Retailing

Allures of Luxury

A specialist in luxury bath fittings is showing how this niche market can be addressed successfully

A report titled ‘India Luxury Review 2011’, published jointly by CII and global consultancy company A T Kearny recently, reveals that sales of luxury products grew by nearly 29% last year. The report says that the market for luxury products and services, which is valued at nearly Rs. 30,000 crore, is only going to get bigger in India, and to a large extent remain immune to recessionary conditions. Bathroom fittings are one of the key segments of the luxury category, and their retailing is fast becoming a well recognised science.

Luxury retailing is not as easy as it appears. It is not a matter of having rich products on display, waiting on customers politely in the hope that they may decide to buy, and sending out greeting cards are regular intervals. This business is highly evolved internationally, and thanks to global brands like Villeroy & Boch, it is set to become a great opportunity in the country as well.

Villeroy & Boch is a legacy brand, founded in Germany way back in 1748. Since then it has grown into a (714-million company with operations in 125 countries and 16 manufacturing facilities in Europe, Mexico and Thailand. In its latest message to shareholders, the top management of the company has said that India, China and Middle East will be the company’s next engines of growth.

But why is this brand so closely equated with luxury retail, when there are others within the industry who cater to high net worth customers as well? The primary differentiator is that this company chooses to remain in the luxury domain and not address the other price segments of the market. This is unlike most others who, with their wide product ranges, try to straddle all price points.

According to Srihari Nair, the company’s director and Indian country manager, “The House of Villeroy & Boch (HOF) sales concept enables its customers to experience the principle of the complete brand. The principle is to provide style guidelines and aesthetic stimuli for purchase decisions. The company’s products are presented in such an authentic and powerfully designed true-to-life composition in settings that customers are inspired to acquire them.”

V&B, as the brand is popularly referred to, made an entry into the Indian market in 2008 with its business divisions of bathroom and wellness, and tableware. Since then it has steadily built up a network of 15 stores, of which three are company-owned HOF. Hari informs that the plan is to take this number to 25 by 2015.

The 260-year-old company is pushing the envelope in India’s nascent luxury bathroom fittings market by delivering craftsmanship, uniqueness and exclusivity, the parameters on which luxury goods are usually gauged. “Our company is deeply rooted in European culture, and as such we are a sole brand capable of reflecting these attributes. The company’s all-embracing innovation culture allows us to reinvent ourselves from time to time by optimising ceramic material, and product functionality and design. Our values give people the freedom to design their homes in accordance with their tastes,” says Nair.

But the business of luxury presents a set of challenges, one of course being the infrastructure. Location is the most important factor for success in this business, and getting the right address in the absence of high fashion streets, like New York’s Fifth Avenue and London’s Regent Street, is a vexing problem. Delhi’s DLF Emporio mall is probably one the few ecosystems in the country in which luxury retailing thrives, as it brings to one place the connoisseurs and high spenders, thereby providing every outlet a critical mass and high visibility.

“Our strategy is to work with those partners who have an appetite of dealing in luxury fittings, and have stores in posh localities.” Most of the company’s retail partners, including Valuline in Hyderabad, C Bhogilal Westend in Mumbai, and M L Sharma in Delhi, are located in the poshest of marketplaces. Hari cites the location of Valuline’s Jubilee Hills outlet, adjacent to the Mercedes-Benz showroom, as an example of locational correctness.

Another key concern is in-store brand experience, a factor often regarded as a determinant for attracting and retaining wealthy shoppers. Referring to the HOF, Nair says that superlative experiences can be realised at these outlets in Hyderabad, Mumbai and Gurgaon. “Our representative stores for bathrooms, tableware and tiles make this concept accessible in so many cities across the world, from Paris to Milan and Moscow, and to Beijing, Mumbai, and Hyderabad. It allows our customers to experience the depth of our brand. This universality enables them to relate with it and make their decisions in a more fulfilling manner.”

Narinder Anand (info@valueline.in) managing director of Valuline informs that channel partners have to conform to display guidelines provided by the company. “We receive a layout guide from Villeroy & Boch which specifies the lighting, colour, graphics and materials to be used in the store. It is important to adhere to the corporate design, since V&B customers are well travelled and familiar with the layouts, and this immediately puts them at ease.”

Visual experience is just one part of in-store experience, the other is customer interaction. Aptly defining customer interaction, Anand says, “Luxury products are not sold, they are served. This can be done only by having exceptional human interaction with every person who steps into the outlet. Obviously, this calls for extensive training.”

According to Anand, training involves product knowledge, which is provided by the company, and etiquette and mannerism which comes from soft skill development at the store level. “One without the other simply won’t work, both have to be there in the right proportion.” He explains that the customer’s experience begins the moment he steps into the store, is escorted to the right floor, and is briefed about the brand. “We are subconsciously being judged at every step, and the sum total of all these experiences will determine if the customer will eventually invest in Villeroy & Boch.”

Valuline goes the extra mile in pampering its customers by offering delicacies and a choice of exquisite beverages, for which it has set up an in-house Café Coffee Day counter. “They can choose from espresso, latte, cappuccino, hot and cold coffee, lemon tea and juice. This has increased footfall, and the average time spent by customers has gone up to 90 minutes.” Anand informs that Valuline commits to providing free of cost lifetime after-sales support to customers. “They need to pay only for part replacements, not for the service or the visit. Our technicians will travel to distant places even if that involves overnight journey.”

Luxury fittings are on the shopping list of builders of residential real estate development as well. Pointing to a unique proposition of luxury, Trupti Mandve (mandve_trupti@dlf.in), senior architect of the fit-out team at DLF, says that luxury is not a mere product that comes with a high price tag, but a priced possession that needs to be told to customers. “Luxury items have a rich heritage of design, style, aesthetics and language. As designers, we communicate these to our clients to help them experience and feel what they are buying.

Mandve is currently designing the interiors for DLF’s super luxury residential project The Magnolia, situated on Golf Course Road in Gurgaon, a suburb of Delhi. “Since these apartments are raised to become a super-premium space with market valuation of nearly `13-14 crore each, luxury sanitaryware like Villeroy & Boch is most appropriate.” She explains that demand for luxury sanitaryware in the country will rise as the construction of plush apartments peaks. “At present, luxury residential construction in the country is witnessing a phenomenal growth of 80%, which speaks about the demand of luxury sanitaryware.”

The business of luxury requires an entire ecosystem, of knowledge, retail, service, specification, and of course engagement. Villeroy & Boch is building such an ecosystem, and Hari insists that to be successful as a luxury retailer, it is necessary to become a part of it, and actually believe in it. “There can be no half measures here.”  

Mrinmoy Bhattacharjee