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SVB on Wine

The Business of US Fine Wine

Sunday, October 30, 2016

Louis Vuitton: A Story in Brand Destruction

 

Rome: The Eternal City


My fiance Jackie and I just got back from a spectacular 2 week wine cruise with Darioush Winery that started in Lisbon and ended in Rome. 

I've never been to Rome so we tagged on an extra 5 days at the end of the cruise to see the sights. 

There is a problem in going that extra week though. I don't care how big your suitcase is. By the time you've lived out of it for 2 weeks you are flat out of clean clothes so selecting something to wear becomes a challenge.

What I underestimated is just how that challenge could impact our shopping experience at one of the world's top luxury retailers. Ask yourself as you read though, 'could this happen at my winery?'


Rome: Luxury Shopping


The Spanish Steps
Having several passengers tell us about the great luxury shopping in Rome, we decided we were going to stop at Louis Vuitton and get a specific backpack Jackie had secretly been eyeing for several months. 

So shortly after we plopped into our hotel, we decided to take our disheveled selves for a walk and have some fun shopping at the Vuitton store near the Spanish Steps. That is where we had the Pretty Woman experience. 

You remember the scene in the movie referenced in the video clip above, where Vivian in her 'street clothes' walked into a Rodeo Drive store and was utterly dismissed by the staff? They didn't want her in the store. That was that store's culture and that was my real-life experience at Louis Vuitton in Rome. 

 

The Ugly Details:

Louis Vuitton

We entered the LV store and with anticipation, wandered around the first floor but without anyone greeting us or acknowledging our presence. 

It was a little busy so I didn't think too much about it. Undeterred we went upstairs. Maybe everyone was just busy and they were less busy up there? 

Again, despite plenty of sales associates walking around, nobody greeted us and not a single person said 'can I help you?' 

My fiance Jackie is far more intuitive than I in these matters and she was feeling uncomfortable. 'Let's just go' she said. Being more dense, I decided to continue the quest.

Please Leave! 


I was really in a state of denial. While I had only been in a few LV stores in my life, the brand's reputation is hard to ignore and because of that, I had built up expectations of the experience, which is the truth in what a brand should produce. High consumer expectation is a good problem to have!

I thought the poor service had to be an aberration. I decided we should just sit on the couch and wait. That should be an obvious sign we weren't just window shopping, right? But after about 5 minutes of me smiling and staring at every sales associate walking by but still getting zero attention, I decided for some reason we were being given a message: You don't belong here. 

While walking down the stairs toward the exit, with one of the sales associates walking up the other direction we finally had our first personal interaction in our 20 minute stay: 

"Arrivederci," she said with a smile. 

Louis Vuitton: How To Ruin Your Brand

Tomb of Julius Cesar

I actually burst out laughing! I now understood the dismissive reaction of the sales associates. While I don't think we smelled, we didn't look like we could afford to be in the store and just like the movie, we were basically told to leave. Arrivederci trailer trash!! 

It is a little funny in a warped sort of way. My mind raced to the parallel in the scene from Pretty Woman. Our clothes were wrinkled from the cruise length and we were dressed very casually like tourists who were trying to see Rome on $45 a day instead of consumers who were ready to shell out for goods with the LV logo. "I have all this money and no dress!"
 
I don't know for certain why we had that experience or what specifically is the culture at the store that allows everyone to ignore a guest, but that was our experience so the true reason is irrelevant. Execution is what matters and what I saw first-hand at the store was a crack in the vaunted LVMH armor. 

One of the most valuable luxury brands in the world had totally and completely failed - store wide - at a luxury shopping experience. And make no mistake: For this experience to happen uniformly with all the sales associates responding the same way, I guarantee that this experience is not isolated just to me. This is endemic to that store at a minimum and left unchecked in one of the 4 fashion capitals of the world, that behavior will spread to their other retail stores, and the word will spread with consumers to the ruination of their brand.

But how does that tie into the wine industry? When it comes to luxury goods, when experience is part of the sales equation, tactics and execution are similar so there are lessons the wine business can learn.

Lessons Learned: Rethinking Your Sales Goals

 
Triumphal Arch, The Forum, Rome
Being located next to the Spanish Steps; a major tourist attraction, that location has to drag in all varieties of people. I'm certain they get their share of pure window shoppers and even an occasional over-served individual with a $300 secured credit card asking about a $5,000 item. 

We get those types in the wine business too. I understand how those people can absorb time and result in no commission and no wine sold. But for the sake of the brand is that the right sales behavior to foster?

