The economic forecast for life post GFC was low and slow growth, a trend ringing true across tills of retailers around the world. This downturn in retail land has led to a greater reliance on price-based bargains to entice consumers back in store, and in turn a greater expectation among consumers that price determines where, how, what and when to purchase.
This consumer desire for bargains is a trap to test the mettle of premium brands. Slashing prices doesn’t just mean sacrificing margins in the interests of short-term survival – play in this space for too long and you trade away hard-won brand equity and compromise your prospects over the long-term. Premium positioning gives way to parity with lesser peers, and loyalty that is tied to a price point.
For the brave there’s another response to tough times – to run against the grain, invest and innovate, shift beyond price and reason and engage consumers with new experiences that are even more mysterious, intimate and sensual.
A nice example is luxury and sports eyewear group Luxottica’s Eye Hub retail store launched last year. It took two years of research to create, and involved studying both what customers’ want and what they don’t.
The store is laid out like an eyeball and is designed to give you a taste of what your new rims might look and feel like in any conditions, sporting wind machines, a treadmill, and technology that simulates snow and water glare. 41 touch screens serve as cameras and mirrors for shoppers to check out the frames and play back their own look. At the store’s epicentre is the ‘iris,’ home to the most expensive brands, displayed like a rare wine vault.
The Eye Hub also includes dedicated areas for education and research on eye conditions and prescriptions. Luxottica’s global CEO, Andrea Guerra, describes the store as an experiment, explaining that the world is changing fast, and thoughts have to be bold.
Sounds right to me. Of course being bold and counter cyclical comes with a greater risk – if your investment doesn’t work you fall harder and there’s less to land on. But the alternative is a slow death by discount. As Neil Young once said it’s better to burn out than to fade away. Bravo to the visionary eyewear company.