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From retail to hospitality

In one of my previous posts, one that I wrote a few months ago about the key trends for retail, I mentioned the luxury brands' increasing appetite for hospitality. Having worked for so many years in the wines & spirits industry for high-end and luxury Maisons, I actually noticed that growing trend a long time ago.


It really began at the beginning of the last decade, as new luxury consumers' appetite for experiences was growing - as illustrated by the growth of luxury hospitality, gourmet food and fine dining back then (Source : 2018 Luxury Goods Worldwide Market Study, Fall–Winter by Bain & Cie). As they were looking for innovative ways to craft experiences, some of them naturally expanded to the hospitality sector. The objective was (and still is) to transform retail from a shopping-only experience into a true destination - where customers go to buy luxury but also to curate their own personal brand & enjoy a piece of the brand’s lifestyle.


At first it was only a handful of brands venturing into the hospitality sector, either in partnership with an established name (food/beverages/fine deli/pastry brands) that shared the same values & origins, or on their own. Among them were Armani (hotels, cafes) and Bulgari - clearly pioneers - or Ralph Lauren with their gastronomy American restaurant, nested at the heart of the most American of Paris' arrondissements.


Progressively, more brands were drawn to the hospitality world. Most of them through pop-up concepts - a way to test the waters and make the news without all the heavy investment behind it - however with different models :


- 100% brand-owned concept, within their own retail space: quite legitimately for a retail and art-de-vivre (with "Home" category) icon like Hermes, the Hermes café (2018).


- co-branded concept, within their own retail space: the Longchamp x Angelina pop-up café in NYC. on 5th avenue. The only adaptation to the pandemic "new-normal", is that they made it a terrace (2021).

Credit : Longchamp


- 100% brand-owned concept, within luxury department store's space: the Fendi Caffe @ Selfridge's (2020). -- following their Fendi Caffe, opened at Harrod's in the Summer of 2019 / or Tiffany's Blue Box cafe in Harrod's

Credit : Fendi Caffe @ Selfridge's (2020)


With the pressure of the pandemic, not only it did not stop luxury retail's aspirations for hospitality, but it accelerated it. With a twist of course, as retail has changed a lot over the last 12-15 months. Very recently, quite a few Maisons opened permanent concepts, in their own name or within their own retail space. That move could feel a bit strange given the content at first, but it actually makes a lot of sense.

- More than ever, at times when digital is so central, luxury brands need to reinvent the role of their physical stores, and find ways to get customers to visit them again.

- More than ever, at times when people need to indulge from time to time, opening a café is a way to strengthen the connection to the brand, and make it more inclusive and more regular.

- Also, let's not forget that in times of Covid, being able to cater customers (in-house or via take out) is a way to maintain that connection and keep building the brand's lifestyle via out-of-home or at-home experiences.


I have 3 different recent examples in mind:

- Cafe V, Louis Vuitton's restaurant on the last floor of their Tokyo flaship in Japan earlier this year (after the café opened in their Osaka store last year).

Credit : Louis Vuitton


- Gucci's Osteria in Florence, Beverly Hills (and soon Tokyo)


- Audemars Piguet's future Hotel des Horlogers


And I think it is just the beginning. In the coming years, in a post pandemic world where we can enjoy traveling and socializing again, I would not be surprised to see those brands - Louis Vuitton, Hermes, Gucci, Fendi or Tiffany's but also brands like Moncler for example (and many more) - push the boundaries even further in the coming years and open their first hotel, membership clubs, deli's or even exclusive cruise.


Additional reading

https://hospitalityinsights.ehl.edu/redefining-luxury-hotel-service

https://www.glion.edu/magazine/power-hospitality-luxury-today/

Global Powers of Luxury 2020 by Deloitte (page 14)

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