International Luxury Conference 2017: The Age of Populism: Threats and Theories

International Luxury Conference 2017: The Age of Populism: Threats and Theories



the world is becoming an abnormal place everyday it feels like the Gulf's are widening between different ages races genders religions those who live in cities in the countryside the haves and have-nots alongside that in the wake of events like the 2009 financial crisis crackdown on corruption in China the election of President Trump a lot of the global elite seem to be re-evaluating how they present themselves to the rest of the world so how are we as luxury brands or you I should say I supposed to read ress that you know how do you maintain and adopt a new way of managing your relationships with these customers how do you adapt to their shifting value systems I've got three people here today who'll be able to tell me a lot more Francesca Bella tini who is the president and CEO of salary Alexandre jokes who is the CEO and co-founder of paddle eight and last but not least Laura Pantera who is the global head of ultra high-net-worth positioning at UBS thanks so much for joining me guys I'm Francesca I'm gonna start with you because you joined salla on 2013 and in the four years since then the brand in the eyes of the world has undergone a total reset especially in terms of aesthetic its moved away from something that people would describe as quite formal quite elitist to what people would I guess say it was a very grungy Street where and there's lots of things we can talk about in terms of how you've carved out a new identity for this brand but let's start with aesthetic and why it was so important to carve out an identity that removed elitism from the equation I guess what good morning to everybody and thank you for for having me here in reality what we did was going back to the values of the brand this is a brand that was founded in 1961 and then in 1966 created platypus which was exactly the the way in which mr. Sanger and mr. Majer wanted to break the boundaries and to break the differences between the elite and the street one of the slogan at that time was dressed to street so what was done was really to go back to the values of the brand we don't do Haute Couture anymore in the sense of what could we do Prada port a Prada party when the brand was founded was standing for that was created by opening a store or if Koshien Paris because what if sonoran wanted to do was to bring fashion and style to the people wanted to create an industrial process into production wanted to make the brand and decide closer to the people themselves so what we did was basically going back to the value of the brand and communicating the values of the brand in a very consistent way and in a 360 way not only with the product but also with the communication and with the state of mind and this paid off because our people paid the fact that we were authentic authenticity means since sincerity so communicating something that is really your own and those were our values it has always been a brand that has been lab rubber for freedom standing for your rights not being afraid of communicating your values even when you know that you're not going to please everybody and consistency that is what is making out until City so is like being authentic and going back as paid off we did it simply going back to our roots we talked a little bit earlier about how the Millennials are particularly politicized generation you know how important with the millennial demographic to you when you were thinking about this were you thinking that in order to attract that customer base you needed to see more accessible more youthful not at all I don't like stereotypes I don't like talking about Millennials not Millennials I mean when you when you create a design a collection I created a writer doesn't think this product is for a millennia this product is for an older person doesn't work that way didn't work that way for us ed wall I discovered honestly I had a huge millennial share presently not that I would have been unhappy not to have it it's simply a fact that it happened I think it happened for various reasons it's not only for sound around a lot of brands are in are increasing the share of younger consumer simply because in my view luxury is opening up one key characteristic of what sonoran did was really this and I think for this we can say we were the first brand after the crisis luxury had become the crisis of 2009 luxury had become incredibly boring incredibly outer referential when I was young myself I was scared of entering a luxury store I was thinking about how I had to dress to go and shop luxury even if I could I was an investment banker I could afford to buy luxury was lucky I didn't go because I felt intimidated so what we did when and when we speak about the value of the brand and becoming modern and living in your aprica' was opening up making it easier our stores first of all became open instead of walls we put glass people could see from the outside what we had inside and there were lots of colleagues other CEOs who told me you're crazy this is not luxury why people should enter if they can see everything from the outside what because of that but it's not that we did it because we were targeting the millennia we did it because the values of our brand were that because we wanted to be modern and stay relevant communicating our values so we opened up younger generations now are less intimidated by fashion thanks to social media the barriers have been broken they communicate with each other so is a dual factor and the more this happened the more you're cautious about the fact that they are part of your consumer base you get to know them but it's not that you change who you are because you need to sell to Millennials I want to sell to all of clients and actually what we had in mind when you did the change was more a way of being well if you ask me how which of your clients are millennia in the mentality one other percent because of what we stand then age is a secondary factor in my personal point of view this be a good point to bring alexandrine because I guess the idea of breaking down the intimidation factor and luxury was probably what drove you in a way to launchpad lay you know you've been part of the old guard art well do you have for me the chief auctioneer at Phillips and then went on to launch paddle a what what drove you to do