Questions: How are you setting sales goals in your tasting room? Do your goals lead to effective interactions that drive positive brand equity, or are they purely about revenue? Is it possible a goal is overemphasized creating a circumstance that could lead to our experience? How are you measuring the effectiveness of your sales culture? Are you engaged and observing the activities in your tasting room for qualitative measures? Is your sales culture delivering your brand's future promise?


Lessons Learned: Are You Profiling Your Guests?


The Trevi Fountain
Does profiling such as I experienced at Louis Vuitton take place at wineries? Absolutely it does, but hopefully not with "please leave" as a possible outcome. 

Today, we have many wineries who are trying to dial in their DtC practices. To improve tasting room sales in heavily frequented locations or tourist spots, wineries often have someone at the door as a greeter who can ask a few questions and then direct that person to the VIP Lounge, or the general tasting bar depending on their responses. 

Profiling in that way can have positive results in giving the guest the experience they seek, but it's a very high-risk task. That important position can't be staffed by the equivalent of a restaurant hostess. Greeting someone is a minimum job requirement in a hospitable winery.

Questions: Does your winery value hospitality as an embedded imperative? Do you insist that everyone from cellar worker to CEO look guests in the eye and greet them when passing? Do you have someone who's job is to direct guests to positions within the tasting room? Is that a highly paid job or entry level? What is the first impression a consumer gets when they enter your place of business?


Lessons Learned: It's Not Just About What's in the Bottle

 
St Peter's Basilica
A recent report by consumer research firm L2 had the following comment: 

"Affluent consumers take customer service extremely seriously, which can make it or break it for luxury brands.  These high-priced retailers can miss out if customers feel that the shopping experience is not up to the highest standards, no matter the quality of the product."

Like a Vuitton bag, fine wine is a luxury product. Quality of product is critical so we spend a lot of time thinking about the label, the story, the grapes and farming in order to make and present the best possible wine for the price point. But as a luxury good, the quality of the product is only the permission to play. After that, every experience your employees have with your guests either builds or detracts from your brand. 

Questions: Have you hired a secret shopper to test how your guest interacts with your brand? Do you analyze all points of interaction such as social, direct contacts, desktop, phone, and smart phone communication? Each of those are defining the shopping and engagement experience and your brand. Do you monitor the digital brand that is being created with Yelp, Wine Searcher, and the volume of wine apps out there?

 

The End of the Pretty Woman Experience

 
Being a persistent sort, after getting dismissed at the Via Condotti Louis Vuitton store, Jackie and I decided to walk to the other LV store at the Piazza di S. Lorenzoin but we just couldn't walk in. We both were actually taken aback by what we had just experienced and the whole idea of having fun shopping lost it's luster. So, we instead walked over to a cafe to take a break over an early dinner and a bottle of wine. 

Pretty Woman Gets Respect

By the end of dinner, with our strength restored and with the wine giving us new-found courage, we walked into the other LV store where we immediately faced four sweater-clad sales associates talking to each other. One of them looked at us and said, 'buongiorno' with a smile, and then resumed talking with her associates. 

There was hope, but we still didn't have their attention.

I kept staring at her as we walked closer, and while continuing her conversation with her colleagues, our eyes connected and she said, "Do you need help?" I blurted out, "Help her!" pointing at Jackie. 

I felt a little like Richard Gere at that point in the movie and the plaintive plea sounded funny coming out my lips. It was laced with irritation, expectation, and bolstered with the fortification of the bottle of Montepulciano we'd just consumed.

The associate walked behind the counter and after a slow start showing her some wares, started to warm Jackie up. I just took a seat on the couch as I was out of my element, but I was interested to see what Jackie was going to do? I started feeling better when I could see both the sales associate and her laughing, so I started sneaking pictures of the process like this one because I wanted to share this experience and story with you.

The Final Bill


It turned out we bought 4 different items at the second Louis Vuitton store and did predictable financial damage that I'm coming to grips with now that I've seen the credit card statements at home.

We knew when we started out that day that we were going to spend a painful amount of money on a product and like DtC in wine sales, both of us had an expectation that included being treated to a fun experience as part of the process. Experience is part of what you pay for when buying luxury.


Finally just for fun, like the scene from Pretty Woman above, we both walked back into the first Vuitton store near the Spanish Steps with our shopping bags in hand, full of merchandise. We forcefully grabbed the attention of the sales clerks and said to them, "You work on commission don't you? Big mistake. Huge!" 

