The convergence of luxury retailers and hospitality brands is reflective of the modern consumer’s increasing demand for augmented experiences, and synergistic business partnerships provide enhanced commercial benefits to both the retailer and hotelier.
For retailers, brands need space to engage with consumers and hospitality experiences provide an opportunity to create deeper connections. The brand stays front-of-mind without diluting the value of the products by forcefully trying to sell more.
For hoteliers, it’s an opportunity to elevate brand awareness, heighten loyalty and reach new potential guests – especially when the retail partner shares brand values and is aligned with target audiences.
The importance of brand
Today’s consumers seek connections with brands, often using logos and products to articulate their own personality to their peers and networks. Younger generations are driven by a hunger for experience and heavily influenced by social media: owning objects is no longer seen as their quest, experiences - the more luxurious and unique, the better - are today’s trophies.
In the luxury sector, brands are increasingly aligning themselves to ‘experiences’: one study found the market for luxury hospitality is growing faster than personal luxury items. Driven by the rise of millennials as luxury consumers, the researchers found “emotion and experience have emerged as luxury consumers’ important motivations to purchase.” They don’t want to just buy the status symbol; they want to live it.
Analysing consumer behaviour in the luxury sector, it’s believed:
“twenty-first century consumers want to interact with brands on a deeper level than just a financial transaction. These consumers aim to form emotional, contextual, and sensory connections with brands... As a result, luxury brands have become synonymous with going above and beyond to provide consumers with a personalised and unforgettable experience.”
Yet, brand loyalty remains a key factor in 90% of luxury purchasing decisions, with a consistent brand presentation across all platforms – including experiential partnerships – boosting revenue by as much as 23%. Forging a meaningful partnership with a hospitality provider allows retailers to keep their brand relevant to consumers’ mindset and lifestyle, without having to roll-out increasingly frequent product lines and risk devaluing their brand.
The concept of lifestyle is without doubt influential in hospitality: by 2025 lifestyle hotels are expected to constitute 23% of the hotel development pipeline worldwide. And it’s a category that delivers for owners and operators, achieving an additional $33.60 ADR over non-lifestyle hotels according to STR.
The benefits of collaboration
Deloitte cites the challenge for luxury retailers as finding the balance of driving “future sales, while remaining unobtrusive, discrete and scarce.” At the core of luxury brands has always been a physical experience – marquee stores in exclusive locations – and partnering with hospitality brands provides an opportunity for them to extend a physical and emotional relationship with their customers.
Collaborations between luxury lifestyle brands and hotels (and the wider property market) grab attention, both in the media and with consumers. Examples include:
The Dior Spa on the Royal Scotsman
Frame’s hoodies for the Ritz Paris - shoppable on social channels!
Christian Louboutin’s 13-room Hotel Vermelho in Portugal
Fashion behemoth LVMH acquired the high-end Belmond Hotels, while Milan (and other cities) are home to Armani, Bulgari and Moschino hotels
Mercedes Benz Residence in Dubai
Aston Martin Residences in Miami
Nobu Hotels - not only well-known for its celebrity owner Robert de Niro and evolution from Nobu Restaurants, but the Atlanta hotel is a car-lover’s dream with the exclusive Porsche Icon Suite and Porsche Classic Room available
Elie Saab Residences for those seeking a base in London
Swiss watchmaker Audemars Piguet’s Hôtel des Horlogers, the ‘Watchmakers’ Hotel’
Fashion bible Elle has a Maison Elle collection, including, of course, a property in Paris
Experiential activities allow luxury retailers to bring more aspects of their brand to life and strengthen their brand equity: “Producers of luxury products have realised this and are switching elegantly between selling products and offering experiences to promote their brands and values best.”
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