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What is a Collaboration for?

 
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What is collaboration for? At its finest it is the coming together of values. At its worse, it is a luxury brand’s attempt to crawl back into relevancy—riding on the coattails of the latest streetwear craze. Sadly the former is less common than the latter. While through well crafted collaborations brands have the ability to cast their story and magic to a wider audience and catapult two brands into power-couple status, they come with inherent risk. Poorly conceived collaborations can lead a luxury brand to lose its untouchable mysticism, its recognition for creative influence, and most dangerous of all: lose its core loyal audience.


Why Brands Collaborate

As the Business of Fashion offers, “the [collaborations] move comes as more and more luxury brands are tapping the cultural energy and business model of streetwear to stay relevant with millennial customers, who drove 85 percent of luxury growth last year and increasingly demand newness and novelty.”

At first glance this may seem as a genius strategy, as Gen-Z and Millennials will account for 45% of the global luxury market (Bain & Company) by 2025, but as another Bain report offers, Baby Boomers today continue to drive the demand for luxury consumption.

 
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And while Millennials and Gen-Z’s demand for street-wear brands like Kith and Supreme are important to recognize, the average age of an individual in the Gen-Z cohort is that of fourteen. Since when has it been so important for a luxury brand to be relevant to a fourteen year old? Are your thoughts today at all aligned with the thoughts of your fourteen year old self? At fourteen you haven’t developed strong enough of a palate to understand luxury. Luxury brands should of course create a strategy to ensure they remain among Gen-Z’s evoked set, but this strategy should not revolve around their seal of approval.

To the contrary of comments by David Fisher (founder of Highsnobiety), that “it is the luxury brands that are the ones that need credibility in the streetwear space, not the other way around,” true luxury brands do not waver through the trends. Their main goal is to remain influential and to elevate the customer at all times. It is a dual source of aspiration and achievement. This is why luxury is something that you grow into as you develop a strong sense of self and a point of view—an acquired taste. If luxury brands are irrelevant to teenagers today, it is not because they are doing something wrong, they simply haven’t acquired that taste.


A Temporary Rush

However, some brands have moved full speed ahead with a Gen-Z strategy— Balenciaga and Gucci to name a few. But at what cost? Demma Gvasalia may have made Balenciaga “cool”, but seems to have burned all of the brand’s archives and rich heritage along the way. As J N Kapferer and V Bastien offer in The Luxury Strategy; heritage (a unique know-how and culture) is one of the six criteria in defining luxury.

 
Source: Highsnobiety

Source: Highsnobiety

 

The end result? Like every other trendy brand before it, from Givenchy to Saint Laurent, Balenciaga and Gucci’s coolness and temporary profits will wear off. But they will be left with a bigger issue on hand. They will have corrupted their heritage and diluted their brand value; but most pressing of all: by the time this consumer reaches adulthood, and has the discerning point of view and the financial wherewithal to buy into luxury, the brand will be old news.  Luxury is about progress and achievement, it is about becoming a better version of ourselves. When that time comes for the young consumer of today, they will seek brands with rich histories that embody that rite of passage.


Risking Creative Influence

Then there are those who are argue that collaborations are necessary to keep things fresh and desirable. But true luxury companies have been doing this for decades without collaborations. And then there is the argument of nostalgia, that collaborations satisfy this yearning to go back to the past—the past does always seem more simple and romantic doesn’t it? But once again luxury companies have been revisiting the past and re-imagining iconic house codes without collaborations. Think of when CHANEL reissued the 2.55, or when Frida Giannini re-imagined the Jackie and Bamboo bags for Gucci. In these instances re-issuing a look or piece wasn’t simply bringing something back. It was a celebration of how an iconic item had changed a generation, and an exemplar way to show a brand’s stability through time.

