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Private shopping is nothing new to retail. Think high jewellery and watchmakers, they have always traded in discreet ways. More recently, luxury flagship stores have increasingly developed private lounges. While they used to be opulent rooms with comfortable sofas, they have transformed and expanded into private floors, private apartments, and finally, full private stores that are only accessible to a limited list of VICs. This comes as an evolution for big spenders’ shopping habits. On one hand, top customers tend to spend more, hence expect to be treated accordingly. On the other hand, the pandemic created a new demand for one-of-a-kind or, at least, special experiences.

Besides, in an environment where luxury brands intend to increasingly go direct-to-consumer and where resale is gaining traction and is considered a more responsible shopping behaviour, private retailing represents an additional and crucial strategy for brands to make a difference in the way they consider their best customers.

While Covid accelerated luxury consumption, the private retailing trend is here to stay. Many options are available from full private stores, private suites and salons inside of the stores, to confidential retail spaces. The IADS pulled together the most relevant examples of what private retailing offers at the moment.

Private retailing in department stores

In close partnership with luxury brands, a few department stores were early adopters of private retailing. In different ways, Harrods and SKP are fair examples, both happening in China.

The Residence: Harrods outside of Harrods

Back in 2020, at a time when Chinese consumers were unable to travel to the UK, Harrods started a new format in China. Called ‘The Residence’, the concept was tested first with a 3-day pop-up store initiative during Shanghai Fashion Week, which soon transformed into a permanent space. The project, strictly invitation-only to its top-tier clients, consisted of stockless VIP lounges and showrooms, including personal stylists, exclusive collections and areas for customers to invite and meet with their friends, and even host dinner parties. The concept soon expanded to Beijing.

The reasons for such a strategy were to keep in touch with wealthy customers and increase brand recognition. Also, the company anticipated that, with the degrading relationships between the US and China, the UK might become a more enticing destination for affluent Chinese in the future. It was also a smart move since there is no physical stock to be found at The Residence: the department store counts on its relationships with brands to locally supply the products sold.

Luxury brand ‘social clubs’ at SKP

A few months ago, Chanel revealed its plans to open private boutiques dedicated to their VIP customers, starting in Asian cities in early 2023. The long queues in front of every Chanel store hardly represents a nice luxury experience so the news of this new exclusive experience didn’t come as a surprise. Besides, with only 250 stores worldwide (compared to 400 Louis Vuitton stores), Chanel has a relatively limited retail footprint, hence the need to take measures to accommodate the upper part of its growing customer base. To support its retail expansion, Chanel plans on hiring more than 3,500 new employees, many of whom will be sales associates.

In Fall 2022, the initiative was first implemented at SKP in Beijing where Chanel (along with Louis Vuitton and Dior) took over the third floor of the building to open a VIP-only store. What’s more interesting is that it is not as visible as one would expect, as the store is not dubbed Chanel but ’31 Cambon’: the reference to the historic boutique in Paris is highly challenging for non-Chanel shoppers to grasp, and that’s obviously the goal. The collections are displayed as if in a lavish art gallery with artisanal tools demonstrating the brand’s know-how and craftsmanship.

At Dior, the private boutique consists of 3 rooms only accessible upon reservation for a limited number of loyal customers. As for Chanel’s ’31 Cambon’, Dior’s salon concept is totally different from the usual boutiques. To showcase and emphasize the brand’s culture, the concept takes cues from an art gallery reminiscing of the Designer of Dreams wall created for the namesake exhibition. Besides sales service and consulting, these private stores are also meant to entertain VICs: private trunk shows and pre-orders, friends’ gatherings, birthday surprises, and educational courses. One VVIC (very, very important customer) of Dior shared her retail routine. Whenever she wants to buy something her sales assistant books her one of the 3 salons. She is welcomed with pre-selected items in her size, but also with her favourite sweets and drinks. Big spenders become addicted to such swanky treatment. And since being a VIC is not forever, the top customers are pushed to keep up with their purchase volume to maintain their status.

Private retailing as developed by big names

Brunello Cucinelli’s hidden Casa Cucinelli

Following the opening of a similar space in Milan before the pandemic, Brunello Cucinelli opened an invitation-only store in New York in December 2021 to emphasize private shopping for its most loyal customers. Located on 689 Fifth Avenue, the space at street level is not occupied by the Cucinelli store (but rather a Canada Goose). Actually, one will find it hidden on the 9th floor of the building. The Casa Cucinelli apartment space is designed so that top customers feel like they are at the designer’s home. Guests are first invited into the lounge, immediately leading to the kitchen. The rest of the apartment includes a living room, a study room and a dressing room where everything can be acquired.

From Dior to Cartier: renovated Paris flagship stores develop unprecedented private spaces

In 2022, Dior and Cartier in Paris offered 2 versions of a luxury revamped flagship. In Spring 2022, Dior reopened its store on the opulent avenue Montaigne. On top of haute-couture and private salons, the ‘Suite Dior’ is a private apartment whose keys give guests the full run of the building, with dedicated staff of six to eight people around the clock, ranging from chefs to personal shoppers.

