The Business of Luxury Summit this year was held in Lisbon, who were obviously delighted to have the Financial Times and an illustrious group of people from the worlds top brands visit their city, not only to network and learn but to enjoy its vibrancy and beauty.
The Prime Minister of Portugal, Antonio Costa and Jose Manuel Barrosa, Chairman of Goldman Sachs International gave us their view on Portuguese worldwide politics and growth. Once the politics and the subject of Trump and Brexit were over, we got down to the real business of craftsmanship, innovation and manufacture.
There were a few little hitches with this conference. Patrizia Arienti was difficult to follow with the Deloitte report on Global Powers of Luxury Goods in FY2015. Bearing in mind the speed in which digital is revaluating the market and the momentous events in the world, since the end of the report in June 2016, it would have been useful to have current figures for the luxury market. At the 2016 conference we had Sarah Quinlan from MasterCard, who gave us amazing up to date figures and confirmed that experiences were more important than just shopping. This year we were hoping for more up-to-date information.It was disappointing that Louis Vuitton’s Nicolas Ghesquiere gave his talk via a live-link from their amazing fashion show in Kyoto, Japan. However, these small aggravations were overlooked by the presentation from Nuno Mendez of Chiltern Firehouse, Nuno explained the name – the development was on the site of an old fire station. He explained how a destination restaurant can have a positive effect on a neighbourhood; developers are now looking for the celebrity chefs to open restaurants in their developments. East London is now one of the most exciting areas in Europe, developing a food destination where the food and service are the focal points. According to Nuno the chef has to be visible to the diners and the vegan market is set to grow and grow.Jonathan Anderson of JW Anderson and the Spanish leather goods company Loewe, set the room alight with comments that luxury today is just a branding tool, after all you can get luxury sausages in Tesco and luxury shops are now just marble tombs. After everyone had recovered from these comments, we moved swiftly on to a superb presentation by Frederico Marchetti, CEO of Yoox Net a Porter group. Frederico explained that by 2020 most of their sales worldwide will be via mobiles. Their average sale is £1000 and for special customers their driver will deliver and wait while you try on the garments. One of the biggest growth areas for Net a Porter is India. Geraldine Larkin, who produces the finest bespoke hand embroidered textiles for interiors, explained to me that in Mumbai same day home delivery is a huge growth area, anything and everything can be delivered to you.Innovation and the speed of digital were the hot topics of day one. We had to wait to learn about craftsmanship and manufacture until the very end when Alex Dumas the CEO of Hermes took to the stage. Hermes see themselves as craftsmen, each year they take on 250 apprentices, leaving many more crying on the pavement, as the demand to work at Hermes is enormous. The apprentices work their way through the company slowly; don’t think of joining Hermes as a marketer or as a merchandiser, these departments do not exist in Hermes. Famous for introducing the waiting list for bags, Mr Dumas said ‘the idea is not to create a scarcity, you are buying a hand crafted product, not machine made, when you buy a Hermes product you are paying for the craftsmanship’s time’. Sales increased by 11.2% to 1.35 billion euros’ and their next investment will be in digital, they were one of the first luxury brands to set up an e-commerce site back in 2001. So we were back into the hot topic of technology again.
The message from the first day was that companies, who are slow on the uptake of digital and rely on physical stores, should seriously think about closing their doors. If you are not in the digital space you are nowhere.
All images courtesy FT Live.