Well .... we didn't do that, but it would have made an great end to the story! Wouldn't it??

oooo_\\|//_oooo

Could this experience happen at your winery? That's the important question.

~~~~~~~~~~~~~~~~~~~~~~~

Weigh in with Your Thoughts and Opinions!!

  • Please join the site in the upper right hand of the page
  • Offer your own thoughts for the benefit of the wine community on the topics presented. 
    • Have you had a bad luxury shopping experience?
    • What do you do to ensure a great shopping experience at your winery?
  • If you think the discussion is worthwhile, please promote this on your favorite social media platform.

17 comments:

  1. Tony CaffreyOctober 31, 2016 at 8:21 PM

    I'm European, have lived in the US for 25 years. Your experience is not uncommon in Europe. Has happened to me many times.

    I once waited more than thirty minutes for a server at a table in a cafe in Harrods with three African American women, two of whom were serving colonels. I had to resort to loudly musing, to the embarrassmet of other tables who arrived after us and were served before, that I was going to get pizza delivered.


    My theory is that luxury products companies in Europe deliberately take a different marketing approach than US companies, or even the same EU companies operating in the US.

    In Europe there is a greater premium on exclusivity than there is in the US, and that is reflected in higher prices. Reason is, that EU markets are segmented by language and culture, in a way that the US is not. The economies of scale available in the US market are not as easily transferrable as might be wished to any five or ten EU markets with a similar population to the US, therefore the policy is to try to get more money from fewer people, rather than less money from more people, and consumers are encouraged to participate in this strategy. That rubs off on employees too.

    ReplyDelete
    Replies
    1. Rob McMillanOctober 31, 2016 at 9:21 PM

      Tony - Thanks for the comments and logging in.

      It's an interesting perspective. I've experienced a different service attitude in restaurants in Europe but I've always attributed that to their comp structure and guessed there was a cultural component.

      Culture can get lost in translation for sure. Having just come back from New Zealand I discovered it was normal there to bring the check to the counter to pay when you're ready. They don't want to rush you.... quite civil in truth, but Americans can attribute that lack of attention to poor service since we seem to think rushing through a meal is more important.

      I have a hard time believing what I experienced at LV was what they shoot for with their guests, though I'm happy to be corrected. I've stayed in 4 Seasons hotels in Europe and received the same service level I would receive in the US. Granted it's the 4 Seasons and service is their calling card. But this was Louis Vuitton and as one of the dominant names in luxury I think they have to aspire to a better service level than apathy?

      Thanks again for an interesting perspective worth pondering. Perhaps someone else has a supporing or alternate perspective?

      Delete
    2. Reply
  2. winesmithNovember 1, 2016 at 4:01 PM

    Isn't that part of the exclusiveness of the company? They are supposed to make you feel uncomfortable, and out of place. It's a place for elitists only. Much like going to a high end white linen restaurant.

    Like the time I wandered into Firehouse in Sacramento just dressed in normal casual clothing I got treated like crap. The server actually asked me and my date if we would like to go somewhere else and try one of their other cheaper restaurants. I then decided to have the Halibut with a nice bottle of Hugel.

    Or the time I went to Opus One without an appointment. I pulled up in my '95 toyota tacoma, and parked next to all of the mercedes benzes and bmw's. They let me in to taste, but the woman at the bar said "please feel free to go up to the terrace" with a (yeah we don't want you in here feel).

    have you ever been to any of Loius Vuittons wineries? Chandon, Newton, Yquem? I've been in the caves of the two former tasting...still waiting to make it to D'Yquem.

    Although I'd assume they would treat a poor winemaker from the U.S. like crap unless your name is Thomas Jefferson.

    ReplyDelete
    Replies
    1. Rob McMillanNovember 1, 2016 at 8:22 PM

      Thanks for the comments WS.

      I will disagree with the concept that a luxury retailer's goal is to make a customer uncomfortable. Exclusive yes but you want the consumer to identify with the brand and feel part of a community.

      Delete
    2. Reply
  3. Tim HanniNovember 4, 2016 at 6:34 AM

    All you have to do to get this kind of disenfranchisement is ask for a glass of sweet wine!

    ReplyDelete
  4. AnonymousNovember 5, 2016 at 6:40 AM

    My husband and I run a small winery in Ohio. I guess you can call us a "mom & pop" operation. We were slammed in an online review because we weren't snotty enough. So, you see, it can happen the opposite way. The guy said he'd tasted all over the world and ours was one of the top five worst experiences ever. He didn't say why, but when I read your article - I "got it". We try to make everyone feel welcome. But, some people are just never going to get happy. They pre-judge before they ever walk in the door.

    ReplyDelete
    Replies
    1. Rob McMillanNovember 5, 2016 at 10:35 AM