 
Source: KITH

Source: KITH

 

The collaborations that inundate us today do neither of the aforementioned. They don’t raise the bar of craft or creativity— providing a vision of what could be—nor do they re-interpret the past. All that collaborations do is smash logos together, from Louis Vuitton and Supreme, Kith and Tommy Hilfiger, to Ralph Lauren and Prime. At times, this smashing of logos comes from companies that don’t even make any sense—I am still trying to wrap my head around the Coca-Cola and Kith collaboration.

 
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Once again I ask, at what cost? Luxury fashion used to be looked upon for continuously pushing the boundaries, and leading the way. Think of CHANEL and the little black jacket, Yves Saint Laurent and Le Smoking, or Marc Jacobs and grunge. But with a single collaboration, Ralph Lauren which for decades was the truest symbol of a lifestyle luxury brand, has corrupted decades of a perfected dream. 


Risking Core Loyal Audience

 
 

As Jacobs notes in an article by Cathy Horyn, discussing his then infamous grunge show, these collections had an impact because they didn’t seek to cater to the desires and understanding of the masses. Unlike those of today, collections like Jacob’s were intended for a special group, “a very specific and special group that understands the vocabulary, the irony, the perversity, and the content of it. So, it’s almost by definition not something that most people should see.”

While not intended for everyone, they did make you stop and think, adding to the brand value. Today in pursue to cater to all and drive sales, designers create a couple of good sneakers for the kids to post about and call it a day. But a lack of provocation remains, and when the earnings-rush dissipates, that legitimacy for clairvoyant creation will too have faded.

 
Source: WWD

Source: WWD

 

But that’s not all. Once a brand has lost its raison d’être, the social-fabric that connects those who Jacob’s refers to as a “special group” is gone. Take Supreme as an example, its collaboration with Louis Vuitton may have been a commercial success, only to have alienated those who truly understood the brand’s essence. As a skater in the Lower East Side told WWD  “I think [the collaboration] it’s stupid as s–t,” adding that “it solidifies Supreme’s place in fashion, which is so stupid. They started the brand as a f–k you to fashion, and now they’ve become it.”

Skaters were the subculture that kept the Supreme flame on. As Ana Andjelic offers in Brands Must Hack Culture, “a subculture is made up of people who are more informed and passionate about a topic than anyone else. They are likely to be beta-testers, source material, and advocates for a new product or service.” When a brand loses those who are spreading its message with such gravitas, the brand is done. 

So then, what’s a collaboration for?


Collaborations Done Right x The Ultimate Collaboration

In its most basic form a collaboration should be about the coming together of values between collaborator and luxury brand. It is an opportunity to share a brand’s voice to another audience, but both brands must individually have a strong sense of self. It creates the ultimate power-couple and lifts both brands. Such is the Apple Watch collaboration with Hermès. Both brands were able to touch consumers that previously seemed unreachable, and both retained their essence and legitimacy.

As for my vision of the ultimate collaboration, I vote CHANEL X Patagonia. Neither brand needs the other insofar brand relevance is concerned. But each individually is propelled by a strong set of values—values from which they will not waver for temporary profits—that when combined could catapult them to power-couple status. Moreover they both have incredibly discerning subcultures, both which are willing to pay a premium to amplify the brand’s mission. Through a collaboration both could spread their missions even further. 

Source: USA Today

Source: USA Today

Source: Patagonia

Source: Patagonia

And while a dichotomy between both does exist—no one would offer that Patagonia is the most fashionable, nor that CHANEL is the most environmentally cautious—this is exactly why both ensemble could strengthen their brands. The luxury consumer is increasingly altruistically inclined, and spreading Patagonia’s message to CHANEL’s vast consumer base would be a huge step. Furthermore, this collaboration would provide CHANEL’s audience with that provocation they so yearn for. From The President Stole Your Land, to Don’t Buy This Jacket, Patagonia has proven time and time again that it is an expert in provoking thought through its communication efforts.

Some may cry sacrilege, that a CHANEL X Patagonia collaboration would destroy a dream. However this move would not risk CHANEL’s untouchable mysticism, its recognition for creativity influence, nor alienate its core loyal audience. If anything, this collaboration would give us something grander to dream about, and that is what a collaboration is for.

