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Luxury brands are beginning to compete to enter the coffee pop-up market. On August 6, a Beijing Business Daily reporter visited and found that the pop-up space jointly presented by MissDior and Grid Coffee has officially launched in Taikoo Li Sanlitun. This pop-up will supply two limited coffees for a limited time. Not only Dior, this year luxury brands LV and Gucci also launched limited coffees in cooperation with coffee brands % Arabica, Grid Coffee and Blue Bottle. Compared with the unit price of joint products of tens of thousands of yuan in the past, limited-time pop-up stores that use coffee as an opportunity for marketing are becoming a secret weapon for luxury brands under pressure to break the retail dilemma.

“Luxury goods + coffee” has become the standard

Luxury brand Dior also launched a limited-time pop-up store. Beijing Business Daily reporters saw that in the pop-up space jointly created by Miss Dior and Grid Coffee in the South District of Sanlitun Taikoo Li, the product materials of the Miss Dior series of perfumes and the new Miss Dior fragrances released this time were displayed. At the same time, the coffee brand Grid Coffee launched two limited-time coffees to echo Miss Dior's new products, namely "Provence Cold Brew" and "Love Latte", priced at 48 yuan and 42 yuan respectively. Currently, Grid Coffee's limited-time new coffee products are only available at the Sanlitun Taikoo Li store.

It is understood that the theme of the pop-up space is "Love is Fearless", and it is the first exhibition of Miss Dior's new fragrance series in mainland China. The exhibition will last until August 11. The reporter saw at the scene that even on weekdays, there were many young consumers queuing up to enter. Consumers can not only buy Miss Dior products in the pop-up space, but also buy related branded coffee.

Entering 2024, "luxury goods + coffee" has become a new trend in offline marketing for brands. Earlier this year, Gucci launched limited-time pop-up spaces in Beijing, Shanghai, Chengdu and Shenzhen, and launched limited-time coffee with coffee brands Grid Coffee, Blue Bottle and %Arabica, and displayed the brand's 2024 spring and summer new products. In July this year, Louis Vuitton also launched the "Beijing Style" limited-time space in Beijing 798, Gulou, Liangmahe and Guomao, and launched special drinks in cooperation with coffee brand %Arabica.

Attracting young customers

Regarding the above-mentioned marketing trend of "luxury goods + coffee", Zhou Ting, director of Yaoke Research Institute, said frankly that this is a way for luxury brands to "woo" young consumers. Pop-up stores have unique shapes and designs, as well as limited-flavor coffee drinks. These limited-time and unique features can help luxury brands that are suffering from declining performance quickly attract young consumers to gather, thereby expanding the brand's radiation area and promoting the brand's transformation to younger consumers.

It is true that the performance of luxury brands in the first half of this year showed a general downward trend. In July this year, LVMH Group's 2024 first half financial report showed that LVMH's sales fell 1% to 41.7 billion euros in the first half of the year, operating profit fell 8% to 10.7 billion euros, and net profit fell sharply by 14% to 7.3 billion euros. The revenue of LVMH fashion leather goods department, where brands LV and Dior are located, fell 2% to 20.8 billion euros. Kering Group's revenue in the first half of the year was 9.018 billion euros, a year-on-year decrease of 11%, and its core brand Gucci's revenue fell 20% year-on-year to only 4.1 billion euros. In terms of operating profit, Gucci fell 44%, Bottega Veneta, Saint Laurent and other brands fell 28%, 34% and 80% respectively. In addition, Zegna Group's second quarter financial report showed that the group's organic revenue fell 0.4% year-on-year; Swiss watch group Swatch's net profit fell sharply by 70% in the first half of the year; Richemont Group's sales in the first quarter of fiscal year 2025 fell 1% at the current exchange rate, compared with an increase of 19% in the same period last year.

At a time when luxury brands are experiencing a slowdown in performance, the "luxury + coffee" pop-up model provides brands with a new sales idea. "Compared to the past brand collaborations that cost tens of thousands of yuan, a cup of coffee that costs just a few dozen yuan is more likely to meet young consumers' demand for freshness and innovation, and brands can also increase their visibility and influence through the unique experience of pop-up stores," said Zhou Ting.

Reshape brand image

Rather than marketing products, it is better to say that the brand is conveying its lifestyle philosophy to consumers through the "luxury goods + coffee" pop-up model. Zhang Peiying, an expert in the field of luxury fashion, admits that it is difficult to impress consumers by simply selling products. Only by strengthening experiential consumption can luxury goods effectively improve customer loyalty and increase product repurchase rates.

The 2024 Global Luxury Market Research Mid-Year Update shows that from the performance of the global luxury market in the first quarter of 2024, most countries and regions have seen a significant slowdown in growth. Compared with physical luxury goods, the trend of consumers preferring luxury experiences has continued, and immersive experiences have been highly sought after, which has also led to the steady growth of experiential consumption. Xing Weiwei, a global partner of Bain & Company, said that if luxury brands want to break through the trend and win the market, they must rethink how to optimize and deliver value propositions at different price points and touchpoints, and cultivate customer advocacy and loyalty while expanding brand influence.

Regarding how luxury brands should develop in the future under the pressure of performance, Zhang Peiying said that luxury brands have their own brand value concept, which is the bond between the brand and consumers. Limited pop-up stores are a kind of brand promotion value concept. In the future, luxury brands should strengthen the emotional connection with consumers and enrich the brand cultural connotation on the basis of adhering to the brand development concept.

In addition, luxury brands are also focusing on consumer experience and services. Through scenario marketing, they cater to consumers' consumption preferences, closely connect with customer groups, and expand their influence and build loyalty in multiple price ranges and contact points, Zhang Peiying further pointed out.

Beijing Business Daily reporter Wang Siqi