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How Harrods connects with a new generation of shoppers

January 12, 2015 12:18 PM
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The 185-year-old storied London department store Harrods earned its reputation as a premier shopping destination by being able to provide just about anything a customer could want. Furniture delivery by gondola to a palazzo in Venice? Sure. A baby elephant or lion cub? No problem.

“Experiences are judged by exceptional service,” said Guy Cheston, Harrods Ltd.’s media sales director, during his presentation Sunday at the National Retail Federation’s Annual Convention and Expo in New York. In his presentation, Cheston discussed how the retailer, which Qatar Holding bought for 1.5 billion pounds ($2.27 billion), has renewed its focus on connecting with consumers through in store improvements and through traditional and digital media. Qatar Holding is the sovereign wealth fund of the oil-rich nation of Qatar.

Since 2010, Harrods has invested more than $250 million in store improvements, including more than $50 million it spent to build out the 42,000-square-foot Shoe Heaven shoe department, which Cheston says is the largest in Europe. It opened in fall 2014 and includes private luxury shopping suites for customers.

Cheston emphasized that retailers can’t be complacent and rely on their reputation to sustain sales. That doesn’t work to draw younger shoppers. “We have to match the digital channels our customers are using,” he said. “Content helps create relationships and brand loyalty.”

Harrods employed a mix of media to get the word out about the opening of Shoe Heaven. To target women age 20 to 40, it created a Candy Crush-style game called Stiletto Wars where the top scorer won a gift card to spend on shoes. To access the game, shoppers had to download Harrods’ magazine app—the retailer has published more than 35 magazines in print, digital and app formats since 2010 to 300,000-plus subscribers—a major part of Harrods’ marketing strategy to target consumers. More than 13,000 consumers downloaded the app to play the game, spending an average of 19 minutes playing.

But the Stiletto Wars game success went further than downloads and players, Cheston said. More than 200 media outlets wrote stories about the game and its tie-in to the debut of Shoe Heaven, and word spread to 80 million consumers via social media, Cheston said. The windows of the Harrods store also were decorated with Shoe Heaven imagery, a special landing page appeared on Harrods.com, and the more than 200 high-definition digital screens in the store also promoted the launch.

Buoyed by the success of Stiletto Wars and the promotional boost it brought to Shoe Heaven, Harrods tried to replicate that with a game called Never Mind the Baubles during the past holiday season, with the game winner receiving a gift card and a Christmas tree decorated by Harrods. Cheston said many fewer consumers downloaded and played this game than Stiletto Wars, and that it didn’t get the media attention the previous effort did. But Cheston said he isn’t abandoning gaming as a way to connect with younger consumers. “We feel there is much to gamification,” he said.

Cheston said Harrods management has been forward-thinking and supportive of digital investments. Harrods’ sales—the vast majority of them taking place in the one store—grew 10% last year.

Harrods’ e-commerce division operates independently from the store, Cheston said, although he said he expects the store and web division will merge at some point. Harrods.com is No. 376 in Internet Retailer’s 2014 Europe 500.

 

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