On a Wednesday night in June, hundreds of people lined Bloor Street in downtown Toronto to get into Holt Renfrew. Inside was Charlotte Tilbury, the world-renowned British makeup artist who has painted the faces of Kate Moss and Kim Kardashian. She was launching her first beauty counter in Canada and in her honour, the decor for the night included a stretched black London cab, a pair of Queen’s Guards, and robed showgirls flapping pink feather fans. The glass doors hadn’t opened yet to the public. But in a private room inside, an intimate event was taking place for 10 customers, selected as thanks for their robust makeup purchases, their speed-dial relationship with a Holt associate, or both. The guests of honour were dolled up by leading makeup artists and received tips from the red-haired pro herself. All before everybody else could.
This private event is one of many exclusive experiences that have come out of the luxury department store’s Icon Privileges program. It launched in March to deepen customer relationships through one-of-a-kind functions like meet-and-greets with top designers and first-looks-at for new products.
“Most people love to be the first one to have a new experience. Being introduced to a new line like Charlotte Tilbury’s really resonates with luxury consumers,” says Alison Simpson, senior vice-president of marketing at Holt Renfrew. She spearheaded the Icon Privileges program, the first of its kind for Holt Renfrew, and since day one, more than 100,000 members have signed up.
The privileges are pretty sweet. Members get access to the Apartment, a fully furnished 1,000-square-foot residential suite, used for trunk shows and private meetings. One frequent customer, who drives an hour from Woodbridge, Ont., often books the Apartment so she can shop while her husband and two boys are occupied with Xbox and Chinese takeout. Another Icon member was flown to Paris for Fashion Week to sit in the front row of leading fashion shows such as Elie Saab, Louis Vuitton and Givenchy. Welcome to the life of a luxury shopper, where invitations to exclusive events pile up, where you’re the first one called when the limited-edition Jimmy Choos have finally arrived in-store, where sales associates greet you and your spouse and your spouse’s chihuahua by name.
For a long time, glitzy stores felt they needed to be snobby to be credible (particularly if you wore a sideless number like Julia Roberts did in Pretty Woman). But now, luxury brands are learning to play nice, trading in turned-up noses for open arms. It’s not every brand that checks its attitude, says Milton Pedraza, CEO of consulting firm the Luxury Institute. But some of the hottest brands right now—like Tiffany, Burberry and Hermès—are also the ones that do a very good job of going the extra mile. And by the looks of it, more and more Canadians want to be treated like gold. The country’s luxury market grew by 9% in the first quarter of 2014 alone, according to Moneris. No surprise, it’s tiny compared to the American market, but not all those who like to buy bling are high-income earners. The demand for personal luxury goods grew to more than $300 billion worldwide in 2014, up 5% from a year earlier, driven largely by the U.S., Canada and Mexico, according to research by consulting firm Bain & Co. Upscale retailers have caught on to Canada’s new craving. Holt Renfrew and Harry Rosen are expanding their square footage while Nordstrom and Saks Fifth Avenue are setting up shop across the country, bringing an orgy of attentive, charismatic and ridiculously nice service. Luxury companies are donning the proverbial white gloves to seduce customers, from the old moneyed elites to the aspirational hoi polloi. Other, less-gilded companies may want to take a page from their playbooks.
Matt Oechsli lives in North Carolina. He’s got 15 suits inside his closet that were shipped from a Nordstrom in Anchorage, Alaska. He’s well aware there are a handful of Nordstroms much closer to his zip code. But he’s ignored them all because he trusts only one guy when it comes to his suits: a sales associate named Sam. Oechsli, the author of The Art of Selling to the Affluent, has an eye for good service, and he found it about 15 years ago during a short visit to the northwest state. Sam was kind and alert and really geeky about Italian fabrics, which Oechsli admired. But it was what Sam did after that solidified the relationship. “He asked me, ‘Do you mind if I contact you when we get good deals on suits?’ I said sure. And he actually followed through.”
Sam texts whenever there is a sale on Ermenegildo Zegnas, Oechsli’s favourite. He sends snaps of new styles when they come in. And when Oechsli buys a suit, Sam always checks up to ask, “How does the suit feel?”
“This guy knows the product and he’s taken the time to know me and what I like,” says Oechsli. “He’s really accentuating that Nordstrom brand image.”
Experts have consistently lauded Nordstrom’s outstanding customer service, driven by an employee culture with one rule: “Use your best judgment in all situations. There will be no additional rules.” Most companies know that customer service has a big bearing on their business’s financial performance, but many have no idea how to measure that impact. Only 36% have a formal strategy for making the connection, according to a 2013 joint study by BDO and the Economist Intelligence Unit.