Cartier’s 6-floor, 3,000 square meter newly renovated historic store located on rue de la Paix, is also a relevant case for private retailing. The 5th floor of the building is a completely private floor called the ‘Residence’, an apartment consisting of a dining room, a lounge, a large kitchen and a winter garden. It is designed to host exclusive events, a party for a client, or a product launch with VICs. The 4th floor is also dedicated to top customers: it hosts an archive space where they can discover old drawings, mood boards, books and old photos. The other floors’ breakdown is quite classic, with each floor having at least 2 private salons. Called ‘Prestige’ and dedicated to high jewellery and made-to-order, the 2nd floor has a special salon for bespoke jewellery: customers will decide on their projects there thanks to an inspirational library and archive pieces, and they will discover their unique creations in a rather impressive cabinet.

Private retailing is a key part of Gucci's turnaround strategy

Gucci opened its first private store in April 2022 in Los Angeles’ Melrose area. Accessible only by appointment, the ‘Salons’ exclusively show the most elevated products, including made-to-order collections. Privacy is key here: windows are tinted so clients can see out, but passers-by can’t see in. Private appointments are flexible and can be booked for 2, 3 or 4 hours, or all day, in which case a special menu is available from the Gucci Osteria restaurant on Rodeo Drive. The store has been designed to be flexible and host special events: the racks can be easily removed to use the store as a fine jewellery or watch salon, for example. Nine private stores are set to open in the coming months (New York, Paris, Milan, London, Dubai, Hong Kong, Shanghai, Taipei and Tokyo). They will support Gucci’s turnaround strategy and product elevation, with its average selling price rising double-digits last year.

Tiffany’s The Landmark has to both accommodate 2 million visitors per year and top VICs 

Tiffany’s Fifth Avenue store is a cultural destination and New York City’s fifth-largest tourist attraction. Now fully renovated, ‘The Landmark’ (as LVMH dubbed it) will probably be even more attractive than before, especially with tourism booming. The challenge will be to cater to the expected 2+ million visitors annually and to design remarkable shopping experiences for top-tier consumers under the same roof and at the same time. To that end, each floor is equipped with private salons, starting on the ground floor with consultation tables coming with panels to create private spaces. On the third floor (the Love & Engagement floor), 4 private shopping rooms are available for couples to have a more intimate shopping experience. The seventh floor (the high jewellery salon) offers spaces to reveal pieces specially curated for visiting clients. Finally, the 10th floor is a full VIP private selling salon only accessible to Tiffany’s top clients. It features 4 VIP salons and a private dining room that can host up to 60 people.

Confidential retailing: an efficient alternative to flagship stores to capture loyal customers

Intimate, more confidential – but not private – stores are also considered by luxury brands as a lucrative strategy to tie affluent loyal customers to their favourite brands knowing that they don’t necessarily want to shop in huge stores anymore.

Balenciaga’s couture store

In July 2022, before the media storm hit the brand and its artistic director, Balenciaga opened a ‘couture store’ located at 10 Avenue George V’s historic address, just below the brand’s couture salon. The store is not private per se but is dedicated to top customers, as it offers limited-edition high-price clothing and accessories (EUR 3,500 eyewear, EUR 8,500 to 15,000 bags and up to EUR 100,000 clothing that can be personalised by the ateliers upstairs). To refrain from random customers wandering around, the store is only accessible upon reservation on Saturdays, usually retail’s busiest day of the week. The store also serves as a “gateway to couture” as said by Balenciaga’s CEO Cédric Charbit: it’s a smart way to push the brand’s top clients to upgrade their spending and buy couture.

Thom Browne’s resolute alternative to a flagship store in Paris

When Thom Browne opened its first retail store in France in 2022, it was surprisingly not in Paris, as one would have expected. Rather, the brand opened a small 50 square-meter store in Saint-Tropez inside the member-only beach club Épi. The US label, whose ambition is to become a global brand, obviously cannot afford big flagship store locations yet. The idea here was not to cater to as many random customers as possible, but rather to develop close relationships with a few top ones. In that sense, the new outpost acts more as a clubhouse than as a billboard. Overall, the new Thom Browne stores are the opposite of the usual ‘mega-store’ that luxury big names are investing in or relaunching. On the contrary, they are on average less than 150 square meters and in locations that are more interesting than visible.

It’s no surprise SKP was the first to dedicate a floor to private luxury brand stores as the department store accounts for the highest sales in China. Besides, Asia is the continent where most of the future growth in luxury consumption lies (despite recent worries in China). Asian customers are also more eager to participate in exclusive and entertaining shopping experiences.

If Chinese VVICs will probably favour shopping at the most exclusive freestanding flagship stores when they are back in Europe or in the Americas, VICs and other big spenders are still to be caught by department stores. Assuming these consumers will revenge-shop when they resume travelling, department stores should consider opening private luxury brand shop-in-shops to make sure they will cater to these tourists’ demands. The surface allocated to such new stores could be made profitable thanks to higher average baskets. Even though questions remain on the business agreement to negotiate with brands, the initiative could be an additional tactic for department stores to retain luxury brands at a time when they are increasing their DTC operations.

Another option is to double down efforts on personal shoppers, private lounges and extend the services and experiences offered. This is what Harrods will do in 2023 as mentioned by CEO Michael Ward during the NRF big show in January 2023. He is planning to multiply fourfold the resources allocated to private shopping (people and systems) while focusing on managing relationships with luxury brands and making sure that Harrods will be able to satisfy the demand for luxury products.

Credits: IADS (Christine Montard)