that launch what niche in the market did you see I mean I think you know ultimately from the sort of the 10,000 foot view we saw a few key opportunities and paradigm shifts I mean ultimately you were seeing that there was a new free of entrance into the market I mean I think it goes back to sort of the collaborations of Mondrian and Eve Sano Hall – most recently Marc Jacobs and Murakami that was bringing artworks finally back into the shop window secondly you had the sort of new validation whereby art was the epicenter of the cultural Venn diagram you see Lady Gaga collaborate the Jeff Koons for the cover of art pop that meant as a new Fred interest coming in through art through music through fashion through architecture and they didn't really have a place to go these new entrants to the market there was also does the fact that the the established guard the old guard and the the auction houses were yet but they really sort of undermined the importance of the the advent of online and how such an intellectual girden attack tailgaters as art could be approached fire such as a sterile medium as as the Internet but hadn't really sort of seen how the the likes of net Authority and staff had created context and Trust and elevation of experience and beyond that there was also just it was a very fragmented market the middle market was was run by sort of 1500 small regional auction houses mom-and-pop stores so there's an opportunity for consolidation and finally dogmatically and empathetically myself as the end user I felt that I wanted a place to go where I could see everything in one place 24/7 I craved immediate access and we're all spoilt and we want this culture of immediate gratification and so there was the very clear opportunity there was a white space between you know the larger auction houses that were focusing on the upper end of the market the uber luxury and the eBay's the world that were essentially bringing a great market for volume but that didn't have the trace their taste and the trust factors to sell with conviction items of rarity and artworks so we entered in through to that through that door and saw that space and what have you seen in the years since you've launched I mean how is your customer buying art is it different from the old guard auction houses do they have a different approach what are they what are they buying I think there is there are two types I think in many ways you know luxury today is about being versus having and I think there are these new collectors who are seeing in many ways that the new Birkin bag is the Kusama print they're buying these new entrants that branded artists an artist through this day and age of improved visual acuity and and the greatest advent and greater population of artists that understanding who these artists are there's great education the most popular arts in the world happens to be Banksy by recognition so people are coming in through these more accessible forums through street art through photography and new collectors want to to buy into these big brand names the more established collectors are essentially becoming more eclectic I think they are venturing out into new realms collectors understand with time that your collection is an impartation of yours your identity it is a physical identity that lives beyond you and there is this greater eclecticism and a national hero in this country's axial for food who is teaching people about how to mix on resent geographies and types and eras and some of the greatest collects in the world not quite we're not quite in the in the day and age yet of the IKEA furniture with the Rothko but you're seeing people you know mix books and tribal masks and and antiquities with great contemporary art and when people can build a context and a purpose and a narrative around that and they are that they're hitting the mark in terms of taste and collecting stuff Nora you know your job is is both a mediator and an adviser often between different generations of super wealthy clients you know who are the people that are buying things from pat lake from salim on you know are you seeing a difference in the generations and how they approach spending and what they're asking of a increasingly aware of what's going on in the world around them of course and how are they responding to that yes so you know as you say I'm more representing a well management industry so it's not necessarily a question of spending but it's more a question on how they protect and they grow their assets and and that's basically where we come in and and the quest what we see more and more is what they care about is referring back to what you just said is in how they leave a legacy and they are clearly when we talk to the third generation we talk to millennial there is a big difference and especially in the Millennial we see they become more and more close to topic related with philanthropy with impact investment with so there is a debate that actually is going back to the first panel about a match they want to use of private wealth to basically give back to the public and and in that forum I mean we need we as UVs we try to remain authentic so we are a well management industry what we are good at is actually wealth but there is clearly a need for us to spend the way we advise them we need to become moralistic and we need really to talk to them to their passion and art is also playing a very big topic philanthropy as I said sparklab is for example as well something that they invest in and it's a way for them exactly to go back to community so it's a different balance of interest I guess what this all centers around then is the idea of status symbols and it seems to me that the argument keeps going back and forth at one level you know we were told that the day of bling is gone and that it's over and then there's this idea at the next level that like little most recent shows in Paris and Milan the logo was everywhere it was very clear that people wanted to relate to those logos and really associate themselves with tribes so where are we in terms of status symbols I mean are people proud to present their wealth or is the new status symbol of the nonprofit institution you know I think they're big differently culturally so serving a global basis clearly you see a difference in the way our status symbol play a role in u.s. or in Asia or in Europe but at the end the client we are dealing here we state they are so passionate