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Impact of COVID on Luxury Malls

Clement Brunet-Moret
Former Managing Director at RIMOWA and Goyard

Learning outcomes

  • How COVID could impact the luxury market and landlords of luxury malls in APAC
  • The potential growth in luxury online during coronavirus shutdown

Executive Bio

Clement Brunet-Moret

Former Managing Director at RIMOWA and Goyard

Clement has over 20 years of experience in the luxury goods industry in Asia. He joined Cartier as a Retail Manager in 1997 where he managed 12 boutiques and over 80 points of sales across APAC. Clement then joined Goyard, the luxury french brand, where he built the brand’s distribution network in Asia for 5 years. He then joined RIMOWA, the luxury luggage maker owned by LVMH, where he opened new locations and built out distribution with malls and boutiques across the region.Read more

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Interview Transcript

How do you think luxury brands will deal with landlords, given the Covid-19 issues, over the last month or so?

It’s too early to say if that virus is going to change the way we live, travel and consume. I was in Hong Kong, during SARS, and it showed that, by the end of the year, after a SARS had dissipated in June, we had fully recovered and SARS had no financial impact on Cartier, the brand that I was working for at the time. But it was a very strong brand and a very strong market and very limited in the scope of the virus. This time, it may be different.

What could it change? I think, the landlords will find themselves in a tighter spot than they have ever been. Why is that so? Because new markets will be more limited, for some time. There will be less new brands, because there will be less funding available. So there will only be the major players going around. There will be less opportunity, for the landlords, to play with different offers and opportunities. Also, they will need to reinvent the way they work with their own customers. Most landlords have a limited membership programs. Some of them are very young, by the way, especially in Asia. Therefore, the most successful landlords are the ones that are going to invent a new way to capture the audience and capture the customers, not only for the brand that they carry, but also for the range of experience and service that they offer.

The landlord’s job far, to this point, has been relatively easy. Aside, obviously, from the selection of the brand and the in-fighting for the locations and so on. You had to, basically, manage a mall, make it look very clean and very nice. You had to have a bit of communication, in order to promote your location. But once you were established in the market, it’s just regular, ongoing customer service and not much investment. This is probably going to change. The first difference, in this crisis, is the fact that people consume more online, because they cannot do anything else. So they shift to online, which is still working. They will probably stay online.

So the market share of the online will develop further. Already, it was very important in Asia but it’s very likely to develop further. It’s likely to double in size, over the next couple of months. I don’t think that is going to be the end of retail, as we know it, because most customers and us, you and me, we still need to discover, to test and to repair and that’s not going to change. The strongest brand – if you take the very good example of Apple – have a very strong online presence, very strong online store and sales. But yet, it maintains a very strong network of stores, because of all these reasons. I think the servicing and experience discovery is going to be even more important, in the years to come.

The relationship between the customers and the brand and, therefore, the landlord and the customers, is no longer about coming in, buying and leaving. It’s about experiencing a journey with any brand. How do I discover it? How do I live it? How do I repair my product? How do I exchange my product? How do I upgrade my product? How do I recycle my product at the end of its life? The shopping mall will need to evolve and we need to really consider that there is going to be a before and after, not only with this crisis, but the e-commerce has been a major player, in terms of distribution.

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