Luxury lifestyle brands in an online conversation about how interest-from fashion and food to art-play outsize roles in travel.
———
CONNECT WITH AFAR
Afar.com is a digital and print magazine that publishes travel tips, guides, news, and stories: https://www.afar.com
Get updates on the latest articles, travel news, and more from AFAR by signing up for the AFAR newsletter: https://afar.com/newsletters
Follow AFAR on Facebook: https://www.facebook.com/AfarMedia
Follow AFAR on Twitter: https://twitter.com/afarmedia
Follow AFAR on Instagram: https://www.instagram.com/afarmedia
Follow AFAR on Pinterest: https://www.pinterest.com/afarmedia
———
CONNECT WITH AFAR
Afar.com is a digital and print magazine that publishes travel tips, guides, news, and stories: https://www.afar.com
Get updates on the latest articles, travel news, and more from AFAR by signing up for the AFAR newsletter: https://afar.com/newsletters
Follow AFAR on Facebook: https://www.facebook.com/AfarMedia
Follow AFAR on Twitter: https://twitter.com/afarmedia
Follow AFAR on Instagram: https://www.instagram.com/afarmedia
Follow AFAR on Pinterest: https://www.pinterest.com/afarmedia
Category
🏖
TravelTranscript
00:00 [MUSIC PLAYING]
00:03 So thank you guys for being on this call today.
00:11 Ellen and I, a few weeks ago, decided
00:12 it was like putting together a dream dinner party.
00:15 So you guys are all on our dream dinner party list.
00:17 I really appreciate you being here and taking the time
00:20 as we continue to have Zoom fatigue.
00:23 So thank you for being here.
00:24 And most of us on this call today
00:27 are in the business of luxury travel.
00:29 And over the last few weeks, I've been on a lot of webinars.
00:31 And I'm starting to hear the same things in the travel
00:34 business over and over again.
00:36 And that, of course, is going to change as things open up
00:38 even more in the weeks ahead.
00:40 But I think it's so important to talk to voices outside
00:43 of travel, to learn, to understand,
00:45 to stay curious always, and not be bored
00:49 or listening to the same thing.
00:51 And of course, the brands on this call today and us,
00:54 we're all in this together.
00:55 It's not just travel that's been hit.
00:57 But we're all experiencing it in different or maybe
01:00 similar ways sometimes.
01:02 So if you look at travel as kind of the big umbrella,
01:05 so many amazing passion points fall under that.
01:08 So we travel for food and wine and architecture and art
01:11 and jewelry.
01:11 And we might read something in a book
01:13 and then want to go there, see a TV show and then go there.
01:16 So all of these industries are interconnected, and of course,
01:19 fashion.
01:21 And so people who love exploring these passions
01:23 tend to be the best kinds of travelers,
01:25 the ones that want those deeper, richer, more fulfilling travel
01:29 experiences, which just so happens
01:30 to be our mission, by the way, to help support those kinds
01:34 of travel experiences.
01:35 So they're also the travelers that come back first.
01:38 And this week, I don't know about you guys,
01:39 but for the first time in a long time, at least in travel,
01:43 I'm getting a lot more emails with hopeful information.
01:45 Hotels that see bookings skyrocketing,
01:48 advisors who are getting inquiries and bookings,
01:51 which has made me feel really great that things
01:54 are slowly, ever so slowly coming back.
01:57 And if you're seeing that as well, I'd love to know.
01:59 I just want to hear that from everyone.
02:01 So feel free to email me at annie@afar.com
02:04 if you're seeing any trends you're seeing as well.
02:07 So we have experts today in retail, fashion, and books.
02:11 And when it comes to retail, so much of consumer behavior,
02:14 of course, relies on mood.
02:15 I was talking about this with a couple of our panelists
02:18 yesterday.
02:19 I think as things continue to open up,
02:21 we'll, of course, see spending go up.
02:23 And as you guys might have heard,
02:25 I was in Switzerland last week where everything was open.
02:28 And I just wanted to spend money.
02:30 I just felt alive again, even though there
02:32 is this insane economic uncertainty
02:35 and incredible job loss.
02:38 But we also know that our industries
02:40 support jobs in local economies in such a huge way.
02:44 So with that, I'll introduce our amazing panel today.
02:47 Just kind of give a wave if I say your name.
02:50 So we have Jack Calhoun in the San Francisco area.
02:54 He's the former CEO of Banana Republic,
02:57 which was my first job, a senior advisor at McKinsey & Company
03:01 in global apparel, fashion, and luxury,
03:03 and a former board member at Kempton.
03:04 So he also understands the hotel industry very well
03:07 and an avid traveler.
03:09 We have Bob Chavez, the president and CEO of Hermes
03:12 Paris.
03:12 You're in New York, New York City.
03:15 And he's been there for almost 20 years.
03:17 Is that right, Bob?
03:19 I've been at Hermes for 20 years.
03:21 I've been in New York for longer than you'll want to know.
03:24 [LAUGHTER]
03:26 Later.
03:27 And then we have Esther Kremer, the editor-in-chief
03:29 of Azulene, which publishes some of the most
03:32 beautiful books in the world.
03:34 They're really art themselves.
03:36 They're more than books.
03:37 So we're so thrilled to have all of you guys here today.
03:40 And then we have Joe Diaz, our co-founder of Afar,
03:42 who started this crazy ride 11, 12, I don't know, years ago.
03:48 And then we have Ellen Asmodeo, our executive vice president
03:51 and chief revenue officer.
03:53 So today, we're going to talk a lot
03:55 about how we're talking to our customers today
03:57 and what we're hearing from them.
03:58 And we'll get into all of that.
03:59 But I'll start with Joe to kind of give us
04:01 an overview of what's happening at Afar
04:03 and what you've been seeing.
04:04 Yeah, thank you, Annie.
04:05 It's good to be with everyone today.
04:08 Hard to believe that Afar launched 11 years ago.
04:12 And I was thinking about this panel.
04:14 And I was thinking about three key pillars when we launched
04:19 that we haven't wavered from and I
04:23 think has helped us significantly,
04:25 especially in this time.
04:26 One was do work we're really proud of.
04:30 And so in other words, of the highest quality
04:33 and that really aligns with our values.
04:35 Two, do work that's different, really
04:37 take a unique point of view.
04:39 And three, create a really dynamic relationship
04:43 with like-minded audience who cares deeply
04:46 about the same things that we care about.
04:48 And like I said, honestly, I think
04:50 this approach has given us the ability
04:52 to navigate these waters better than some of our competitors,
04:55 frankly.
04:56 And we hear that a lot from our partners telling us that.
04:59 And I think you heard--
05:01 it was a couple of Afar Lives ago
05:03 where we were talking about all being in the same boat
05:07 or actually really in the same storm with different boats.
05:11 And I was thinking to myself, who do we really
05:13 want in our boat?
05:14 And it's that affluent global citizen.
05:18 And that's one that we've been attracting
05:20 from the very beginning.
05:21 And reflecting back, I can say why we would
05:26 want this particular group.
05:28 I think one, right now there's just a smaller pie.
05:31 There's not as much to go around.
05:33 And we need to really concentrate our resources
05:35 and really focus on taking share because our resources are
05:39 more limited than they've ever been.
05:41 And the demand on those resources to make an impact
05:45 is higher.
05:46 Two, I think this audience-- and we know this from research--
05:49 they travel the most, they spend the most,
05:52 and they influence other the most.
05:54 And we know that the reams of third party research,
05:57 the things that we see internally,
05:59 and also just through our excellent network
06:01 and communication with the world's top travel advisors,
06:04 we're hearing this.
