Reporter | Huang Shan
Edit | Zhou Zhuoran
"I haven't been under the same roof with so many people in months, and I'm a little unaccustomed." Michael Ward, managing director of The Harrods in the UK, told Interface Fashion. At the end of September 2020, after applying for a visa to China, Michael Ward and nearly ten staff members flew from their headquarters London to Shanghai, and after 14 days of quarantine, appeared on time at the event during Shanghai Fashion Week in October.
For the sake of Chinese fashion practitioners, Harold set up three temporary small live broadcast rooms on the top floor of the Shanghai Yongshe. The three live broadcast rooms have different functions, the white and blue "Studio 1" is the place where fashion KOLs and live streamers cooperate to bring goods, and the pink and purple "Studio2" is a place where industry elites share fashion trends such as clothing and beauty. The innermost black and white "Studio3" invites brand executives and media elites to discuss and share business experiences and industry trends.
A number of Chinese and foreign fashion industry insiders and Harolds industry partners in China told interface fashion reporters that Harold overcame the difficult and cumbersome international travel procedures and rushed to Shanghai to participate in the digital pop-up store activities, "which shows its determination and investment in the Chinese market." ”
Harrods is 186 years old, and the Chinese market may determine its future. From serving Europe's old money to Asia's new rich, luxury department store has always believed in an age-old industry principle: service is based on strong relationships of trust.
"Relationships are built on trust and on what people say they do. We said we would come and we would come. Isn't the process hard? Yes, but that doesn't matter. While a trip to China from abroad this year has been unusually troublesome, Michael Ward thinks it's all worth it.
After years of investing in Chinese high-net-worth customers, Harold's first fixed assets invested in China will finally surface by the end of 2020. At the party, a number of people familiar with the matter revealed to Interface Fashion that Harrods department store took a third-floor bungalow located next to the Art Warehouse Art Museum in Pudong, Shanghai.
According to Harold, this building is the first permanent service space opened by Harrods in Chinese mainland, named "The Residence" Exclusive Membership Club, which will provide private shopping guide services for Chinese customers for a long time. This will also be the first time harrods' private shopping guide service has been expanded outside of London, UK.
An industry insider told Interface Fashion that the original opening time of the permanent exclusive membership club was shortly after the end of fashion week in October, and the "The Harrods Studio" live pop-up event held during fashion week was to warm up the opening of the club. However, due to the impact of the new crown epidemic in the first half of the year, Harold postponed the official opening of the permanent club.
Although the opening of the permanent club has been delayed, the live pop-up event will be held as scheduled. In addition, Michael Ward has participated in a number of events during Shanghai Fashion Week, including serving as a jury member dedicated to supporting young designers.
"We have been supporting Shanghai Fashion Week. Some of the young Chinese designer brand products are now sold in Harrods stores. Ward told Interface Fashion, "This year may be the hardest year of Shanghai Fashion Week, so we have to support it here even more." So we're not going to stay in the UK. ”
Indeed, this is the third consecutive year that Harold has hosted a pop-up event and forum event in China.
In October 2019, Harold held the three-day The Residence Limited Time Exclusive Membership Club for the first time at the Shanghai Yongshe. This limited-time club event copied the beauty business of Harrods' Knightsbridge store in London to Shanghai, providing invited VIP customers with beauty brand and product matching advice, aesthetic treatment service experience, etc. On the occasion of Shanghai Fashion Week, Harolds and the Shanghai Fashion Week Organizing Committee jointly held a series of industry sharing meetings.
Two months later, Harold moved the limited-time pop-up club to Chengdu for a one-day exhibition of fine jewelry and fine watches, which showcased De Beers, Earl Piet, Chopard Chopard, Jaeger-LeCoultre, Hublot and other high-bead and watch brands.
The limited-time pop-up club for three consecutive years is clearly setting the stage for the opening of the permanent The Residence members' club. In fact, Harold's preparations for this moment were more than three years.
In 2010, after being acquired by Qatar Holdings, the gulf sovereign wealth fund, Harrods Group, the parent company of Harrods, launched an expansion plan. Michael Ward told the media that year that the company was considering opening the world's second Harrods department store in Shanghai, China.
At that time, wealthy Chinese tourists began to travel to Europe to shop. According to a report in the British newspaper The Guardian in 2010, Chinese consumers at Harrods grew 125% year-on-year in 2010. At that time, Chinese tourists spent three times as much at Harrods.
These signals signal the direction of future wealth flows, and China is one of the luxury markets with the most growth potential.
With the growth of the middle class and the rise of the new rich, the number of Chinese tourists traveling abroad has increased year by year over the past decade. At the same time, the international student population continues to grow, and the United Kingdom, as one of the favorite study abroad countries for Chinese students, naturally enjoys the dividends of Chinese with strong purchasing power of luxury goods.
By 2017, Chinese tourists had become the absolute main consumer force at Harrods. Michael Ward told Hong Kong's South China Morning Post that year that "for every £five a customer spends in a Harrods store, one pound comes from a Chinese tourist." ”
To attract more visitors Chinese mainland and Hong Kong, as well as the Middle East, Harrods launched a three-year store refurbishment programme in 2017, which requires a £200 million investment. Michael Ward explicitly denied the idea of opening a second Harrods store in overseas markets at the time, replacing it with the first time in history that the Harold Knightsbridge store had renovated 1 million square feet (about 92,900 square meters) of retail space.
At the same time, Harold also used part of the funds to build and improve e-commerce channels. An industry insider once told Interface Fashion that Harold asked luxury e-commerce company Net-a-Porter to help him build a direct-operated official website. Today, Harrods' website has covered a number of overseas markets, including Chinese mainland and Hong Kong, where consumers can place orders remotely and choose cross-border logistics services.
