The recession has made the luxury customer even more demanding, said Steve Sadove, chairman and chief executive of Saks.
Acording to Sadove, luxury customers continue to love their favorite brands, but want them at lower prices, or at least want to understand why the product commands the price it does.
Saks has been adapting to the current environment by focusing more closely on customer service and enhancing the experience of shopping at its stores. This has included hosting events where shoppers can meet designers.
"The reality is people love luxury, they love brands, they love shopping...what has changed is their understanding," Sadove said during a panel discussing the state of the luxury segment at the National Retail Federation's annual convention.
Sadove also discussed the need for more product innovation.
"In the end, it's the products people are buying," Sadove said.
Sadove also highlighted the role of cause marketing. Saks partners with a number of charities, including St. Jude's Children's Hospital.
He said luxury customers like to "give back."
One of Sadove's co-panelists, designer and retailer Tory Burch, also sells products to raise money for a charitable foundation.
Burch talked about the need to develop relationships with consumers, which she does through Twitter, through the company's Web site and by personal appearances in her stores.
The challenge for luxury brands is to be accessible, while retaining a brand's mystique, Burch said.
That's a difficult task, especially when Burch is sharing events from her daily life on Twitter.
A recent Tweet just yielded a loud, emotional outcry among her followers and will eventually lead to a new product.
Burch sent out a Tweet that said how "grossed out" she was that she was standing barefoot in airport security. Her followers agreed this was one of the ickier parts of traveling.
Burch's response was to develop a new product: the travel sock.
This anecodote backs the old adage that companies don't own brands, customers do, according to Mark Gobe, president of Emotional Branding.
Gobe said this has only become more true in the age social media.
More from Consumer Nation:
- Consumers Spending Again Despite Weak Jobs
- Winning Retail Stocks for 2010: Senior Analysts
- Pepsi Deal Will Rock The Energy Drink Aisle
- Advertisers May Need to Embrace Consumer Fear
- The Coming Retail Real Estate Nightmare
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Saks' Peers:
Nordstrom
Tiffany
Macy's
Coach
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Questions? Comments? Email us at consumernation@cnbc.com