06:06 Three, they vote with their passions.
06:08 These discerning global citizen travelers
06:11 really do vote with their passions and values,
06:13 meaning that they're not as price
06:15 sensitive as other travelers.
06:17 And I think that's really important.
06:18 And we've been doing a lot of surveying of our audience
06:21 during the COVID epidemic, just really trying
06:24 to understand their mindset and what they're thinking.
06:27 And we're consistently seeing that only one third--
06:32 I guess the takeaway step that I saw
06:34 was only one third of our audience
06:35 agree that they are planning to take advantage
06:37 of lower prices as a result of a crisis.
06:41 So really, to me, that means that it's
06:44 all about getting it right, not getting it cheap.
06:46 And people are going to, I think,
06:48 especially in this tier, become more discerning about how
06:52 they're spending their dollars.
06:54 This audience also is the first to return.
06:58 Just anecdotally, our stay list, which
07:00 is our roundup of exciting new hotels,
07:02 was one of our top performing content pieces in April,
07:06 despite the current climate.
07:07 So we're seeing a demand for not only travel inspiration,
07:12 but actually deeper planning.
07:14 And this audience is actually more adventurous and less
07:17 fearful.
07:17 So they're willing to travel farther and for more time.
07:21 And we've seen our traffic from March to April
07:25 double on content around longer haul, higher end trips.
07:30 So that's exciting.
07:31 And finally, I think this audience is highly engaged.
07:35 So not only are we seeing that from our site traffic being way
07:39 up, which I think is an effect of a lot of people being home,
07:42 and a lot of our fellow publishers and competitors
07:46 are seeing the same things.
07:48 But our affiliate revenue in May is also
07:51 pacing to double April's numbers.
07:53 And the rate of individual responses
07:55 that we're getting to our content
07:57 in the form of personalized emails, questions,
08:01 encouragement, via email and social is way, way up.
08:05 So rounding this out, I really believe
08:08 there's a real opportunity to lean
08:10 into this audience of globally minded, discerning travelers.
08:15 And you have to know really how to communicate with them.
08:19 We've been experts in that.
08:20 And I'm really excited to hear from our panelists today.
08:24 Because one, I think we share a core audience
08:27 of like-minded affluent global citizens.
08:30 And two, you're experts in communicating and engaging
08:34 this audience as well.
08:35 And three, you come from a different industry.
08:37 You come from different industries.
08:39 And so we'll have much to learn from your experience
08:42 and perspective.
08:43 And I'm really excited to listen and learn from all of us
08:48 today.
08:49 Thank you, Joe.
08:50 Thank you so much.
08:51 And I think the thing that stuck out
08:52 to me the most, which we've talked about a lot,
08:54 is of course luxury travelers come back first.
08:57 And so I wanted to--
08:59 first I'll start with Bob.
09:01 What is the pulse of your customer right now?
09:06 Could you give us an overview?
09:08 How many stores are open?
09:09 What are some indicators that you're
09:11 seeing that consumer habits are shifting or changing?
09:15 Or what are you seeing right now?
09:19 Well, here in the US, we have about 30 stores in total.
09:23 And right now, we're at about half of them are open.
09:27 When I say open, they're open only for either curbside
09:30 pickup or by appointment only, not really
09:33 open to the public as yet.
09:36 And what we've seen is that the clients are eager to come back.
09:40 They're eager to shop.
09:42 Our website has remained open.
09:45 We closed for a couple of weeks, but it was the first to reopen.
09:50 But what was interesting is that we saw continued demand
09:52 and strength on web sales throughout the closure.
09:58 So the customer is there.
10:00 They're ready.
10:02 They're waiting.
10:03 And to Joe's point about they're the first ones to come back,
10:07 in a way, we feel like they never really left.
10:10 They just were a little dormant, or they
10:12 kind of went inside the way all the rest of us did.
10:18 I love that.
10:18 And I have to say, I kind of did a deep dive on the Hermes
10:21 website last night, and it's so easy to use.
10:24 It's a very user-friendly website.
10:27 It's very easy to just put it into the shopping cart.
10:32 Thank you for that.
10:33 And Jack, you, of course, work with a lot of different clients
10:35 around the world.
10:36 What are you seeing right now?
10:37 You've done a lot of surveys.
10:39 What's the pulse right now for global retail?
10:42 Yeah, I think it very much varies greatly
10:45 around the world.
10:46 I work from Europe.
10:48 I do a lot of work in China, Australia, US.
10:51 And it's kind of like travel.
10:53 It's very local.
10:54 And I think because of this pandemic
10:55 and how different countries, and then even within the country,
10:59 regions are responding and opening up or not opening up,
11:02 it's really affecting what people are doing,
11:05 how they are moving about, and how they are spending.
11:08 One of the surveys I was looking at this morning that we had
11:11 is just kind of the optimism about the economy
11:14 and looking at the US versus China.
11:17 So China's been open longer.
11:19 And we've seen optimism, which meaning people
11:22 believe that things will start to get back
11:23 to normal after things open up in two to three months.
11:26 The economy will kind of bounce back.
11:28 Pessimistic means it's going to take over a year or two.
11:32 Optimism is going down in the US.
11:34 And it's growing considerably in China since they've opened up.
11:38 So it's interesting to see those two.
11:39 And it even kind of shows in the spending patterns of those two
11:43 things.
11:43 So I kind of feel like travel has always been local.
11:46 You go to experience a local culture, a local something.
11:49 And I think this is going to even push that more.
11:52 I think we're going to see very varied results around the world
11:55 based on what's open, what's happening,
11:58 how the government's responding on a national and then even
12:00 a local basis.
12:02 And do you see, Jack, with that, do you see that as in China,
12:05 that it's just a factor that things,
12:07 like I was saying in Switzerland,
12:08 like just felt better that things are open?
12:10 And so maybe that's just--
12:11 that's one of the big reasons why there's optimism.
12:13 Or do you think it's something else?
12:15 I think so.
12:15 I think, I mean, it's a little bit of the reality.
12:18 And I look at another study we had looked at.
12:20 It was just true spending patterns in China.
12:22 This is taking aggregate spending data
12:24 for the 21 provinces around China.
12:27 If you set December at 100, so the month of December,
12:31 we're going to say as 100.
12:33 The month of January, kind of their pre-Chinese New Year,
12:36 they bumped up to about 123.
12:38 So they were having a great January.
12:40 The minute the lockdown went in, it went down to 37%.
12:44 So nothing was open.
12:45 So you saw for the 100 way down.
12:47 First month back open, they bounced back up
12:49 to about 76% of the 100.
12:52 And then this past month, up to 84.
12:55 So they're still down 16% off of what was, like,
12:58 consider the normal December.
13:00 But it's not down 50%.
13:03 And the things that they've seen bounce back are some retail
13:07 is still down in apparel retail quite a bit.
13:10 Things like grocery stores that had a huge spike,
13:13 not seeing that continue.
13:14 They're kind of flattened out and back to normal.
13:16 So the rush on the grocery store has not continued.
13:18 Kind of makes sense.
13:20 Drug stores have continued to be up about 30%.
13:23 And then while apparel was down like 90%,
13:26 it's now down in the 35% to 40%.
13:29 It's just interesting to see what categories are coming
13:32 back.
13:32 And again, that's aggregate spending data
13:34 through the banking system of all of China.
13:37 So it's very gross numbers and then broken down
13:39 in where is it being spent.
13:41 But I think it's a good sign that things are bouncing back
13:43 at 84% two months out.
13:46 It's not down 40%.
13:48 So to me, that's kind of encouraging.
