What’s next for the Luxury Sector?
The luxury goods market is being shaken up like never before with the rise of new consumers and changing buying habits. This, combined with the late adoption of digital and technology means that luxury brands face more uncertainty than at any point in their history.
To win in the new luxury landscape, where Apple is becoming as much a force as Burberry, requires new thinking and there is a real appetite for change.
1. Engage consumers on their terms
Mobile has led to an increase in ‘butterfly consumerism’. Brand loyalty simply doesn’t exist in the way it did a decade ago. If you don’t engage consumers when, where and how they want, and provide convenience in the last mile of the buying journey, they will leave you for a brand that can be counted on to meet their needs. That’s even more true for high-spending consumers who naturally will have much higher demands for convenience, speed and a tailored experience – and less patience for those who fail to deliver.
2. Focus on experience
Modern luxury is about conveying a lifestyle; it is about creating an overall experience that products are a part of. A strong brand narrative combined with technology. Unfortunately, many luxury brands continue to lag on the digital end, with ecommerce sites that lack usability, personalisation and responsiveness – often leaving consumers frustrated with a digital experience that is not aligned with the service they receive in-store.
Holland Cooper, a brand which sells luxury British made tweed clothing, treats online like a personal appointment at their showroom. This attitude means they can provide a personalised experience across their digital channels. This forward thinking approach should be the aim of every luxury brand – utilising technologies to provide a seamless and value-added brand experience across channel.
3. Create a seamless path from inspiration to purchase
Brands, particularly emerging luxury retailers, are struggling with the ability to serve customers equally across all channels – whether in-store or online. With 73% of shoppers using multiple channels during their shopping journey, this is leading to a disjointed approach and unfulfilled customers.
To support greater channel integration, the luxury sector should be considering single solutions that provide visibility over inventory management, streamline order processing and automatically update sales channel in real-time with information on what products are available.
Some brands are getting it right; Net-a-Porter, for example, are managing to seamlessly merge digital and physical touchpoints, and understand that the contemporary consumer demands a strong omnichannel approach where service, experience and products interact. Getting to ‘seamless’ is paramount for the luxury sector to retain its edge and having the right systems in place – both on the front end and operational side – is absolutely key to presenting the experience, from inspiration to purchase, that your customers now expect.
5. Reliability is key to luxury service
Many luxury firms we work with often utilise high profile celebrity endorsements and influencers strategies – this can have a major impact, leading to sales spikes, but this can also have a hugely damaging impact on a brand’s reputation if they are the unable to meet demand, due to inventory shortages. For consumers, the emotional impact of not being able to buy the product when and where they want could be detrimental to them ever coming back – any they’ll certainly share that negative experience, compounding the damage to the brand.
Consumers expect a high of level of trust and reliability from the luxury sector. The key to offering a reliable service in a multichannel environment is ensuring sales come into one ‘central hub’, that provides real-time visibility across all channels and the flexibility to meet spikes in sales, no matter the complexity of your operation.
5. Know consumers deeply: personalise their experience to reap rewards
A wealth of consumer data allows smart luxury brands to surprise and delight their customers via personalised offers based on their individual browsing and buying history. With 43% of purchases being influenced by personalised recommendations, it’s clear that this is an avenue that must be considered if brands are to meet increasingly sophisticated consumer demands for excellence in all parts of their purchase.
However, the ability to provide a high level of personal service requires access to all data in one place. Having the right technology, for example, a solution to sync information across your different platforms, is a crucial component. It enables all areas of your business to have access to a single record for any given shopper, allowing you to gain deeper insights about your customers – their buying behaviour, preferences, and loyalty. The endgame is an enhanced customer experience at all ends of the buying experience, from up-to-date communication regarding delivery changes, to acknowledgments on social media after purchase, to follow up recommendations and personalised offers.
For the luxury sector, the ability to to offer truly personalised experience is crucial – it allows brands to better serve, engage with and reward customers on a more personal level.
Derek O’Carroll is the CEO, Brightpearl a cloud-based ERP built solely for retailers and wholesalers.
