hello everybody and welcome to the latest in a series of webinars exploring leadership in extraordinary times brought to you by the site Business School of the University of Oxford I'm Jonathon Reynolds I'm an associate professor in retail marketing at the school where I'm also a director of our Institute of retail management I've been writing researching about retailing for over 30 years today's webinar is aimed at exploring some of the extrordinary challenges facing luxury retailing internationally and let's position this challenge first of all here's a sector which which thrives on personal service and customer contact on delivering remarkable customer experiences and yet as some retail and leisure markets worldwide is slowly emerging from the lockdown imposed by the pandemic they still often faced severe litigation measures ranging from social distancing to significant store and shopping center capacity caps with queuing and face coverings as the new normal in many geographies so so what can we learn about the ways in which the the luxury retail sector is adapting and responding or what are the longer-term implications for retail business models and indeed for consumer society itself now to help me explore these and other questions I'm really delighted to be joined in conversation by Scott Malkin Scott's a founder and chairman of Valley retail a company which specialises in the development and operation of luxury outlet shopping villages around the world in partnership with some of the world's leading brands Scott's also a member a Vox of Syed's Global Leadership Council as well as I realized recently co-owner of the new Islanders hockey team we might get to talk about that I guess towards the end if if time permits and talking about leisure and sport and we'll be interested to in in your questions and observations what would you like to ask Scott please post your questions and we'll make sure we have time as we go through and suppling at the end to try and respond to as many as we can so welcome Scott great to see you and for those unfamiliar with the history of the best a village shopping collection which is the heart of a Vandy retail could you perhaps just kick us off by describing the origins of the concept and the your particular approach of philosophy towards luxury retailing pleasure thank you Jonathan the image behind me in fact is of mr. village which is located just down the road from Jonathan Oxford Oxford University Oxford City and it is the flagship earliest and first project of the mr. village shopping collection which is modeled all of our projects 9:00 in Western Europe - in China were modeled on a project we've developed called torneo Drive in Beverly Hills in Los Angeles which was my first graduate training as it were in luxury and fashion retail when people are much more - said in big boxes with department store anchors and multiples filling in and what we learned about fashion is that is built around touristic qualities in fact Iran tourism and that it was really where the most innovative the constantly challenging events were taking place and then with fashion one really needed to run a shopping precinct or a venue in the tradition of the great carriage trade department stores appearances and Selfridges models and we further learned so constantly we realized in constantly working with the brands constantly driving the performance of the quality experience and then we discovered if one can get all those pieces right don't think of a process of craving shopping precincts as a manufacturing logic think of it as a cultivation and long-term organic evolution and make places special and keep reinventing them and if one thinks about again a traditional great department store her Selfridges sales keep going up they haven't been flat for the last 50 years the the stores are Emporia they change with the times they change with the customers but they remain setting the standard they remain in the vanguard of what people want and it's something about embracing the consumer and respecting the brand's so we we pursued that mr. village was the first of our 11 projects we have kept control of it kept ownership of it and we are constantly redefining and reinventing it as recently as last week when we reopened mr. village we introduced as we have done and all of our projects now digital cueing so they are tools of practice for the brands because they are the ones who have to replace the cue outside of doors which by the way they tend to think is a very cool thing now a lot of people waiting to get in clamoring and desirous but not necessary safest thing and social just and now it's a QR code it's an invitation time to show up at the door and interesting that we we discover that we have discovered that those who come through the QR code digital cueing rather than just walking across the transom more casual spend more so the more defined more more directed shopper who gets to the store comes into the store so in a funny way we we reflect perhaps a general trend which is on the one hand people glad to be released from confinement but on the other hand people saying we tested the mechanisms some of them increasingly efficient that provide alternatives to personal visits or physical experience and now we want to benefit from personal experience but of a flagship quality so what we our view is and I think increasingly the view of fashion and luxury brands is any visible physical touch point for the brand has to be a flagship quality whether it's at an airport people will go back to airport shopping will continue to be vibrant in airports or a prime catch or a luxury fashion department store those will exist as the chains themselves shrink away Karstadt just announced 82 stores to close Macy's will close hundreds of stores in the US and finally it turns out that our channel which is really devoted to on the one hand the traditional purpose of a correct proposition a correct method for selling authentic surplus merchandise at open-air pedestrian street of boutiques mall of Ontario drives logic then very much appearing to the travel in luxury consumer as annual errands when she