Ralph Toledano, chairman and CEO, Chloé: “Customers have gotten used to discounting in ready-to-wear, and that is very bad for us. I really believe people look at price, but they also want to have quality. The expression ‘value for price’ is absolutely valid. We see in our stores the customers really want the best quality. We also see the buy-now, wear-now phenomenon. We used to deliver coats first for fall. This might change. It’s clear we also have to look at our retail networks and our service in particular. We will be looking more at CRM [customer relations management], viral marketing, in-store events, and service, service, service.”

Patrizio di Marco, CEO, Gucci: “Even prior to the financial crisis…the consumer [was] placing higher emphasis on individuality, personalization, and less ostentation. The crisis has increased the focus on discrete consumption and the price-to-value relationship. The crisis has lowered substantially the disposable income of entry-level, aspirational consumers with a resultant drop in traffic from this segment. For the foreseeable future, [consumers] will be more prudent, pragmatic, and discerning. When buying luxury products, they will evaluate more true quality, heritage, craftsmanship, and exclusivity and expect outstanding levels of service. I also believe that social responsibility is increasingly important in the minds of consumers. A concern for the environment, appropriate labor practices, and a policy of giving back are all factors that can play a part in purchasing decisions today.”

Jean Cassegrain, managing director, Longchamp: “We have been less affected by the crisis than most of our competitors. Our first half of 2009 has been difficult, but we have still ended up versus last year, which was a record year. In July and August, even the markets that have been most affected by the crisis—the U.S. and Japan—were up again. I believe that this success is related to the positioning of our brand. We are a European luxury brand, but we have never been overpriced.… The customer still wants a sexy, desirable product but is no longer ready to pay $1,500 or $2,000 for a bag that is obviously not worth it.”

Ilaria Alber-Glanstaetten, CEO of Provenance, the London-based strategic and creative-marketing agency: “Consumers will be looking for a greater price-value ratio. I think companies will very quietly follow the lead of Dolce & Gabbana, for example, who have lowered their prices. I also think there will be a return to service. It’s no longer going to be about a power dynamic between shop assistant and customers, but more peer-to-peer selling. I was recently invited to a YSL store event in London, and the chief executive of the company was there helping the customers with the clothes. I think there may be more user-generated products similar to what you see in the mass market: more interchange between consumers and companies. Nowadays, you can design your own T-shirts, sneakers.”

Luxury 101: Back to Basics

Patrick Thomas, CEO, Hermès International: “One phenomenon will accelerate: There will be a segmentation between brands with high quality, craftsmanship, and quality materials—and "masstige." Consumers are quite discriminating, and within luxury goods there are high-quality players and the rest is mass luxury goods. In Japan, for instance, consumers are extremely aware of the quality of products and give a premium to products of high quality. There’s also the growing importance of Chinese customers everywhere. There’s a big surge, including in Paris. It’s a long-term phenomenon. For the moment, we have fewer Russian customers, but that’s not going to last.”

Sebastian Suhl, COO, Prada Group: “The current macroeconomic context clearly provides opportunities to leading brands. Those brands, which are able to develop and drive a strong retail network and support it with a solid communications platform, will ultimately come out on top. Balance is key: A leading luxury brand must maintain its appeal, offering innovative, top-quality products across all product lines and providing customers an exceptional retail experience.”

Massimo Ferretti, chairman, Aeffe SpA: “The current downturn has certainly changed the industry environment, particularly the attitude of the clientele: more selective and more sensitive to the value-price ratio. The true challenge we face is to be in the perfect condition to catch the opportunities of the upcoming economic recovery, with an efficient and flexible organization, with appealing and well-balanced collections, with a selective presence on the key markets.”

Maria Grazia Chiuri, co-creative director, Valentino: “The product remains king because that’s how we transmit our point of view. More than ever, there has to be coherence between store windows, the ad campaigns and the relationships with the celebrities, all for a unique vision.”

Francesco Minoli, CEO, Pomellato: “The companies that will survive the downturn are the ones that in the past years coherently carried forth an authentic message. Conversely, those that overexposed and overdistributed the brand in the name of growth will suffer, as they will inevitably be repositioned. This crisis has taught everyone that growth isn’t infinite, so there will be major attention to production, stock, and distribution. Shopping will be a moment of self-gratification, but a more pondered one.”