In June 2017, Walpole took a delegation of senior luxury executives to Berlin as part of the European Excellence Summit, an event designed to reiterate the value and unique nature of the luxury business model, economic contribution, and to highlight the key areas of policy to ensure long-term growth. You can read more about the summit here.
In early October, we welcomed a return delegation to London from Walpole's sister organisation in Germany, Meisterkreis - led by its founder and president, Clemens Pflanz - as well as 24 CEOs and entrepreneurs from within the Meisterkreis membership of German luxury brands, including Loewe Technologies, Leica-Camera, Nymphenburg Porcelain, Esteé Lauder Companies and Sabine Römer.
“It was our first bilateral meeting and we discovered that we share the same values. Particularly in the current situation, the UK and Germany must set an example of how to combine economic growth, cultural heritage and social responsibility. Our solution requires a closer working together. This friendship between the UK and Germany, between Walpole and Meisterkreis, between our Members, must be cultivated and continue to be ambitious for an even stronger future Europe.” - Clemens Pflanz, founder and president, Meisterkreis
The group's visit to Britain began with a drinks reception in Savoir Beds' Design Centre, Chelsea Harbour showroom, ahead of Walpole's Culture, Craftsmanship and Curiosity Dinner in DCCH's North Dome, with speaker Tristram Hunt, director of the Anglo-German conceived Victoria and Albert Museum. Please click here to read more about this event. The group were welcomed to the event by Harrods MD and Chairman of Walpole Michael Ward and Alistair Hughes, MD of Savoir Beds.
"Our relationships with our colleagues in Germany and our colleagues in the ECCIA are long-standing. They are relationships that are founded on common interest, mutual benefit and, importantly, respect and admiration between business leaders and peers. It is with this spirit that we look forward to many years of future collaboration." - Michael Ward, Chairman, Walpole and Managing Director, Harrods
The following day saw the group visit Harrods for a tour of the iconic store ahead of opening. This was followed by two panel discussions in the Harrodian Suite, moderated by Walpole's Charlotte Keesing, with Michael Ward, Clemens Pflanz, Walpole CEO Helen Brocklebank and Dr Andreas Kaufmann, Chairman of Leica Camera on panel 1, and Stephen Etheridge, CEO of Church's, Caroline Welch-Ballentine, Chief Administrative Officer at Richemont; Valentin von Arnim, CEO, Iris von Arnim; and Markus Benz, CEO at Walter Knoll on panel 2. An overview of the panel discussions can be found below:
Defining the luxury market in Germany The panels discussed how to define the luxury market in Germany, with figures for 2016 suggesting that the high-end industries are worth around 90 billion EUR to the economy with about 190,000 employees. German engineering and high-end automobiles are very well known on the global stage, and tourism is also booming with 50% of luxury sales from overseas visitors. Munich, Berlin, Frankfurt, Hamburg are all key retail cities, but unlike the UK with London, there’s less of a centralised buying point. Munich is particularly popular with Middle Eastern tourists.
Defining the luxury market in the UK Defining the British luxury market, it’s clear that London has become a central trading point not just for the UK, but the world: British values, supported by a strong rule of law, makes the UK a particularly attractive trade partner and market in which to do business. Innovation is also important, pushing the boundaries and maintaining relevance to the consumer is key to longevity.
Luxury trends Key luxury trends were identified as digitisation, individualism, wellness and authenticity; there has also been a significant increase in service levels: sales assistants have evolved into curators or navigators of experience, as there’s been a drive towards ‘being’ rather than ‘having’. Products and purchases become souvenirs of unique experiences and how consumers’ feel, while the emotional side of customisation means things have flipped from brand to experience.
Perception of UK and German luxury The perception of Britishness in Germany focussed on creativity, and the continued importance of tradition. The UK is seen as an incubator for new brands and London has overtaken New York as a shopping and creative hotspot. Heritage and innovation sit well together in the UK – Burberry for example, who are great at communicating brand legacy AND innovation. German luxury is perceived in the UK as excelling in functional, high-end products, with watches and automobiles, for example, associated with the country. There is also a real commitment to excellence evident in both markets.
Innovation and technology Looking ahead to new technologies – the luxury sector needs to take more responsibility for guiding and educating the consumer to new products. Design and engineering feels comfortable, but technology is much harder to embrace and get right; looking to Japan and China for new tech innovations is highly advised.
Talent pipeline Moving onto talent, access to next-generation talent can be challenging, as is attracting people from other sectors outside luxury. There is a perception amongst younger talent that, in the digital age, luxury is somewhat behind with technology. It’s also hard to attract younger people to the sector (specifically in making roles) because working with your hands has been devalued and is seen as a second-class job. The drive to send young people to university has overridden desire and demand for hands-on vocational training. Craft-based luxury businesses are often very complex and finding talent who can embrace creativity/making and navigate the business and commercial challenges have made recruiting and developing new luxury business leaders particularly difficult.
Digitisation has changed the need for manufacturing skills, but marrying traditional skills and craftsmanship with technology is important for every culture. Equally, using our hands to make and craft things is fundamental to our culture and what it means to be human.
The next day, following the panel discussion, the delegation decamped to White City in West London for a meeting with Bruno-Roland Bernard, YOOX NET-A-PORTER GROUP Corporate and Financial Communications Director, and tour of YNAP’s offices and innovative new Tech Hub, the company’s new centre for digital expertise.
For more information on Walpole's international programme, please contact Charlotte Keesing, Director of Public Affairs and International, on [email protected].
