Global Luxury Industry

A benchmark to perform at the highest levels of Customer Excellence

Customer Inspired Inference™ Morten Sørensen | Global Luxury Industry - Perform at the Highest Levels of Customer Excellence

The Global Luxury Industry by Market Worldwide Category Size

€284 billion Global Luxury Fashion Industry

€32 billion "I work with luxury retailers to Global Lingerie Industry amplify their customers full worth and create billion euro client €219 billion performances.” Global Online Industry MORTEN SØRENSEN

€248 billion Global Sportswear Industry

2 Morten Sørensen | Global Luxury Industry - Perform at the Highest Levels of Customer Excellence

Benchmarking The Global Luxury Industry Worldwide Brands by Category

FASHION LINGERIE E-COMMERCE SPORTSWEAR

Balenciaga Hunkemöller ASOS adidas Benetton Victoria’s Secret Mr Porter Converse Burberry Net A Porter Lululemon Calvin Klein Zalando Nike Chanel Puma Coach Reebok Desigual Under Armour Dolce & Gabbana Vans Georgio Armani Geox Gucci Hackett London Hugo Boss Jimmy Choo BACKGROUND - ACTIVE CUSTOMER Kate Spade A customer who purchased. Over 1.8 million active customer generated (UGC) data points (shopping Louis Vuitton experiences) in 15 languages worldwide were Michael Kors collected (1st January 2019 - 30th April, 2020) for 45 Mulberry of the Leading Global Luxury Brands. The industry Paul Smith benchmark score averaged 49 Prada The baseline analysis, comparative results and assessment pattern presents an industry view and Ralph Lauren underpins this Global Luxury Industry - Perform at the Saint Laurent Highest Levels of Customer Excellence Program. Scotch & Soda Suit Supply Timberland The Kooples Tod’s Tom Ford Tommy Hilfiger Valentino

Versace 3 Morten Sørensen | Global Luxury Industry - Perform at the Highest Levels of Customer Excellence

Global Luxury Industry Side-by-Side Benchmark Highlights Brands Unique Vulnerabilities and Strengths

adidas 41 ASOS 32 Balenciaga 37 Benetton 42 Burberry 49 Calvin Klein 36 Chanel 55 Coach 32 Converse 30 Desigual 31 Dolce & Gabbana 33 Georgio Armarni 38 Geox 33 Gucci 44 Hackett London 48 Hugo Boss 37 Hunkemöller 46 Jimmy Choo 40 Kate Spade 34 Louis Vuitton 37 Lululemon 40 Michael Kors 32 Mr Porter 38 Mulberry 39 Net-A-Porter 33 Nike 39 Paul Smith 60 Prada 49 Puma 39 Ralph Lauren 38 Reebok 32 Saint Laurent 32 Scotch & Soda 37 Suit Supply 80 Timberland 28 The Kooples 25 Tod's 26 Tom Ford 30 Tommy Hilfiger 30 Under Armour 21 Valentino 24 Vans 35 Versace 35 Victoria's Secret 37 Zalando 47 0% 20% 40% 60% 80% 100% Delighted Happy Impartial Unhappy Angry Active Customer Brand Score

LUXURY INDUSTRY INSIGHT Each brand’s active customers give crisp direction on design, demand and clear investment upgrades that will generate superior returns and accelerate a company’s retail sales growth in 4 “2020 and beyond.” MORTEN SØRENSEN Morten Sørensen | Global Luxury Industry - Perform at the Highest Levels of Customer Excellence

Outside-In: Global Luxury Industry Overview Active Customer Patterns Expose Industry’s Shared €282 billion Loss

Pricing 21% (+30%) Dissatisfied Users (+28%) 20% Positive 26% INDUSTRY Negative CUSTOMER Quality BENCHMARK 63% TOP 5 2019-20 18% (+16%) SENTIMENT FRICTION POINTS Brand Experience (% CHANGE YTD) Neutral (+12%) 18% 7% e-Com Mixed 23% (+43%) 4%

- 33% ACTIVE CUSTOMER PATTERN WEAKENED PERFORMANCE loyalty growth Delighted 2020 YTD: Brands diluted 0% UXURY RANDS 45 L B Customer Experience -2%

Happy 2020: 51% + 7.4%

Impartial + 5.1% lost revenue

Unhappy

Angry - 9.1%

0% 10% 20% 30% 40% 50% 60%

Legend: 2019 FY vs. 2020 YTD

LUXURY INDUSTRY INSIGHT Improve any of the five (5) Shopper Friction-Points secures increased customer loyalty, and in the process gives a significant discount on the cost of new customer acquisitions. Of note, the value “of a 5% lift in customer retention is to increase a Brand's profits by 25-95%.” MORTEN SØRENSEN 5 Morten Sørensen | Global Luxury Industry - Perform at the Highest Levels of Customer Excellence