was running burglary termed that Global Traveler and increasingly we know that the data to support this and help us to refine this thinking customer acquisition for the brand's because it turns out that people who are younger in particular and all the brands want to capture new and younger customers people who are exploring when on holiday when traveling perhaps aspirational but not yet full-fledged full price consumers can discover the brands can build relationships with specific brands and can become new clients for those brands and it turns out that actually of the sales that occur in our boutiques and our villages a high percentage of those customers become full price full price shoppers for the bread of course the brand can tell from the credit card tracking whether these are existing customers and in fact they've virtually never are so suddenly we're in customer acquisition yeah which for brands turns out not only of course to be their lifeblood but also they have discovered particularly the digitally native the digital native brands they can't get new customers online on an affordable cost basis but they called the Facebook Google tax means that with a few exceptions sometimes those are momentary exceptions they can't build enough mass to support their overheads to run the business properly so they've all started back in to opening physical stores as well Cogan interrupts all of this it accelerates a number of things that were already happening those sometimes sadly familiar High Street or Main Street names that were dead man walking or closer to being dead or or dying at the moment but the thing that is so exciting about fashion I'm tripping the high end of fashion is that it's a high wire act regardless at the moment there's always the weather events travel volcanoes erupting between North America Europe whatever it happened and the operators of these brands have to be agile they are it's truly an entrepreneurial culture and historically it's been one led by autocrats and creasing Lee it's one led by management teams from people well trained from places like saying I mean it's a great introduction to the to the topic and I there's so many places we could dive here now let me prep start with that comment around you know the agility of the luxury brand and you know the need the need to take a global view on these things and you think about your own shopping collection you know you as you say you're in number markets in European in China that must have put you in a really unique position to see the early impact the pandemic if you take a step back a few months you know what were your priorities for the business is you as you saw the pandemic start to take hold in China and then and then spread kind of west it sounds cliched but it's true when first thinks of once one staff the safety of the practical issues and of course we've got thousands of people working for us too that's thousands of families and we did the calculation in effect between the boutiques and our director please it's 20 25,000 people who if they don't get paid don't eat some government support here and there but in the early days and in China for example the the cycle went so quickly that they never got a firmer logic things in China move at an incredible pace and the coated experiences is no different so the first was safety and stability for our people the second we're obviously the act of closing the villages we closed on 11 is demanding then the next thing we focused on was our relationship with our brands we really see ourselves as partners with the brands we we take a turnover royalty or a percentage of sales royalty we don't charge a traditional rent we don't have we have licensing contracts like a department store we don't charge a shopping center type rent that thinking comes substantially from our my second leg of my training and in retail fashion was relate Marvin trout who invented dancing is truly a truly emergently it's thinking and who wrote about our business in his book actually booking talked about how the ideas about our focus on experience could be translated to other elements of the retail economy that they were not logically limited to the the outlet channel high-end outlet channel distribution our villages represent so the second thing was with the brands and what we decided straight off was we would not charge the brands anything while we were closed and there for a while they were closed which i think is it remains unique we didn't ask for anything back we just said we're in this together we luckily it's quite painful thing to do organizationally and financially while we were not charging them anything we were cutting our own payrolls and staffing that's very very like you know the situation we see many markets now where you've got developers and shopping center owners and owed rent by retail tenants and so on who's simply not finding a way forward together it it goes all the way down the chain doesn't it so so in the end it goes to what I was in the orphans who invest and the insurance companies and the pension funds who in turn are collecting the rents or the banks who are collecting the rents and goes run back run all the way to government and government doesn't say to those owners of assets in some form will supplement your income streams then who gets squeezed to get the typically the somewhere down the chain someone gets gets squeezed yeah we were lucky we were in a position where we could absorb the pain the the shocks and a system was in China six weeks for six weeks in Europe that's been more two months the bet was when we came back would we come back in a vibrant way yeah clearly the long haul traveling much with the consumer isn't traveling because no one's traveling on the other hand we are built around and they're joining clubs cities we serve hub cities so that consumer is already in the cities where we are located not traveling anywhere else so our goal now and it's working is to speak to that consumer make that person feel so special and welcome in China where our proposition was with a pure almost uniquely deliver the real offer from Europe to China don't deliver