Luxury Retail and Digital Management, 2nd Edition

Chapter 1The Various Models in Luxury Distribution

Luxury today no longer sells because of rarity but on a feeling of exclusivity, which depends primarily upon the selectivity of its distribution, both physical and digital.

–Jean-Noël Kapferer¹

From the outside, observers may believe that all luxury brands are distributed in the same way – through exclusive stores owned by the brand – and that they are able to manage them from their head offices. In fact, the reality is much more complex.

Some luxury products, such as perfumes and watches, are sold for the most part in multi-brand stores that do not belong to them. These stores generally do what they think is most efficient for their multi-brand businesses and they are never easy to motivate or mobilise.

In some countries (e.g. Thailand and Vietnam) a foreign company that imports and distributes products manufactured abroad is not allowed to be a majority owner of its local subsidiary (it is only possible in China since 2018). It has to associate with a majority-holding partner that is a national of the country. So, no luxury group can, even if it initially wanted to, become the owner of all its sales outlets in the world.

Building a global network of outlets demands an enormous amount of time and money. Indeed, for a large luxury brand, having its own store in Ulaanbaatar would be wonderful, but how can it ensure that customers will find the same service there (hospitality, advice, prices and after-sales service, for example) ...