Where To?

Gearing up for autonomous cars, through brand loyalty strategy

As I transition into a career in strategy, I am often asked what industries interest meWhile my passion for fashion luxury has overwhelmingly declined (it is all a saturation of recycled 90’s trends, streetwear, and designer roulette), I still hold an affinity for luxury. My attention however, has turned to industries that in my opinion are the new purveyors of luxury—health and fitness for example. But people are often perplexed by my interest in the automotive industry. This makes all the more sense, when you learn that I have driven a car only a handful of times and that I don’t have a driver’s license. But I do indeed love cars, they satisfy three of my passions: luxury, consumer experiences, and transportation.

I have always been interested in transportation. When I visited Paris for the first time when I was fourteen, all I wanted was to ride the TGV. When I was kid, I would take maps of the Bay Area and draw what I thought would be the perfect subway system. Maybe it was the strategist within me, but all I wanted was to make the city more efficient. It is no surprise that  transportation policy was my favorite class while studying Urban Planning. Like Advertising, Urban Planning fed my need to problem solve and conjure up visions of what could be.

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2006
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That is exactly why I am so enthralled by the automotive industry. Some may be daunted by advents such as Lyft and Uber, autonomous cars, scooters, or hyper-loop, and how they will turn the industry on its head. However, this only provides us with opportunities to problem solve and innovate. Opportunities that can lead to beautiful consumer experiences and the nurturing of loyal relationships between brands and their customers. At the end of the day this is a strategist’s truest value—to intimately understand how clients make money, and see opportunities. Like Foucault once said: “I'm no prophet. My job is making windows where there were once walls.”


The Autonomous Cars Are Coming

According to Henrik Christensen, head of UC San Diego's Contextual Robotics Institute, children born in 2017 may never experience driving. This is because all of the major car companies plan to have fully autonomous cars in 10 to 15 years. Leading the pack is Ford who plans to have an autonomous fleet on the road for ride-hailing by 2021.

However it is not as easy as “if you build it, he will come”, and auto companies that are betting on this strategy are in for a surprise. This is because it is not just the technology of cars that is changing. Consumer sentiment and behavior when it comes to transportation is shifting as well, meaning that driver and consumer experiences will also have to be overhauled. Automakers that plan to remain relevant come 10-15 years, must remain cognizant of these changes to meet the needs of their consumers.


The Transportation Paradigm Shift

The biggest shift within transportation policy comes from ride sharing. Since their inception, ride-share companies like Lyft and Uber have completely changed the way we move around cities. I moved to New York City three years ago, and still haven’t hailed my own cab. While not without their fair amount of controversy, these platforms are more efficient, economical, safer, and seamless. These benefits are only possible because of their mobile platforms, which are as indispensable as Instagram on your phone. However, have ride-sharing platforms also changed our perception of owning a car?

While this might be a stretch, consumer sentiment (especially that of Millennials and Gen-Z cohorts) towards car ownership has changed, with overall interest in owning a car decreasing. Two additional reasons to car sharing that are driving Millennials and Gen-Z to opt out of owning a car are: (1) The Fifth Migration and (2) an overall shift in how we spend money and share our status among our peers.

The term Fifth Migration was first coined in 2005 by Robert Fishman, Professor of Architecture and Urban and Regional Planning at the University of Michigan, to describe people leaving suburbia to repopulate American cities. This phenomenon is largely driven by Millennials. According to a 2014 Nielsen report 62% of Millennials lived in urban centers where they have the access to amenities like shops, restaurants, and offices. Perhaps an even more important figure is that 40% of these individuals would like to remain in urban areas, often only choosing the suburbs because they are priced out of expensive city centers. “As a result, for the first time since the 1920s growth in U.S. cities outpaces growth outside of them.”

