Why are luxury brands taking over the gastronomic sector?

The luxury industry is known for creating an experience around the retail store customer journey, making the act of buying a product more memorable. From the moment you enter in the shop until you leave with your purchase, every detail is staged to allow the creation of a personal connection between the brand and the client.

In recent years, luxury brands are taking experiences to the next level by expanding to the restaurant and cafe? sector. Whether they are located in the brand ?s own shop, in department stores or in prestigious neighbourhoods, the truth is everyone is eager to experience these new gastronomic locations.

The rise of the trend

Despite seeming two extremely distinctive fields, the truth is food and luxury are constantly reinviting themselves. Both push the idea of art and aesthetics and rely on quality to attract and, most importantly, retain customers.

All these cafe?s and restaurants have one characteristic in common: they represent the universe of the brand, reflecting its identity and heritage. But why are luxury brands taking over the gastronomic sector? What are the advantages behind this new retail experience?

· Reach a younger audience

It is true that the prices of the menus at these locations are higher in comparison with other restaurants and cafe?s. Nevertheless, it is still much more accessible than buying a luxury automobile, for example. These creative spaces invite this niche to the world of the maison in an attainable experience.

· Another way to “sell” their way of living

Luxury brands are not purely selling an item, they are also selling with it their lifestyle that the consumer, by purchasing their product, can reach. When buying an Herme?s Kelly, customers are not just buying a handbag, but the Grace Kelly lifestyle as well. Creating these types of experiences allows the client to enter the universe of the brand in a new way.

· Brand loyalty

Experiencing the brand in a new type of multi-sensory experience makes younger consumer to develop a strong affinity for the brand right at the start of their luxury journey, which will have an influence on what these customers will purchase in the future. In addition, luxury brands also host exclusive events to top clients at these spaces, which helps to satisfy customer ?s appetite for exclusivity while continuing to build a relationship with the brand.

· Social media engagement

By creating an aesthetically pleasing universe of the brand, clients are eager to post their experiences online. This strategic move helps luxury brands to attract a niche of customers who are active in these platforms. In fact, some of these spaces are not advertised on the brands ? website.

According Gildas Loae?c, cofounder of Maison Kitsuné and Café Kitsuné, one of the trendiest cafe?s in Paris at the moment, says they take this approach because it is "more interesting to tell a story [about their cafes] with a nice cake and coffee to show on Instagram" rather than hearing about the locations through an ad.

· Create brand awareness

Nowadays, everyone has a social media account where they can post about their personal lives. Because of the awareness these posts create, everyone is eager to try the newest luxury house restaurant or cafe?. This is an incredible strategic move from brands to promote themselves in a less risky and less expensive way if we compare to the investment behind opening a new store.

· Extra source of revenues

The goal of these spaces is not at all to be extremely profitable. Nonetheless, it is a way for the brand to diversify its revenues. The pandemic has proven that companies need to diversify their sources of income in times of global crisis. Hence these prestigious locations ultimately increase the margins of the brand overall.

Conclusion: A New Point in Luxury Retail

The popularity of these spaces within the luxury community is undeniable. Experience is the new mantra of luxury and memories can be valuable. Hence luxury brands continue to bet on the opening of cafe?s and restaurants as they understand the ability to elicit emotional reactions is critical in driving consumer loyalty. Afterall, luxury is all about emotion.

Through this new segment, companies are creating new touch points while providing visitors a complete immersive experience which appeals to all senses. Nevertheless, it is important to be careful about certain factors when launching a gastronomic space. Negative reviews should not be underestimated as they can powerfully harm the image of the brand. In addition, continuous innovation is key to keep clients engaged and surprised when they interact with the brand again, making them come back for more.

To conclude, this growing trend marks a new point for retail. With the recent development of technology, it seems we are losing this personal relation between the brand and the consumer, being replaced by a simple click. Companies need to give clients a reason to come and prove them that ordering an item through the internet is not the same as going to the physical store. Hence this new segment allows brands to reconnect with clients and to reinvent the luxury retail experience.