about the business they are able to take really smart risk and so they are not showing off they are actually very humble very practical in what they want to pursue so I don't think they need to hide their wealth and exactly by becoming there there is a concern about inequality it's as clear and therefore they need to engage in activity that are they make visible actually on how much they can contribute and we don't just see the recent study we publish this billionaire report where we could prove exactly that billionaire around the world actually engaged around 28 million of employee so this is comparable roughly to the working population of the UK and that shows you the importance of how much actually they are they are there to support society so I don't think they need to hide away you know shying away from the wealth they just need to use it smartly such as youth stasis simple – yeah I mean we have a logo in the brand that is part of the heritage and I think that everything goes back again of treating what are your assets with a lot of respect in the past very past the 80s the 90s logo had become a little bit treated without respect by brands and like only the only value that people should buy into to show off that they could afford it in my view when you have a logo and you're super lucky as a brand because it's a way of making yourself recognizable but you have to respect it you cannot just simply pretend that people buy your product because there is a logo actually whenever you use your logo you have to think twice and making sure that a dignity bit behind the product that you are making recognizable through a logo is twice as well you ball then what you stand for because I completely agree that probably today people don't buy a logo as a status symbol but there is a community that buys a logo to basically communicate that they stand for the same value that you communicate as a brand and again you need to be respectful of who you are communicate who you are and engage with more and more people that share your value which doesn't mean you need to engage or attract everybody but more and more of the people that can relate to you and I think that when a person decides to buy a product with the logo is because they respect today what the company that uses that logo stands for is not because they want to show that I can afford it it's a different way and in here I have to say that the younger generation play a big role because they live much more as a community and they stand as a community that goes lateral and is global and it changes the boundaries and they influence the older generations I'm really I really believe in this so I guess in this kind of more fractured world than do we think that luxury is becoming more inclusive or exclusive more inclusive elusive yeah still remain in luxury still remaining aspirational we are becoming more inclusive because we engage more people and when we talk about client nowadays it's not only the people who buy our product are also the people didn't get that engage with the brand through social media for example I believe that a very small fraction of the people that follows and run in the social media at the end Rea they are client of son Ron I honestly don't even care who they are are people that want to engage with the brand and with what we communicate no matter what so your way of looking at what we call our client is very different in front than the past our clients are not only the people who buyer the product but are the people who want we want to engage with a brand and you need to be aware of that and your first client should be your employees we talked before about sustainability and our role in communicating or not the first people for which we should run our business in a sustainable way are our employees because the way we do things matter is not only the results I'm very happy because we have good results but I'm also very happy in the way we do it and I would never compromise on the certain values of equality for example of fairness on trying to do things in the right way to get the point more of EBIT I mean advantage do you feel luxury more inclusive or exclusive at the moment yeah and I think it's entirely more inclusive and I agree wholeheartedly with with Francesca and I think we live in a day and age where there is finally brands are no longer intimate intimidated by embracing the more populist channels in of social media of digital outlets I think everyone's realize that it is the first point of engagement today with most brands is via their digital channels but brands have realized that it's no longer about being superficial through those channels it's thinking about how do you communicate your heritage honestly and authentically and use those channels as a way of entertainment and the Millennials are playing a huge part in influencing it how this news of inclusion works against the grain of elitism of the intimidation of the luxury of old and yet the world is becoming more and more unpredictable I mean there are lots of good results in the luxury market at the moment but nearly every CEO continually says this is such a volatile market you know are you frightened to be operating in this market does it make you nervous when you see what's going on in their headlines and then ultimately we know that we're sort of providing the trappings of luxury to clients I mean clearly this new sort of you know way for a wave of isolation has its certain fears and upheavals and uncertainties I mean in the US alone the seeing the the lack of the reverse of the free flow of goods and and people it creates at a great degree of uncertainty in China with the with President G's decree on anti-corruption from 2012 people have moved away from buying exuberant gifts and it gets damaged more the sort of the luxury spirits and the luxury watch market it's actually conversely somewhat helped the art market that plays more interested as stealth wealth patterns where people can own things privately the value is not immediately known you know we see that in at the in the art world there is still a sort of polarity of buyers you have your uber buyers who are buying at the site formerly the hrothgar level and then you have these these new entrants the the the artist is still that there is more encouragement now to buy locally and to buy and support your great domestic talent and I think that is going to be further accentuated