13:50 Yeah, absolutely.
13:51 That's so interesting to have such a wide breadth
13:54 of statistics to dig into.
13:56 I've got a lot of them.
13:57 Yeah.
13:58 Good.
13:59 We have 45 more minutes.
14:01 So Esther, kind of shifting gears a little bit,
14:04 your company has redefined coffee table books, for sure,
14:08 and made luxury books a thing.
14:11 In your mind, what is a luxury book?
14:13 And then during this time, what books are doing well?
14:16 We talked about travel books before.
14:19 Can you talk a little bit about that too?
14:22 Sure.
14:23 So again, we, Asseline, as a luxury illustrated publisher,
14:28 we have transformed what is in the minds as a coffee table
14:33 book and really made that an object of identity and DNA
14:39 for our community.
14:40 So you are what's on your coffee table.
14:43 You are what's hanging on your wall.
14:45 And our community appreciate collecting books
14:49 that reflect their interests.
14:52 So our entire list has catered to this community that we have.
14:57 And whether it's wine or fashion or jewelry,
15:00 we try to understand their desires and their aspirations
15:06 and create books that are going to inspire them.
15:09 And what we're seeing, interestingly, at this time,
15:13 when we've pivoted--
15:15 everyone's had to pivot their direction,
15:17 their marketing campaigns.
15:20 In the beginning of COVID, we, of course--
15:23 our e-com is where--
15:25 it is what's saving us and communication
15:28 with our audience on e-com.
15:30 And we tried newsletters initially related to food.
15:35 We figured our food books would sell.
15:38 But it has been the travel series
15:41 that we have created on Iconic Destination
15:44 that has been the winner.
15:47 Hats down, this series, we see our community
15:50 gravitating towards destinations they dream of.
15:54 And as we saw that developing, we
15:57 launched a campaign called Travel at Home.
16:01 And we have taken--
16:04 I hope some of you have seen them.
16:05 We've been taking a lot of ads on social media
16:08 and throughout different channels,
16:11 promoting this destination series that
16:15 are devoted to places that people have been
16:17 but dream of going.
16:19 And we are very hopeful that the sales will continue.
16:24 And they've, again, gone through the roof on our e-com channels,
16:28 so much so that we released a book, one in the series
16:32 last week, and we've had a complete sellout
16:35 in maybe the course of just the initial release, which
16:39 is, during this period of time, phenomenal.
16:42 And it does show us that travel is
16:44 very close to the heart of our community and something
16:48 that they're really missing.
16:49 And it's a comfort to them.
16:52 So the book is obviously a form of comfort.
16:55 People are buying things that they love and enjoy
16:57 and that bring them joy.
16:59 And travel is at the top of that list.
17:02 Yeah, and you have title--
17:03 I just brought out my St. Bart's book the other day
17:05 because I can't go to St. Bart's at the moment.
17:07 But I was trying to figure out how
17:08 I'd recreate dancing on the table at Nikki Beach.
17:10 So I just held the book up and danced around.
17:12 Go for it.
17:13 Go for it.
17:16 Is that the purpose of the book, to teach people how to--
17:19 Well, you never know what you're going
17:22 to learn when you read.
17:23 So if you can learn something else, that's great.
17:27 Kim Marie Evans is jumping in.
17:28 Thank you, Kim.
17:29 Then burn $100 bill and it's just the same.
17:31 [LAUGHTER]
17:34 Love it.
17:38 Well, I guess that leads into--
17:39 I wanted to talk a little bit about luxury overall
17:43 because I think the word itself can
17:45 be so overused and confusing.
17:46 I mean, I remember checking into a not great hotel
17:49 and the shower cap was labeled luxury.
17:52 Or at M&S here in London, I can get luxury granola.
17:55 So anything can be luxury.
17:57 It's like Ellen was saying, it's like all natural.
17:59 They become almost meaningless.
18:01 So what does a luxury product mean to you
18:04 and why do you think it will continue to thrive moving
18:08 forward?
18:09 Bob, I'll start with you again.
18:11 Yeah.
18:12 What's a luxury product?
18:14 I think-- I mean, for us at Hermes,
18:16 it's always about the quality and the craftsmanship.
18:20 It's about something that's going
18:21 to last you for a long time.
18:24 And I think that's why people continue to be very loyal to us
18:27 is because in an era where people aren't going
18:30 to want a lot of things, they're going to want fewer things,
18:33 they want the best that they can get of those things.
18:36 If you're just going to buy one beautiful scarf
18:39 or one beautiful tie or one beautiful blanket,
18:43 you want to make it something that
18:45 is great quality, great materials, great craftsmanship,
18:49 and that you'll be able to have and keep for a long time
18:51 and even pass on to your children
18:53 and even your grandchildren.
18:56 But in terms of luxury, one of the things
18:58 that we keep talking about at Hermes
19:00 is that we think the new luxury is going to be all about space.
19:05 All you hear today is about space.
19:07 Everybody talks about six feet apart, six feet apart.
19:10 We think it's something that we've always
19:12 looked at in our stores.
19:14 It's not making the stores feel overcrowded,
19:17 not making people feel really confined into smaller spaces.
19:22 But we think that that's what the customer is really
19:25 going to be looking for even more so going forward.
19:27 And I think it applies to travel as well.
19:29 When you hear about airplanes wanting
19:31 to leave the middle seat empty, I
19:33 think it's even beyond that.
19:35 I think people are going to be wanting that space
19:38 for that comfort level.
19:40 And we're seeing more and more of that already.
19:44 That's why we're doing this by appointment only a lot
19:46 is because it does limit the number of people coming
19:49 into the stores currently.
19:50 And we think it's really a trend that's going
19:52 to be around for quite a while.
19:54 I love that.
19:55 And if I could just follow up and ask you,
19:58 I mean, you've been there after 9/11 and after 2008.
20:02 I mean, how have you seen the luxury consumer
20:05 change over the past few years?
20:06 I mean, you were saying now they want fewer and better.
20:08 I mean, before, did they want more?
20:10 Or how has the transformation happened in your mind?
20:14 Yeah, I would say that in earlier years,
20:17 people still wanted--
20:19 they wanted-- like, people would buy six handbags or nine
20:23 handbags.
20:24 And over the past few years, they're
20:26 not buying that quantity.
20:28 They're buying fewer, but they're buying better.
20:31 Like I said, they really want things that they
20:33 feel are a real investment.
20:36 This whole trend towards throwaway fashion
20:38 has really diminished greatly.
20:41 And even amongst the luxury customer, who at one point
20:44 we were all reading about how they're pairing a Chanel
20:46 jacket with an H&M top, I think some of that
20:50 has started to change as well.
20:52 Because I think people are also much more environmentally
20:55 conscious today.
20:56 And they don't want to live in a throwaway society.
20:59 They want something that is going to be
21:03 very, very long lasting.
21:04 So to me, that's the main difference that we see now.
21:07 And I think it's only going to be magnified
21:10 by people living through this crisis
21:13 that we're looking through now.
21:15 Absolutely.
21:17 What about you, Jack?
21:18 You worked actually-- I mean, you've
21:20 worked for, of course, luxury brands and then also
21:22 a more mass market brand, although it was luxury
21:24 to me in high school.
21:26 Yeah.
21:27 Well, I think the trend Bob is talking about we're seeing
21:30 really across the industry--
21:31 I've been seeing it for quite a few years now.
21:34 The top end luxury has continued to grow.
21:37 And I think this will actually help
21:39 the industry-- people are going to want a smaller, more
21:42 bespoke experience.
21:43 I agree with Bob.
