Luxury Retail – Invest In Digital Transformation For A Successful 2018 And Beyond
Good news for luxury brands – Luxury will see continued growth for online sales and for in-store sales that are influenced by digital touchpoints, per Forrester’s newly updated Global Luxury Retail Sales Forecast 2017 to 2022.
So that’s great – but, as we saw in our research last summer, many luxury brands still have work to do when it comes to developing their digital capabilities and customer experiences. To be clear: luxury consumers are digitally fluent with high expectations, and that includes digital touchpoints that enhance and even elevate their experience when they’re in the store — and vice versa. In fact, luxury consumers are significantly more digitally mature than the average consumer: They are among the first to adopt new technology, frequently engage with social media, and shop across multiple touchpoints – online and offline – based on what is most convenient for them in the moment.
This year, luxury brands and retailers need to act (and invest) decisively in digital, or they stand to lose their digitally savvy customers to online luxury multi-channel retailers (like Yoox Net-a-Porter and Farfetch, among others) that offer much more sophisticated digital experiences. Standalone “online flagship stores” are no longer nearly enough. Richemont has already stepped and announced its intent to acquire Yoox Net-a-Porter Group. In 2018, luxury retail brands must:
Connect digital and physical assets. Executed correctly, digital touchpoints complement and enhance the in-store experience, rather than detract from it. Luxury firms that neglect to connect their stores with digital touchpoints miss out on strengthening how they engage with customers, and forego the monetary halo effect of in-store sales that are influenced by digital touchpoints before the customer even sets foot in the physical store.
Re-engineer the organization to be customer obsessed, not brand obsessed. Luxury brands must catch up quickly to their digitally fluent customers. To survive and thrive, luxury brands must stop obsessing solely about the brand and instead obsess about their customers and their relationship to the brand. To function as one customer-facing organization, they must reconcile technology, processes, personnel, and inventory to connect their digital and physical assets.
For additional insights, see Forrester reports “Luxury Brands Must Chase Digital Savvy Global Luxury Shoppers” and “Luxury Brands: Delight Digitally Savvy Customers With Experience As Luxurious As Your Brand.” And do schedule an inquiry with me!