in this wave of more such isolationist government tactics something you know the buzzword of luxury is often authenticity which can make a lot of people cringe and feeling Lanie especially journalists but there is a question here of authenticity in this kind of world and how much are you thinking about whether your clients feel like they can really relate to what you're talking about when you go about I mean for example you know the Sun on Wall Street well which is amazing but these trainers are extraordinarily high cost these ripped tights are a very high value so how do you reconcile that or how do you think it reconciles itself in the mind of your consumer that's in my opinion is what you really should focus on and when we talk about that authenticity I meaning it means that you don't have to run after what other people do simply because you see it is working it is very tempting looking at the others and seeing that the specific things that another brand is doing and apparently is bringing good results it's tempting let's go there but then you need to ask yourself it is right for my brand or not and if it's not you should not go there we are all I wouldn't say frightened by sometimes worried about what is going on in the world and the days I'm I'm more worried than others I start thinking about you know what are you worried about this is what everybody is facing so your role is trying to overcome better than the others because at the end of the day you're good or bad performance depends on how much you can outperform or or not outperform the market so I we try to stay focus on on the things we can control and clearly what we can control is our brand and the brand value and trying to do everything to protect that and this is what I mean for out until City DC I mean that when you shoot an advertising campaign you ask yourselves is this communicating my values or the values of someone else and if it is communicating the values of someone else or if it could be interpreted for the values of someone else you simply don't do it it's risky because it you see a lot of proliferation in luxury of people doing a lot of the same and and sometimes being successful but for me is very much short term in the long term it pays off a staying true to who you are and presumably when you take that approach the the design head you know your creative director is incredibly important totally it's the most important asset that you have together with a brand and you need to let it free to create of course you need to have at the helm of the brand created director that naturally like it's a case for Sunderland with Anthony vaccarella naturally embraces the values of the brand it doesn't do it in a forced way but it does it very naturally but at the same time can bring something new and the fact that there is this synchrony between the two makes me feel very confident that whatever Anthony decides to do even if it doesn't seem related to the brand at the end is going to be and we need to make sure that we remain luxury all these talking about the Millennials and a luxury going more democratic it sort can be also very risky because we risk of as a an industry to lose our identity our identity is the one of creating trends is the one of creating fashion and is the one of making people desire and to remain aspiration like you said we do street wear but is expensive to it is luxury street there is not it's not fast fashioned street wear and this is what we need to remain and I mean I think you stole our show and that was a standard that we made very strongly I mean luxury is luxury fashion as to be up here and it is something and not everybody can do in fact the creative director are a handful of people there are many more CEOs and good creative directors so you need to make sure that you remain there and you are not trapped down otherwise there is not anymore any difference between fashion and luxury and fast fashion and in my view the two industry can exist in herbology timet each each and every one of us plays the role that we are supposed to have creating trends taking risk creating fashion and the fast fashion coming after and democratize even more what you're talking about it's quite interesting that five years ago so that the accessible luxury market was the sort of much-touted area of the industry and in fact that's the area that's kinda under a lot of pressure as you said there was a drive to make product more accessible and actually if you're looking at the returns it seems that people are either going one way or the other exactly exactly and like you have the people buying very expensive art and buy more entry price the same is happening but we need to make sure that we don't go too much down otherwise we lose who we are and we destroy both industries I prefer people to mix and match then go into much done are you the same Alexander in terms of mixing and matching yeah I mean you know to the I think absolutely I think we all need to sit in a play a role in this eclecticism I think each brands need to be to be specialists today we need to do do very well be very focused not be all things to all people in terms of our identity in terms of our price points and I think you know this luxury is still very much about about the dream everything that sort of you know antithetical to to the rationale but today in the the the codes and the needs and the way that we sell have changed in experience has to be paramount and key the type of experience has changed the honesty of experience and I was talking over the weekend about how the the best restaurant the world this year eleven Madison one out purely because of how they personalize their experience they have a team of dream catchers who listen to the guests around their table and we'll pick out key notes of conversation they have one of their famous examples was a family from Costa Rica the daughter young daughters they're kept looking out at the snow over new york never seen snow before at the end of lunch they came and presented a hand illustrated book of this young girl seeing snow for the first time they took it down to the car that was car waiting and they said sir madam we want you to take your door to the central park and there's a toboggan as a sledge in the back of the car go and enjoy the snow and that type of elevation of dream is sort of key to how we continue to permeate the desire and the aspiration of of luxury in that