By Elliott Jacobs, EMEA commerce consulting director at LiveArea
From Zoom styling consultations and digital VIP dinners to dial-in personal shopping experiences, luxury brands have had to be innovative to woo the wealthy and add the splendour to the spending. Yes, the pandemic accelerated digital uptake in the luxury market, forcing brands to engage and experiment with new technologies from virtual clothing to online catwalks and showrooms.
Two years ago, 80 per cent of luxury sales were influenced by online. And according to Mckinsey, that figure is likely to be higher now. This could be anything from seeing fashion opinions from friends on social media to buying crystal-embellished Jimmy Choo heels on Farfetch.
So, what does this mean going forward? Well luxury brands are now having to emulate the premium experiences they’ve created in-store, online. And they’re up against the rise of pure-play brands like Farfetch and Net-a-Porter, who are pioneering digital luxury experiences focused on data. However, luxury requires a refined strategy compared with other e-commerce sectors. Purchases can be more considered and take longer. They are not dictated by price, which works for fast fashion. In fact, in luxury, cost has the opposite effect.
In the past, luxury brands have dictated the terms of engagement. With the rise of social media, ownership of the brand is shifting. Co-creation is more apparent. Brand image and buy-in have moved towards the domain of the consumer. It is no longer dictated by a management team in the Swiss Alps or a Milanese mansion.
So, let’s explore some of those luxury digital trends brands are deploying…
Luxury brands are moving to this model to stay constantly relevant. They market new items on a monthly basis instead of just seasonally in accordance with the annual fashion week schedule. A buzz is created via Instagram or WeChat before a product goes live. Brands fuel anticipation among followers by using countdown clocks and push notifications. Supreme leads the way in this area while Louis Vuitton and Burberry have also successfully adopted this approach.
These can be engaged via video links and are an increasingly important feature in luxury e-commerce. Net-A-Porter is expanding its offering, hiring more than 100 new personal shoppers and client relations managers, pairing the most loyal customers with a dedicated personal shopper. Gucci is opening six customer service centres staffed by 500 people, reinventing the traditional shop assistant for the smartphone age. The centres deal with enquiries by phone, email or live chat. Virtual personal styling is also part of this movement.
With high-end online sales growing, authenticity via digital purchases is vital. Luxury brands are deploying blockchain or distributed ledger technology (DLT) to ensure authenticity and traceability. This involves a so-called “single source of truth”, reconciled between parties such as wholesalers, stores, luxury brands and their partners if a transaction is to be completed. It can be used to verify whether goods are fake or not.
This involves deploying personas that resonate with high-net worth consumers, as well as the luxury ecosystem as a whole. Influencer campaigns are multi-dimensional. The market is sub-divided into those prominent in fashion, travel or fitness. Brands have to work with many different interest-based influencers to penetrate new areas where their products can be discovered.
Influencer ROI is crucial, especially in the luxury sector where costs can be high. This is also the age of call-out culture, where authenticity trumps everything. Brands are moving towards co-creating, where influencers, customers and data from consumers inform the next iteration of luxury products and experiences.
High-end consumers continue to look for novelty in their social media feeds. Look out for the rise of niche social platforms such as TikTok and expect luxury consumers to seek out more intimate digital spaces. The digital commons will be rife with those looking for more meaningful, life-enhancing connections with like-minded people and brands.
The social-media-sphere is not standing still either; expect traction through Instagram as social shopping comes to the fore. There will also be more fluidity between both stores and online. It will be crucial for luxury brands to offer unique experiences that connect customers’ social and online lives to their physical environments. Burberry’s social retail store in China is a prime example.
Many luxury brands are looking at using technologies that enhance their presence in the market. Gucci has been teaming up with Genies, an avatar platform. Users of the technology can dress digital figurines in Gucci’s fashions and send them to friends via WhatsApp, Instagram and Facebook Messenger. In an era where retail has truly become 24/7, this collaboration hits the mark on delivering high fashion to consumers exactly where they are, when they want it and, most importantly, how they want it.
The convergence of gaming and luxury looks set to grow and brands increasingly realise the power of immersing consumers in a digital experience. For instance, in 2019, Louis Vuitton was the first luxury brand to team up with Riot Games and its online video offering League of Legends. The luxury fashion house offered in-game skins and a corresponding capsule collection by a top designer. Louis Vuitton also designed a carrying case for the League of Legends World Championship trophy, known as the Summoner’s Cup.
It is said that unboxing is the new storefront, which will be even more apparent post-pandemic. Social media ‘unboxing’ trends with countless influencer posts dedicated to filming the unpacking of a luxury shopping haul have worked to place additional focus on packaging. This will increasingly play an important role in elevating the luxury e-commerce experience. With affluent consumers increasingly shopping online, creating a delightful, memorable premium unboxing experience will be crucial.
The challenge for luxury brands will be to find the right balance between luxurious packaging and sustainability goals. Worthy, not wasteful will be the new mantra. There will be luxury brands trialling new sustainable materials, digital storytelling around these elements and reimagining of packaging as treasured keepsakes.
So, what’s next?
Younger shoppers will deliver a great deal of growth for luxury goods and will shape how luxury products are bought and sold. These are digital natives, more socially conscious and very active on digital platforms.
It’s not only about online – they just don’t view offline and online shopping as two separate entities. Brands need to consider how to weave new digital experiences into the retail experience and offer a combined, improved purchasing experience, from social media to mobile payments and in-store retail experiences.
The opportunity is now. If a brand is more adaptable with a more comprehensive digital offering, powered by data, the cloud, digitised supply chains and enhanced online experiences for customers, those brands will realise these benefits even more when the pandemic has passed, stores are open and footfall returns.
Elliott Jacobs is EMEA commerce consulting director at global customer experinece and commerce agency LiveArea.