With such an influx of individuals into American Cities, Urban Planners and Traffic Engineers have had to completely rethink how to design cities. In an effort to maintain efficient, healthy, and safe communities; planners have opted for initiatives that give automobiles less priority, like road diets and protected bike lanes. New York City for example added more than 1000 miles of bike lanes (100% protected), between 2008 and 2018.

In addition to The Fifth Migration there has been a paradigm shift in consumerism, where consumers are opting to spend their money on experiences instead of tangibles. I explore this further in The Luxury Cultural Tension. While in the past owning a car was a status symbol and part of the American dream, Millennials and Gen-Z don’t care to own things. As Sheryl Connelly of Ford Motor Co. offers, members of the Gen-Z don’t see their car as a status symbol and are “much more likely to find value in experiences than they are to find value in things.”  

This shift in how Millennials and Gen-Z spend money, and their sentiment towards ownership is something that Volvo has caught on to, recently creating the Care by Volvo program. In an attempt to make the brand relevant to a generation accustomed to subscription services such as Netflix, Spotify, and the iPhone Upgrade Program, Care by Volvo allows drivers to sign up for a 24-month subscription service that includes insurance, maintenance and concierge services for a flat $600 monthly fee.


From Goods to Services

Christensen is not alone, both Tesla CEO Elon Musk and Lyft co-founder John Zimmer, believe car ownership will cease to exist in 20 years. While some automotive companies may produce autonomous cars for those at the top of the income bracket, because “the technology would prove expensive for individual consumers most will not own a car. In effect we will do away with car financing, as people “pay to use one of many “fleet” cars, provided by vendors such as Waymo, Uber, Ford etc.”

My vision is that the automotive industry will come to mirror the airline industry. Instead of paying for a product you are paying for a service, as most individuals can’t just go out and buy a plane. Thus, for most commuters the experience won’t be all that different from ordering a Lyft or an Uber—except that these cars will not have any wheels, pedals, or hand-operated gears. Passengers will get in, and the autonomous vehicle will transport them to a pre in-puted destination.

However, just how there are those who own private jets, or travelers who prefer to fly business or first class, some people will want something a little more special from their autonomous ride. Therein lies the opportunity to provide consumers with beautiful experiences. In addition to reports showing that autonomous cars will be safer; by not having to drive cars ourselves, autonomous cars are giving us the most amazing gift of all, time. What will we do with all this extra time inside these cabins of the future? Surely there has to be a difference between riding with BMW, Ford, Rolls Royce, or Volvo. From sleeping, relaxing, to making an espresso, or simply watching a movie; what automotive companies decide to do with their cabins will have a deep impact on the loyalty of their customers.

 
 

Volvo for example foresees two viable business spaces where its brand will operate. The first is B2B, where businesses will buy into Volvo’s autonomous service and offer it as a perk to its employees or clients. The autonomous service would be “door-to-door travel with a plethora of amenities." Another space where the brand plans to compete in, is that of short haul flights, where it provides a hassle free alternative to the 125 mile trip between Los Angeles and San Diego for example.

Rolls Royce on the other hand is hunkering down on ownership, believing that the answer to the future of transport is “simply staggering in the extremism of its opulence and swagger.” With the Rolls Royce 103EX, the automaker plans to stand apart by feeling a void in the commoditized market of transport: the void of beauty, space and form. Instead of the usual elements in car, like a steering wheel, Roll Royce has packed this “luxury cocoon” with details such Macassar wood for the interior, and a carpet of "hand-twisted silk." As it notes on its website, “the interior space is designed to be a retreat from the world – evoking a feeling of privacy, warmth and ultimate relaxation.”

Source: The Verge (2016)

Source: The Verge (2016)

Source: The Verge (2016)

Source: The Verge (2016)


Building Loyalty Today for The Cars of Tomorrow

While we can’t know for certain what cars will look like ten years from today, it is suffice to say we will not be driving them. And while some automotive companies have always been known to lead the luxury way (Rolls Royce for example), it is only a matter of time before they all have similar amenities. When you think about it, is there really a difference between flying American or United Airlines? Without implementing a brand loyalty strategy today, and ensuring that the brand remains within consumers’ evoke set, automotive companies are setting themselves for an uncertain business climate, like that of the airline industry.