      Stay true to who you are as a winery. You will attract the right consumers who want to have your experience. The person who complained about it not being their exerience would be the type who'd walk into a Walmart and complain about it not being Nordstrom. NEVER manage to the lowest common denominator or loudest complainer.

      On a side note, sadly Social Media has turned into a way for some to complain and work for discounts and accomodations. In this case LV contacted me and wanted to talk to me. I assured them I wasn't angling for anything and they thanked me and let me know they had passed on the information to their management. You can look on YELP and find serial complainers like that. They aren't worth appeasing but nevertheless your social reputation is important to track and maintain.

      In the LV case, if your business is involved in hospitality, no matter who you are or what you are selling, greeting a customer is a minimum job requirement.

      Delete
    2. Reply
  5. Bob HenryJanuary 5, 2017 at 8:17 PM

    You experienced "selective demarketing."

    Also known as "Not My Kind of Customer." (So let them buy somewhere else . . .)

    PART ONE OF TWO COMMENTS

    Excerpts from a now out-of-print Harvard Business Review magazine
    (November-December 1971, Pages 74-80) article:

    “Demarketing, Yes, Demarketing”

    [Alternate link: http://knowledge.sagepub.com/view/brands-consumers-symbols-and-research/n7.xml]

    By Philip Kotler and Sidney J. Levy
    [Professors of Marketing, Northwestern University]

    In this article we will describe three different types of demarketing:

    1. General demarketing, which is required when a company wants to shrink the level of total demand.
    2. Selective demarketing, which is required when a company wants to discourage the demand coming from certain customer classes.
    3. Ostensible demarketing, which involves the appearance of trying to discourage demand as a device for actually increasing it.

    (A fourth type, unintentional demarketing, is also important but does not need to be considered here. So many abortive efforts to increase demand, resulting actually in driving customers away, have been reported in recent years that the dreary tale does not need to be told again.)

    SELECTIVE DEMARKETING

    Often an organization does not wish to contain or reduce the level of total demand but rather the demand coming from specific segments of the market. These segments or customer classes may be considered relatively unprofitable in themselves or undesirable in terms of their impact on other segments of demand. The company is not free to refuse sales outright, either as a matter of law or of public opinion. So it searches for other means to discourage demand from the unwanted customers. To illustrate:

    A luxury hotel catering to middle aged, conservative people has recently attracted rich hippies who come wearing long hair and odd clothes, and who sit on the lobby floor making a good deal of noise. This has turned off the hotel's main clientele, and the management must rapidly take steps to discourage further reservations by hippies.

    . . .

    The common problem faced by management in such cases is that the main clientele is threatened by the emergence of a new clientele. The organization does not find it possible to maintain both clienteles simultaneously. Gresham's Law seems to operate: the "cheaper" segment appears to drive the "dearer" segment from circulation. For one reason or another, the organization expects a higher risk and/or lower return (whether financial or psychological) from the new clientele. The alternative is to demarket selectively to the new clientele.

    ReplyDelete
  6. Bob HenryJanuary 5, 2017 at 8:33 PM

    PART ONE OF TWO COMMENTS

    Seems like you were "selectively demarketed."

    Also known as "Not Our Customer." (So buy elsewhere.)

    Excerpts from a now out-of-print Harvard Business Review magazine
    (November-December 1971, Pages 74-80) article:

    “Demarketing, Yes, Demarketing”

    [Alternate link: http://knowledge.sagepub.com/view/brands-consumers-symbols-and-research/n7.xml]

    By Philip Kotler and Sidney J. Levy
    [Professors of Marketing, Northwestern University]

    . . . we define demarketing as that aspect of marketing that deals with discouraging customers in general or a certain class of customers in particular on either a temporary or permanent basis. The tasks of coping with shrinking demand or deliberately discouraging segments of the market call for the use of all the major marketing tools. As such, marketing thinking is just as relevant to the problem of reducing demand as it is to the problem of increasing demand.

    Once this view is appreciated, the true character of marketing's mission becomes clearer. Marketing is the business function concerned with controlling the level and composition of demand facing the company. Its short run task is to adjust the demand to a level and composition that the company can, or wishes to, handle. Its long run task is to adjust the demand to a level and composition that meets the company's long run objectives.

    In this article we will describe three different types of demarketing:

    1. General demarketing, which is required when a company wants to shrink the level of total demand.
    2. Selective demarketing, which is required when a company wants to discourage the demand coming from certain customer classes.
    3. Ostensible demarketing, which involves the appearance of trying to discourage demand as a device for actually increasing it.

