So many retail brands have been focusing on digitally transforming their business model. That includes both in-store experience, and a mass migration to digital channels and sales platforms. It’s an effort to meet customer expectations and stay ahead of the technology curve, but also to leverage a store’s physical space in unique ways.
Many luxury brands, which jealously guard their messaging and presentation, have lagged behind in such transformation efforts. But a new luxury model is emerging that melds digital experience and online shopping in a way that plays to these legacy brands’ heritage and stories.
Adapting to the Changing Customer Journey
According to McKinsey, 80% of luxury sales today are influenced by at least one digital touchpoint along their path to purchase. This means even luxury brands are boosting their spending around digital, and surrendering, at least somewhat, to the notion that their customers, through social media and other platforms, have become active participants in shaping their messaging.
Part of “Luxury 4.0” is a shift in operating models focused on adopting the latest technologies, such as customer data, smart logistics and design, and putting it to use to enable brands to pivot rapidly in direct response to customer desires, all without sacrificing their heritage and craftsmanship their core customers have come to expect.
Making Personal Connections
Even luxury brands are using big data and machine learning to intimately connect with their customers, but to be successful, that connection can’t feel contrived. Advanced analytics technology is enabling brands to offer custom-tailored services to each specific customer, treating them as individuals, as opposed to merely collected names and email addresses on a mass mailing list.
Playing to Brand Heritage
Luxury brands have formed institutions, workshops and even museums as a place to show off their unique heritage and give customers an inside look at the inner workings of their favorite brands. Chanel opened its Mademoiselle Prive exhibition in Hong Kong last month, which blended physical and digital experience in an elegant, museum-like setting.
Participate in the Retail Ecosystem
Luxury brands until recently have operated somewhat as islands into themselves. To find success in the digital era, they must forge new strategic partnerships to facilitate engaging customer experiences. Deciding which brands to partner with is a skill that will be necessary for luxury brands moving forward, as well as how best to capitalize on those partnerships.