 
Source The verge.jpg
Source: NPR (2017)

Source: NPR (2017)

 

Key in earning this loyalty, is car companies investing in their own proprietary car-hailing platforms. However unlike Lyft and Uber, which are available to everyone, these car-hailing services would only be available to customers of the brand. Take Volvo for example, the brand could add this service to their Care by Volvo program. Should you need a ride to the airport, or perhaps had one too many drinks at the bar, you can request Volvo to come and pick you up. If you own a Volvo and love it, why would you have to sacrifice the experience you have come to love by riding in an alternative? Volvo should be there throughout every transport experience.

Another way to build interest and loyalty for the brand today, is by extending your services into untrodden territories. Ford for example has created a bike share program in the Bay Area, for those who have no interest in buying a car. The purpose here is to remind the consumer of the brand at the nexus of their transportation journeys. I for one think an auto company should take over a subway car or station in New York, charge a premium, and retrofit it to offer an experience that includes designated seating, coffee/ breakfast, and most importantly a clean smelling space.

 
 

Encore

I am often perplexed at the dismay on people’s faces when they hear that today’s youth may never experience driving a car—as if something was being taken away. However this could not be further from the truth. For the majority of car owners, the driving experience is tied to commuting—86% according to a Census report. Furthermore as the Washington Post offers, not only are these commutes a waste of precious time, they are also associated with negative impacts on our health and quality of life such as: obesity, high cholesterol, high blood pressure, back and neck pain, divorce, depression and death. Autonomous cars will change that, and make the commuting experience a healthier and more memorable one.

Moreover, as autonomous cars take over the mundane task of commuting, automotive companies can double down their innovation efforts of leisure and sport on manual cars. An example of this in practice comes from Land Rover, which through Land Rover Experiences, allows you to test their fleet of cars through different off-road terrains with the guidance of an instructor. Not only do these experiences allow consumers to push themselves, learn new skills, and explore, but in addition it strengthens their bond with the brand.

 
 

I envision that brand strategies of automotive companies will come to more and more resemble that of Land Rover; where consumers can experience their fleets to their full potential. Imagine Autobahn-like corridors where you can race Aston Martins or Lamborghinis. These experiences will finally make the sensation of freedom and exploration that is so fondly associated with cars a reality.

The truth is that autonomous cars aren’t taking anything away, to the contrary of critics, they are providing us with a world of opportunities. Now only one question remains: where to?

Reinventing The Retail Card

In a recent Business of Fashion article Luxury’s Generation Gap, Limei Hoang offers, “millennials will account for 45 percent of the luxury market by 2025, but their values and spending habits are at odds with the business models of many traditional brands.” Millennials are hard to impress and they will remain uninspired unless the brand experience is an immersive one. They worship brands that are transparent, authentic, and participate in the communities where they do business in. In other words, they are loyal to brands that show a high level of engagement. What is so perplexing is that there is not one luxury department store that is responding to this insight, and this remains the reason for their slow demise.  

When we talk about customer engagement, we are talking about the same level of engagement you would expect from your best friends, given that, “like human relationships, customer engagement is the culmination of ongoing interactions and experiences with the brand." A brand needs to make sure that the interactions and experiences between the brand and millennials are meaningful enough to leave a lasting memory on their psyche. Research by SapientRazorfish outlines five key drivers to deepen customer engagement: empathy, personalization, accessibility, value, and consistency/cohesiveness. Blake Park explores these in depth in Know your Millennials. Really know them. Because conventional wisdom can mislead.

Among all luxury department stores, there is a product being offered that could ignite all the aforementioned drivers and that is being foolishly unexploited to its full potential. Enter the retail card,  luxury stores’ biggest missed opportunity, and their last ray of hope, to improve the luxury experience for millennials.


