Why Luxury Retailers Need to Take Another Look at the Potential of Omnichannel
Tuesday, June 18, 2019

Categories: Thought Leadership

Why Luxury Retailers Need to Take Another Look at the Potential of Omnichannel

Before They Make a Big ‘Pretty Woman’ Mistake

There’s the famous scene from Pretty Woman. The one where Julia Roberts’ character, dressed in her ‘work’ attire goes into a store, only to be turned away. The store associates deem her appearance unworthy of shopping there. A few hours later, dressed in new clothing and with several carrier bags in hand, the character returns to that first store to let them know how big of a (monetary) mistake they made by turning her away.

When it comes to omnichannel, luxury retailers who have not yet taken advantage of the possibilities of going online to expand and scale their business might already hear a faint echo of Julia Roberts’ character saying: Big mistake! Big! HUGE!

Luxury Retailers Are Beginning to Accept The Rise of Digital The majority of luxury sales are transacted in-store, with only 8% of sales coming from e-commerce

As more shoppers take to the web to complete or augment their buying journey, luxury retailers are finding themselves adjusting their traditional tactics to meet the needs of the new, omnipresent luxury customer.

Those traditional tactics of luxury retailers are composed of customized attention from associates, the ability to touch and feel the products, and the capacity to fully understand the brand scope behind the price tag. And of course, these tactics are dependent on the shopper being in the physical store. Only at the store can a luxury goods customer truly receive the attention they demand and expect.

Right?

Wrong.

With today’s technology, it is possible to translate many of the benefits of shopping in-store to online. But even more so, it is actually possible to make the customer’s journey even better.

This augmented customer experience happens when a brand crafts a truly omnichannel experience. One that is engaging, customized and rewarding for both brand and customer.

“Many luxury brands are still hesitant to fully embrace e-retail as part of their distribution strategy. Fearful of losing a feeling of exclusivity, but knowing they should offer some sort of digital experience, other luxury brands are somewhere in-between, only providing a limited online boutique.”

Florine Eppe Beauloye, Shine – Digital Craftsmanship for Modern Luxury Brands

Online Luxury Shopping is Still in its Relative Infancy. Why?

Luxury shoppers have traditionally been of an older generation. But modern luxury retail is experiencing an influx of a new generation of shoppers, including millennials who were early adopters of e-commerce.

“This power shift between generations, away from the baby boomers towards younger shoppers, means the latter are now the growth engine of the market in every region globally,” said Claudia D’Arpizio, a partner at Bain & Company who specialises in luxury and fashion. “In order to recover following the downturn, brands had to strategically reposition themselves towards this new demographic and their state of mind and distinct product and shopping tastes. But what has proven particularly interesting is how those habits and preferences are now shaping those of other generations, too.“

Consumers’ online experience influences at least 40 per cent of all luxury purchases.

Why Omnichannel is Perfect for Luxury Retail Shoppers By 2025, nearly one-fifth of personal luxury sales will take place online

Luxury shoppers love a personalized experience. They depend on store personnel knowing their name, their sizes and their colour preferences. As well as anything else that will help them have a unique and customized experience.

A hallmark of omnichannel retail is the ability to deliver a personalized experience for each customer. This makes omnichannel a near perfect fit for luxury retail. Modern technology systems, such as a robust order management system, support both the business and customer’s need for a seamless experience from store to online.

“Consumers are clear that they see the future of luxury as digital. The research finds that the essence of luxury is changing from an emphasis on the physical (products) to a focus on the (digital) experiential. Over 37% consumers feel that luxury products and technology will become more closely linked.”

Deloitte, “Global Powers of Luxury Goods

Pretty Woman Gets an Omnichannel Reboot

Should Julia Roberts’ character be the star of today’s omnichannel version of Pretty Woman, store associates may never see her dressed for work. The character may have begun her shopping from the comfort of the hotel room, ordering an outfit or two to be delivered. We would never hear the infamous line: Big mistake! Big! HUGE! But surely, filmmakers would find another way to provide us with the drama and tension we crave.

 

Author:

Carla van Deventer

Carla van Deventer is part of the OrderDynamics Marketing team. Her background in corporate communication and events helps her navigate the ever-changing retail tech world.

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