21:44 People are going to want fewer, better.
21:47 And that's been a trend that's been growing.
21:48 And this is going to accelerate that.
21:50 But we've also seen the opposite end of the fashion spectrum
21:53 doing quite well in the more value and discount space.
21:56 Look at TJX and Ross here in the US.
21:59 They've had like 26 quarters of consecutive growth and profit
22:04 until the last one.
22:06 You're seeing a very kind of bipolar, high end growing,
22:09 low end growing in the middle, like my old company of Gap
22:12 Bank and Banana Republic, really caught in the middle
22:14 and not doing well.
22:16 So those brands that are not differentiated
22:18 are overstored, too much inventory.
22:21 As Bob said, people are worried about sustainability.
22:24 They'd rather have one than 10 of something cheaper.
22:27 It kind of pushes you to both ends of that spectrum.
22:30 And we're seeing that across the globe.
22:32 In the work I've done in Australia, China, Brazil,
22:35 those trends are very much universal.
22:37 And I think this is going to push that even more.
22:40 And we're seeing it in the data of those people I said feeling
22:43 more optimistic or less.
22:45 The higher income people are much more optimistic
22:48 than lower income people about how
22:50 the economy is going to respond.
22:52 The younger generation, much more optimistic
22:55 than the older generation.
22:57 So I think we're going to see a lot of those demographics play
23:00 out into these trends.
23:01 But the trend of luxury growing and people
23:04 wanting a more bespoke experience or fewer of better,
23:08 I think was a trend that was happening.
23:10 And this is going to accelerate it.
23:11 Thank you for that.
23:15 I totally agree.
23:16 And can everyone else hear right now?
23:19 I've just got two messages.
23:20 The audio was lost.
23:21 Do you guys hear me?
23:25 OK, all good now.
23:26 Perfect.
23:26 Thanks, John.
23:28 Thank you, Jack.
23:31 Esther, for you, I mean, it's a little different, right?
23:33 How do you choose a luxury destination for a book?
23:36 Or what does it mean to you when you're looking at that content?
23:39 Sure.
23:40 So first, just to say in general, what does luxury mean?
23:45 I think it's overperformance.
23:47 And that's really what our audience looks for.
23:51 And I'm sure the same way if you buy a Hermes bag,
23:53 you feel if it overperformed, it did more than you expected
23:57 it to do for you.
23:58 And that's really what we're trying
24:00 to do with all of our books by enhancing the finishes.
24:05 A lot of you see the colors, foil stamping.
24:08 We will have a book on wine that's in a wine crate.
24:11 So we're really trying to go over and beyond
24:14 because we see that luxury customer where they really
24:18 want to be impressed.
24:19 And you have to do something more for them.
24:23 And then that purchase becomes a value purchase.
24:26 And they're going to come back.
24:27 So ironically, in addition to the Travel collection, which
24:32 is a bestselling series for us, our Ultimate collection,
24:35 which is a series of books that retail at $895 and $995
24:41 and more, are bestsellers.
24:44 And again, it's because our audience
24:46 is looking for permanence.
24:47 They're looking for detail and overperformance.
24:50 A book that they open, and they're just amazed
24:53 at the artisan level of stitching and the binding
24:58 to the tip-ons of the images to the different papers
25:02 that we're using.
25:02 So we're paying a lot of attention
25:04 to details in all of the books we create
25:08 with our consumer in mind.
25:11 I'd say also it's about meaning.
25:14 So they are looking for meaning.
25:16 And this is alluded to by other panelists
25:20 where a destination might have meaning to them.
25:23 So we are choosing-- when you said,
25:24 how do we choose the destinations?
25:27 One, iconic destinations that have an identity,
25:30 so that stand for something.
25:32 When you buy a book about Ibiza and you put it
25:34 on your coffee table, it says something about you.
25:38 Versus if you've purchased a book on St. Moritz
25:41 or on Palm Beach or on Tulum.
25:44 So we are looking for locations that stand out
25:51 and are very clear.
25:52 And I think that this goes the same across brands, where
25:55 you need to define your brand.
25:57 You need to really define your location
26:00 and have it stand for something.
26:02 And our audience, this is what's speaking to them right now.
26:07 Absolutely.
26:07 I'm sorry, with those $800 and $900 books,
26:10 what were the titles of those, some of them?
26:12 That series is-- a lot of them are
26:16 based on what's called the impossible collection.
26:19 So we work with an expert who chooses a dream collection.
26:25 So the 100 most important American wines.
26:28 So if they choose, what would be your dream seller?
26:32 That would be one collection.
26:34 We've done it with watches, 100 most important watches,
26:37 with art, with fashion, with design, with cigars.
26:43 And we continue to expand that series that is, again,
26:47 very specific, always led by an expert.
26:50 But the finishes and the details of what we create
26:53 are what speak to our consumer.
26:55 We're coming out with whiskey this coming September, which
26:58 we're anticipating incredible sales.
27:02 We've had a lot of pre-order on that title.
27:07 And some of the series are also dedicated
27:10 to photography or other themes.
27:13 Wow.
27:14 So that kind of book, I need to keep that away
27:16 from my 19-month-old, because she likes tearing the pages.
27:18 It would be quite a disaster if that happened to that book.
27:22 Thank you.
27:25 Very, very interesting.
27:26 I love it.
27:27 I love books.
27:27 They're not going anywhere.
27:30 And neither is retail, I don't think.
27:32 So I wanted to ask you, Jack.
27:35 We had an interesting conversation
27:36 about market penetration when it comes
27:38 to online sales versus retail.
27:40 Can you talk about that?
27:42 Yeah, there's obviously a lot of conversation now about--
27:45 it's been in the press during this, but certainly before--
27:48 are stores going to go away?
27:49 How important are stores for retail?
27:52 Stores are very important for retail.
27:53 Stores are not going away.
27:56 A good brand might have in the US about 20% of their sales
28:00 being done online, 25% and most are above 30%.
28:04 So you're still doing 80%, 70% of your sales in stores.
28:08 Why?
28:08 These stores, while we're closed down,
28:11 you can't make it up online.
28:13 And yes, everybody has seen tremendous growth
28:15 in their online sales.
28:16 If they've got a good e-commerce presence
28:19 and had a strong business already, you've seen that grow.
28:22 But when 70%, 80%, maybe more percent is coming out
28:26 of stores, you can't make that up.
28:28 So stores are extremely important.
28:31 In other countries-- I do a lot of work in Australia--
28:33 their penetration is very low, 5%, 6%,
28:37 almost across all categories.
28:38 It's just not very penetrated.
28:40 People don't shop online, their delivery systems
28:43 are not like the US.
28:44 In the US, if you don't get it within a day, you're like,
28:46 why do you mean it took so long?
28:48 In Australia, if it's two weeks, they're like, well, of course,
28:51 it takes two weeks to get something
28:52 that I ordered online.
28:53 So online penetration is something we very much
28:56 look at across the industry.
28:57 I'm sure, Bob, you see it across different regions
29:00 in which you guys deal in.
29:02 But still, stores are very important.
29:04 Now, the big question is, what are stores
29:06 going to look like as we reopen?
29:08 What are customers going to expect?
29:10 Obviously, almost most brands in the world
29:13 are probably overstored, especially
29:15 those brands in the middle, not necessarily
29:17 in luxury or in the discount space, but in the middle,
29:20 too many stores.
29:21 So yes, a lot of those need to close.
29:23 We need to close before this.
29:25 But then what does the protocol look like?
29:28 How do you make people feel safe and comfortable
29:30 shopping in your stores?