Have you heard of our rewards program?

Call them loyalists, influencers, or segment them by levels, circles, or even precious stones or metals; every luxury store offers a credit card and they all want you to have one. Not only do they avoid the transaction fee; but they also reap the benefits of interest or potential late fees, and according to intra-industry reasoning—customers with retail cards spend more. But like many other financial instruments, none of them differ very much from each other.

Beyond this, as far as millennials are concerned, these cards are just another financial instrument unworthy of their trust. Having grown up in the midst of the worst financial crisis since the depression, millennials’ distrust for the financial industry is at an all time high. As Scratch’s Millennial Disruption Index offers, the banking industry runs the highest risk for disruption. This notion triggers down to retail cards, because none of them are different. And yet these cards hold the power to solve all of luxury’s problems. They have the potential of checking off all the mentioned benchmarks and like travel metal cards, they  have the potential of becoming the latest status symbol.


What’s in your wallet?

What is it that is implied when a client drops their Centurion, Platinum, or Sapphire Reserve card? Perhaps that you have an exceptional credit score, that you spend enough to outweigh the annual fee, that you can afford the annual fee, that you have enough money to meet the signup bonus, and perhaps that you have the time and money to utilize the perks that come with the card. Perhaps, because of these cards, others perceive you as cultured, wealthy, or at least as someone who has been responsible with their money. These cards also say that one has access that others don’t, whether this be access to places, things, or knowledge.

 
 

Luxury retail cards need to achieve these perceptions while ensuring that they are enriching client engagement. They have to say “I have access to a plethora of exceptional luxury. My card can get me into ‘so and so’ luxury department store.”

Any place with the perception of exclusivity—from the Delta Sky Club to the Soho House—requires a membership. So luxury department stores must switch their ‘come one, come all’ mentality, and only allow entrance and access to all the perks the store offers to cardholders. To countervail any loss of clients who may not want to open a card or can't because they are a tourist, stores should offer a day pass. Should the client buy anything that day, the entrance fee can be applied to their purchase.


The Perks

Now let’s talk about the perks that these card should provide, and that will allow them to meet the engagement benchmarks for millennials.

Empathy: According to Blake Park brands need to be empathetic to millennials’ need for flexibility when it comes to earning and redeeming points. However, as I point out in Dethroning the Client, it is also imperative that brands demand a level of commitment from their clients. As such, a loyalty program should become more flexible the more the client spends. As previously noted, customer engagement works like human relationships. You wouldn’t forgive a stranger for being late to an appointment, however, you would be flexible for your best friend’s mishaps and perhaps reschedule with pleasure. A loyalty program should reward you more and more as you spend, and there should be multiple tiers that a client can strive toward. This allows a brand to target a large audience, while maintaining its image of luxury. As you spend more, not only should you earn more, but your perks should also accrue. These perks should be relevant and meaningful. For example, your shipping preference should be upgraded, your purchase protection such as alterations and repairs should change, and how soon you can start enjoying your rewards should also change.

This level of flexibility in earning and redeeming points is the reason why the Chase Sapphire Reserve card has seen major success, while “American Express cards in use declined by almost 18 percent, according to industry analysts.” The Chase Sapphire Reserve allows you to earn points under its travel and dining categories in various ways. Under its travel category, one can earn points by using the card for airfare, taxis, subway, and transportation companies like Lyft or Uber. One can also use the  $300 travel credit on any travel expense. The American Express Platinum card, on the other hand, will only allow you to earn points on airfare, forces you to use its $200 Uber credit in $15 increments per month, and will only allow you to use your $200 travel credit for qualifying incidental purchases. Unlike the Amex Platinum card, the perfect luxury retail card must be empathetic to the needs of the consumer, while remaining in control of the luxury experience.

