On a recent earnings call, Chanel revealed its plans to open private boutiques dedicated to their VIP customers, starting in Asian cities. This is hardly surprising when faced with the scenario of frequent, long queues outside their boutiques around the world — hardly a luxury experience.
And it’s not the only luxury giant to adopt this strategy: during the latest quarterly financial report, the French conglomerate LVMH — whose revenue rose 20 percent, beating analyst estimates — also outlined its focus on “continuously strengthening the desirability of its brands” to meet the preferences of ultra-high-net-worth VIP clients.
Luxury lines’ desire to please high spenders is evident and this is already playing out in China. At Beijing SKP — the prestigious mall with the highest sales in the country — Dior and Chanel have recently taken the third floor of the building to open VIP-only salons. (The first one to do so was Louis Vuitton.) And they’re not as visible as you’d think, as 36-year-old Chen Xiaochen, partner of a commercial design firm in Beijing, found out.
The Chanel customer explains how “on the facade of the salon, ‘31 Cambon’ is written — the name of the street where Chanel’s Parisian boutique is.” Clearly, the reference would be highly challenging for non-Chanel shoppers to recognize. But as Philippe Blondiaux, the group’s chief financial officer, intimated during the yearly earnings release this May, that’s probably the goal.
“Our biggest preoccupation is to protect our customers and in particular our pre-existing customers. We’re going to invest in very protected boutiques to service clients in a highly exclusive way,” he stated. Given this, Jing Daily investigates how brands are courting HNWIs and how these VIP experiences are perceived — and analyses the return on investment for businesses.
VIP Salon experience and offering
These mysterious private boutiques guarded by black suit-wearing bodyguards have captured the imagination of netizens. On Xiaohongshu, users call them the “little black rooms.” “It’s seen as a privilege for loyal shoppers to be invited in,” comments James Hebbert, managing director at the China digital marketing agency Hylink.
So, what do they look like? Dior’s private boutique offers three rooms (all by reservation) managed by the deputy store manager. Given the limited number, only loyal, existing customers have access to them. “It rarely happens that sales associates bring new customers in,” a Dior employee (who wishes to remain anonymous) reveals to Jing Daily. She adds that the salon concept is totally different from the boutiques. “Rather than a store, it is like a gallery, where the brand’s culture and DNA are showcased.” From images circulating on Xiaohongshu, it’s evident that the maison has recreated a smaller size version of the Designers of Dreams Dior wall.
Chanel’s exclusive store is similar. Internal sources revealed that experience is all that matters there. The latest collection and hard-to-find blue-chip pieces are presented as if in an art gallery; spacious tweed sofas run along the walls, where artisanal tools that highlight the house’s craftsmanship hang.
Besides one-to-one sales service and consulting, VIP salons have much more to entertain HNWIs. With intimate trunk shows and private pre-orders, as well as exclusive gatherings, birthday surprises, and high-end educational courses, “we can say that to a certain extent, the luxury brand VIP salon has become a social club for the luxury consumer,” comments Charmaine Lin, general manager and client partner at Chinese communications and marketing solutions agency Gusto Luxe.
What do HNWIs think of luxury VIP salons?
One VVIC (very, very important client) of Dior shared her retail routine on the condition of anonymity. Whenever she wants to buy something her sales assistant books her one of the three rooms at Dior’s VIP salon. “The experience is super premium,” she remarks. “The sales team always prepares the clothes in my size in advance and welcomes me with my favorite desserts and drinks.”
Recently, luxury research and consulting institute Yaok released a survey on Chanel’s VIP-exclusive boutiques based on 300 shoppers, 60 percent of whom were HNWIs with a net worth of over $1.5 million (10 million RMB): over 80 percent of respondents said that Chanel’s initiative of opening VIP salons resonated well with them. “Affluent wealthy women, who consider luxury clothing and furniture part of their lifestyle, desire new, exciting, and high-quality products. And of course, privileged treatment,” notes Danni Liu, general manager of the Chinese integrated creative agency iBlue Communications.
Investing in loyal HNWIs. What is the ROI?
Before Dior and Chanel, prestige skincare outfit La Mer held invite-only VIP gatherings in five-star hotels from time to time. Chinese high-end fashion label ICICLE and luxury alcohol company Louis XIII also opened their own VIP salon spaces to lure high-spending clients. However, Gusto Luxe’s Lin believes that being able to open independent VIP boutiques in one of the most premium shopping malls in the country is proof of a certain industry status: “those high-net-worth individuals who are invited will also feel more valued, and thus deepen their loyalty to the brand.”
The private space and tailored experience significantly boost the intimacy between brand and customer. James Hebbert from Hylink concludes, “once you’ve experienced the VIP service, no one likes to accept a consumption ‘downgrade’ to the regular boutique.” As per internal sources, a VIC or VVIC status is not lifelong. Therefore clients need to keep up their high purchase volume to retain membership. As such, the better and the more exclusive the experience, the less HNWIs want to be excluded from it. It is foreseeable that in the future, more luxury players are going to follow suit.