What: The 1 million euros question: how profitable could it be to focus on regions instead of capital cities?

Why it is important: BoF focuses on luxury houses, however, department stores do also have to find an answer to this question to make the most of their regional networks.

Selfridges CEO already mentioned her renewed interest for local customers at a moment when no tourists are allowed to come to London. We see the same trend across Europe, out of bare necessity. In China, Bain states that 50% of luxury customers are in second or lower tier cities.

In parallel, luxury houses tend to internalise their distribution by stepping away from department stores, independently on how luxurious their capital cities flagships are.

BoF cites the example of Flannel as a strategy to make the most of regional demand, thanks to its coverage of the rest of the UK, in order to diversify its sources of growth while at the same time fuel the loyalty of younger customers not living in London.

How Big Is Luxury’s Opportunity Outside of Capital Cities

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