IBISWorld has identified four key factors to success in the luxury retail space: a clear market position, an experienced workforce, proximity to key markets and attractive product presentation.
Retailers are urged to establish a “clear, consistent image of their brand”; have an experienced team of customer service professionals; position stores with the greatest exposure to target demographics; and ensure stores are “attractive and intriguing”.
The reputation of the Tiffany & Co brand has been established across the past 177 years and Schlehuber says customers have built a strong connection with the brand.
“When a customer comes into Tiffany it is quite often in relation to a celebration or a special occasion in their life and I believe this is why so many people feel a strong connection with the brand,” he says.
“It is not just about the product, it is about everything else that goes with it, the packaging, the brand image, the store experience, the sourcing of the materials that gives the romance to the brand.”
The brand’s image is something the company works “very hard” to maintain both in-store and through the responsible sourcing of products.
Schlehuber is optimistic about the future of Tiffany’s, but he’s sceptical about the segment.
“We are operating in a relatively small market and continued growth at the rate it has been growing in the past is not sustainable in any environment. I believe those brands which have developed a solid local strategy and who evolve their businesses in line with the rapidly changing retail market will perform better than those who do not have an adequate strategy in place,” he says.
“We are seeing many international brands enter the Australian market. While many of these brands are not necessarily luxury brands, they are all competing for a share of the consumer’s wallet… existing brands in the market will need to adjust their local strategies accordingly.”
Audi managing director Doyle expects the premium car market in Australia to continue to grow.
“The premium market’s share of the total car market in Australia is about 6-7%, but in Europe it’s about 15%. So despite the fact it’s growing fast, it’s still a smaller percentage than in other markets,” he says.
Local factors such as the luxury car tax have brought about this gap, but there is still scope for the industry to keep growing.
Doyle says the company focuses on innovation and this is clear in its environmental standards, engine development, materials used and technology.
“The good thing about Audi is we’re a profitable company globally, but a lot is put back into research and development. We’re spending around $30 billion between now and 2018 on new innovations,” he says.
Audi is also developing its automated driver technology, and its latest model has an entirely virtual “cockpit” with no dials, as demonstrated by Audi’s chief executive at the recent Consumer Electronics Show in Las Vegas.
“Our company chief executive was a key note speaker and he demonstrated all the technology Audi is launching including piloted driving, which will allow the car to do all sorts of things such as find restaurants, car parks and even drop the driver off at their destination and then park itself,” he says.
As well as technological and engineering advancements, Audi is gearing up for a more social future.
“We’re very focused on social media,” Doyle says. “Our fans and engagement rate in online activity is the best in the industry, at least in the premium segment. We cracked over 120,000 fans on our Facebook page.
“Whenever there is a new model we post it on social media pages… it’s a great way to get a conversation started… We think it’s the way of the future, it’s not something just for younger brands.”
While the future looks rosy for Audi, Newman says the next 12 months will be particularly crucial for OrotonGroup, although there are no planned acquisitions on the horizon.
“We have a lot to do over the next 12 months with the innovation and focus on our Oroton brand, but also with expanding the Gap brand here and rolling out 14 Brooks Brothers stores, however, we are always open to opportunities,” he says.
“We are focused on building Australia’s leading luxury group of owned and partnership brands.”