29:31 And it's the same thing that restaurants are going to go
29:34 through, hotels are going to go through,
29:36 airlines are going to go through.
29:37 So the consumer sentiment on that is pretty similar.
29:40 And shopping in a physical store matters.
29:44 Here in the Bay Area, you can go do curbside pickup.
29:48 I'm OK with that, but I kind of like
29:50 to go into a store and see stuff.
29:51 That's when I buy stuff I don't need.
29:53 That's what retail is all about.
29:55 I might have an Hermes bracelet on here
29:57 that I might not have needed at the time,
29:58 but I happened to be in the store and they had it.
30:00 So that's what retail is about.
30:02 So just picking up and transacting
30:05 is not the whole part of the game.
30:07 The reason that luxury and all types of things
30:10 work is because people do buy stuff
30:12 that they fall in love with.
30:14 It's sometimes easier to fall in love with when you actually
30:16 physically see it.
30:18 So stores are going to remain being a big, big part
30:22 of the retail environment.
30:24 They are going to change.
30:25 They needed to change anyway.
30:27 So we're going to see that trend continue,
30:30 but everybody's going to have to figure out how to do stores.
30:34 Yeah.
30:35 And I think, too, like you were saying, physically being there,
30:38 of course, when you travel, shopping
30:40 is such a huge part of traveling, too,
30:42 finding a store or buying something.
30:44 And you just always remember it, right?
30:45 Especially if you're buying a very high ticket item,
30:47 you always remember where you bought that
30:49 and how that experience was.
30:50 Yeah, no.
30:51 Physicality of all this matters.
30:52 I mean, I love all of my Asseline travel books,
30:55 but I do kind of want to be there at some point.
30:57 Sounds like your whiskey book is great,
30:59 but I might want to taste those at some point.
31:01 So like physicality of all of this actually matters.
31:05 And when you travel, at least I travel for the things
31:08 I can't do right now--
31:09 restaurants, bars, shopping.
31:12 Those kind of things are part of my curated travel experience.
31:15 In fact, I was on with one of my advisors
31:17 yesterday trying to figure out a place I want to go in mid-June.
31:21 What I mostly wanted to know is, OK, if the hotel is open,
31:24 are local restaurants open?
31:26 Is the restaurant in the hotel going to be open?
31:28 I don't just want to go sit in that hotel in my room.
31:31 So I was more looking for his expertise of what
31:34 is happening in Santa Barbara.
31:37 Yeah.
31:38 Absolutely.
31:40 I just couldn't resist this, but one of the thoughts
31:43 of going back to Paris and the Lutetia, which
31:46 opened not so long ago--
31:47 reopened-- but the Hermès store that's right near that hotel
31:51 is such a part of that neighborhood experience.
31:53 And when you go into that store, it's like being--
31:57 it's a work of art.
31:58 And obviously, just exploring it and being part of it
32:02 just feels so good versus just having to look at everything
32:07 digitally right now.
32:09 Yes, absolutely.
32:11 And Bob, how are you guys reimagining the store
32:13 experience?
32:14 Are you looking at it as temporary or forever or--
32:18 Yeah, for us, we have a very strong online business.
32:24 But it's quite low compared to our total.
32:29 And we've had a website--
32:31 we launched our internet business back in 2002.
32:34 We were one of the first luxury brands
32:35 to actually do online business.
32:38 And that business, needless to say,
32:40 has really become exponential in the last several weeks.
32:44 But for us, the store experience is really--
32:46 it's really very, very important.
32:50 Like Jack said, people want to touch.
32:51 They want to feel.
32:52 They want to smell.
32:53 You want to smell the leather.
32:55 You want to touch the silk.
32:56 You want to feel the cashmere against your skin.
33:01 So what we're seeing is more comfort in the stores,
33:04 more comfortable areas.
33:06 We're seeing more privacy, so offering
33:08 more private experiences in terms of rooms,
33:11 whether they're not necessarily VIP rooms,
33:14 but salons where people can sit.
33:16 And we can show them the product.
33:18 They have the privacy.
33:19 I go back to the comment I made about space,
33:21 which is very important.
33:23 So we're creating space in the store that
33:26 allows our clients to have the privacy that they really
33:30 want to have.
33:31 And then, of course, the service,
33:32 which we strive to offer for everybody,
33:36 making that also a very special experience for them as well.
33:41 I love that.
33:42 And that, of course, those are things that will probably
33:45 last a long time, right?
33:46 More personalization, more space.
33:49 Yes, it's moving more and more towards that.
33:51 As I said, we do a lot of business by appointment.
33:55 But now, it's by appointment only
33:57 because we're forced by certain states not to allow--
34:03 they're not open to the public.
34:04 But it's interesting how the clients are responding
34:07 so positively to this because they love the idea that they
34:10 can then, at a specific and designated time,
34:13 and work with their sales specialists
34:15 and have 100% attention.
34:18 The sale that occurs from a 100% attention
34:21 on a private appointment can be anywhere from three to six
34:25 times the rate of a normal sale.
34:28 So it's something that they really, really want.
34:32 Yeah, absolutely.
34:33 And they trust.
34:33 And we've all been talking about trust, right?
34:35 So they trust that person.
34:37 Does this look good on me?
34:38 Or is this something that goes with something
34:39 I already have, right?
34:40 So that trust is so important as well.
34:44 I mean, speaking of fashion, Jack,
34:48 we talked about some of the changes that
34:50 might come after COVID-19 is under control.
34:52 And you mentioned the end of the calendar.
34:55 Can you talk about that?
34:56 Yeah, definitely.
34:57 Yes, and Bob just brought this up.
34:59 It made me think of when people now are going to go to stores
35:01 and have an appointment, some of the metrics we look at
35:04 in retail is the amount of traffic coming into a store
35:06 and then conversion.
35:07 I think conversion is going to be very high.
35:09 When you go into a store, you're going
35:11 to be so excited to be there.
35:12 You're not going to want to leave without something.
35:14 So I think we're going to see average ticket go up,
35:16 and we're going to see conversion go up,
35:18 although traffic will be down.
35:19 So it'll be interesting how the equation ultimately comes out.
35:22 Yeah, so a lot of discussion about we've
35:25 now shut down retail stores around the world for eight
35:29 weeks, 12 weeks, whatever it is.
35:32 What happens to all that merchandise?
35:34 Where do you restart?
35:36 How does this whole thing start back up?
35:38 And I mean, I've been part of it for 20 years.
35:41 And we've seen the fashion calendar with fast fashion
35:44 and high-end fashion kind of get out of whack
35:47 with what consumers want and seasonality.
35:50 Most high-end fashion brands and then fast fashion
35:53 follows it, starts delivering their spring merchandise
35:56 into stores in November, December.
35:59 It's pretty much marked down sometime by February or March.
36:03 It's really not spring in most of the Northern Hemisphere
36:06 at that point.
36:07 For those of you in New York, I don't
36:09 remember the first spring day in January or February
36:11 that I've experienced in New York.
36:13 So this idea of maybe getting this fashion calendar back
36:16 to reality, slowing it down a bit--
36:19 and I think it will very much be led by the high-end fashion
36:22 and the luxury brands--
36:24 I think could be a huge benefit.
36:27 The consumer has been asking for it, more of this buy now,
36:29 wear now.
36:30 People have kind of said they're doing it, trying to do it,
36:33 but not really.
36:34 But we've definitely seen some brands like Gucci and others
36:37 come out and kind of say, we are saying
36:39 they're going to stop this madness,
36:41 get it back to a real calendar.
