GRAZIANO DE BONI’S CRYSTAL BALL

An excellent Zoom presentation last week sponsored by Coresight Research featured Deborah Weinswig interviewing fashion exec Graziano De Boni (who previously served as the president of Giorgio Armani North America, CEO of Prada U.S., and president of both Reed Krakoff and Philipp Plein) on the future of luxury business. “The strong will get stronger; the weak will go out,” was one of De Boni’s astute predictions, soon modified by his belief that some of the smaller e-commerce brands could do well. “Not having stores is, these days, an asset,” he maintains. “In general, retail sales have been deplorable; increased direct-to-consumer business is inevitable.”

Other words of wisdom from this luxury guru who has headed up many top companies including Giorgio Armani, Valentino, and Prada:

** “We must learn how to live, eat, and sleep in front of our screens.”

** “The luxury market is still at the early stages of embracing data, and data will be the game changer for most businesses. The huge opportunity is bringing data into predictive analytics.”

** “Luxury customers are eager to get back into stores but they will be very cautious, especially in the west. Health and safety are paramount until there’s a vaccine. And online will prevail.”

** “Luxury will be more low-key: no one wants to be seen parading down Madison Avenue with three shopping bags.”

** “Chinese consumers account for 40 percent of total luxury consumption; this will go up to 50 percent by next year.”

** “With more consolidation, the future of luxury in department stores is precarious. As it stands, department stores account for less than 5 percent of luxury sales. They (dept. stores) should cultivate new luxury brands and non-apparel products, e.g. gourmet foods. Customers shop for food 2.2 times a week vs. six times a year for apparel.”

** “Eventually, more luxury brands will get out of the outlet business, but with the over-inventoried situation now, it’s hard to manage without discounts. Many (Chanel, Louis Vuitton, Hermes) are choosing ‘quiet’ friends and family sales.”

** “With growing interest in second-hand business, brands might consider managing their own re-sale, kind of like luxury car dealers selling certified pre-owned cars. Once customers understand the resale value of the brand, it increases the overall value of the brand.”