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For me, this isn’t a problem so long as it’s the mini bags that are hot. It’s immaterial to my appreciation for the classic values of H. Also, I think it depends where you live. My home city is large and has busy H stores, but I wouldn’t say that we’re saturated with B/K in the wild. Under the radar has always been perceived as more stylish here.
Definitely there are some 17 year olds with their own profiles and authorized cards (from their parents) and getting their own profile history. Of course the money is often provided by the parents. But - devil’s advocate again - does it, in practice, make a difference (to Hermes or even in general) that it is technically their parent’s money? (What about someone using their spouse’s funds?) I guess a better way to put it is…does it matter so much if those funds weren’t made by the person making the purchase, as long as the person has access to spend the funds?
).
Yes; do you mean H is selling to Client Z in terms of marketing strategy when in fact it’s Client X they should be selling to? Or do you mean that it doesn’t make a difference if there is nothing much beyond entry level for Client Z because they are not the real purchaser (yet)? I suppose it makes me think that Client X is probably not reached by H marketing anyway. He/she already has the relationship and has reached a stage of life where he/she is not easily swayed by such things. My half-baked theory is that advertisers stop selling to older women not so much because of the invisibility factor but because they know the superficial “sell” doesn’t work on them any more.
May I ask what has changed since H took control of the boutique? The reason I am asking is that our home boutique is rumored to be under H control starting next year.
forum.purseblog.com
forum.purseblog.com
forum.purseblog.com
I will agree that the surprise of what you are offered is part of the fun - kind of like Christmas when one is unwrapping a gift. I'm particular to some of the H bags, but not all hence why I've turned down some bags or flat out said that I'm not interested in a particular style. Example: I have multiple Bs and Ks in various sizes, colors, leathers and skins, but have only one 2424, and one just recently acquired Picotin, and not interested in a Constance or Evelyn - for me personally I don't like the giant H on it (or anything else that H creates with a giant H like belt buckles). This is also part of the reason why I like H, while I appreciate the B and K doesn't have a logo and even if people who know know and even those that don't still know, it doesn't require a logo and their clothes are rarely logo'd (unlike brands like LV, Dior, etc).I loved reading this thread. I work in finance and strategy in the consumer / retail space and "covered" luxury retail brands in a past life (how I first learned about Hermes, actually). Across almost any given brand, the top ~5-10% of buyers typically contribute to ~40-50% of sales. This could be a smaller household % contributing to a higher sales % for luxury brands where spend can be enormous, but that's a general guideline. Heavy buyers are a goldmine, and the path to growth is either 1) to increase household penetration by gaining new households that do not currently purchase your brand, or 2) push purchase occasions and spend per occasion up for your buyers so that ultimately your medium and light users close the gap to the heavy users and continue to maintain loyalty (with repeat rate typically calculated as someone who makes multiple purchases within any 52Wk period and lapsed buyers being buyers who do not return in a 52Wk period).
The "Hermes Game" is pretty perfectly curated to accomplish goal #2, and as someone adjacent to the industry, I love that Hermes has perfected this craft. Let's take someone who is shopping Hermes with hopes of receiving a coveted bag. Having this concept of "pre-spend" allows Hermes to build a customer base that shops across categories, which is highly lucrative. Even if this consumer gets a bag, lapses, and stops shopping the brand completely, their spend as a lapsed user is still relatively high from an absolute dollar basis. The gamification aspect is also very on trend right now. I joke that shopping at Hermes is almost akin to gambling. Due to the scarcity factor, you can't fully control what you will be offered, which adds a bit of excitement. So a consumer gets a bag, enjoys the little adrenaline rush of getting offered something known to be scarce, and experiences the excitement of the initial unboxing, not fully knowing what they will get. Will they want another bag and continue playing this game? A pretty good chance that yes, this would be the case.
Or maybe I'm projecting
But the ideal consumer for any brand is one that is highly loyal and highly sticky (price inelastic and won't leak to other brands with a price increase), which ultimately boils down to someone who genuinely loves and connects to the brand. While a consumer doesn't need to be a heavy user to get bag offers, customer lifetime value is an important metric and if you're loyal throughout many many years, that's hugely important. So I agree that loyalty to the brand and length of relationship plays a larger role than a "pre-spend ratio" at any given moment.
As long as demand is greater than supply, there is little reason to cater to consumers that will potentially lapse. And as long as demand is greater than supply, helped by social media, gamification, and scarcity factor, this is a business model that will continue crushing it. I am kind of all for it.
Totally agree with Ferrari limiting their cars and will be interesting to see how Rolex goes given they are taking control of their secondary market by selling "previously loved" watches through their stores - I'm not a Rolex person but know their brand can set some new standards akin to Patek and others pulling in the brand to their own stores vs dealers cutting too many deals or AP opening their AP houses to set a different standard of "we have no stock, but come here, relax, have a drink and chat with us" kind of relationship building.
As the older woman in this equation with plenty of Gen Z and Gen Alpha around - my theory (and personal soap box lecture that my students occasionally have to endure) is that they know very well how to manipulate the 'future' to haunt the present to buy all this stuff for them. But of course, it is really about investing in long-term customer loyalty - convert them young and keep them interested. Not sure if H is at this stage yet.Yes; do you mean H is selling to Client Z in terms of marketing strategy when in fact it’s Client X they should be selling to? Or do you mean that it doesn’t make a difference if there is nothing much beyond entry level for Client Z because they are not the real purchaser (yet)? I suppose it makes me think that Client X is probably not reached by H marketing anyway. He/she already has the relationship and has reached a stage of life where he/she is not easily swayed by such things. My half-baked theory is that advertisers stop selling to older women not so much because of the invisibility factor but because they know the superficial “sell” doesn’t work on them any more.
I'm in the US. I turn down bag offers all the time. I think it actually helps your cause. If you come across as someone who loves the brand, but can only afford a new bag every view years, so you have to wait for the "right" one to come along, you're more likely to get exactly what you want. I am by no means a "big spender" at Hermès, but I'm consistent, and make it clear I only buy want I will use.
I think that happened to me recently. I was offered a Black box Birkin 30 sellier this year. I had made it known I was in the market for a new quota bag (I had bought my last Kelly 3 years previously), and mentioned I loved box. Got the call and was offered the box Birkin. It was over my budget, but I splurged because it was such a rare and beautiful treat.
