Luxe shopping: no longer just about the USA, France and Italy
Fair enough, since the USA is the world’s largest luxury goods market, while Italy has the world’s largest number of luxury goods brands and France has the world’s highest share of luxury goods.
But there’s more to luxe than street side strip shopping in traditional markets, in particular the growth – until recently – of luxe shopping malls in Asia.
According to Deloitte’s Global Powers of Luxury Goods 2017 report, consumers in emerging markets are driving the global growth in luxury goods, particularly China, Russia and the UAE.
While nearly half of luxury purchases are made when consumers are travelling in a foreign market (31 per cent) or at an airport (16 per cent), due to exchange rates and more consistent market and channel-based pricing, the emerging markets are increasingly shopping for luxury goods domestically.
This has seen the rise of a number of local luxe brands in markets such as China.
Below is a roundup of some of the luxury goods shopping malls in less ‘traditional’ markets.
Note that in a softening luxury market, the overarching trend toward experiential retailing, and not just product merchandising, still applies – however luxe the goods on display are.
Some malls and brands are embracing experiential retailing, while others are still relying on the product and brand name to sell itself.
- Dubai, UAE: The Dubai Mall built in 2009 is the world’s largest mall by area and numbers 1200 luxury shops and 70 restaurants. The Mall of the Emirates, opened in 2005, includes an indoor ski resort, 700 stores and a 5-star hotel.
- Abu Dhabi, UAE: Sports both The Galleria Al Maryah Island and The Avenue at Etihad Towers.
- Doha, Qatar: The Villaggio Mall, an Italianate-style mall opened in 2006, includes Gondolania Theme Parks, ice rinks and gondola rides.
Japan is one of Asia’s traditional luxe markets but there has been significant development in luxury malls in other countries.
Other Asian markets with a mature luxury goods offer include Hong Kong, Taiwan, Singapore, and South Korea, the latter becoming one of the most popular luxe shopping destinations in Asia.
However, both developed and developing Asian countries have luxury goods malls.
- Beijing, China: The city has a top 10 luxury shopping malls list, including The Malls at Oriental Plaza, Shin Kong Place with 983 brands ranged, and Seasons Place.
- Singapore: There are a number of luxury malls here including the Shoppes at Marina Bay Sands, Mandarin Gallery, Ngee Ann City, The Paragon, and ION Orchard.
- Manila, Philippines: Shangri La Plaza built in 1991 and owned by the Kuok group, is one of Asia’s original luxe shopping malls.
According to Skyscanner, some of the top luxe malls in APAC include Bliss in Cambodia, Siam Paragon in Bangkok, Vincom Shopping Mall in Ho Chi Minh City, Vietnam, and Lotte Myeongdong in Seoul.
As far back as 2014, a JLL report on shopping centre development highlighted areas where Asia was outpacing the rest of the world. Areas included experiential and customised fine dining offers, with offers such as private dinners with Michelin-starred chefs, custom and personalised couture with malls providing on-site stylist concierges, airplane parking for private jets and helipads for helicopters, ‘virtual valets’ using platinum key fobs and augmented reality on smartphones, live sporting events and special private training events run by professional athletes.
What about the USA?
It’s not just about Los Angeles or New York.
Here for good measure are a few luxury malls in other parts of the USA. Note they are in large travel destinations:
- Bal Harbour, Miami: Considered one of the original lifestyle malls, it attracts a large number of South Americans. Latin America is traditionally problematic for luxury goods, due partially to the variability in the growth of middle classes. Mexico is the largest luxe market, followed by Brazil however both markets are unstable at best.
- Las Vegas: Luxe destinations include The Forum at Caesars Palace, Grand Canal Shoppes at The Venetian, where you can shop by gondola, and Wynn Esplanade.
- Honolulu: Forget the frankly underwhelming Ala Moana. Along the long shopping strip that is Kalakaua Avenue, you’ll find Luxury Row, which holds a number of events, the most recently promoted being the Hawaiian European Cinema Festival and the Chinese New Year 2019 – yes, next year – dragon and lion dances.
History can play a part
Some of the world’s luxury malls are in historic buildings. One that stuck in my mind –pun intended – is GUM at Red Square in Moscow. Originally opened as the ‘upper trading rows’ in 1893, it was a state-run department store in the 1920s and 1930s before being privatised at the end of the Soviet-era. It’s now owned by supermarket company Perekrestok and luxury goods distributor Bosco di Ciliegi. The building has beautiful glass ceilings, but at the time of my visit several years ago, its dingy basement-located bathrooms were not of a quality in keeping with the rest of the building.
Another historic mall, and the one on which GUM was styled, is the Galleria Vittoria Emanuele II in Milan, built in 1877. Both Galleria and GUM were inspired by ‘passages’ – covered shopping streets invented in the early nineteenth century in Paris and which were in turn inspired by the covered bazaars of Arab countries.
What goes around…closer to home, Melbourne’s GPO, relaunched in 2004, is another heritage-listed example.
Traditionally luxe brands have relied on physical retail rather than online sales.
However consumers have proved willing and able to buy luxury goods online at full price.
It will be interesting to observe how the luxe players combine their digital and social offerings, with the increasingly experiential requirements of the physical retail space.
Norrelle Goldring has 20 years’ experience in retail, category, channel and customer strategy, marketing and research, working in and with global retailers, manufacturers and research houses.