the Chinese version or don't deliver a watered-down version absolutely we're now getting people who would go to Europe for travel who can't because so the barriers to travel are real and who say I can find Singapore in Shanghai if I can find Dubai and Shanghai I can find an experience like Hudson Yards in New York and Shanghai but I can't find real European quality experiences in Shanghai find fake versions of Europe that I know aren't the real thing because I'm him I've been there I've sophisticated enough to know difference so suddenly we're getting people coming to us word-of-mouth and we had one chap go the other day and spent a $50,000 in an afternoon and that's I'm sure in his mind that's money he would have spent in Paris London in New York on some kind of trip and instead he's spending it at home but with us so so this idea that the global positioning for brands has to be matched by the service providers which is what any real estate operator is is simply serving the brands and in turn how to do that because it's a nightmare for the brands are for us that's one of the big challenges going forward how to do that and get the costs in line such that one can stay in business yeah now I'm told we've we've got 150 countries amongst in our audience so it's a really global conversation that we're having and that really you know leads me on to think more positively about some of things you've started to say around the recovery and the reopening you know you've also been able to observe consumer reactions as lockdowns around the world have actually lifted have you seen any common patterns have you seen any differences internationally and when I reminded that you know this phrase revenge shopping where people kind of suddenly released from lockdown kind of hit the malls talking to a colleague in Malaysia who's going through that sort of experience and if we look at China Hermes was reporting they did the de Rio could like pool they did nearly three million dollars in sales you know but how durable is this bounce back it to your to your mind I'm sure that's the right question Jonathan there was pent-up demand I would say we are we are a good indicator in certain respects and possibly not the best evidence in others because it seems consistently that there's an enthusiasm for what we happen to provide which is open air in the countryside not in the urban core surface parking people drive themselves or arrive on their own terms depart on their own terms so it's there's a sense of choice and a sense of which in some sense some logic isn't a sustainability some idea that one is more at peace with the environment rather than at odds with the environment and what we are finding is that we tend to come back faster than any traditional shopping centers would come back and faster than full prices kind of thing I think the idea of an outing our whole visit vision has been a day a day in the countryside a break from what's normal we don't sell convenience goods we don't sell more affordable fashion priced pricing we don't sell groceries so it's really about a wander a memory like we're in the business of delivering memories that's the gift you take home you bought for a family member or loved one you bought for yourself that item symbolizes the trip visit the gesture so we're we're trying to be a place where someone goes once a year or maybe once in a lifetime not once a week what we're seeing in treinen is a sharp V recovery we're ahead of last year in our numbers as of only three or four weeks after we opening so there's there's a tentativeness where people test the water so you see a few people spending more generally or how does that how does that ratio with you that is broadly correct but now in China we're actually at similar visitation levels too huh yeah is the UK today just hours ago has limited the distance requirements reducing to two meters to a meter that's happened in China China there is a tradition of wearing masks santé logic but but in fact the China moral and in some other places in that part of the world they've been stamping down on the illness versus trying to manage it I think in the West which is a much more porous much more porous infrastructure it seems like countries are working more to to manage the flow assuming a level of a level of illness in fact no Ferguson and former Oxford University profit just put a piece out on Bloomberg isn't Stanford now talking about the the I think it's the Chinese flu in the 50s under Eisenhower in the US and he was writing about how the US administration behaved that and nobody talked about it it was just a bad flu and if there were there wasn't a hospitalization approach there wasn't a national media coverage there was a death toll that looks like an adjusted basis Macy's it might be very similar to what's happening here and the idea was that those in those days there were so many things one could catch that weren't vaccinated where there were no vaccines that it was just another obstacle to work around in one's life now his argument is we were much more joined up through communications but we're also much more built on the assumptions that there will be a vaccine and we should be cared for yeah it in the West how people will gather how they will behave in group settings will shift as the vaccines of urge I know Oxford has one yeah well the road yeah and then the question becomes to me the interesting question is less what happens for the next six to twelve months before the vaccine is distributed in the first group of countries that receives it that receive excuse me and more how will behavior be different after there is a broad-based vaccine in existence yeah existing I mean you're anticipating the question state because this is a question from one of the audience saying how to try to compare with the rest of the world pre Co bit in your business and how much we've been reading into the bounce-back news in China should we expect to see these kind of bounce backs have we seen it already in for example in your sights in elsewhere in Europe as well as in so your we've been open one to five weeks depending on the country we run