Personalization: There is nothing as upsetting as a rewards program that treats everyone the same. It makes you feel like the brand is not doing their due diligence and learning about your habits and what makes you tick. The reality, however, is that every loyalty program does just this. As offered in Dethroning the Client, when discussing how to properly stage breathtaking experiences and transformations, brands need to “transcend expectations, to go off in new (and unexpected) directions entirely.”

Instead of offering gift cards, notes, or in store cash to shop again, luxury department stores must use these funds to create remarkable experiences for their patrons. As Ajay Kelkar offers in How Banks are Missing the “millenials” Mark?, “research from Facebook IQ has shown that Millennials tend to show off not through the ownership of things, but through experiences.” These experiences can be meaningful no matter how much the client has spent—from a diner to their favorite restaurant or tickets to their favorite artist’s concert, to tailor-made travel journeys to exotic destinations. These experiences will keep clients coming for more; and as a brand you will benefit from invaluable exposure that is sure to arise through organic advertising.

Ensuring excellence from this strategy, however, requires a team that is dedicated to continuously touching  base with sales people, gather insights on clients, and create fabulous experiences. It also requires a state of the art mobile app.

Accessibility: When in regards to the accessibility driver, Park is concerned with the ease with which a client can interact with the brand across various platforms—whether in digital or in store, and the transparency a brand exemplifies in terms of collecting and using client data. As noted, millennials hold high distrust for the financial industry; so as financial instruments, luxury retail cards should always put forward the highest regard for transparency. As for the ease in interacting with a brand, luxury department stores need to use the retail card as a client’s access pass to interacting with the brand in order to demonstrate and foster high levels of engagement.

Think about your best friends. You probably are friends on Facebook, you follow them on Instagram, and are connected on LinkedIn (even if you don’t work in the same industry). You like all of their posts, photos, and stories. However,  what's most important is that if you wanted to reach them, you could do so on various platforms. Personally, I prefer to text or call my friends. How do we take this ease and accessibility and implement it to a rewards program? The ultimate luxury retail card must give you access to its mobile app, access that non-cardholders would have to pay for (because yes, it should be that good). What would this app do for the client?

There are a couple of apps that I rely on. Among them,  Susan Miller’s Astrology Zone (if you don’t have it, get it, it’s the best) and the financial app MINT. However the most important app in my phone is the Equinox app.  It may sometimes seem like I am working undercover for the brand because I write about it all the time, but in all reality I can’t live without it. Not only do they make my life easy, they’ve helped me transform myself. And this should be the ultimate goal for a luxury department store. The Equinox App allows me to search classes and export them to my calendar, and helps me track these classes and see my workout results. It also let’s me know what clubs are near me and what classes are coming up. It informs me about  promotions that are available to me at The Spa, new merchandise available at The Shop, and it shares upcoming events. It also previews articles that are available on Equinox’s online magazine, Furthermore. Foremost however, is that the app allows me to ‘favorite’ classes, instructors, and clubs. So let’s say I had to leave work later than expected and because of this I missed a class; I can open the app and filter out my favorite classes, instructors, or clubs, or all together, and see what workouts  are available to me.

 
 

A retail luxury card should offer an app that does just this, but goes even further. Imagine an app that works a little like Facebook, a client should be able to request and favorite a salesperson. This would allow them to see when their favorite salespeople are in the store, and set up an appointment with them, or just message them if they have a question. They would also have access to a salesperson’s shares from pictures of new merchandise, to their thoughts on the the latest runway shows or an article about the industry they found interesting, and the associate would be able to invite them to events or trunk shows. A client can share pictures of how they are wearing their latest pieces, or perhaps ask for recommendations should they be looking for something special.

From the salesperson’s point of view—if the client has favorited them—the salesperson would have access to merchandise they were looking at, and liked, and they could comment on it. They would have access to their purchase history, to know how to build their wardrobe, and know when the client is in the store. A sales person would also be able to add insights they are gathering through their interactions with the client, so that the ‘Rewards Team’ can strategize the next experience that will “wow” that client. As Park notes, “with greater insight into current and future needs, and the ability to meet those needs in the most relevant way, brands have the opportunity to build longer-lasting, ever-deeper relationships.”

