With borders restricted for foreign tourists, French department store chain Galeries Lafayette is betting local customers and Christmas tradition will help it recoup some of the losses during the critical festive season.
International shoppers account for 50 per cent of Galeries Lafayette’s annual revenue, according to the company. The retailer is bracing for an overall loss of €1 billion or more this year, says chief executive Nicolas Houzé. Traffic was down by about 20 per cent compared to normal times at the store on the Champs-Élysées, a smaller format location, opened last year to test new sales techniques and designer brands. The Boulevard Haussmann flagship typically sees €2 billion in annual revenues.
Key Parisian shopping streets like Boulevard Haussmann and the Champs-Élysées are welcoming less than half the people they were receiving pre-lockdown, according to data from French firm MyTraffic, which measures GPS data from shoppers’ mobiles. The capital lost most of its long-haul tourists from the US and China, a blow to department stores, who typically accrue 40 per cent of annual retail sales during the holiday season, Antoine Salmon, partner and head of retail leasing for France at Knight Frank says. And the French are holidaying elsewhere: Brittany and Normandy, both situated on the northwestern coastline, have been the most popular destinations, Les Echos reported.
“The impact of the Covid-19 crisis has been huge,” says Galeries Lafayette’s chief marketing officer Guillaume Gellusseau. “We’ve lost weeks of turnover and activity. We hope that by 2021 the troubles will stop, and tourists will be back in the city again. But in the meantime, this is an opportunity for us to concentrate on local customers, especially the Paris clientele, who maybe haven’t been to the store for a while.”
But convincing the French may be a hard task. The Champs-Élysées is such a tourist destination that many Parisians actively avoid the area, says Salmon, and Galeries Lafayette’s shopping experience has become more stressful in recent years.
Gellusseau hopes that the annual festive windows, store decorations and unveiling of the Christmas tree will be a draw. Promotional tactics, launching digital tools and pivoting towards a local French crowd that will be shopping in the city are also on the agenda.
Galeries Lafayette plans to invest in physical advertisement on subways and around France. About 1.5-2 million journeys are currently being taken daily on the Metro, a fraction of the 10 million journeys pre-pandemic, but it’s still important to position the adverts in front of key commuter audiences, says Gellusseau. “We want to be a part of our customers’ daily lives. They might be shopping online but their daily life is not on the web; it is outside, in Paris, on the streets.”
Over the past few months Galeries Lafayette saw a sales uptick on its website, particularly when its stores across France were shut. The store launched a personalised live video retail service in May to bring the store experience to customers at home. Customers can connect with a personal shopper or stylist at Galeries Lafayette, who can advise on a selection of 120 brands, product fit and prepare items for next-day home delivery or same-day in-store pickup.
The service will be beneficial for customers outside of Paris who aren’t able to access some luxury brands and products where they are, says Gellusseau. “You can buy a Prada bag while having a real-time personal connection with our personal shopper, so it’s not just an order that you make online. It is a shopping experience. Customers are going to be attracted by this type of shopping, which is both digital and modern, but with a human touch.” He declined to share how many transactions or sales have been made through the service, but says that the results have been “extremely encouraging”.
Galeries Lafayette will also ramp up digital content via emails and social media platforms like Instagram, which Gellusseau says is a “priority” channel. “Instagram is not just about reaching younger consumers. Yes, our objective is to attract new younger shoppers [on Instagram] while keeping our most loyal customers, but [it] is also much about images and video. It can really show what’s happening in the store at Christmas.”
Even in a much different holiday season, pop-ups will go on. An in-store Swarovski pop-up in collaboration with French jewellery brand Shourouk, which offers everyday items like a Frosties cereal box or Vanish cleaner bejewelled in crystals, is in the works to drive foot traffic. “Galeries Lafayette excels in drops and brand events. Because of Covid-19, it makes sense for them not to do big events that attract hundreds of people, but little activations that people love pinballing between,” says Aaron Shields, executive strategy director at retail consultancy Fitch. Shields adds that shoppers this holiday season are likely to be more selective and less impulsive than last year — especially if most shopping is done online, where browsing and spontaneous buying are typically less likely.
Regardless of initiatives, Galeries Lafayette, along with other department stores around the world, are fighting an uphill battle. Concerns around safety will co-exist with pent-up consumer demand for retail normality, predicts Valentina Candeloro, director of international marketing at Mood Media, an experiential retail firm, which tracks consumer sentiment. A survey of 8,120 global respondents found that 63 per cent of French shoppers plan to spend less time in stores this holiday season, and 23 per cent do not expect their purchasing habits to fully resume before the summer of 2021.
“We will take into account all of the necessary safety measures, but at the end of the day, we feel that it’s also our responsibility to keep things [merry] in store for Christmas and to make our customers happy,” says Gellusseau. “I want to say to our customers, you might not be able to come to Paris this time, but we are still here and you can see what’s happening in store. It's not just about product, it’s about experience and everything around it.”
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