from from Italy and Germany all the way through to the UK mr. village and farted in our villages that are smaller in attendance numbers we're actually in that relatively short period back to training levels that are consistent with last year which is extraordinary again generally slower build and footfall fewer people spending more but the idea that we could be two or three of our villages last week we outperformed the year before which is which it's surprising for me the villages that are larger in visitor numbers and have these social distancing requirements they simply can't put through the same volume of guests and there so it's hard to tell what the real appetite is the trading numbers are off against last year but well ahead of what we projected in our recovery classroom so I would say that for us to the extent that and I think again we are an early indicator of what might be going on more broadly in these different Western European countries for us it looks like it may be optimistically and subject to whatever chaos emerges later in the year from coronavirus reasserting itself where are you rather than a V West finer our experience is that it's been of the interesting I mean you met earlier on you know the way you've been you supporting your brand partners sharing the financial pain for example you also mentioned earlier in our conversation that you try to also try to reassure customers and you mentioned into digital queuing and most other things so have you worked with your support your brand partners as they've as they've reopened it's it's charging we're lucky because we have a an unusually large complement of staff so we hire primarily from fashion brands and we take the view that like Marvin trout would have done Bloomingdale's or like Victoria Medici was doing at Selfridges or the me were there to work with the and to help them maximize their presentation and their performance so it's really not a rent collecting logic and because we share in the performance and don't take a rent and because the people working with the brands are from those brands speak the language of those brands they it's worked pretty well historically but the the reality is that

we we have there's so many moving pieces the brands are such a complicated existence and we have to in essence fight for their attention fight for the bandwidth that they could make available possibly for some other part of a complex business infrastructure to to support their stores with us know that could mean potentially asking the brand to allow us to go with brands executives tell select stock that works from a customer that's going to a particular village rather than just a blonde drop from a warehouse infrastructure or that could mean and does mean that we give our consent to how the brands present themselves and the visual merchandising how they present their their messaging in their displays in the windows of their boutiques I would say that there are two contradicting forces one of the brands that's just reopened in the UK we are their their number one store across all of the UK so in theory and we've got at Bicester village maybe worth 50% plus or minus of the football of the year ago 55% this past week so in theory that should be very good news to be excited to see their progress and work with us the bad part is that the rest of them you can't state as a bit of a disaster they have a million things going on and it's very hard for them to adjust peacetime generals are not necessarily the best wartime generals yep and in trying to adjust there is a temptation for them to try to simplify and standardize and suddenly we're being lumped in when stores that might not be open or might be trading at 5% of last year we we get a call from a guy in New York who says here's our policy globally he's got a big global brand he's got 3,000 stores he's making no distinction between a store he has with us in serving Paris or Milan and a store serving Kansas City or Chengdu it's all just one and but of course it doesn't it can't work that way but that's a starting point that it's massively destroyed yeah and then you work with the local teams to in a sense get around the obstacles I'd like to come back to that point about leadership and the importance of the local teams as we get through the conversation can I can I go back to the sort of measures that you've taken there's a question here from the audience what has it been like trying to control crowds and taking on responsibility for the health of customers in effect when you allow them into into into your villages you know that we see some commentary about you know people think they got covert in particular place and resorted illegal means and so on is that a concern that you have it's quite intimidating the issue generally this is why we switch to digital cueing because it by definition creates more space for people to move and to breathe I think and by the way we take a regular stick from local press everywhere usually it turns out spouses and partners of people working in the boutiques in our villages who are themselves very afraid of that they're their partner spouse will come home and convey coronavirus into them and delivered into the household so there is there's this balancing act between between trying to be orderly and trying to be flexible because in every culture and every mindset things are different in in some markets facemasks are acquired others they are regularly seen others UK their their almost almost actively rejected so what we can do is talk about we can we talk and talk about what we hope the guests will do convey that on a website convey that upon entrance and we can talk to the brand's about what we hope their staff will do and we can talk about standards we hope they will embrace what if the global brand says we're going to go two feet to the left it's very hard to convince anybody at a local or regional level that actually that that might be a bad choice in a specific case because they're not flexible on that scale and so it's I would say that back to the agility point it's no different than anything else these Browns face how did they respond