Archive for year: 2018
The New Digital Consumer and the Evolution of Luxury Retail
The luxury retail industry has been in constant change over the past decade, in part, thanks to social media and the digital world. This industry is turning into a whole new sector, that combines both traditional retail with the latest innovations, creating a unique and rich experience for the consumers. The new digital consumer has changed the way he socializes, communicates and consumes, this is precisely why many luxury retailers have started to opt for omnichannel strategies that connect with their customers both inside and outside the stores.
How is it that the industry leaders are taking advantage of this and what can we learn from them to devise our own strategies?
Understanding your consumers
To start crafting any marketing strategy we always have to start with one of the most important elements, and that is the consumer. Today, consumers are informed, social and digital, and this means that brands have to adapt to stay on top of the game.
The luxury goods market is facing great changes in consumer habits, while the generation of baby boomers prefers to invest in material goods, new generations, such as millennials or generation Z, seek shopping experiences where the product It is not necessarily the most important thing.
A recent study by Bain & Co indicates that by 2025, millennials and generation Z will represent more than 40% of the luxury goods industry.
Unlike the others, the new generations are much more connected and seek to interact with brands on different channels. While digital and e-commerce play a big role here, that doesn’t mean that we have to shift all our focus online, physical stores as just as important, as consumers look for the whole shopping experience, they are moving between online and offline constantly, and retailers should aim to provide a seamless shopping experience.
Focusing on Experiences
Luxury is no longer just about the product, now it relies on integrating experiences as part of the purchasing process. Hospitality, gastronomy, and tourism are some of the industries that specialize in providing experiences to consumers, but more recently, luxury retail has begun to adapt to these trends and to a large extent, thanks to new technologies and the digital world.
The synergy between the offline and online worlds is changing the retail environment, today’s consumer is always connected and looking for an integrated shopping experience, which allows them to interact with the brands in multiple channels and at the same time.
Although the growth of e-commerce is undeniable, impulse purchases, the desire to see and touch something is still an important factor in most of the purchases of the retail sector. This is where the integration of the digital and in-store experience plays an important role and many brands are already adapting to these new trends.
One of the pioneers, is the British fashion brand, Burberry. Thanks to data collected through loyalty programs, the company obtains information on the purchasing habits and preferences of its consumers, that when they arrive at the stores, the sales consultants use tablets to give them personal recommendations based on their purchasing history. and activity in social media. Taking advantage of this to create a better shopping experience.
The power of Social Media
Much of the marketing strategies of luxury lies in storytelling, it’s not only about selling a product, but selling a lifestyle. A great number of brands have a long history of tradition and status and feared that participating in social media could make them lose their image of exclusivity. But this is already changing, as many of the most famous luxury brands like Louis Vuitton, Gucci or Chanel, to name a few, are taking advantage of the power of social media.
Much of the retail sector sales are influenced by digital channels. New consumers investigate and are always connected. It is not just the information we receive from brands anymore, but also the opinions and experiences of other users. Opinion leaders or influencers have become the new digital word of mouth and an extremely influential factor in the decision-making process.
Recently, the Italian fashion firm Dolce & Gabbana is betting on the millennials. Not only with the unique style of their clothes, but including celebrities from social networks, singers, footballers and youth icons as part of their parades and online brand image.
Thanks to the combination of its online activity, events and new products focused on the new generations, D & G has been able to generate not only improvements in its sales but more personal relationships with its new audience.
The future of Luxury
So what does all this mean for brands and retailers? To be ahead of the change, companies must adapt, and the implementation of an omnichannel strategy is not an easy task.
Part of the success of retailers will also fall on how they can take advantage of new technologies to learn more about their audiences. Connectivity, e-commerce, and social media are now very influential factors in the customer’s buyers journey, and it’s now a big challenge for brands to integrate them in a way that allows them to engage with their audience and offer them a much more personalized and unique shopping experience.
What other strategies would you consider implementing? Are you already using an omnichannel approach in your business? Tell me about your experience!
