The right luxury retail environment

Today, luxury is no longer the preserves of the royal. With India opening up to the world, luxury began entering upper middle-class spaces. Lifestyle habits of Indians are shifting from austerity to complete self-indulgence and Indians are now unapologetic about spending lavishly on goods such as luxury watches, cars, and other hi-tech products.

Of the three big emerging Luxury markets – China, India and Russia – India is the second-largest. With the young workforce making appreciable money, along with the soaring consumer confidence, more interest is being generated in luxury brands. Discretionary spending has also witnessed a 16 per cent increase for the urban upper and middle classes.

Tradition gives way to modern

Five years ago, premium international brands like Mango, Lacoste, Marks & Spencer were perceived as luxury brands, but today as Luxury becomes ubiquitous in modern India, the perception stands corrected with the entry of ‘real’ luxury brands like Louis Vuitton, Valentino, Hugo Boss, Chanel, Moschino, Christian Dior, Estee Lauder amongst others. Today, acquisition of luxury products is no longer an ‘occasion’ for an Indian consumer, but an aspect of today’s living.

Retail environment

The importance of ‘retail environment’ in the luxury sector is particularly high. Though malls are springing up throughout India and high streets are undergoing a makeover to bring a look more like the fashionable avenues in any key international cities, there is still a lack of veritable luxury retail space which is still limited to 5-star hotel lobbies.

There is however an ongoing debate among luxury retailers about choosing between high street and malls. The Rolls Royce Company, for example, has started to unfold its brand in a shopping mall, Atria, in South Mumbai.

The idea of a hi-fashion street like a Fifth Avenue or Oxford Street is still novel to India. But, luxury and lifestyle malls, which are up and coming as the new hotspots would surely set the ball rolling for luxury retail to expand in India by providing an ideal retail environment.

From luxury standpoint, having a good location and foot traffic would not mean that it is ideal for luxury retail. Several new luxury retail centres are being built in India that would be high-end enough to create the right environment for international luxury brands.

The sizes of these luxury/specialty malls range will range between 1 to 2.5 lakh sq.ft, and typically have 30 to 50 boutiques with separate floors for perfume, jewellery and watches.

Initiation into luxury retail

One company, which has major plans in retailing for the next few years, and more specifically, luxury retailing, is Gitanjali, the largest diamond retailer in India with a presence in every major city of the country. For the purpose, it has already floated a new company, aptly called ‘Luxury Connexions’ with an initial investment of Rs 100 crore in the first phase of its inception. The corpus will be for acquiring brands, mainly in the business of fashion and lifestyle, health, beauty and wellness, food and hospitality, and in setting up luxury retail across the country.

All of Luxury Connexions business activities will operate under four verticals:  Advisory, Events, Media and Retail.

Over the years I have had a prolonged exposure to both the Indian and international luxury markets for high fashion, and I am confident that we can emulate the same modules here.