Luxury goods have been constantly on the rise. Whether it’s a classic “forever” bag or a big statement piece that won’t be as fashionable in a year, the appeal of luxury has driven the fashion world with its exclusivity, personalization and, most of all, status representation due to high prices and quality products. Although impactful, it is still a sector that is established and very connected to the past, constantly paying homage to 19th-century origins and personal in-store relationships with customers.
Given that, it can be a challenge for this segment to make a shift to the online world. But the COVID-19 pandemic set the luxury ecommerce retail revolution in motion, and below are some of the trends and ways that big brands are doing it.
The future of luxury ecommerce retail
According to a McKinsey report, nearly 20% of personal luxury sales will take place online by 2025, showcasing that the digital transformation in retail is effectively underway. Even so, luxury brands have been slow on the highway of ecommerce and were forced to step on the accelerator because of lockdown and social distancing policies that took place in 2020.
Looking into big brands’ behavior during what experts are calling the COVID-19 recovery phase can be a good way of understanding how technology is impacting and will impact the online luxury goods industry and what are the best strategies to surf this tech wave.
Below are 5 technology trends used by luxury retail brands digitally and how they are using them to maintain brand essence and keep their customer base even closer.
1. Tailor-made experience
One of the most important parts of the luxury buying experience is going to the store, browsing through all products and receiving V.I.P treatment from the sales associates, who are usually real experts on everything related to fashion. The fear of losing this type of interaction has driven luxury brands away from ecommerce, but going online doesn’t mean giving up on that experience.
High-end customer service and small perks
High-end customer service and exclusive experiences are some of the staples of luxury branding. Being attentive to clients and fostering a sense of the go-to e-store is a feat luxury brands are competing to offer. Either by producing content, being active on social media, or offering perks for clients, tech-related strategies have been helpful in boosting brand-customer relationships online.
- Brands like Prada, Balenciaga and Dior offer free shipping on all orders and complimentary personalized gift packaging as if the sales were done in-store.
- British giant Burberry and Italian outerwear brand Moncler developed native apps specifically focused on new products, exclusivity, curation of selected items and V.I.P. access to private events.
Conversational commerce
Being greeted by sales associates when entering a store is essential to the luxury sales process, which is why conversational commerce tools have been on the rise in this market.
Chatbots and online in-store sales associates are crucial in completing the ecommerce sales process and bringing customers closer. If they are curious about what material a piece is made of or want to know more about the measurements of a piece of clothing, they can do it through tools like WhatsApp, on-site chatroom, Facebook Messenger and more.
But some are still on the traditional route. Most luxury brands also offer the option of calling the store and getting client assistance through the phone, while others encourage scheduling a boutique on-person visit.
Louis Vuitton and Prada have an AI-powered chatbot configured on their website programmed to answer some questions related to purchasing, delivery, and returns. If there are any extra questions not answered by the bot, a “real-life” sales assistant comes in to help by sending pictures of the products and expert tips. This strategy also goes beyond the website and finds its way on social media.
Chatbots, for instance, are all over Facebook Messenger and WhatsApp. Burberry has Lola, a virtual assistant on one of the most used messaging app in Europe. French boutiques Celine and Yves Saint Laurent are on WeChat, the Chinese super app, through mini-websites where they connect to their customers and sell them products.
Shoppable content
As conversational commerce, social selling is the future. See a picture of a hoodie you like on Instagram? How about buying it on the spot? The “see it and buy it” mentality affects in-store sales and being able to showcase products online without disrupting the customer journey can improve user experience and make online shopping seamless and almost effortless.
Shoppable content such as Instagram posts and stores, WeChat mini-site social selling and blogpost selling, like Louis Vuitton’s magazine where shoppers browsing through content can buy all the products that the models are wearing.
Content like this also helps to establish a community that relies on that brand beyond the product, for tips in styling different catalog pieces, seeing how it looks on people you follow and by keeping up with trends and new products without having to constantly access the website. This multi-platform approach is the future for fashion and luxury retail is slowly but surely coming on board as well.
2. Artificial intelligence and machine learning
Artificial intelligence goes beyond trained chat robots. Prada, for example, is a brand that uses AI to power the customer journey. With Adobe Experience Cloud solutions, the Italian brand was able to support its marketing efforts and deliver a more rewarding and perfectly tailored experience to its shoppers.
3. Live shopping
Luxury brands and retailers need to seriously consider live shopping and execute a strategy that can offer an experience comparable to shopping at a high-end store. Louis Vuitton and Marc Jacobs are already tapping into China’s live shopping market with Bilibili, a video social platform nicknamed by the Western press as the Chinese version of YouTube.
4. Virtual Reality
Travelling through cyberworlds
Virtual reality sounds like something out of a science fiction movie. It allows luxury fashion customers and influencers to be somewhere they are not, while they lounge at home. For their Autumn/Winter 2021 show, trendy brand Balenciaga distributed Oculus VR equipment for 30 press members to witness a fashion show entirely in 3D, with no real models or clothes.
That is a big representation of what the luxury retail ecommerce will look like in the next few years – from sanitary restrictions to fashion sustainability, cyberworlds and runaways will keep on being created as an escape form. But don’t worry, offline shows are not dying yet. While on this subject, Louis Vuitton also created fashion items for characters in the world-famous videogame League of Legends, which players could buy with real money.
Adding to the seamless online and offline experience, Stella McCartney launched an Augmented Reality app for guests to use on her show. The idea was to point at the garden surrounding the runway to see it come to life with elements from the Fall 2021 collection. From there, they also connected it to their stores and enabled an “at home” feature.
Virtual try-ons
Another type of VR-enabled experience is the virtual try-on. When talking to customers, most of them will say that one of the main differences between online and offline shopping is being able to try a product on and see if it looks good on their bodies, with their skin tone and so forth.
Filters on Instagram and Snapchat unite the social and the buying experience. Luxury platform Farfecth has partnered with Snap Inc. to create a filter with Off-White, a hype internet sensation brand.
They also used voice recognition software that allows users to change their outfits by simply talking. And don’t forget the “shop now” button. It’s always there!
5. Omnichannel Experience
Even with the digital growth spurt suffered by luxury retail, the in-store experience will always be cherished by luxury customers. For that to work evenly with the online experience, omnichannel strategies have been put into place. From using a pick-up in-store feature to encouraging appointment booking online to meet with experts in-store, brands are upping their reach.
Honorable mentions
The global luxury industry is also adopting strategies outside of digital channels but that surely makes a difference in the digital customer experience. Below are some approaches that help bridge online and physical stores together, especially with the return to the “new normal”.
- Free exchange policy when doing it in-store and a free care-taking of leather goods for almost all big luxury brands (LVMH group, Prada group and multi brand Net-a-Porter, for example).
- Online store locator with information such as opening hours, COVID-19 restriction, in-store availability of changing rooms, ready-to-wear collections, made-to-wear tailors and other luxury perks.
- Concept stores, such as Tiffany & Co.’s store in Convent Garden, London, can offer a different experience than just the online and offline product offering. With multiple screens and the availability of designing your own jewelry on a tablet, this store taps more into the experience than in the shopping process itself.
Finding the balance between tradition and technology
At the end of the day, luxury is all about the details. The experience and feel that it creates matter just as much as revenue and conversion rates.
Why not use technology to favor tradition and keep it alive in an ever-changing digital world?