The power of insights. Turning valuable data into smart business decisions.
Data can help lift our brands and make our businesses grow, but all this information by itself, without any context, would not give us the results we desire.
Many companies are concerned about having all the data and KPI’s available, about their customers, the market, their sales performance, etc. trying to evaluate their decisions and measuring results. But sometimes forgetting how to use this information where it really matters, which is turning it into real strategic actions.
Deciphering information and turning data into valuable insights requires a strategic approach that starts with identifying what do we want to achieve and how are we going to do it, especially throughout the buyer’s journey. We want to make sure we set up clear goals for each step as it will help brands understand if their efforts are being effective or what strategies they need to change.
This is where business intelligence tools like dashboards work as a great allied, allowing businesses to spend less time processing data and focus more on generating powerful insights to create successful strategies.
Why should marketers care about Storytelling?
One of the goals of most brands when deciding to invest in digital marketing is to make real connections with their audience in the best ways available through the many platforms that we have available today. Costumers want to feel that brands understand them and that they provide valuable content that truly speaks to them. When costumers feel that they are taken into account they are more likely to be loyal to a brand and consequently generate conversions.
Storytelling is one of the marketing approaches that helps brands reach their audiences in a much more personal level than traditional advertising. As its name suggests, storytelling makes it possible for brands to tell their stories and help them build their identity and reputation. This story conveys values and ideas that will make a stronger bond between brands and their customers.
That’s what consumers care about at the end, especially the younger generations. They are interested in what a brand promises them, what it makes them feel and how they see themselves in that social spectrum consuming that brand.
Today the big challenge for marketers is to create the best stories to get attention, to entertain and persuade in a few minutes, that’s why social media is an amazing tool that brands need to take advantage of when telling their stories. Taking social media, not as another distribution channel, but a channel to spark conversations and transmit genuine experiences.
How can the retail industry benefit from data visualization?
The retail industry generates a large amount of data constantly. Sales, promotions, and client information are just some of the few things that can help companies achieve their goals.
But what do we do with all this information that we collect from our businesses? The best data in the world would be worthless if we can not understand it. It is right here where the data visualization becomes important. The main objective of data visualization is to communicate, in a clear way through graphics or infographics, all the information collected, in a way that facilitates making business desitions.
It may sound easy, but one of the biggest challenges of professionals working with big data or business intelligence is that they are not “communicators” and that much of the valuable information gathered can get lost in translation.
In the retail sector, data visualization software, such as Tableau, can help us in a simple, user-friendly way, identify key market indicators like sales by location, historical purchase information, product availability or shopping cart behavior and turn that information into visually attractive and easy to understand graphics that provide context to the data.
These visualizations will allow members of different business areas to make real-time business decisions in a matter of minutes.
Campaign Creativity To Grow Big Brands
In this “always connected but not always receiving” world with fragmentation and more ways and places to interact, brands face both great opportunities and challenges.
In this panorama, it is important that brands have a coherent message that differentiates them. With the right ingredients, it is possible to overcome the challenge of fragmentation and evasion of the media. Instead of advertising focusing on sending messages to consumers, I believe that it should leave a significant brand impression that will grow and maintain brand partnerships. To achieve that, a solid process of creative development is needed.
By following a clear creative development process for your content, you can minimize the risk and create something that not only appeals to the consumers but is also effective. We must start by raising an insight. An insight must discover a tension that can release growth and serve as inspiration for creativity.
Next, we need a clear statement of how the brand is going to creatively address the tension that has emerged in the insight, in a differentiated way. Later in the process, actionable ideas are developed and filtered before validating their effectiveness in the channels. Finally, once the creative content has been displayed, the performance in the market is verified and the impact on the brand is measured in order to guide its growth.
The future of shopping. Benefits of Virtual Reality in Luxury Retail
In the highly digital world in which we live today, where mobile and e-commerce are the big favorites, it is a big challenge for many luxury retailers to attract consumers to the stores. But interestingly enough, new technologies can become great allies of brands, allowing them to attract their audiences and provide them with a unique shopping experience. One of the technologies that are increasing its presence in the retail sector is virtual reality. Becoming more relevant again in recent years, this technology represents a great opportunity for the sector, since it generates a new and exciting way for consumers to interact with products at the point of sale.
