Another luxury coffee shop opened, RMB68 per cup

Another luxury brand has opened a coffee shop.

On July 13, MIKIMOTO's first coffee shop in the world officially opened in Zhangyuan, Shanghai. It is understood that the store is a pop-up store and will only be open for ten days, from July 13 to July 23. On the opening day, famous stars such as Dilireba, Song Weilong, Wu Zun, and Charmaine Sheh attended.

Judging from the on-site situation, the store is located on Maoming North Road, Jing'an District, Shanghai, and is no more than five minutes' walk from Nanjing West Road Station on Metro Line 12. The exterior wall of the store is mainly silver, with silver beads hanging on the entire wall and dotted with white balloons. When the wind blows, the beads will move with the wind, with a colorful effect, which echoes the theme of the store "Searching for treasures and going to the glittering world together".

It is understood that the store has two fllors. The first floor is the brands's first coffee shop in the world, with dine-in seats and special pearl jewelry on dsiplay. The second floor is a high-end jewelry appreciation space created for VIC.

Tea and coffee observation from the applet shows that MIKIMOTO has launched a total of 14 products including coffee, desserts, and savory snacks, with prices ranging from 38 to 108 yuan. It is worth mentioning that only coffee products can be picked up and taken away, and other products must be eaten in the store.

MIKIMOTO originated in Japan and is a pearl jewelry brand founded by Yukichi Mikimoto. It officially entered the Chinese market in 2004. According to media reports, MIKIMOTO opened a coffee pop-up store in the hope of getting close to young consumers through coffee and attracting new consumer groups.

Not only MIKIMOTO, as of now, many luxury brands including Dior, Tiffany, Maison Margiela, AMI, and Louis Vuitton have already entered the catering industry.

It is worth noting that according to the first quarter financial reports of many well-known luxury brands around the world, the previously fast-growing luxury industry has shown signs of weakness. LVMH Group's revenue in the first quarter of 2024 was 20.7 billion euros, with sales down 2% year-on-year; Kering Group's revenue in the first quarter of 2024 fell 10% from the same period last year (on a comparable basis); Burberry's total revenue fell 4% year-on-year.

In fact, the luxury industry has not only recently shown signs of fatigue. According to Bain Consulting data, the global luxury sales growth rate in 2022 was 22%, and the increase in 2023 was only 8%. Under this circumstance, various brands are also taking measures to seek growth, and obviously, cross-border has become a good means.

Strategic positioning expert Zhan Junhao told Chaka Observation that luxury brands can maintain brand vitality, attract new consumer groups and increase exposure by crossing over to the coffee and dessert industries that young people like.

First, luxury brands can reach a wider range of consumer groups by opening coffee shops. Compared with jewelry or high-end custom clothing that cost tens of thousands or even hundreds of thousands, the price of a cup of coffee or a piece of cake seems much more affordable, allowing ordinary consumers to experience the life experience and life atmosphere brought by so-called luxury goods, thereby enhancing the brand's popularity and favorability, and even having the opportunity to convert into potential buyers of higher-end products.

Secondly, cross-border store opening can also be used as part of brand promotion, which can attract a lot of attention and create topics in a short period of time. For luxury brands with a long history like Mikimoto, it can give the brand new vitality.

Finally, in addition to "traffic diversion", cross-border store openings, especially catering stores, have higher customer turnover and repurchase rates. This means that even if consumers do not necessarily buy expensive jewelry or clothing, they can increase brand exposure by regularly visiting the brand's coffee shops. At the same time, this is also an additional VIP service provided to luxury consumers, which can better maintain the connection between brands and consumers.

It is true that luxury coffee shops have narrowed the distance between high-end brands and the public, but if coffee is sold only for marketing and popularity, it is obviously impossible to attract coffee consumers who have high requirements for quality for a long time. Now, a large part of coffee consumers are not satisfied with just paying for appearance, novelty and atmosphere, but pay attention to coffee and food itself while enjoying the comfort brought by the coffee shop environment.

Therefore, for luxury brands, if they want to truly break the boundaries of circles through cross-border, they must be more attentive to products and services, build catering into new brand assets, and form the ability to continuously feed back the brand's clothing business. Otherwise, these businesses can only provide value-added services to existing customers, and cannot become a means to expand market boundaries.