The Ritz-Carlton exudes the same Nordstrom ethos of letting employees run free with their go-that-extra-mile service. The luxury hotel chain routinely ranks among the highest on J. D. Power’s annual survey that measures hotel customer satisfaction, thanks to a brand that’s wired around fulfilling the unexpressed wishes and needs of guests. Every day, employees have a 15-minute standup meeting where they share “wow stories” about their above-and-beyond interactions with clients. There was the time an employee rode the elevator all the way to the 22nd floor (he was headed to the 10th) so that he didn’t interrupt a guest’s ride. And the time a housekeeper bought a new bottle of makeup remover for a guest who had been running low. She placed it on the vanity with a note: Please accept this with our compliments.
When he hires people, Tim Terceira, the general manager of Ritz-Carlton in Toronto, picks out people who are empathetic, kind-hearted and genuine. “These are important traits because we want our employees to think, ‘How can I make things more hassle-free for the guest?’”
Mike Peters has been selling people suits for 27 years. He’s Harry Rosen’s managing director for Western Canada, and when he wants to win over a client, he pulls some tricks out of his proper-fitting (read: wrist-bone length) sleeves. He looks for personal hang-ups, or what he calls “normal abnormalities”: muffin tops, beer bellies, chicken legs or freakishly long arms. He spotted one the other day on a customer who was shopping for dress pants. He had an athletic build with strong but disproportional thighs. This guy probably has trouble finding pants where pockets don’t gape open and the waistband isn’t so loose, thought Peters. “The minute I brought it to light in a way that wasn’t uncomfortable, he said, ‘Yeah, that’s exactly right!’ and the trust went through the roof.”
Peters also does house calls, where he cleans out his clients’ closets and gives them advice on what’s in, what’s out and what’s coming—for free. Listening, connecting, educating: that’s how he sells. “Among luxury retailers, there tends to be more of a relationship with the salesperson. They keep records of what somebody’s bought, what else they have in their wardrobe, how many homes they have, what they like to do on the weekends,” says Maureen Atkinson, a senior partner at Toronto’s retail consulting firm J.C. Williams Group. “The more the salesperson knows about the customer, the more likely they are to be truly helpful.”
Customer relations at Harry Rosen improved when it adopted an advanced customer relationship management (CRM) system. More than a buzzy acronym, the customer-focused application records and tracks everything about clients, from the basic stuff like their height, weight and age to fine details like their birthday, spouse’s name, and the make and model of their car. “It’s like we hired an assistant for each of our sales associates. It’s brilliant. Their days are instantly planned,” says Peters.
Nicole Comeau wishes more luxury brands treated clients like this. The Toronto-based founder of the I on Fashion, a website, has done consultancy work for three of the world’s luxury giants, Richemont, Kering and LVMH Moët Hennessy Louis Vuitton. She says these brands, most of which are built on family traditions, still cling to outdated practices that rely on their shiny wares to do all the work, instead of focusing on how to sell them. “Luxury brands have yet to embrace CRM,” says Comeau. “It’s an expensive undertaking, about half a million dollars for some brands, but in this market, to remain relevant, you need to service your clients to the max. And ecommerce integration can help with that.”
She’s got a point. Most luxury brands lose 80% to 90% of their customers after that first sell. They’re also not very good at encouraging their clients to spend, according to the Luxury Institute. The New York–based market researcher found customers who have a relationship with a salesperson typically spend twice as much and stay loyal for longer.
A few years ago, the luxury institute sent out mystery shoppers to test out the service at some luxury stores. It found that Burberry and Bottega Veneta had the most enthusiastic and helpful in-store associates of any other luxury company, which didn’t surprise Luxury Institute’s Pedraza. He points to the people-centric culture that’s embedded in both these brands. “They do a very good job of investing in the future marketability and careers of their associates,” he says. “They have good benefits and they make sure the sales associates are well-educated on the products.”
By focusing on the floor, luxury powerhouses will have in their arsenal something Pedraza thinks will help them win the battle of an overcrowded market: super nice salespeople. “People who feel respected and valued tend to manifest the same behaviours on their clients.” In other words, devils don’t sell Prada very well.
This, of course, is what luxury’s established players are banking on: experience. It’s no longer enough to have the shiniest, most covetable item. Not even the elusive Birkin bag can absolve a horrendous crime in customer care. After hearing so many stories of bad service, what customers long for is the unexpectedness of a really truly delightful experience, the kind they can tell their friends about. To strike customer service gold, “You don’t need champagne, caviar and opulence,” says Pedraza. “You just have to work that generosity muscle.”
This article originally appeared at CanadianBusiness.com in partnership with Lexus.