intelligently and the more they try to simplify and standardize the more generally speaking they get it wrong this the idea that I once heard a stock market presentation for the then chief executive of Macy's as they merged them all in stores and he was celebrating the fact that they were no longer shipping winter boots to Florida's stores in Florida and this the idea of inventory management and matching stock supply because they'd centralized all the by there were no longer there's new individual stores and differential customers that was obviously the moment where the department store model in the US was finished because they they didn't have algorithms to they couldn't replace real people with AI but the whole logic was to get rid of the people in order to simplify the back of house stand reduce costs so that was one benchmark another moment was when sacs are fifth which was a discount business was open six or eight blocks from Saks Fifth Avenue in the center of Manhattan another a clear marker you one can see these things as as an expert Jonathan you you get to look at them and write about them but they're 10 they tend not to be that surprising with day to day it's complicated and certainly responding to coronavirus but complicated yeah that's a nice segue into a morning this conversation now slightly and thinking about the wider retail sector internationally and I think we've both been guilty of using the kind of phrase that you know Kevin is accelerated existing longer-term trends are we being lazy in that respect I've heard people say well we've done three years and three months in relation to online growth for example what are the what are the features that have really accelerated and which ones do you think more kind of bounce back to the way they were before or is everything up for grabs I think it's relatively predictable personally first point is nobody starting with Amazon makes money retailing online the only people will make money retailing online with one or two exceptions for specific reasons are the brands who control their own inventory self from their own sites but meta portait uke's go down the list in part the costs are high and the returns are high and of course is one of the sources of cost and in part Amazon is modeled to make money from the membership fee and the ancillary costs not the core proposition there their goal is scale and scale is delivered by great pricing and great efficiency and it's not by chance that they're sitting in Seattle down the road for a company called Costco which whose entire structure is that they make money from a membership fee and the float on your money until they pay for their goods and everything else is delivered at cost and they're ruthless about limiting costs so so it's not it's a bit like education nobody's make money in commercialized education because the model of education generally speaking around the world has has not been a profit-seeking walls so the competitive environment is distorted so I think on the one hand there's there's an economic proposition that is not completely obvious if anyone were to say Amazon gross sales are this and profitability from retail as a percentage of the gross sales is so tiny people would say well why did they bother and there are lots of reasons that they should it did bother and they're gonna make a lot of money but it's not going to be from retailing per se its use of data it's it's the Web Services it's a host of things because they are extremely entrepreneurial and agile as they think about their their their model but those who try to compete with Amazon are less believable than Amazon so that's a first trend there's a consolidation in fact we're talking about so we're saying that actually the big platforms that are going to be successful because they can get make money from other things but actually the goat alone and competitors are going to have much more difficulty so you have to kind of throw in your lot with a platform and then if you do as a purveyor producer of goods if you don't have your own infrastructure where you can defend your margins and your and your pricing then your brand equity you're going to be devoured by the online yes so that's the second point if the future of friends and I said is physical brand equity experience definition that's more pronounced than before the next thing would be expectations of the consumer are rapidly growing and a cost to the the retailers so if you look at Claro Swedish buy now pay later card in its simplest form it's it's an ingenious because it's reducing friction so I can order 25 items have them all shipped select one or none ship everything back and I don't paying for anything except depending on the retailer the shipping until I've confirmed purchase of an item so as you can see why wouldn't I jump to do that as a retailer that's another cost I have to bear the idea that I'm now providing a float on the merchandise to the customer rather than charging the 25 items to a credit card and giving a leaf on 30 or 45 days later or whatever it happens to be so another try is that friends that failed to have retailers even more decisively than brands that failed to have a clear point of view and a clear purpose but are running on the momentum of history

