about improving customer service during the past decades that, given the global exposure of firms on the Internet and the world economic turmoil, one could easily assume this issue does not exist anymore simply because in theory, companies should have learned enough from the tough lessons associated with a poor customer assistance in the past.

Unfortunately, the problem not only persists but it has also become a real challenge to overcome, especially in the retail arena, and more specifically, in the luxury retail industry where excellence is non negotiable.

Customers are Kings (and Queens!). These words should be repeated like a mantra every day, all day long, by anyone trying to do business nowadays. And, more importantly, they should be put into practice just for the sake of business survival. Whether small or large, a company that provides luxury services or products that does not excel in customer service, even through small details, is paving the road to hell.

Let me give you an example: let´s imagine you may be inclined to get a lovely piece of jewelry for your beloved. The idea warmed up for a while in your head and the decision is finally made to visit a renowned jewelry store. You step in, confident that you will be received like a King—after all this is a shop you do not put your feet into everyday as it is the supermarket or any retail store you visit with certain frequency. Instead, you just get what I call “a scanning look” and someone with unforgettable body language clearly indicates you are not especially welcomed, even with a slight smile on their face. Believe me, you do not actually “see” this, but you clearly feel it.

You may think this is unusual in the luxury industry. It is my duty to tell you it is not. Reality shows that many luxury companies judge their clients either by their aspects, their race, their origin, the way they speak or move, they way they are dressed, and the list is endless. Moreover, they “rely” so much on their brands, reputation, tradition and marketing campaigns that they generally forget self-criticism and/or periodic research to understand what kind of feedback they receive from clients, how are they being perceived and, most importantly, if their customers  really like them.

Prejudice, unwillingness, lack of enthusiasm, poor or inexistent customer oriented training, payment systems that do not work properly after the sale is done, salespeople who are not trained in the appropriate way to offer a service of excellence to customers, the lack of a system to build trust and loyalty is only part of the problem.

Business owners and salespeople in the luxury segment have countless excuses not to address this lack of attention to their business core. Excuses come in all sizes and colors, and of course the matter of “budget” is one of the most common ones. However, excellence in customer service has more to do with small details, attitude and care than huge budgets.

People need to feel the great experience of having purchased with you, and you need to acknowledge that the sales process has evolved, so you need to learn how to transcend your clients` expectations by providing the excellence service they deserve. Always.

Mónica M. Arias is a luxury sales and marketing specialist and a Spanish and English translator. She has spent 15 years experience working in a variety of sales marketing positions for several multinational companies. She is skilled in advanced sales techniques and is a proven expert in person-to-person interaction—both commercial and personal. She can be reached at contacto@monicaarias.com.ar.

Global Luxury Sales Show Renewed Worldwide Strength

Strength in markets around the world is fueling an increase in luxury sales, which are projected to grow worldwide by 8 percent to €185 billion ($276 billion) in 2011, according to a survey released by a global luxury goods consultancy Tuesday in Milan.

The growth of luxury sales in China has been getting most attention lately, but this current rate of growth is also being buoyed by strong first-quarter momentum in the U.S. and Europe, according to the “Spring 2011 Update: Luxury Goods Worldwide Market Study,” by Bain & Company. In fact, the U.S. remains the world’s largest luxury goods market.

The Bain study also estimates that luxury sales will grow in the next three years to €214 billion ($318 billion) to €221 billion ($329 billion) and that the demographics are changing, in terms of age, technical knowhow and attitude.

The report also notes that despite the improvements in U.S. and Europe, the biggest growth rates in luxury sales remain in emerging markets, such as Russia, Brazil, the Middle East and, of course, China.

After declining by €17 billion ($25.3 billion) over the course of 2008 and 2009, a strong 2010 closed with a 14 percent increase in luxury sales, versus 2009—bringing the luxury goods market to €172 billion ($256.6 billion), surpassing its prior peak of €170 billion ($253.7 billion) in 2007, according to the annual survey.

Bain said in its report that department stores and direct-owned luxury stores saw continued double digit sales increases in February and March versus 2010, selling out on much of their Spring/Summer 2011 inventory. Stores have placed robust orders for the Fall/Winter 2012 seasons and have restocked sold-out inventory levels. Among the high-growth categories are accessories, leather goods, jewelry and watches. Bain said retailers expressed a high level of confidence that consumers will keep making purchases with the same vigor that preceded the global financial crisis.

“Luxury has made a brilliant return to the retail stage, but the script has been re-written,” said Claudia D’Arpizio, a Bain partner in Milan and lead author of the study. “More demanding customers, generational shifts, new loyalty rules, an increasingly integrated offline and digital customer experience and the continued growth of China and other fast-growing markets are transforming the luxury industry.”

Bain forecasts that sales in the Americas for 2011 will grow by 8 percent, to nearly €52 billion ($77.5 billion). China will see 25 percent year-over-year growth this year, putting Greater China (including Hong Kong, Macao and Taiwan) in a strong position to exceed sales in Japan for the first time. Growth in Europe will reach 7 percent in 2011 and Japan will see a decline of 5 percent, due, in part to structural decline and also the impact of the March 11 earthquake and tsunami. However, the study estimates that Japan’s luxury sales will stabilize starting in the third quarter of 2011, as consumption recovers and as reconstruction drives GDP growth. In fact, even as Tokyo stores reopened in the two weeks after the earthquake, brands reported a quick resumption of sales to expected levels, with little impact in southern cities such as Osaka.

