It’s always good to have an opinion but it’s better to listen first, and I did a lot of that in 2016. Following a year of big changes, from Brexit to declining oil prices, fashion industry insiders, big retailers and designers all painted a bleak picture.
It’s true, the last two years in retail have been temperamental, the market has softened both worldwide and in the Gulf. According to the Chalhoub Group’s 2016 White Paper, the luxury market in the region fell from an annual growth of approximately six-to-eight per cent (over the previous five years) to a real year-on-year growth of just one-to-two per cent in 2015. In 2016, the big groups started tightening their belts which led to hushed discussions of redundancies. Everyone talked of keeping their heads down. People (the good, the bad, the qualified and unqualified) were nervous about the security of their jobs.
Recently I was invited to an intimate roundtable in Dubai, hosted by Burberry, to share my thoughts on the current climate with some global luxury power players and retail partners in the region that included Cartier and the Chalhoub Group. Two major topics were discussed: Brexit, and the empowerment of the consumer thanks to e-commerce.
The conversation revolved around the post-Brexit effect on the luxury watch and jewellery sector – an important focus for the Middle East consumer – and how local price points have to be adjusted for fear that since the pound plummeted in value (the lowest in 30 years), top clients would travel to London to get their fix of fine jewellery and watches to make huge savings. Historically, stores in the Middle East priced goods at 30 to 40 per cent more expensive than in Europe or the USA, this has now reduced to around 10 per cent. To spell it out, post-Brexit, goods are discounted between five to 20 per cent – Bloomberg reported that the Cle de Cartier Flying Tourbillon timepiece was around Dhs55,000 cheaper in the UK than in France.
Also high on the agenda was e-commerce. According to PwC’s Total Retail Survey 2015, the e-commerce industry is expected to be worth Dhs36.7 billion by 2018. With technology at our finger tips, we’re not only more price savvy, but we needn’t travel to take advantage of lower price points abroad thanks to the folio of fashion commerce sites now delivering to the region. It was unsurprising then to hear that Mohamed Alabbar of Symphony Investments (which includes Bysymphony.com) has entered into a joint venture with Yoox Net-a-Porter set to change the face of e-commerce in the region. God help our bank accounts.
Another hot topic in retail last year was the disruption of the fashion calendar. Both the merging of women’s and men’s fashion weeks (makes sense to me), and the first foray into the see-now-buy-now model lead by Burberry, Tommy Hilfiger and Tom Ford. I can see how big brands like this can make it happen with their standalone stores, e-commerce platforms, manufacturing facilities – plus having enough inventory to cope – but, honestly, I’m not sure it will affect the region’s designers, many of who never followed the international calendar in the first place and have a more bespoke relationship with their customers.
Brands have also, it seems, come to the realisation that the Middle East has a hugely diverse fashion landscape made up of stylish, smart and experimental women with a love of luxury and a fashion sense that reaches beyond the abaya. Finally these brands are aware they need to think ‘local’ and tailor their communication to suit the different, diverse territories (and women) within the Middle East.
As a result of retailers listening to what we want, they are thinking more locally, encouraged by organisations such as the Dubai Design and Fashion Council. Reports show we wanted to see, touch and buy pieces from regional designers. Showcasing ‘local’ has become an important part of their marketing strategy, and let’s hope it becomes part of their buying strategy too.
I feel with so much turbulence in 2016, looking forward 2017 will be about delving deep and embracing our heritage, revisiting and redefining dyeing, craftsmanship and appreciating our artisans once more. A reason I believe Hermès has such ongoing importance and relevance in this market is that it defines itself through its craftsmanship. So no, I don’t mean hippy-style hemp dresses, but this year you can expect to discover more socially responsible, sustainable brands, and to coin a phrase from the purveyor of style with conscience, Donna Karan, ‘meaningful luxury’ is on its way with a vengeance in 2017.
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