inertial momentum of history are going to die much faster than they were going to you before coated okay well they're going to be massively constructed aggressively constructed much faster and brands who are in the middle maybe do have a point of view but are neither as efficient at being delivering great product and design at some rational price or delivering extremely efficient product and design at some incredibly attractive price they're being battered particularly now but that was a trend that's been ongoing and then finally I would say we talked about leadership where is leadership coming from there's not a merchant generally speaking running any retailer any longer there are financial people a lot of consultants a lot of consultants so so what does the leadership look like I've had the privilege of sitting in a room with a digital platform team and a luxury brand team and a luxury brand team is speaking Italian and the digital platform team is speaking computer programming and it might as well be Martian there's no good no kind of there's no connection yeah so what constitutes leadership for an Amazon platform by definition will be an uneasy fit with the leadership of a what's called a higher end position brand platform and then when you go to how do how do you run a business how does one run a business with what used to be 450 stores in the UK to give you an example but that brand today would have how many stores in the UK 60 yeah so yeah but how do you run 62 is always a number that gets talked about in the UK for these things exactly so then how does that person run those 70 stores and what 45 in France and very messy and and the the attempt to get scale through physical distribution is more complicated than ever and I think that most of these firms most of these brands are run by people who came out of the way they traditionally were built which was to manufacture things that were wholesale to retailers to multi brands to department stores to others and that piece is being squeezed out and the brands have to have a different kind of leadership team it's no longer enough that's not good enough there needs to be an agile response and that requires a leader leadership of a team which is not really lots of examples of teams in retail but it's really one person giving instructions highly competent people yes it is it's come on a control kind of model in many respects it has been perhaps that's not agile enough for we currently need I mean the we're tracking a QA quite quite nicely here because is Connick in Oxford says what about is it offline and shopping now sustainable that takes into the experience of question you mentioned experience number of times near the title of the the conversation around Sparkle you know tries to capture that that notion of experience with people queuing with face masks with social distancing what does experience look like and is there a a challenge for physical stores to create enjoyable experience in as we emerge from lockdown and longer term you know you kind of hinted that the middle ground is losing its way in respected experience has luxury retail placed in relation to this can't can can't can actually retail provide the the richness of experience the the assurance the experience that it could um precoded well i think there are two ways to think about answering that question the first is to say it's it's more sustainable than online because online generates a lot more packaging in cardboard you know somehow recycled and the returns so so one can run in some sense a more responsible business

with an with a physical infrastructure that is not based only on scale the second way to answer that question I think is that offline or physical retail distribution will absolutely remain for a variety of reasons the evidence is clear that there is an appeal for that but it will be more towards population centers towards tourism hubs towards places where people would choose to go by the way that might be a remote spot on the costa brava where there's a restaurant people from around the world are booking six and nine months in advance or year 1/2 an advance that that's a specific example Brittany so two people choose to go for a reason and as transcendentalist said the journey is more important than the destination so so there's something about the quality of experience that can be delivered through a physical point of contact that embraces the five senses that creates memories that challenges emotion so what what are the emotions of flagship experience we focus on shopping that we could talk about other forms of flattery experience but in the first baseline in today's world is trust we live in an environment where there's extraordinary transparency there's a high degree of noise often fake news types of noise confusion and rumor we have very high levels of expectations constantly growing higher on the part of consumers guests and certainly the focus in the US and a question from New Orleans there's this idea that you're not sued that's the big issue in fact for for the recovery of these various economies is will you jonathan if you send a colleague on a trip to a conference run the risk of being sued personally or organizationally if that person catches coronavirus sometime during that trip no that sounds a little bit far-fetched sitting in some parts of the world but come that's why so many big US companies or us-based companies have been cutting away back on travel you send someone to the hotel the person somehow gets ill how are you liable morally financially legally so I think I think what will happen is there's a period where people will there was pent up demand you never discussing this on consumption and experience absolutely clear it's been in every market of our eleven markets we've seen it again and again then there's almost a reading of the infrastructure to address we are not seeing in our locations perspex screens but people are putting those up in classrooms or takeaway restaurants in central London but different ways of limiting physical crowding and access that will shrink away and I think what will happen is as the vaccines emerge and it seems firm clear they will manufacture distributed what will people keep with them from this moment one piece definitely will be hostility towards the establishment and anger towards institutions another they'll be called a social issue and that will translate through I think it lots of ways in terms of brands and goods a brand can be the University a brand can be a company manufacturing product a brand can be a sports team but but I think that's one big trend the second trend will be the remaining disappearance of middle ground financial investors and sponsors won't want to touch something that doesn't have a clear role in the economic hierarchy of an economy a third will be the idea sorry I'm skirt there's a great birdsong actually outside your window getting the lawnmower is coming next alright okay but um a third a third will be what's an acceptable level of contact