rarefied world though is is only available to a relative kind of view so when you look at the sort of state in the last year of the US for example how closely are you looking at the headlines on a day-to-day basis in terms of you know what you do and how you drive your business we have to remain very good i mean and my business is very different to the eleven madison visit you know we have to sort of we we usually sell brands that very much play an irrelevant and a part of that ecosystem but we are selling at price points it can be everything from a few hundred dollars to and a few thousand dollars we're helping people buy into this world the dream and aspiration at much lower price points and we've been very focused on on remaining within that realm we're not trying to go into the uber realm of mega rarities were selling to you know Laura's clients and we want to help people enter this market which has previously been intimidating and highly exclusive Lori I know you can't sort of speak to individuals but in the last year have you noticed an uptick in the number of your clients I guess who have who have been more concerned about what's going on in the world do you feel like they want to evolve the way that they spend present themselves in reaction to news events or not really I mean the clan you're serving their global citizens actually so they live especially because we are dealing with family so multicultural multi-generational family living across the globe so concern related about the global economy definitely they're concerned related with a specific market less because they are less dependent so they they are they are so mobile and their wealth is very mobile that they they are less sexually at the moment concern in in regards to individual market taking specific action but overall I mean the global wealth of billionaires actually increase substantially last year I mean increase seventy percent so we see a substantial increase as well in our business and and we take it from there I mean but it's slightly different in terms of what I'm doing then what were you are in and and and clearly protectionist mean and US politics clearly have any an impact on the volatility of the market and geopolitical situation so yes and no I mean we need to recognize there is a concern but it does not necessarily have an impact on behavior I'm gonna ask you guys one more question but then we'll go to the floor for other questions I guess you know we no one has a crystal ball no one knows what's gonna happen you know tomorrow let alone in the next twelve months but you know particularly to Francesca and Alexander you know how will you protect your business in the next 12 months from these global fluctuations what are the best pieces of advice that you can give to the floor and also any mistakes that you've learned from in the last two years as well I can answer mistakes I mean either you know we are we're a very young business with six years old you know we constantly have to and finding Nisha's have to take risks and think about you know how we build sustainability and growth and we're a venture backed business and they're always pressures from investors we made a very ill fated judgment last year to grow quicker to grow faster they have more geographical expansion we merged with the company in in Germany it didn't pan out well we had to go they went under we did a management fire back with carved ourselves back become independent again and again I think that was just us thinking too far ahead of not understanding how to preserve our and culture identity build a brand in a very focused manner protect yourselves but for the long run bill there'd be a sustainable company work on your own dream focus focus on your own mission and goal not try and be everywhere and nowhere and be inch wide mile deep not mile wide and in Geneva yeah I think that the advise that you can I give to myself more than everybody else looking at the mirror is that this globalization forces us to go even more local in the sense that you need to be exactly for what Laura said the client today is much more mobile depending on what it's happening in the political scene or a terrorist attack so the currency or the exchange rate they shop everywhere even the same client rob is much more so focusing on locals and making sure that you are relevant on your local market that you look at your business on a comp level I mean same number of stores it's a better way to protect yourself from the fact that those people that travel around will always shop you no matter where they prefer to shop you and this again goes back to protecting the brand and communicating your brand values if you have a strategy for it let's take the let's talk about talk about the millennia let's talk about the Chinese know instead of talking about age we talk about nationalities if a company has a strategy of of selling to the Chinese the Chinese will travel if you're managing Europe and you're focusing on your price point over there and the spread with China because the Chinese so buy over there bomb the terrorist attack arrives in Europe and they all disappear if you don't engage them with a brand when they disappear you lose them to someone else so the way to engage with the special nationality is to engage with them at home and then wherever they go they shop you so this globalization in my view forces all of us to become even more because in terms of the strategies that we are implementing and in terms of learning from the mistakes it's really this one is like even in the moment when you are growing trying to always identify in the companies what is not working perfectly because actually is when things are going well that you can solve the issues being a little bit more relaxed because if you only tackle them when when things are not going well then you you create a sort of panic and if in a company you create panic it never works so this experience to me comes more from before before stand around but I try to apply it in the company every day so I'm a little bit of looking at what doesn't work a freak than enjoying what works and we've got time for one or two questions is there anyone with a question no which is quite lucky because we're running out of time okay well in which case thank you very much and I'm gonna call Vanessa and Phil on to the stage for next session thank you [Applause]

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