How to sell a perception called Luxury

 

With luxury brands, the excellence of the underlying product is merely a starting point. What makes these luxury products truly stand apart is the superb level of service in which the products are wrapped.The services surrounding each of these brands can be viewed not only as an intrinsic part of the products themselves, but as an important differentiator of the brand.

Promil Pande, Founder, Sidhast Crafts shares her views about the niche retail business – “Luxury retail is more of an art. The service shall not be intrusive yet personal. The ability of the staff to make a client feel special and yet be subtle would be essential. Interaction at the point of sale, for even small things, such as the choice of words, to remember the way he likes his coffee while shopping, would emerge as very important elements”.

In luxury business, 10 per cent customers buy 90 per cent of the products, so quantity of customers is never an agenda instead it is about maintaining the loyalty of the customers.

Yet, are we ready?

Successful luxury brands give the same attention and care to selecting employees that they put into nurturing them. The Ritz-Carlton, which features luxury hotels and resorts in the world’s premier destinations, uses a process that sets the standard rigorously. It evaluates each applicant using scientific, behaviour-based assessment tools developed by the human resources consulting firm.

Speaking about the Indian scenario, Pradeep Hirani, Chairman, Kimaya Fashions, says, “Since we are in the nascent stage of luxury, wherein most brands do not have the understanding of importance of front-end staff in generating customer-loyalty and providing the customer experience it deserves, we have not been able to maintain or even set benchmarks for the Luxury industry in India”.

This dearth of quality staff creates a huge challenge for retailers. Though a challenge, recruitment and training of store executives becomes a very critical factor in the growth of the brand.

Another big problem faced by the luxury brands is the unavailability of front-end staff and brand managers who have an expertise in luxury. Hirani adds to the same – “Usually, brands in India end up hiring just school graduates and pay them pennies to work at the store, which definitely brings down the servicing standards. We hardly have any colleges in India who train students for the retail industry, whereas all across the west, this is taken very seriously and front-end training is mandatory for any back-end job. As an industry, first of all we have to understand the importance of sales staff, it is then we will realise their worth and will value them accordingly”.

Comparison, or ‘no comparison’

The Indian standards if compared to that of the international bench marks, only give a clue that there cannot be any comparison as ofnow.

The Retailer team researched on the staff selection and training process which clearly points out the difference between HR selection process in India and in the international market.  The words of Sanjeev Wadhwa, Country Manager, Fisher & Paykel India, explains it:  “Indians believe in ‘Jugaad’ and ‘Chalta hai’ attitude, which is why standards are in a very primitive stage”.

A few things which are quite evident are that any prior knowledge of luxury is not a parameter before judging an employee. The compensation is not of a level which can attract the niche crowd into this niche industry.

At the same time, the average Ritz-Carlton employee receives 232 hours of training per year. At Park Place, the Fort Worth car dealership in Texas which deals in Mercedez cars, the average employee receives 186 hours of training per year. A resume with prior luxury experience or luxury training is always required. Besides this, the top-performing brands have elaborate procedures to measure both customer and employee satisfaction, and they reward high-performing staff with extra recognition and superior compensation.

Speaking about the salary and compensation provided to Indian staff, Kripesh Singhvi, Director, Audelade, revealed, “Indians are offered a compensation which is a minimum of 2.5 times lesser than the international standards. The first step that needs to be done is to increase the wages to attract quality professionals”. Wadhwa also admits, “There is a huge difference in salary packages in India and developed economies where manpower is a constraint. Indians do not pay at the same level as our Sales & Marketing teams to the Customer Service team”.

Though Indians have earned the riches and have developed the desire to indulge in luxury, this nascent sector still needs to bridge the gap. Indian market predominantly has been a premium level market. Infrastructure, retail space and customer service, all of these have evolved in a way good enough to cater the premium sector. The gap between luxury and premium level experience needs to be bridged. Wealthy, well travelled customers who are willing to pay 10 times more than the product value is definitely looking for a special experience. Being pampered, wooed and treated the royal way is what makes a service the luxury service. But the question remains, are we ready to meet the high standards set in the international market?          

 

 

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