36:42 And truly, if you took out about 8 to 12 weeks,
36:45 it would start to get back to a little bit more reality
36:48 of what the calendar probably needs to look like anyway.
36:51 So it's going to be interesting to see where that goes.
36:54 The consumer has been asking for this for a long time.
36:57 Everybody's talked about it, but all the companies
36:59 I work around the globe have never really wanted to do it,
37:02 because you don't want to be the first one to do it,
37:04 to get kind of off sync with the gold calendar, which
37:07 is fashion shows and editorial and wholesale.
37:11 I think that is all up for grabs now,
37:13 because people have got to figure out,
37:15 what do I do with this 8 to 12 weeks of merchandise
37:19 that didn't sell?
37:20 So back at my old company had been in our public,
37:22 you didn't sell your merchandise from March through April.
37:26 That was spring/summer merchandise.
37:28 It would mostly go on sale and to be cleared out
37:31 at some time in late June.
37:33 It's still very wearable all the way through September.
37:36 So should you really just open back up and put it on sale,
37:39 or should you just keep selling it and then delay
37:42 some of the fall goods into what really is fall,
37:46 rather than delivering fall August 1?
37:49 Maybe you should actually now deliver fall on October 1.
37:52 So there's a lot of things in play on that.
37:54 But again, if companies do the right thing
37:58 and manage through this, like I did in 2009
38:00 when the bottom fell out of our business,
38:02 we exited 2010, the strongest year we ever had
38:06 in sales and profitability,
38:08 and had five great years after that.
38:09 So I think if companies in the apparel space say,
38:12 we're gonna take this opportunity to do the things
38:15 that the customer's been asking about anyway,
38:17 and get our business to be healthier and stronger
38:20 than it's ever been, I think a lot of brands
38:23 will exit quite well from this.
38:25 - Come on, I do, I mean, I think travelers shop
38:27 for all seasons, right?
38:28 I remember in like July, you can't find a swimsuit, right?
38:31 But what if you're going on a beach vacation, right?
38:33 'Cause they sold out in March.
38:35 So I think that plays into it a lot too
38:38 for the higher end travel,
38:39 is traveling throughout seasons and hemispheres.
38:43 So Bob, I wanted to ask you,
38:46 Hermes has the Birkin bag and these incredible scarves,
38:48 these like forever status symbols.
38:51 And in the same way, I think luxury travelers
38:52 have their own status symbols, right?
38:54 It's not the Eiffel Tower and Big Ben,
38:55 but it's a trip to Antarctica or Bhutan,
38:58 or making your own wine in Sicily.
39:01 Can you talk about why those icons are important,
39:04 but also you've launched recently like a lipstick line,
39:06 right?
39:07 So you're kind of moving into other areas.
39:10 Why did you do that looking at the luxury consumer?
39:12 - Well, we went into beauty because we feel that beauty,
39:16 it's a significant category for us.
39:21 We dipped into it several years ago,
39:23 but we weren't quite ready.
39:25 And typical Hermes, it takes us a long time to do things,
39:29 but we have to do it 1000% correct
39:32 with full control quality, full control craftsmanship.
39:37 And so this project has been in the works
39:40 for at least the last four years.
39:42 It was supposed to launch even over a year ago,
39:46 but again, waiting to make sure that everything
39:48 was really absolutely correct.
39:50 But we felt that beauty was a way to introduce Hermes
39:54 to more people who want to be a part
39:57 of the Hermes experience and offer them
39:59 an entry price point, just like we have other entry
40:02 price points in some of our silk products.
40:04 So maybe if you're not gonna come in
40:05 and buy an Hermes scarf for $400,
40:08 you can buy a small trulli for $175.
40:13 And we find that a lot of these entry price points
40:16 are things that are very appealing to people
40:18 who want to have a part of the Hermes experience,
40:21 but are easing their way into it step by step.
40:24 The icons are very important to us.
40:27 They continue to be, and we think that they always will be.
40:30 These are things that identify the brand
40:33 without screening a big logo,
40:37 but people identify the certain elements
40:40 of the look of a Birkin, the lock on a Kelly,
40:43 that they know that it's an Hermes product.
40:47 And in the past couple of years,
40:51 these iconic products have become even more
40:53 and more significant to our total business
40:55 because they are the most recognizable
40:57 and the ones that people really are looking for.
41:00 - I love that.
41:01 And your lipstick line is also sustainable, right?
41:05 Or you worked for sustainable--
41:06 - Yes, yes.
41:08 Yes, there's absolutely no, there's zero plastic,
41:11 zero plastic in any of the packaging.
41:13 And there is zero plastic on all of the units
41:17 that are in the stores.
41:18 When you go into these massive cosmetic departments,
41:21 you usually see huge tested units
41:23 that are all made of plastic
41:25 or other unsustainable materials.
41:28 And we didn't do any of that.
41:30 It's all sustainable.
41:32 And I have to say, it's been very, very popular.
41:35 It's been a huge success.
41:38 And we launched on March 4th.
41:39 So just imagine that, imagine what it could have been
41:41 if we hadn't been in this situation,
41:44 but it's okay, better things to come.
41:46 - Yes, for Zoom calls.
41:47 (laughs)
41:49 - Exactly, exactly.
41:50 - Zoom friendly.
41:51 And there was also a question about,
41:55 someone went on to see if Hermes is making masks.
41:58 Is that?
41:59 - No, we're not making masks.
42:02 I mean, it keeps coming up a lot.
42:05 I mean, you see a lot of people
42:06 making their own Hermes masks,
42:08 but it's not something that we would do.
42:10 We would never take advantage of a situation like this.
42:14 Although there are a lot of creative types out there
42:17 and we've seen people have sent us some amazing photographs
42:20 of what they're doing with their scarves and their prints.
42:23 - More power to them.
42:25 - Yes, absolutely.
42:27 - And Esther, I wanted to,
42:28 'cause you not only of course work with luxury brands,
42:31 but you work with big brands like Coca-Cola and Netflix.
42:35 Can you talk about that and what people wanna see
42:36 out of those kinds of books
42:38 when you're working with brands like that?
42:40 - Sure, so a part of our business
42:42 is that we have partnerships with key benchmark brands
42:47 across industries that are looking to invigorate loyalty
42:51 with their audience or celebrating something,
42:55 particular moments or collection or anniversary.
42:59 And we work closely with them to develop a book
43:02 that will tell a story, elevate,
43:05 make something that might be temporary
43:08 into something permanent in the book itself.
43:12 And we're seeing that today,
43:14 in today with digital,
43:15 everything becoming digital more and more,
43:18 the brands want a reflection in print of what they're doing
43:23 because that resonates with their consumer.
43:27 So for example, with the Netflix,
43:30 last year, two years ago, we partnered
43:32 and we created a book on "Roma"
43:34 because this is a film that is a work of art
43:37 and a book kind of echoes that message
43:40 and added a lot of gravitas
43:42 and is something that their audience
43:46 can live with beyond the release.
43:49 We did for "The Irishman," we did for "Marriage Story."
43:52 So this is an example where a completely digital brand
43:56 is looking to print.
43:58 Coca-Cola, we've worked with
44:01 across three different projects on anniversaries
44:05 and celebrating the contour bottle
44:07 and also deep diving into their relationships
44:11 in music and film.
44:12 So in that case, the brand wants to express their DNA
44:18 and show that they're a lot more than just a product.
44:22 There's a whole identity and culture and meaning
44:25 and print is a way to storytell
44:28 that allows for that communication with a key audience.
44:33 - Well, and I think that's, I mean,
44:35 it's a lot of what we talk about in media too, right?
44:37 Multi-platform, right?