    (A fourth type, unintentional demarketing, is also important but does not need to be considered here. So many abortive efforts to increase demand, resulting actually in driving customers away, have been reported in recent years that the dreary tale does not need to be told again.)

    SELECTIVE DEMARKETING

    Often an organization does not wish to contain or reduce the level of total demand but rather the demand coming from specific segments of the market. These segments or customer classes may be considered relatively unprofitable in themselves or undesirable in terms of their impact on other segments of demand. The company is not free to refuse sales outright, either as a matter of law or of public opinion. So it searches for other means to discourage demand from the unwanted customers.

    To illustrate:

    A luxury hotel [substitute: retailer] catering to middle aged, conservative people has recently attracted rich hippies who come wearing long hair and odd clothes, and who sit on the lobby floor making a good deal of noise. This has turned off the hotel's [substitute: retailer’s] main clientele, and the management must rapidly take steps to discourage further reservations by hippies.

    . . .

    The common problem faced by management in such cases is that the main clientele is threatened by the emergence of a new clientele. The organization does not find it possible to maintain both clienteles simultaneously. Gresham's Law seems to operate: the "cheaper" segment appears to drive the "dearer" segment from circulation. For one reason or another, the organization expects a higher risk and/or lower return (whether financial or psychological) from the new clientele. The alternative is to demarket selectively to the new clientele.

    SEE PART TWO OF TWO COMMENTS

    ReplyDelete
  7. Bob HenryJanuary 5, 2017 at 8:35 PM

    ReplyDelete
  8. Bob HenryJanuary 5, 2017 at 8:38 PM

    PART ONE OF TWO COMMENTS

    Excerpts from a now out-of-print Harvard Business Review magazine
    (November-December 1971, Pages 74-80) article:

    “Demarketing, Yes, Demarketing”

    [Alternate link: http://knowledge.sagepub.com/view/brands-consumers-symbols-and-research/n7.xml]

    By Philip Kotler and Sidney J. Levy
    [Professors of Marketing, Northwestern University]

    . . . we define demarketing as that aspect of marketing that deals with discouraging customers in general or a certain class of customers in particular on either a temporary or permanent basis. The tasks of coping with shrinking demand or deliberately discouraging segments of the market call for the use of all the major marketing tools. As such, marketing thinking is just as relevant to the problem of reducing demand as it is to the problem of increasing demand.

    Once this view is appreciated, the true character of marketing's mission becomes clearer. Marketing is the business function concerned with controlling the level and composition of demand facing the company. Its short run task is to adjust the demand to a level and composition that the company can, or wishes to, handle. Its long run task is to adjust the demand to a level and composition that meets the company's long run objectives.

    In this article we will describe three different types of demarketing:

    1. General demarketing, which is required when a company wants to shrink the level of total demand.
    2. Selective demarketing, which is required when a company wants to discourage the demand coming from certain customer classes.
    3. Ostensible demarketing, which involves the appearance of trying to discourage demand as a device for actually increasing it.

    (A fourth type, unintentional demarketing, is also important but does not need to be considered here. So many abortive efforts to increase demand, resulting actually in driving customers away, have been reported in recent years that the dreary tale does not need to be told again.)

    SELECTIVE DEMARKETING

    Often an organization does not wish to contain or reduce the level of total demand but rather the demand coming from specific segments of the market. These segments or customer classes may be considered relatively unprofitable in themselves or undesirable in terms of their impact on other segments of demand. The company is not free to refuse sales outright, either as a matter of law or of public opinion. So it searches for other means to discourage demand from the unwanted customers.

    To illustrate:

    A luxury hotel [substitute: retailer] catering to middle aged, conservative people has recently attracted rich hippies who come wearing long hair and odd clothes, and who sit on the lobby floor making a good deal of noise. This has turned off the hotel's [substitute: retailer’s] main clientele, and the management must rapidly take steps to discourage further reservations by hippies.

    . . .

    The common problem faced by management in such cases is that the main clientele is threatened by the emergence of a new clientele. The organization does not find it possible to maintain both clienteles simultaneously. Gresham's Law seems to operate: the "cheaper" segment appears to drive the "dearer" segment from circulation. For one reason or another, the organization expects a higher risk and/or lower return (whether financial or psychological) from the new clientele. The alternative is to demarket selectively to the new clientele.

    SEE PART TWO OF TWO COMMENT BELOW . . .

    ReplyDelete
    Replies