The study predicts that growth in emerging markets will remain the focus of luxury manufacturers for the next two to three years. Lifestyle changes have driven a return of luxury goods sales in Russia (5 to 10 percent annual growth). New store openings will fuel growth in the Middle East (10 percent to 12 percent), while Brazil will see heavy investment by international brands (10 percent to 15 percent). China’s fast-growing wealth will fuel both same store sales growth and new store openings.

“The emerging market consumer continues to create the most exciting challenges for our industry,” said Santo Versace, chairman of Fondazione Altagamma, an Italian luxury goods industry trade association, which provided much of the data for the study. “Even as we adjust to the maturing of the North American and European markets, consumers in countries like China are becoming more demanding and more sophisticated in their luxury tastes.”

In its report, Bain mentions three ways that those in luxury industry can better take advantage of the growing and changing luxury market:

* Deep focus on emerging markets—penetration; route-to-market; a tailored value proposition

* Adaptation to the continuing generational shift—baby-boomers retiring; Generation Z (always connected)

* Continuous enhancement of the customer experience—increase loyalty and satisfaction; integrated online and offline experiences; unrelenting service

“Emerging markets are doing more than generating revenues,” said Bain’s D’Arpizio. “New consumers are also forcing luxury brands to become much more nimble in the merchandise selection and customer experience they offer to increasingly diverse consumers.”

Luxury Demand Fueled Sales for PPR

Multi-brand retailer PPR SA said the performance of its Luxury Group led the way for the first quarter turning in what the company described as a “stellar performance” with revenue surging 26.2 percent to 1.13 billion Euros ($1.68 billion).

Brands in the Luxury Group include the Parisian luxury jeweler, Boucheron, which reported double-digit growth in sales for the period “spurred by a buoyant performance from high jewelry and jewelry,” PPR said. Other companies within this group include Gucci, Bottega Veneta and Yves Saint Laurent.

Overall, the Parisian global brand conglomerate—which also owns Puma, Fnac and Redcats—said first quarter sales were up 9.1 percent on a year-over-year basis to 3.71 billion euros ($5.52 billion), powered by the fast-paced growth of the company’s business in emerging countries, which represented 21 percent of its total revenues.

PPR, formerly Pinault-Printemps-Redoute, said it had revenue growth in all geographic areas with the exception of Japan, where the March 11 earthquake brought an end to the upward trend observed since the beginning of the year.

Sales for its Luxury and Sport & Lifestyle businesses climbed 20.6 percent, the company said.

“Strong sales growth was driven by an excellent showing from our Luxury and Sport & Lifestyle businesses, which altogether delivered double-digit growth in all geographic areas apart from Japan,” said François-Henri Pinault, PPR chairman and CEO. “In Japan, the professionalism and courage of our teams have seen the Group’s brands through testing times. These performances testify to our vigorous organic growth dynamic. I am therefore confident that in 2011 PPR will be able to maintain its revenue growth momentum and surpass its 2010 financial performance, building on the strength of its business model and the pertinence of its strategy.”

Holiday Jewelry, Luxury Sales Show Continued Strength

Reuters

Jewelry sales for the holiday season have increased 2.6 percent year-over-year, according to MasterCard Advisors’ SpendingPulse, which tracks national retail and services sales. Luxury sales, excluding jewelry, are doing slightly better at 2.8 percent.

Jewelry sales have grown steadily in the latter part of the season, according to the report, which tracks sales from October 31 to December 11. Overall, retail sales are generally up with some exceptions, most notably electronics.

“The modest growth we first saw with the August Back-to-School season has accelerated. These results suggest that retail spending continues to gain traction,” said Michael McNamara, MasterCard Advisors SpendingPulse vice president. “Most sectors are showing steady improvements, with Electronics, Department Stores and Furnishings categories recording flat to small declines. The solid November growth rates have continued across most areas through the first half of December.”

In addition to jewelry and luxury, SpendingPulse, which uses card swipe data from MasterCard and estimates of other payment methods, analyzed the Electronics, Apparel and eCommerce sectors. Here are the midseason highlights:

eCommerce
eCommerce continues to be one of the stars of the season with a season-to-date growth rate of 13.5 percent. The sector has been showing double-digit weekly year-over-year growth rates since the second week in November.

Apparel
The Total Apparel category was up 9.8 percent for the season-to-date. Women's Apparel sales were up 4.4 percent for the season with the category recording a slightly better showing since Black Friday. Men's Apparel sales grew 8.4 percent year-over-year. Growth within the Teen and Family Apparel segments is also strong.

Electronics
Electronics sales fell below 2009 levels during the three weeks leading up to Black Friday. Sales during the rest of the period barely made up the decline, with sales season-to-date recording a 0.4 percent increase over last year.

Worldwide Luxury Sales Growth to Slow in 2011

After a 10 percent increase in 2010, growth in the global luxury sector will slow to a 4 - 5 percent gain, according to a report released Monday.

By the end of the year global luxury sales will reach $235 billion, according to the report by Boston-based consultancy Bain & Co. along with Milan-based luxury trade body Altagamma. In 2011, sales should rise to $246 billion.

The projected drop in the growth rate is due partly because of this year’s stronger than expected increase in luxury sales along with the continued weakening of the dollar against the euro and other currencies that will limit U.S. consumers ability to spend overseas, according to published reports.

China leads in luxury sales growth at 30 percent and is set to become the world’s third biggest luxury market in five years, according to Bain.

The U.S. grew by a surprising 12 percent in 2010, according to the report, while the recovery in Europe was slower at 6 percent. Only Japan continued to contract, with a 1 percent fall in sales.

U.S. growth is expected to slow in 2011 while Japan will begin to recover, according to the report, which was released during an event in Milan.

Women remain the biggest luxury buyers, making up 61 percent of the total luxury consumer base compared with 39 percent for men, the report said.