44:38 How content is content,
44:40 but it's how are you distributing it, right?
44:42 So that, I mean, I just,
44:43 I didn't realize that Netflix had done books
44:44 and it's so many of their TV shows
44:47 or movies are so experiential, right?
44:49 And so to bring that to a book is so interesting.
44:51 Like "The Crown," I would love a book on "The Crown," right?
44:53 Or "Unorthodox," right?
44:55 With Berlin photos.
44:57 So thank you for that.
45:00 I had a question come in about how there, of course,
45:04 is these vastly deepening income disparities in the world
45:08 and how important is it talking about the job
45:13 and economic aspects of the business,
45:16 I guess, through marketing or internally.
45:18 Jack, do you have any thoughts on that
45:20 from the companies you've worked with?
45:22 Like, 'cause there's so many jobs supported
45:25 by what we all do.
45:26 - Yeah, I think, you know, in retail and travel,
45:30 hotels, restaurants, all the things that we're talking about
45:33 that are related to travel are the industries
45:35 that are the most impacted.
45:37 While our wealthy travelers are probably least impacted
45:40 and will be able to travel,
45:41 the people that work in these places are severely impacted.
45:44 They've been shut down.
45:46 You know, a restaurant that you might wanna go to,
45:49 if it has to operate at 50% of capacity,
45:52 it's hard enough for restaurants to make money.
45:55 Having been on the Kimpton board,
45:56 we had 74 hotels and 74 restaurants,
46:00 and in total, they make money,
46:02 but that's 'cause a couple made a lot of money
46:04 and quite a few didn't.
46:05 So restaurants are hard to run.
46:07 Especially when you shut down the bar business, right?
46:09 So they're like, okay, you can open the restaurant,
46:10 but you can open your bar.
46:12 I'll tell you, most of the profit
46:14 comes out of the bar side of a restaurant.
46:15 So, you know, I think the impact on employees,
46:19 the local workers, you know,
46:20 the things that really fuel our travel industry,
46:24 I think are huge.
46:25 And I think, you know, I think we do need to talk about it.
46:28 I think, you know, the places that are doing things,
46:30 I'm on the board of the San Francisco Opera,
46:32 I'm the vice chair of our fine arts museums in San Francisco.
46:35 These institutions, performers are severely impacted.
46:40 And we're talking about it.
46:41 We're trying to figure out how to help them.
46:43 There might be fundraising parts of it.
46:45 Are restaurants going to need to up their price?
46:48 Maybe.
46:49 Like we want to have a great experience in that restaurant,
46:52 but if they have to do it at 50% and they can't make money,
46:54 we don't want them all to close.
46:56 So I think being in any good communication,
46:59 open, honest, transparent, telling what it is,
47:03 offering again, that great experience
47:06 is going to make a big difference.
47:07 And I think the brands that talk about it
47:09 and really do it rather than acting like it's not happening,
47:12 I think are going to resonate.
47:14 It's that authenticity that people want.
47:16 And again, if you look, especially Gen Z, millennials,
47:20 like they want authenticity.
47:22 They want things like Bob talked about sustainability.
47:25 I think this all comes together with,
47:26 we need to talk about it like it is,
47:28 and certain regions and places that are going to be impacted.
47:31 But the things that fuel our travel industry
47:35 are severely impacted, especially the people
47:38 that work in it day to day, that clean our rooms,
47:42 that serve our drinks, that serve our food.
47:45 Those people can't telecommute.
47:47 They're not working at all right now.
47:49 What does that look like?
47:50 And then when they open and they have to open
47:52 at a small percentage, what does that look like?
47:55 So I think the industry and those brands
47:59 that are able to talk about that
48:00 and really take it on and be open and honest about it,
48:04 I think we'll win.
48:05 - I agree.
48:08 Does anyone else wanna say anything on that or can move on?
48:10 Okay.
48:14 Actually, I mean, kind of going along with that too,
48:16 we talked about in travel how,
48:18 if you discount your room rate by 10%,
48:22 it takes five years to come back.
48:23 So everyone's talking more about value add, right?
48:25 And of course, when I've been looking at hotels,
48:27 I mean, they haven't really been discounting prices,
48:29 but they might be giving four nights for three.
48:32 So I'd be curious from all of your standpoints
48:35 or your viewpoints, what you think about discounting
48:40 right now because of COVID and in the future.
48:43 - Well, I would say that if you're discounting a product,
48:49 if the luxury customer doesn't want that product
48:52 to begin with, I don't think a discount
48:54 is gonna change that.
48:55 I think it's really about the experience that you offer
49:00 that customer in total that's going to drive them
49:04 to that hotel or that restaurant or even that product.
49:09 At Hermes, we don't discount.
49:11 And on the opposite, I'm sure several of you have read
49:15 that many luxury brands, because the business in China
49:18 is back first and it seems to be booming,
49:23 are raising prices in China.
49:26 And Hermes is not raising prices in China.
49:28 We were a little surprised and taken aback to read that,
49:32 but it's just something that we just think
49:35 is really not the right thing to do
49:37 in a situation like this.
49:38 But in terms of discounting, no.
49:41 If a customer wants the product, they're gonna pay
49:44 what they think is a fair price for it.
49:47 And we don't believe that you have to discount it
49:50 to get people to purchase something
49:52 that they really, really do want.
49:54 - I'd say 100%, we agree and we don't discount on our site.
49:59 And we have tried to move away from Amazon sales
50:04 as much as we can, because again,
50:07 we find that our consumer less is more,
50:10 as we said earlier on in the conversation.
50:13 And they value the book, they value its permanence.
50:16 And we don't, even when we're selling a book
50:20 that we created 10 years ago, which we do,
50:22 on the site every single day,
50:24 the book is still at the full retail value.
50:27 So we don't discount our backlist.
50:30 The only thing we'll do is sometimes celebratory.
50:33 So in honor of Earth Day or a moment
50:36 that connects naturally with our brands,
50:39 we'll have some special promotion,
50:42 but it's really not something we see as a discount.
50:44 - I think, I mean, before, as we kind of come to the end,
50:51 I wanted to ask you if you could think about,
50:54 and maybe I'll start with you Esther,
50:56 kind of for someone who markets luxury products
50:59 or talks to luxury consumers,
51:00 just some of the best advice over your careers
51:04 that you would give to someone
51:05 who's talking to these kinds of consumers.
51:08 - So I would say first,
51:11 you have to really know your consumer
51:13 extremely, extremely well.
51:16 And we do that very closely on our site
51:19 by following what their trends are
51:22 in terms of their taste, what they're buying.
51:25 When we come out with a new book on jewelry,
51:27 we know we can go back to the jewelry clients
51:31 and we don't want to over inundate our customer
51:35 with information that they don't need
51:36 or doesn't speak to them.
51:38 That's important with a luxury
51:40 and an ultra high net worth individual.
51:44 Things are coming at them from all angles,
51:46 from all brands.
51:47 And the last thing that you want to do
51:49 is flood them because it's a turnoff,
51:51 but you really want to know what makes them tick,
51:54 what excites them.
51:55 And when you do that,
51:57 it's really like fireworks and they respond immediately.
52:01 But then I would also say on the flip side of that
52:04 is that the ultra high net worth luxury customer,
52:08 you want to sometimes take them a little bit
52:10 out of their comfort zone
52:11 because otherwise you're not providing them
52:13 with enough of a service.
52:16 They don't need you
52:17 if you're just going to keep showing them same.
