design:retail - November/December 2014 - (Page 38)

038 shopping with paco Reporting from the Edges PACO UNDERHILL CEO & FOUNDER ENVIROSELL T HE COMMERCIAL TREND reports tend to gush about the latest in Paris, London or New York. Yes, the new Tiffany & Co. on the Champs Élysée is breathtaking. In the Peter Marino world of sumptuousness, luxury goods retailing is at its stinking best. The market has expanded over the past 10 years, and while the economists talk about the gross imbalance of income distribution and politicians rail against the Fortune 100 companies playing the shrinking globe to dodge paying taxes while their balance sheets swell, the proliferation of high-end stores and malls continues to grow. Meanwhile, all is not well within the luxury market, as new projects usurp attention from existing properties, and stealing other peoples' business supplants chasing new markets. In Tokyo and Shanghai, the wars are no longer polite and the stakes remain high. Tokyo as a city is an enigma some 20-plus years into the Japanese financial meltdown. The streets are filled with clean new cars and at five-star hotels, there are lines of women waiting to have afternoon tea. The up-market cocktail bars are happy to sell you a well-prepared drink for $50 with sculpted ice in a crystal glass, and there seems to be no shortage of takers. While this economy may have slipped from a global second to global third, the land inhabited by the Imperial Palace still is said to have an appraised value that exceeds that of all the property in United States. Japan has more millionaires per unit of population than any other nation on earth, and most of whom live in Tokyo- and all of whom shop. Even in the midst of a typhoon, Tokyo Midtown, the property development in Roppongi Hills, was hopping. The Ritz Carlton on the property was full. The elegant grocery store was packed, and the NOVEMBER/DECEMBER 2014 DESIGNRETAILONLINE.COM 038_drm_1214_Paco.indd 38 restaurant was so busy that it took entrées two hours to hit the table. Since the property opened some sixplus years ago, the tenant turnover is at 40 percent. The landlord has traded out underperforming tenants and upgraded. That said, Mr. Nakamura, the president of Tokyo Midtown, was adamant that the purpose of the retail piece of the property was to increase the value of the office space that sits on top of the mall. The landlord gets a 30 percent premium compared to office complexes immediately adjacent. What makes the offering of the upscale Tokyo mall unique is the quality and range of the food offerings. Custom-made lollipops, gourmet popcorn, every baked sweet known to man, fresh and dried fruit, and regional delicacies. Food gifting is a wellestablished protocol, which fits into a culture of small apartments and past history of re-gifting. Give a perfect melon and you know it will get eaten, rather than passed on to someone else. But more surprising are the themed properties and sections of malls targeting specific shoppers. One of my favorites is a mall in Shibuya targeting teenage girls, with cutie-pie and good-girl-dressing-bad themed outfits, not quite (but close) to Halloween looks. The feeding frenzy is fueled in part by the new purse of choice: a wheeled carry-on in pastel colors. More room for more stuff. The new Aeon flagship is four malls on the same property-the Grand Mall focuses on adult fashion; a Pet Mall offers a pool for dogs complete with doggie swimming lessons; a Family Mall sells children's apparel, toys and recreation; and an Active Mall focuses on athletics. Aeon is opening malls across Asia, from Malaysia to Cambodia. If Japan is interesting, Shanghai is a trip. Twenty-four million people in a city leaping from the 19th to the 22nd century. The appetite for luxury goods, which has been part of the landscape for more than a decade, is in transition. Eric Chan, leasing director of the über-hot K-11 brand, observed that the Chinese consumer is going from "having to have the same bag to needing to carry a different bag." In his artthemed shopping complex, all the luxury brands are required to stock lines exclusive to that property. K-11 runs a shopper loyalty program that includes a level for shoppers that spend in excess of $1 million dollars. While the lead tenants at all the high-end Chinese malls continue to be Western brands, native luxury brands are growing, and Asian beauty brands like Amore Pacific and Innisfree are giving Western prestige brands a run for their money in the Asian market. The LVMHs of the world need to know that while their ride is not over, it is getting a lot more complicated. PACO UNDERHILL IS THE FOUNDER OF ENVIROSELL AND AUTHOR OF THE BOOKS "WHY WE BUY" AND "WHAT WOMEN WANT." HE SHARES HIS RETAIL AND CONSUMER INSIGHTS WITH DESIGN:RETAIL IN THIS BI-ISSUE COLUMN. Photo courtesy of PACO UNDERHILL 11/13/14 10:39 AM http://www.DESIGNRETAILONLINE.COM

Table of Contents for the Digital Edition of design:retail - November/December 2014

design:retail - November/December 2014
Editor’s Note
Show Talk
On Trend
We Love This!
Designer Picks
How’d They Do That?
Have You Heard?
Shopper Insights
Shopping with Paco
Buyers’ Guide
Company Listing
Product Category Index
Product Category Listing

design:retail - November/December 2014