conversation touch in the store environment and and and again after trust the most powerful emotion is the evocative and use the word love the item the memory of the item of the gift this is something about a deeper emotion than a transaction so the Internet is about transaction and physical experiences flagship experience is about heightened emotions and they will become more important because the reality is the more I buy online the more time I have the more freedom I have at some level the less money I have my proverbial pocket to do really special things and I'll be looking for really special things let me broaden that out a little bit all you just come to as I wind it very good have you broaden that out a little bit we've had a couple questions in with the look at a broader kind of issue around sustainability you know one question here is kovin is being compared to a war and sacrifices have had to be made as a result have you seen it were experienced any negative feedback or reaction to a luxury product for a few at a time when people are dying and there's another observation here lockdowns in many geographies of giving us a clean air a great a sense of our local community and their impact on the world in the context of climate change in particular do you think that the affluent need to lead the way in shaping consumption messages and what the implications for for luxury retail for those kinds of observations I think collectively we must respond to events that's a reality I think that brands have always focused on this issue I've always been responsive relative to many other kinds of organizations because by collection by quarter of the year they have to come up with something new that reflects the mood and the sentiment of the moment and that's stylistic it's maybe composition of fabric and materials it might be themes about geography and nationalities so Parvin Trobe created these festivals Bloomingdale's New York became famous for festivals of India different parts of the world the very first one was built around Britannia going and anchoring in New York Harbor and the Queen and Prince Philip coming up and a ticker tape parade to open celebration of Brenda

Louisiana's so so I think that the challenges most organizations are led by I don't mean this to sound overly provocative they're led by talented intelligent people with fantastic records of success as conformists people are promoted for performing well within the confines within the structure of an organization when all the rules are changing abruptly and continuously the leadership of these organizations normally isn't prepared for that life hasn't prepared them for that they haven't been selected or self selected for that and I think that's what we're facing for the next five years three to five years so it will be more volatile then it will feel and be more volatile volatility but then it needs to be as a result of all of us can add another kind of disruption into this which is what we've tended to call these d globalization tendencies which pandemic is accentuated clearly through the curtailing of international travel and so on but also think Arif disputes we're seeing retail supply chains disrupted because of that and we've seen perhaps you know kind of move towards ensuring rather than off curing and it's a lack of connectedness as experiencing how a viewers in terms of the value retail position how have you as a business sought to address some of those sorts of trends if you if you recognize well something like ensuring it's absolutely happening Larry Summers from US Secretary of Treasury forecasts this eight nine years ago I said supply chain risk was real costs of delivery through manufacturing we're going down in the West because of mechanization and he expected that insuring would mean manufacturing at home but without a net increase of jobs that was his forecast I think largely has to be logical and if if one thinks about responding to changes meeting demand wouldn't it be great to have everything a day away rather than a month away or delivered delivered less and less costly forms terms of sustainability or economics so I think I think we're in that again that world that moment where the agility to embrace reinvention is required and we're lucky enough to be at a point where if the rules aren't being ripped up if the system is being disrupted we have the opportunity to to grow by adapting to that so I'll give you the example of the digital killing now you test we tested it five weeks ago in Germany we opened up first in Germany we arrived with it in hand at Bicester village a week ago when we opened the first couple of hours there was congestion and confusion as people tried to adapt in part to the fact that there were no who's going to be allowed and the brands themselves found that different to what they were used even if they've done it with the same Brad might have worked with us in Germany to do it their local teams and their regional leadership hadn't seen it yet there was a huge amount of pushback including within our own organization because there is this bias towards doing what's known and trusted even if it's intellectually clear that it's not the right thing emotionally there's resistance but the fact is we were 100 we are today 100 percent digital cure five five weeks after we tested the app and we didn't write our own app you know we didn't do all that we try to avoid based on necessity the traps that could lock one solely so you persuaded each of your partner brands to install to use the same app for digital killing in effect so so we provide we provide access to an app that works and we have a very high-end jewelry brand in one of our villages it's using a different model there's different kind of a list of reservations because if the average price of an item being sold is is much higher than normal fashion item might be they want to create a curated experience or touch yeah yeah that really gets a personalized experience for the because just fine yeah point is that there can't be a queue outside their front door yeah yeah so we moved about eight minutes left surprisingly and it's