 
 

Value: Park believes that there are two ways that will enhance the value exchange driver between brand and clients. The first is providing clients with incentive to share their benefits on social platforms such as Instagram. The other is fulfilling their desire to be heard by the company.

While these two practices are important to implement, they are given when it comes to a luxury retail card. To truly ignite this driver, luxury department stores need to go above and beyond, surprise and delight, and transform clients. In Dethroning the Client and The Untapped Power of Luxury I explore some of the sources of value exchange that would strike a chord with the behavior and values of millennials. These two sources of value are altruism and knowledge value.

Altruism is an emotional need that millennials so fervently seek to satisfy. Nothing reaffirms their shopping behavior more than feeling like they are serving a purpose and having a positive impact on society. A luxury retail card can achieve this by ensuring that a certain percentage of membership fees collected are allocated to supporting a cause. However, not just any cause will foster the authenticity that millennials expect, in establishing legitimacy for stronger client engagement. Any cause you take on has to be authentic and reinforce the brand’s promise. As Jasmine Bina offers in her Business of Fashion Op-Ed, What You Don’t Know About American Millennials, doing the right thing “means doing it before it’s expected of you. It also means doing it because it means something to you, not because you think someone is watching. If your initiative doesn’t tie into your brand story, you’re potentially opening yourself up to a world of scrutiny and backlash.”

An example of such a cause is the CFDA Vogue Fashion Fund, whose mission is “to cultivate the next generation of emerging [of] American design talent.” Another example could be to partner with Parsons School of Design and fund their end of the year fashion show, which showcases the best work of the entire graduating class. Not only is this a good cause, but it would provide a luxury retailer with leverage in picking up the next generation of designers to host in its store.

Knowledge Value is the economic offering resulting from accumulated wisdom. Having become of age during the information age, millennials have felt the impact this revolution has had on the paradigm of consumerism. It is no longer just enough that you look good in your clothes. Your clothes announce to the world that you are  ‘in the know’ by having access to the best information and knowledge that money can buy. What millennials put on their back is “an extension of themselves or a conversation piece.” This conversation can be about how they learned about the designer, or about where they were when they picked up the piece.

Access to a place where they can gain this knowledge is exactly the value that millennials expect from a luxury retail card. Luxury department stores—if staffed with talented individuals with a true acumen for luxury—can ensure that millennials find value by offering them with various sources of knowledge to remain ‘in the know’. From an interaction with a salesperson, to workshops (of the like of the Apple Store), to a magalog, all of these are just a small sample of the perks that must accompany a luxury retail card to foster high client engagement.

 
 

Consistency and cohesiveness: Key in a luxury retail card delivering high engagement to millennials is ensuring that they are indeed loyal to the brand and not the loyalty program. This means that any additional perks that are available through the membership of a luxury retail card, must reinforce the brand’s essence. These will obviously vary brand to brand. A lucrative business opportunity for luxury department stores—especially those in high tourist cities—could be to partner with companies such as Delta Airlines or American Express to create in store lounges like The Centurion Lounge. Lounges could also be an opportunity for Chase, or the top echelon of fitness and wellness Equinox.

 
 

 

Other perks that would remain consistent with the brand promise could be:

-Membership to the Business of Fashion Professional,

-Access to the stores’ magalog,

-Priority access to ‘waitlist’ items, and

-Events where clients can meet and interact with the designers and store executives.


The values of millennials are indeed at odds with the “exclusivity” ideology of luxury powerhouses. This is not to say that millennials are not aspirational or that they don’t want beautiful things. That Instagram post from your trip to Mykonos shows us that snobbery is alive and well. However, it is no longer enough to just look good, and in the eyes of millennials, this is all a luxury department store has to offer. Millennials are looking for continuous self growth, and they will invest their money on brands that will support them in doing so, while also showing high engagement. Reinventing the retail card can help luxury department stores achieve just that.