Lane Crawford and Joyce have been household names for luxury shopping in Hong Kong for decades and now China. With a gutsy online strategy the group wants a bigger slice of global luxury spending, both from its wealthy Hong Kong and China clients while they are traveling and those from the West that want to tap into its eclectic and fashionable base of designers.
With the rise of the Chinese Ultra High Net Worth woman who is ‘calling the shots’ Elite Traveler Editor-in-Chief Douglas Gollan visited Andrew Keith at his Hong Kong headquarters where the Scotsman is currently looking to build on his run of success.
Elite Traveler: Tell us about your background?
Andrew Keith: I was brought up as an expat kid. Southeast Asia has been my home for most of my life, with a further education in the UK. I came into the industry through design. My love of product is what started my love of retail. The first 15 years of my career were in product, leading design teams and working on merchandising. I found that the creative element was very interesting, but what was even more intriguing and gratifying was pairing the creative with business together, being able to tell brilliant stories and continue to showcase brilliant product, the commercial element at the same time. I’m quite a good combination of left and right brain combination, balancing art and science aspects of this industry, which has obviously brought me here.
ET: And you’ve had a number of positions since you came here?
AK: I’ve worked for the Lane Crawford – Joyce Group for the last 12 years. I joined the organization at a time where we were going through a very strategic alignment with the brand Lane Crawford. I was brought on to head up the merchandising department for menswear. We were evaluating what was happening with the market, what was happening with the brand and what the opportunities for growth were. I was challenged with what a contemporary menswear brand should really look like, what kind of key brands partners we should be targeting, and essentially changed 80 percent of the menswear department in about 18 months. We brought in a number of key brands that have been part of our portfolio that have built up our brand, including accessories and other categories to this day, including Paul Smith, Armani and Dunhill.
ET: What next?
AK: From there I then took over looking after womenswear, and by that point we really began to re-strategize the Lane Crawford plan. This led to opening up the IFC flagship store (in Hong Kong). That required re-strategizing with what was happening in the market and what’s happening for the consumer. For us it was the realization that we would be looking at the younger customer with higher spending capabilities, who was much more global with their referencing, becoming increasingly sophisticated and looking for a retail experience that was differentiated, not a generic retail experience. So we did a lot of strategy around the IFC store. We created something unique, something that we feel is still being used as a benchmark for multi-line luxury retail globally.
ET: What were the implications of this strategy?
AK: Because we invested so much into the store we decided that the model was going to be controlled by us, which meant no concessions in the model. We sort of stuck a flag in the sand and said this is what Lane Crawford is going to look like for the 21st century and this is where the market is moving. It’s been very successful for the rest of the brand’s development.
ET: How did you follow up that success?
AK: From there I took on all of the merchandising. Then about five or six years ago I had the opportunity to move internally in the group to go into Joyce as the President, and look at how we could take Joyce to a pinnacle luxury high-end boutique, and again inject a bit of newness and dust off some of the cobwebs. It was a pioneering store but wasn’t necessarily leading in the way it could have been. We opened a flagship store in Beijing. We signed some new franchising agreements with Rick Owens, with some new brands as well as extended out existing relationships with brands like Armani. We invigorated the brand. Part of the strategy was to look at China potentially as a great growth opportunity particularly for high net worth women, which was a huge part of the development of the market. Joyce really talks to a very fashion-forward luxury consumer in a very personal way, high levels of service, one on one service. We invested a lot into “clienteling”, being able to take customers to Paris or to New York or to Milan, being able to introduce them to designers in intimate ways, being able to secure product for them, etc. That became Joyce’s brand position.
ET: What was the upside of being able to run both Lane Crawford and Joyce?
AK: I moved into overseeing both the Lane Crawford and Joyce business in 2011, a very exciting opportunity for myself and the company. This enabled us to be quite strategic in terms of positioning our business because Lane Crawford has a very large customer demographic, a very broad audience of a luxury lifestyle consumer and Joyce speaks very much to the fashion insider. They are very complimentary to each other. It enables us to work with our brand partners in a very inclusive way, so that we can strategize with our brands depending on what they need and what their requirements are in the market. Joyce will identify, nurture incubate whereas Lane Crawford has the ability to talk to a much broader audience, with greater volume capabilities and a broader platform.
ET: Any you are gaining press attention for your web strategy?
AK: One of the most exciting things about Lane Crawford is the development of that open commerce strategy which is to really build the digital components of our business and reach a global luxury consumer audience, but in China especially, which has happened in the last two years.
ET: So are you seeing customers from all over the world with the digital strategy?
AK: Yes, it has been fascinating. Seventy-seven percent of our digital business is generated from Greater China, the rest mostly from Europe, UK and USA. We have seen triple digit growth with our digital business, which is fantastic and very exciting. To be able to see a thriving digital business in China is excellent and gives us the indication that future opportunities will continue to exist.
ET: Does digital help keep share of purchasing even as the Chinese consumer travels overseas?
AK: Digital allows us talk to a much larger audience, aligned with our physical strategy as well. We’re rolling out a 150,000 square foot flagship store in Shanghai in September, which is double the size of our flagship store here in HK. We will expand into Chengdu at the start of 2014. Those two stores together with the existing stores in Beijing will enable us to have Beijing, Shanghai, Chengdu as physical anchor points of the brand that will enable us to talk to a regional audience. We feel that we will have the major cities in China covered physically and feel that our digital presence will enable us to talk to the rest of China. We are looking towards an aligned strategy. Online is an extension of out store, to enable convenience, as this is what luxury consumers are looking for. Seamlessness and convenience is very important to our customers which is what we will always deliver. To be able to deliver this, particularly to China, has been very exciting.
ET: Any significant trends when it comes to the high end woman in China?
AK: If you look at China as a market, for us, we are starting to see that women are starting to have the ability to call the shots. They are business leaders and entrepreneurs in their own right. They have personal spending power that is starting to be very interesting. Powerful women in China are very interesting, and what this means for luxury fashion brands. We are seeing a difference in lifestyle and mindset here as well. Women in China are becoming incredibly global, especially over the last eight years.
ET: The luxury hotel industry is grappling with how to marry technology and high touch in just the right way. What’s your take on the retail side when it comes to the luxury consumer?
AK: I think retail of the future is increasingly going to be around the fact that we live largely toward not differentiating between the channels, so accessibility to product and information is going to be increasingly blurred and available 24/7. I think also information and differentiated information, so unique content is going to be very important as well. I also believe that increasingly scarcity of availability will be very interesting and that will come into play as well. You will have on one side the fact that information can be editorial and unique content is very important but also that finding personalized differentiated exclusive way to express their individuality. In China you can see that people wanting things that are so different and non-ambiguous. People choose to travel on their own agenda. It’s very much about making it work for “you.”
ET: When traveling, any favorite hotels?
AK: In London I am great fan of The Connaught. I like Le Meurice in Paris. In New York the SoHo Grand. The majority of my travel is business so it’s really about staying somewhere with a level of convenience and service. When it comes to business travel, I think you’re always looking for a feeling of being at your home away from home. I’m a great fan of the Six Senses brand when traveling for pleasure. They are interesting and really pioneering in social responsibility.