Tommy Hilfiger Overview: Looking Outside-In Customer Patterns Exposed Tommy’s €2.8 billion Loyalty Loss

Pricing 18% (-13%) Dissatisfied Users (-17%) 14% Positive TOMMY 6% TOMMY HILFIGER Neutral HILFIGER Quality Negative TOP 5 2019-20 1% BENCHMARK 89% 24% (-21%) FRICTION POINTS Mixed SENTIMENT Brand Experience (% CHANGE YTD) 4% (-11%) 27%

e-Com 16% (-23%)

ACTIVE CUSTOMER PATTERN WEAKENED PERFORMANCE loyalty growth Delighted 2020 YTD: The Brand diluted Customer Experience

Happy 2020: 64%

Impartial lost revenue

Unhappy

Angry

0% 10% 20% 30% 40% 50% 60%

Legend: 2019 - 2020 YTD

TOMMY HILFIGER’S €2.8 BILLION INSIGHT Improve any of the five (5) Tommy Hilfiger Friction-Points secures an increase in €2.8 billion lost in customer loyalty to give a significant discount on the cost of new customer acquisitions. The value 6 “of a 5% lift in customer retention is to increase Tommy’s profits by 25-95%.” MORTEN SØRENSEN Morten Sørensen | Global Luxury Industry - Perform at the Highest Levels of Customer Excellence

Tommy’s Top 6 Interconnected Friction Points Eroding Brand Value and Customer Excellence

BRAND EXPERIENCE

CUSTOMER PRICING EXCELLENCE QUALITY

INTERCONNECTED AND INTERDEPENDENT

E-COMMERCE DISSATISFACTION

DISTRIBUTION AND FULFILMENT

TOMMY HILFIGER INSIGHT Customer Excellence is to implicitly understand that imprecise measurements of the right things are infinitely more valuable than precise measurements of the wrong things. If Tommy Hilfiger “drives a 4-point brand NPS gain it will increase retail sales by 2% / €87 million.” MORTEN SØRENSEN 7 Morten Sørensen | Global Luxury Industry - Perform at the Highest Levels of Customer Excellence

Customer Excellence sits in its Simplicity Framework and Methodology

Engagement Excellence: In nine (9) years, no luxury brand engagement has been the same. Each service-engagement is crafted and customised to match each client's unique brand appetite and sustainable pace for change to achieve the desired future client growth that exists. 10X Core Principle Policy: Client results come first. Set to a 10X positive Return- on-Investment (ROI) per engagement measured against the incremental year-over-year gain delivered in brand performance.

Thinking Phase Transform Phase

Diagnose Prescribe Apply Improve

UNDERSTAND RECOMMEND IMPLEMENT OPTIMISE

‣ Perceive Problem ‣ Present Findings ‣ Apply Option ‣ Revalidate Option ‣ Desired Future ‣ Prescribe Option - Solution ‣ Optimisation ‣ Validate Problem - Solution - Approach - Enhance - Gap Analysis - Approach ‣ Measure ‣ Remeasure ‣ Diagnose Option ‣ Scope / Plan ‣ Document ‣ Maintain ‣ Price Option €34 million nine-year running-average annual result in client increased full-year net sales

8 Morten Sørensen | Global Luxury Industry - Perform at the Highest Levels of Customer Excellence

Notes

9 Experience shows it should be fun.

It’s a continuous journey of open conversations “taking the small incremental steps that create the new and challenge the existing belief-systems that truly deliver the sustainable revenue and client growth that exists.

Be confident to perform at the highest levels of Customer Excellence.”

MORTEN SØRENSEN [email protected]

This report is designed and produced by Morten Sørensen. Over 1.8 million active customer data points (shopping experiences) in 15 languages worldwide were collected from 1st January - 30th April, 2020 for 45 of the Leading Global Luxury Brands. The baseline results and assessment presented are industry representative driving this Global Luxury Industry Benchmark - Perform at the Highest Levels of Customer Excellence Program. This publication is not a substitute for professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. For making any decision or taking any action that may affect your business, you can consult directly with Morten Sørensen for professional advise. Londos shall not be responsible for any loss sustained by any person who relies on this publication. Copyright © 2020 LONDOS Consulting. All rights reserved.