How can luxury retail embrace the digital disruption?
Smart luxury brands know that moving towards a more curated digital experience is the way to get that lucrative high-end pound. We’re seeing mobile applications that intelligently manage the digital lives of consumers, and serve them only the content that they want to see. Think of it as the royal digital treatment, when you want it and on your terms.
The UK’s high-end creative and cultural industries are forecast to reach sales values of £51 billion by 2019, according to a study commissioned by Walpole. This means luxury businesses need to keep reinventing themselves and the type of products and services that continue to inspire new breeds of consumers while staying true to origins and heritage; they want experiences, not just goods.
Burberry’s recent full-year results showed the impact an investment in digital can make to a long-established luxury brand. By investing in omnichannel - and improving not just the online experience, but the in-store and back-office as well - the fashion house names digital growth as a strategic focus. It’s paying off, too: 70% of its customers’ buying decisions are now influenced online, and revenue on both its own website and third-party sites has been boosted.
Luxury retailers could learn a lot from the likes of Amazon Go, the convenience store optimising technology to allow customers to walk out avoiding the cash register: sensors recognise the items as they're picked up, they get matched with the customer’s mobile app, and are charged automatically to their registered Prime account. While it’s going to be a long time before we see a Vivienne Westwood pick-up-and-go shopfront, it’s this sort of digital innovation you're competing with. How can you make it work for your own business model? What’s your mobile point of sale?
Speaking with Essential Retail, Anya Hindmarch’s CTO Dan Orteu said: “At a store level, luxury fashion is still often quite old fashioned, with store managers having little black books in which they store valuable customer data. If they leave, that valuable data can be lost to the business. In high-end fashion, the personal relationship between store manager and their customers is closely and carefully guarded. We want to enhance the experience, ensure it is always on brand and allow people to click through and purchase easily.”
In an age where everything is available via a screen, we can miss the personal touch. Digital personalisation fills this vacuum. It helps cut through the noise by providing curated content, and creates a unique online experience that helps luxury consumers feel “looked out for”. It’s the same feeling they used to get when they had to book an appointment to visit a Bond Street boutique and have all staff at their service.
“Where you are” is key: for example Louis Vuitton has been using Facebook Messenger as a customer service live chat tool to answer questions, share online order information, and help shoppers find products. Because even the most affluent still want the humble brag. Luxury has always been about exclusivity and the personal touch.
Now, with chatbots, AI and smartphones, that personal touch has evolved. As Tom Ford says: “Luxury isn’t going out of style, it just needs to change its style.”