Harrods' official website also specially set up a Chinese information service area to facilitate Chinese consumers to shop online. In 2016, the Knightsbridge store of Harrods introduced alipay payment methods to facilitate Chinese consumers' shopping. Today, Harold has already opened a WeChat public account and an official Weibo account.
As Michael Ward foresaw a decade ago, China in 2020 has become the world's most critical luxury market. A sudden outbreak of COVID-19 has become a litmus test, validating the resilience of the Chinese market, the purchasing power of Luxury Goods of Chinese consumers and the maturation of luxury companies in the Chinese Market.
Chinese consumers who have been educated in the European market for the past decade have begun to return to their home markets in recent years. Years of investment and construction by international brands in China are enough for them to take on these world-class and well-tasted luxury consumers. These luxury customers don't want to be treated differently, and they expect the same service in China as they do in the European market.
That's why Harrods is now copying his exclusive personal shopping guide service from London to Shanghai. Ward believes that Harrods' regular customers also need Harrods' British private services in China. In an interview with Interface Fashion, Ward mentioned that these regular customers are a group of ultra-high networth Chinese individuals.
The upcoming permanent The Residence Privilege Club will be an invitation-based private clubhouse. Ward told Interface Fashion that the permanent Residence mansion is about 6,000 square feet (about 557.4 square meters) and has four or five rooms, and a conference guest room in the middle will be where Harold's distinguished customers organize friends to meet.
At present, Harold has not disclosed the criteria and thresholds for inviting members to the outside world. But a person familiar with the matter revealed to Interface Fashion that the people served by the club spend at least one million dollars a year at Harrods. At the same time, brands working with Harrods will also have the right to invite customers to enjoy The Residence's services.
Michael Ward defines the services offered within The Residence as "incubation." Unlike luxury brands that offer their customers private services behind closed doors, Harrods offers a combination of fashion items that best meet the individual needs of their customers, simply by selecting and matching the combination of fashion items that best meet the individual needs of their customers, including Chanel, Hermès, Cartier, Van Cleef & Arpels, and even independent designer brands. In addition, a full set of styling designs such as beauty, hairdressing, and makeup will be added.
Harold The Residence wants to incubate not only fashion tastes, but also lifestyles. According to Ward's description, invited guests can also enjoy a custom match for home furnishings at the club. In short, the services available at Harrods in London will be available to customers in Shanghai, China.
For luxury brands and retailers, it is both products and services. In the Chinese market, many department stores are innovating private customization services, but few have really developed into well-known ones.
This may be a problem of innate deficiency, and perhaps to provide first-class private customized luxury services, it needs to be rooted in the cultural soil of the Old Money People in Europe.
Mention "Downton Abbey", you may immediately think of the British aristocratic home and dress style, and it is easy to visualize the imagination of Harold Shanghai The Residence. After all, born in the affluent Knightsbridge area of east London, Harrods has nearly two hundred years of experience in serving the upper class and the wealthy. "I don't think anyone but Harold can do it." Michael Ward told Interface Fashion.
However, the key to success is whether the services of the Harold Knightsbridge store can be replicated in Shanghai. Harold's "GreenHouse" party during Fashion Week was attended by all of Harold's Shanghai The Residence's personal consultants. Harold began building the team 18 months ago, many of whom had previously worked for some of the biggest luxury brands and luxury e-commerce companies.
These consultants first learn about fashion and luxury, but also receive training from Harold. "We've given them some additional training on how to deliver traditional British services and I think that's the differentiation that customers want."
In addition to offering services, Harold Shanghai The Residence will also partner with luxury brands to display and sell in-store. Harrods' buyer team will also introduce new cooperative brands according to customer needs.
To that end, Harold has built a separate inventory data management system in the Chinese market over the past 18 months, adding Michael Ward, "to make sure we comply with local laws and regulations and that everything is accurate." ”
In recent years, China's luxury market has grown rapidly with foreign department stores that are scrambling to open stores in China. Today, Beijing SKP has become the most profitable department store in China, and the high-end malls of the Hang Lung department have also performed well, while the French Department Store of Lafayette has only opened two stores in Beijing and Shanghai in China in 22 years, and once withdrew from the Chinese market. And the once ambitious Macy's in the United States and Marks & Spencer in the United Kingdom have long since faded away.
The fierce market competition has not stopped the pace of foreign department stores entering China, among which Harrods Department Store's operation in China is quite different. Michael Ward told Interface Fashion that after a decade of investing in China, Harold believes that moving the Premium Membership service to China is a reasonable way to maintain customer relationships and communicate with them.
Assuming a large-scale investment in opening a new department store, Harold's labor, material resources, operation and management costs in China will be higher, and these costs will need to be absorbed by China's top luxury consumers on a larger scale. But Harold always served the crowd at the top of the pyramid.
Looking back from 2020, Harold's move is more predictable. The COVID-19 pandemic has hit britain's retail industry hard, with Harrods announcing in July that it would cut 14 percent of its workforce, affecting nearly 700 people. The upcoming Opening of The Residence can now take over the London headquarters to serve customers stranded in China who cannot travel far.
Will brick-and-mortar department stores be opened in China in the future? Michael Ward didn't answer a question from an interface fashion reporter.
But at the end of the interview, Ward revealed that he would visit Shenzhen, Beijing and Chengdu after Shanghai Fashion Week. "Can we open The Residence in other cities?" We can. In fact, everything is difficult at the beginning, but the second time it will be much simpler. ”