gone free quickly I wanted to pick up some of the points you mentioned about leadership you talked about you know conformists having led many retail businesses up until now and the need for greater agility can I also perhaps prompt you to talk a bit about what kind of leaders were retelling post covert actual require data skills and capabilities do they need to empower their local teams more for example so when I talk about conformist side I'd like to clarify that I think in general the conformity is driven by financial expectations yes oh the leadership in retail has often been selected by people who are reflecting the interest of investors public company investors none of that's wrong but one can see a series of trade racks and then quoted sector now touching retail that are unnecessary so it's a it's a cycle you have you have executives you have a board you have stakeholders but but it's very strongly speaking institutional investors and I I believe that whenever when all of those people selected precoded agreed it's definitely the wrong answer because they they were aligned with a view of the world that's no longer accurate and they were selected because the goal was perpetuating the status quo rather than disrupting and reinventing the norm that's not true intact that's not true in attempts to retail online but traditional retail organizations still are dominated by either a successful autocrat who may or may not be able to rebalance and adjust in this environment efficiently and decisively and if he or she can maybe not be able to get the teams in those organizations to respond because it's such a complex moment or what I think realistically should be termed committees and committees are a failure for running anything and the committee today is the board the senior leadership team having endless conversations that don't get anywhere decisive I'm giving you an example of this logic but I've had calls from brands I have to sit there for an hour while I'm given the prepared speech about why landlords I don't consider myself a landlord have to be flexible the brand is struggling this than the other every single factual statement made I just had to go through one of these this week does not apply to us but the board has hired a consultant has hired a restructuring expert the consultant the instructure expert are telling the management team you must go to every landlord and give this canned presentation the management team meanwhile is not running the business the consultants and the restructuring teams are intelligent people but nothing that said to me in a meeting reflects the specific relationship they have with our company our service our pricing they're in there telling me why turnover linked payments are the requirement of survival for the brand ignoring the fact that we didn't with yeah with and the management team are they're not rolling their eyes but they're smiling politely knowing the whole thing is completely illogical yeah yeah but they're not gonna explain the board and the consultant than these these red Adair people dropped in with expertise and these companies are gonna go to the wall there's not a question right this is the way they're approaching today they're dead tomorrow yeah that's the committee approach yeah and I think I I think the team-based approach is something about assembling a group that is able that some of this is based on history of working together already able to work responsibly talk every morning talk every evening constantly adjust constantly reinvent and accept that everything's going fine in country a and suddenly you're told that the social distancing norms are not going down from 2 meters to 1 meter or being removed they're being reintroduced what are you going to do that they're suddenly and this happened to us some somebodies partner spouse started a hate campaign online because actually this person was resentful that the partner was going to work every day in a brand owned a boutique that happened to be represented with us how do you how do you react and respond in an appropriate way these are things we're not used to dealing with we haven't had to address them before but I think teamwork comes from people relinquishing I would say relinquishing authority but not empowering control because then you just get back to the committee is defining roles and I would think we're talking about retail companies but I think the same is true for Oxford University in the same I quite agree the universities bureaucracy which is thrived for nine hundred years on committees I'm glad to see it's not doing that at the moment these are wonderful moments again perhaps in a university setting where the university is decided it's required to adjust because he creates all sorts of freedom yeah well that Scott we're nearing the end at that time and I could go on for a lot longer because it's a fascinating conversation to be having so I haven't taken nearly enough questions from the the audience we've managed I think two or three but there are four or five here which really marital response we've had contributors from Pakistan India Japan Hong Kong South Korea Australia early listening to us today so thank you so much for taking part in this let me promote the next webinar in our series if you're keen for more then the next offering is on Thursday at again the same time two o'clock BST UK time we'll be debating one of the great controversies in business today stakeholder versus shareholder capitalism and I'm sure Scott you'll have some views on that hosted by occupy professor Rene Adams on one side of the debate will be Professor Lucien webhook at the Harvard Law School and on the others of Oxford's own professor Colin Mayer so Scott I know your ex Harvard what's involved in Oxford so you've got to choose a side I guess I have but looking forward to to that debate but in the meantime let me take the chance again to thank you Scott and obviously forgiving up your an hour of your time at such a busy moment but business for sharing such great insights with us and just reminds me to thank the audience for tuning in and to say stay safe and stay well thank you.