In a recent earnings call, Chanel unveiled its intention to open private boutiques dedicated to its VIP customers, starting with Asian cities. This is hardly surprising given the scenario of frequent and long queues outside their shops around the world – hardly a luxury experience.
And it’s not the only luxury giant to adopt this strategy: during the last quarterly financial reportFrench conglomerate LVMH – whose revenue rose 20%, beating analysts’ estimates – also underlined its aim to “continuously strengthen the desirability of its brands” to meet the preferences of ultra-wealthy VIP customers.
The desire of luxury lines to appeal to big spenders is evident and it is already playing out in China. In Beijing SKP, the prestigious mall with the highest sales in the country, Dior and Chanel recently took over the building’s third floor to open VIP-only lounges. (The first to do so was Louis Vuitton.) And they’re not as visible as you might think, as Chen Xiaochen, 36, a partner at a commercial design firm in Beijing, discovered.
The Chanel client explains how “on the facade of the salon, is inscribed ’31 Cambon’, the name of the street where Chanel’s Parisian boutique is located”. Obviously, the reference would be very difficult for non-Chanel buyers to recognize. But like Philippe Blondiaux, the group’s financial director, suggested during the publication of annual results This can, that’s probably the goal.
“Our greatest concern is to protect our customers and especially our pre-existing customers. We are going to invest in very protected shops to serve customers in a very exclusive way,” he said. Considering this, Daily Jing studies how brands woo HNWIs and how these VIP experiences are perceived — and analyzes the return on investment for businesses.
VIP lounge experience and offer
These mysterious private shops guarded by bodyguards in black suits have captured the imagination of netizens. On Xiaohongshu, users refer to them as “little darkrooms”. “It’s considered a privilege for loyal buyers to be invited,” said James Hebbert, managing director of Chinese digital marketing agency Hylink.
So what do they look like? Dior’s private boutique offers three rooms (all by reservation) managed by the store’s assistant manager. Given the limited number, only loyal and existing customers have access. “It rarely happens that salespeople bring in new customers,” a Dior employee (who wishes to remain anonymous) reveals to Daily Jing. She adds that the salon concept is totally different from boutiques. “More than a store, it’s like a gallery, where the brand’s culture and DNA are showcased.” From the images circulating on Xiaohongshu, it is evident that the house has recreated a smaller version of the dream makers Dior wall.
Chanel’s exclusive store is similar. Inside sources revealed that experience is all that matters there. The latest collection and hard-to-find premium pieces are presented like in an art gallery; spacious tweed sofas run the length of the walls, where artisan tools hang that showcase the house’s craftsmanship.
Besides sales service and one-on-one advice, VIP lounges have much more to offer HNWIs. With intimate lounges and private pre-orders, as well as exclusive get-togethers, birthday surprises and high-end educational courses, “you could say that to some extent the luxury brand’s VIP lounge has become a club. for the luxury consumer,” comments Charmaine Lin, Managing Director and Client Partner of Chinese communication and marketing solutions agency Gusto Luxe.
What do HNWIs think of luxury VIP lounges?
A VVIC (very, very important customer) of Dior shared his retail routine on condition of anonymity. Every time she wants to buy something, her saleswoman reserves one of the three rooms in Dior’s VIP lounge for her. “The experience is super premium,” she remarks. “The sales team always prepares clothes in my size in advance and welcomes me with my favorite desserts and drinks.”
Recently, luxury research and consultancy institute Yes OK published a survey of Chanel’s exclusive VIP boutiques based on 300 shoppers, 60% of whom were HNWI with a net worth of over $1.5 million (RMB 10 million): Over 80% of respondents said they liked Chanel’s initiative to open VIP lounges. “Wealthy and affluent women, who see luxury clothing and furniture as part of their lifestyle, want new, exciting and high-quality products. And of course, privileged treatment,” notes Danni Liu, managing director of Chinese integrated creative agency iBlue Communications.
Invest in loyal HNWIs. What is the return on investment?
Before Dior and Chanel, the prestigious skincare outfit La Mer occasionally hosted invite-only VIP meetings at five-star hotels. Chinese high-end fashion brand ICICLE and luxury liquor company Louis XIII have also opened their own VIP lounges to attract high-spending customers. However, Lin de Gusto Luxe believes that being able to open independent VIP boutiques in one of the most upscale malls in the country is proof of a certain status in the industry: “The wealthy people who are invited will feel also more valued, and thus deepen their loyalty to the brand.
The private space and tailored experience greatly enhance the intimacy between the brand and the customer. James Hebbert of Hylink concludes, “Once you’ve experienced VIP service, nobody likes to accept a consumer ‘downgrade’ to the usual shop. According to inside sources, a VIC or VVIC status is not permanent. Therefore, customers must keep their purchase volume high to retain their membership. Thus, the better and more exclusive the experience, the less HNWIs want to be excluded from it. It is foreseeable that in the future, more luxury players will follow.