What: Leaders from LVMH, Neiman Marcus Group, and Harrods discuss what the future looks like for their brands in the current economy

Why it is important: While luxury firms may be more resistant to a recession, they feel the impact of shifting consumer patterns and need a plan to win over consumers, retain existing shoppers, and innovate.

At the National Retail Federation’s Big Show, attendees heard from luxury leaders from LVMH, Neiman Marcus Group, and Harrods. With reports of the luxury sector slowing due to slowing Chinese tourism and consumers shifting their spending habits more on experiences, the retailers discussed what their plans are to tackle the challenging world economy today.

The luxury sector is said to be more resistant to recession, but definitely will not be immune to the effects. LVMH is taking Web3 and innovation seriously as they feel they are prepared for the recession with their financial strength. They also believe that the recession won’t be as impactful as Covid-19 and will continue to see customers return as they did during the pandemic because of the appeal luxury has on consumers to keep them coming back.

Neiman Marcus Group is focusing on growing and strengthening relationships and reaching more people. With 2% of their customers generating 40% of their revenue, their big focus is on how to recruit more people that have that potential and getting more share of their current customers’ wallets. Additionally, they are focusing on getting customers in-store, as they see the average order value increase with customers at their brick-and-mortar locations.

On the contrary, Harrods is focusing on improving their online experience. They partnered with Farfetch to revamp their website in hopes to recreate the same extraordinary experience and feeling customers have in-store, online. Their managing director believes traditional wholesaling in luxury will be replaced by an e-concession model where brands have more control over their future. While the retailer is focusing on technology, they also caution that technology isn’t the end-all be-all and buyers still need to purchase items that are new and intriguing.

Luxury’s play in a challenging world economy