Some of the key benefits retailers can get from virtual reality include:
Strengthening brand image
VR technology allows brands to get closer, in a much more personal way with their audience. YSL, one of the biggest luxury brands, launched a campaign for their perfume incorporating VR technology that allows viewers to enter the world of the brand, get behind the scenes and discover all the shooting locations.
Increasing sales
Not only is virtual reality a unique way to get potential new buyers to the stores, but it can also have a big role in the buying desition process. For example, Jaguar added the virtual reality element to their dealerships by allowing potential buyers to see the interiors of vehicles and play around with personalization options helping them make desitions.
Enhancing the shopping experience
One of the primary benefits is this technology is the ability to improve the shopping experience. Virtual reality offers retailers new ways to interact with their consumers. Dior used VR lenses at several points of sale to showcase their new collections at the store, and while consumers shopped they could also get a front row seat to enjoy their latest fashion show.
In the end, incorporating these new technologies can help brands connect with their consumers in a unique and innovative way that will allow them not only to generate sales but to create brand loyalty.
The power of music
Music, regardless of the genre, has an incredible power to generate emotions on a listener, it can make you feel good, calm or anxious, and it’s no surprise why it’s such an important element when it comes to advertising.
The audience can gather information, feelings, memories… from the music they are listening to, and this can be a great benefit for advertisers that are trying to bring them closer to the products or services they are announcing, at the end, advertisers seek to attract the attention of the viewer, generate an interest and provoke a greater interest that will push them to the action.
When we associate brands with songs we are transmitting feelings and emotions if the music reaches out to the audience and actually connects with them in an emotional level it will also do so with the brand, increasing brand recognition and creating loyalty. Whether it is a popular song, a catchy jingle or an original score, with the power of repetition, the musical element on advertising can become part of the brand’s identity, how consumers see and remember our brands.
Luxury Retail: Benefits of an omnichannel consumer experience
The luxury retail industry, traditionally centered in physical stores, has dramatically changed these last few years. Making a switch for new technologies, social media, and e-commerce, luxury brands are adapting to new shopping behaviors where consumers are jumping from offline to online, merging analog and digital worlds to create an integrated, multi-channel experience.
Omnichannel marketing strategies start with understanding customers, getting to know what they need and how they shop so that retailers can provide a much more personalized experience. New technologies are making this much easier for brands to get data on their consumers’ shopping behavior, on and offline, allowing them to get valuable insights on how to reach their audience.
The role of the physical store has also evolved with the omnichannel approach, many luxury retail brands like Gucci or Burberry for example, not only keep the high-end experience with personal shopping assistants or offering champagne to their customers, but they also incorporate technology, where you can find big screens showcasing the latest collections or Ipads with your shopping history, which allows them to engage with their customers and offer them a far more rich and unique shopping experience.
Creativity with a plan
When it comes to the digital environment, we are currently saturated with advertising. We see ads and sponsored content everywhere, much so that even social media platforms like Facebook faced the need to changed their algorithms to “declutter” our newsfeeds. This has become a big challenge from brands, trying to understand how to stand out from the crowd, and actually, reach their audiences with the right content. One of the biggest benefits from digital media is the ability to analyze data in real time, this makes not only understanding our audiences much easier, but it gives us the possibility to make adjustments in our campaigns to make them more effective.
This is where A/B testing comes to play. In simple terms A/B testing, also called split testing, let’s us test out variants of the same message. It could focus on colors, the different wording in a call to action, the placement of our logos or many more small changes that when tested end up being a decisive component in the performance of our communication.
Even if we as marketers believe we might know our audience perfectly, we truly can’t predict how will they react to certain content and how will the behave. That’s why when we are communicating with our potential buyers, testing is a great tool to our disposal to actually see real results and understand what message will work better and lead to better results.