Read the Exclusive interview with Michaela Merk, renowned specialist in international luxury brands.
Michaela Merk is the CEO and founder of “Merk Vision & Partners”, a consulting company specialising in strategic marketing and management aimed at leading brands from luxury, fashion and cosmetics industry.
Michaela has held executive positions for nearly 15 years in prestigious luxury brands such as L’Oréal, Marionnaud / AS Watson and Estée Lauder.
She is now an expert in brand strategy and supports companies throughout their digital transition by preparing them for tomorrow’s challenges related to the transformation of retail.
Michaela Merk holds a PhD degree in marketing. She is also a professor, author and international business speakers holding conferences in more than 20 countries.
What is the importance of leadership today as the role of sales teams has experienced a rapid transformation with the digitalisation of outlets?
With digital transformation, the role of the sales teams has become much more complex. Not only must they sell, but they must understand how to integrate all the new technologies into the customer journey in a smooth, invisible and intelligent way.
This requires you to master digital while using emotional and behavioural intelligence.
This complexity requires day by day support by leaders who are real coaches and models very close to their teams, who grow them in this new complex ecosystem.
A good leader will help his teams to better manage this complexity which often exceeds them and restructure their way of working by prioritising their multiple tasks.
How would you describe a successful instore customer experience? What are the key factors to delight and retain customers?
A customer feels that he has lived an experience from the moment that he has been touched by emotions during his buying journey. The journey begins before the purchase, becomes reality during the purchase, and continues after the purchase. So, the human component brought by the salesmen and all the people in contact with the customer influences his emotions. His emotions are not stimulated when the salesman can perfectly explain the features of his product with all its technical sophistications or when he reviews the brand facts. However, the emotions are triggered when the seller has understood the customer in all its complexity, his buying intention, his tastes, his current need, his culture. It is when the customer feels understood through the initiatives of the person who has the pleasure of answering his needs. Even better, when the seller is able to anticipate his desires and achieves to surprise his client, we arrive at the epitome of the customer experience. Institutions such as the Ritz Carlton have put this ability in practice and we just have to stay at the Ritz to realize that this is reality. We can talk about a successful experience when the client wants to tell their positive experience to those around him, through social media or directly to his close friends. Customer loyalty and recruitment are linked and build together the basis of CRM (Customer Relationship Management).
How could the instore customer experience compete with the online customer experience revolutionised by the latest technological innovations (virtual reality, holograms …)?
The two experiences must not compete, but they must complete each other. The two channels play a different role: online must inspire with new technologies and an unlimited space of expression.
The real asset of offline is the presence of humans and products, which often has an interesting and unexpected tactile aspect in the luxury industry.
It is still difficult to arouse the senses on a computer screen and nothing can truly replace an instore experience.
But we know that 80% of customer itinerary in luxury start online and end up in stores for these reasons. Thus, online is a perfect lever that can reach customers who would never have crossed the door of a luxury store.
We often hear that the luxury industry is not affected by the crisis and pursues its growth over the years. In your opinion, has the luxury sector suffered from digitalisation, or rather the opposite, fostered its growth?
We are in the midst of the digital era and the top 100 global luxury companies generated +11% growth in 2019 with $247 billions in sales (Deloitte, 2019).
Groups like Kering, LVMH and L’Oréal Luxe have put digitalisation at the core of their development strategy and are outperforming thanks to the successful integration of digital in an omnichannel way.
Brands such as Gucci and Balenciaga, which have relied heavily on the digital lever to attract millennials, have allowed Kering to grow by almost + 30% over last year. These figures show that digital has amplified sales within the luxury industry and has reached a new and younger target, but certainly not less demanding. What is interesting is that this is not the end of stores, despite this impressive growth related to the online presence.
Contrariwise, they attract a very discerning and expert clientele which has a strong will to discover and test in the real world what they see online.
What are the issues specific to the luxury industry towards digitalisation?
The biggest issues enhanced by digitalisation are mostly internal issues in luxury firms – and there are many. I’m just going to focus on 3 major issues:
- Digitalisation forces to work in a more transparent way, but the luxury industry has by definition always played by the rules of confidentiality.
- Digitalisation affects all areas and requires cross-department collaboration. However, many luxury firms have always introduced work in silos creating a glass ceiling which doesn’t allow transversality.
- Digitalisation has accelerated processes and drives luxury brands to increase their responsiveness, both in store but also in customer service. The customer is spoiled by the speed of pure players like Amazon and mass markets like Zara. He also claims from luxury immediacy – but it is incompatible with luxury with long waiting times and waiting lists.
How do you see the importance of the role of “influencers” towards consumers, particularly in the cosmetics industry?
Their role is fundamental, especially to Generation Z customers, who are no more than 20 years old. Influencers inspire them, initiate them, influence them. They are excellent recruiters and storytellers. They often have a language that fits well with this younger generation who is more into the experience than the product itself.
Their subscribers feel themselves committed to the influencers, who make them dream, and they want to imitate them. An excellent cosmetics influencer, Sabrina, told me in an interview: “I feel like a teacher to my subscribers. What motivates me is to educate them in a good way, to make them grow, to share my passion and my expertise in luxury and cosmetics. On a saturated market with many new releases every year, it is our responsibility to help the customer choose and select the highest quality products”.
Nowadays, the consumer is hyper connected and highly sought after by brands via online marketing and social networks. Don’t you think that it might turn against the brands and that the consumer- tired of it- could go back to retail?
Today we know that a brand that communicates a lot in social networks increases its desirability, its reputation and attracts new well-informed customers in store. So, on the opposite, the brands hope that, thanks to their growing online activity, the customer will confirm his purchase in store. The biggest turnover can be realised precisely, when a brand is perfectly established in several online and offline channels and manages to combine them in a smart way. When I worked on setting up Lacoste’s first commercial website, for example, we also increased the number of physical sales outlets to make the omnichannel purchase easier for customers.
What is your favourite quote?
“Elegance is when the inside is as beautiful as the outside” – Coco Chanel
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