With nearly half of all luxury brands selling directly online, there has been much discussion around the lack of touch points connecting and fortifying the luxury retail experience. Opting instead for traditional ecommerce and marketing channels, many luxury retailers fear the loss of exclusivity as brands move online.
How does one convey exclusivity in a multichannel environment? High price? Limited and select inventory? Meticulous craftsmanship? Celebrity? Brand Identity? Customer Engagement? For many, the luxury brand experience involves highly personalized service – how better to distinguish one’s outreach than by faithfully delivering personalized communications, content and customer service to the very consumers who demand it?
Global luxury retail sales growth is beating market expectations and could be up 8% by the end of this year. Recent sales data from groups such as LVMH and Burberry supports this trend. Bain’s findings suggest that global luxury sales will not slow in 2011 as previously thought in spite of 2010 spending trends. The consultancy estimated luxury sales would grow 5-6% in 2012 and 2013. Moreover, the massive growth of luxury goods has now extended deeply into China, which is poised to become the largest consumer of luxury goods within five years. Estimates vary, but the luxury market is worth between 60 billion and 20 trillion U.S. dollars.
Clearly, investments in online footprints have had significant impact on luxury growth. However, luxury retailers remain hesitant to move beyond the online store.
Brands steeped in heritage have significant opportunity to share history, create a sensorial experience and syndicate using rich media. New luxury has the opportunity to build integrity and expand market share using the social web and alternative technologies such as RFID, digital watermarking and augmented reality displays. With the ubiquitous nature of the web, luxury retailers need to catch up and engage quickly, as they will face challenges from the entrepreneurial black market that has historically responded much quicker and faster than its authentic counterparts.
Affluent consumers are often early adopters of technology and the fulfillment of their needs and wants is very important in the purchase process. Multichannel strategies enable brands to motivate impulses through experience; providing a level of personal attention and connection that is essential to customer retention and loyalty.
In the global landscape where market variation reinforces regional tastes and social mores, geographic distance and cultural standards guide the discriminating consumer. As a consequence, channeling and localizing engagement is essential. Put simply, what is luxury to one person or group may not be exclusive to another, so how that luxury is delivered depends on the ease and access of technology as well as the cultural comfort in sharing and transacting using various touch points. Maximizing channels is about knowing your customers and how they engage with the world around them.
Multichannel strategies are not invasive or diluting. Rather, effective engagement is empowering and discreet; allowing for a renewed focus on the consumer where delivering goods and personalized attention is just another layer of service.
- Luxury Brands Remain Aloof on Facebook (adweek.com)
- Luxury Brands in China Revise Marketing Tactics in Response to Growing Number of Female Entrepreneurs (thenextwomen.com)
- The changing luxury retailing market in China (blogs.cisco.com)
- Tissot Augmented Reality (Video)
- Luxury Interactive: What Luxury Brands Have Learned About Social Media in 2010