SCHMITTblog

Lots of Creativity, Little Innovation

Carlo Fei, as he dropped me off with his Audi back at my hotel, after a dinner and ride through Milan, made a great off-the-cuff remark, “There’s lots of creativity here, but little innovation.” He’s so right about this distinction between creativity and innovation, and Milan this week is a perfect showcase.

I had been giving a couple of presentations at Bocconi, the business school, to students and executives on experience. I had also stopped by briefly at parts of the Salone Internationale del Mobile, perhaps the most important design and furniture trade show in the world (http://www.cosmit.it). Lots of creativity there, especially outside the big trade location at the cutting-edge Zona Tortona, or in the inner city where fabulous projects happened between retailing and designers. Creativity, yes. Installations, thought pieces, animations of ideas – really weird, sweet, stylish stuff; but little innovation in actual furniture design.

I also stopped by, as I always do when in Milan, in the retail fashion district (Via Monte Napoleone, Via della Spiga, you know). Still all branding, and little customer experience! Moreover, luxury brands have extended their lines into furniture (stores), and flowers (stores), and chocolates (stores), and hotels, and some have done all of it (see Armani). There are brand accessories stores (see Ferrari), flagship stores, pop-up stores. But they are all stores (or, alright, hotels) plastered with the brand name, designed by this-and-that designer—yet, with the usual opening hours and salespeople and merchandise. Frankly, there has been far more innovation in customer service, customer interactivity, and in merchandising by mass-market retailers than luxuryretailers. Think of some of the classics: Apple Store, Whole Foods, American Girls Place. Luxury brands have been, sadly, followers of mass-market brands; shouldn’t they be leading? Not surprisingly, the research that Carlo conducted with his firm on the retail experience shows that many luxury stores in key cities (not just Milan) fall short of providing a great customer experience.

Luxury and Recession

The other day, in Hong Kong, I was wondering whether the old rule that luxury is recession proof still holds. Miles and miles of empty shopping malls in Central, Pacific Mall, and, across the harbor, in Kowloon convinced me that this time consumers have changed: this time they are  counting their pennies.

Or have the excesses of the luxury industry gone too far this time, irrespective of the recession? Consider casual fashion lines. Half a year ago, designer jeans for around a thousand US dollars were piled up at Lane Crawford’s and at Joyce.  Every designer was moving into athletic shoes at a huge price premium beyond Puma’s and Adidas’ (some of those shoes were running around USD600-800). Luxury makers were dancing on the volcano; and now they are getting buried under the fire.