52:19 So we try to surprise our audience by every year
52:24 we'll come out with titles that aren't as expected
52:27 that our brand would do,
52:29 just to keep them, surprise them
52:31 and really have that kind of relationship
52:34 where you never know what you'll find
52:36 in one of our stores or one of our sites.
52:39 - And thank you.
52:40 And Jo, you talk about that, right?
52:41 When you talk about taking people through a front door
52:44 they know in order to take them out of side door
52:46 that they don't know.
52:47 - True.
52:48 And I mean, I think the other thing is,
52:49 Esther's point,
52:50 this is I think where Greg and I were
52:52 when we launched Afar in 2009 was,
52:56 we knew we were going to be speaking
52:58 to a higher end audience,
52:59 but Greg said this, he goes,
53:01 if you just give rich people the same old, same old
53:05 about the quality of the thread count of the sheets
53:08 and the five-star white glove service,
53:10 like that's not that interesting.
53:13 And so, they want to be laid interesting lives too.
53:17 And so, you gotta push people a little bit
53:20 outside of their comfort zones
53:21 in little incremental ways.
53:25 And that does speak to this idea
53:27 of you'll walk them through something
53:28 they feel comfortable with,
53:29 but that's really the beauty of travel, right?
53:31 You go into something thinking
53:33 you know what's gonna happen
53:34 and you put your head on the pillow that night
53:36 reflecting on that day
53:37 and your mind is just like,
53:38 oh my God, I can't believe
53:39 all of these amazing things happened
53:41 and I met all these incredible people.
53:42 And I had these great experiences.
53:44 Okay, with me.
53:45 So, it really speaks to being able
53:47 to push people a little bit
53:49 outside of their comfort zone.
53:50 And that goes for travel advisors too.
53:52 We've spoken, we've had good conversations
53:55 with our travel advisors about
53:57 if we just keep giving people
53:59 the same, the same, the same,
54:01 maybe they might not complain as much,
54:02 but they're not gonna get as much from that experience.
54:05 And it's really incumbent upon us
54:07 to use travel as a force for good,
54:09 to use it as a way to translate
54:11 and a way to transform people's lives
54:13 and the lives of those around us.
54:15 And the only way that you're gonna do that
54:17 is if you step out that front door
54:19 a little bit differently than you did
54:21 maybe the day before.
54:23 - Absolutely.
54:24 Bob, what about you?
54:27 Kind of the one minute piece of advice
54:29 you'd give to someone
54:30 who's marketing to luxury consumers.
54:32 - It's very simple, be authentic.
54:34 You have to be authentic in everything that you do.
54:37 How you communicate, what you communicate,
54:40 what you're telling the customer
54:41 they're gonna be getting,
54:42 whether you're talking about the material,
54:44 whether you're talking about the experience,
54:46 whether you're talking about the product,
54:48 you can't fool people anymore.
54:50 You can't fool anybody anymore.
54:52 There's too much information out there.
54:53 We're all blitzed with information constantly,
54:57 on a minute by minute basis.
55:01 And you certainly can't fool the luxury customer anymore.
55:05 So it's for us, it's all about that authenticity
55:09 that is really, really important.
55:11 And as long as we adhere to that,
55:12 that's what keeps our customers coming back again and again.
55:16 - I love that.
55:17 So true, be yourself.
55:19 Jack?
55:22 - Yeah, I very much agree with Bob.
55:24 I think it's about being true to your brand
55:25 and make sure that you're consistent.
55:27 And that is for Bob's brand,
55:30 certainly the travel brands,
55:31 like what is Four Seasons, Rosewood, Amman going to do
55:36 to be their true brand?
55:37 I don't think you need to change at this point.
55:39 You need to be authentic to who your brand is.
55:41 I do think we're going to enter a phase
55:43 because we're going to be
55:43 in some sort of a recessionary environment,
55:46 especially in travel with the people working
55:48 in these places that are impacted.
55:49 The things are going to be a little less ostentatious,
55:53 a little less showy than they have been.
55:56 Again, I think Bob's brand is set up perfectly for that.
55:58 That's not what his brand is in any way.
56:00 But we've been in a pretty over the top maximalism
56:04 kind of fashion world and very showy.
56:07 If you look at the Instagram posts from a year ago,
56:09 that's going to die down.
56:10 I think people are going to be more restrained,
56:13 still wanting to do beautiful things
56:15 and have bespoke, great experiences.
56:18 They will step out their front door,
56:20 but I think it's going to be less ostentatious.
56:22 And I think the brands that can be that authentically
56:26 of who they are and then reflect that with their customer,
56:29 I think will really win.
56:31 But I don't think showy and ostentatious
56:33 is going to work in the next year or so.
56:35 - I don't know.
56:36 I think of hotels who do sleep in a golden egg for the night.
56:39 I think that's probably over.
56:42 And maybe shouldn't have been part of it in the first place.
56:46 (laughing)
56:47 Anyway, so I guess we're coming to the end.
56:49 So Ellen, if you want to close us out
56:52 and thank you guys so much,
56:54 I could talk to you all for another hour.
56:57 - Yes, as you know, I can.
56:59 This has been so great because we've been talking
57:03 for 11 weeks again about travel.
57:05 And it is so refreshing to hear Jack's stats on China
57:10 and the optimism that that relates to the US
57:14 because as we reopen, we will start shifting
57:18 and seeing what the real behavior is.
57:20 And I completely agree with Bob about how
57:24 if you didn't want it in the first place,
57:26 a discount is not going to get you to buy it or do it.
57:30 And that's a conversation that I know a lot
57:32 of our partners have been having in terms of,
57:35 you know, what do they think is gonna get travelers out
57:38 to start moving around the world?
57:40 Is it going to be a discount?
57:41 And I completely disagree.
57:43 I think that if you don't tell the story, the backstory,
57:47 that's why the brands that we have here
57:49 and Jack knows this as well, is that, you know,
57:52 if you're not creating the why,
57:54 the books that Esther has been selling
57:56 during this COVID virus is really interesting to me
57:59 because you can get that kind of revenue
58:02 for a quality product and a brand that really can tell you
58:06 the backstory of what that means.
58:08 And, you know, we at Afar have been doing that for ourselves,
58:11 for our audience, for our partners.
58:13 We have a division that does that in case anyone
58:16 doesn't know how to do commission, you know,
58:18 do the messaging themselves, but it's so important
58:21 not to focus on just getting people out for the sake of it.
58:25 It's really about why should they travel?
58:27 'Cause they're gonna have more,
58:28 as Joe mentioned, limited options, right?
58:31 The resources are limited.
58:33 We are, you know, the pie is getting smaller.
58:36 So why should all of these consumers
58:38 do what each of us need them to do?
58:40 And you better have a good story for that
58:42 because they're ready.
58:43 They are so ready.
58:45 Every piece of research we look at points to that.
58:48 So I thank you all.
58:50 I'm very, very grateful.
58:51 This is, you know, some of my dear friends
58:54 that I have traveled with and spend a lot of time with,
58:57 and I miss you guys so much personally.
58:59 So this is a great way to see you at least.
59:02 And next week at the same time, Thursday at noon,
59:06 we're gonna focus more on things
59:08 that Annie experienced last week,
59:10 which is a city that reopened.
59:12 And as each of our places are reopening
59:14 that we live in or want to travel to,
59:17 it'll be an ongoing discussion of how that's happening
59:20 and what is the future of where we can go
59:24 and how we can move around.
59:25 So I'm excited about that next week.
59:27 And I thank you all again for sharing such great insights.
59:32 (silence)
59:34 (silence)
59:36 (silence)
59:38 (silence)
59:40 (silence)
59:43 (silence)
59:45 [BLANK_AUDIO]