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The New Digital Consumer and the Evolution of Luxury Retail

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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.

Dolce & Gabbana Millenials

 

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 future of shopping. Benefits of Virtual Reality in Luxury Retail

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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.

Luxury Retail: Benefits of an omnichannel consumer experience

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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.

Business Transformation. How the luxury goods industry is changing in the digital age.

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While the traditional concepts around luxury focus mainly on exclusivity, latest changes in the industry and the growth of e-commerce are generating a shift in the way consumers see luxury, where they no longer care for possessions as much as they value the experience. Luxury brands have already started to take advantage of the endless possibilities offered by the digital environment, and are trying to make sure that their brands and products are perceived as a total consumer experience.

This makes the concept of “worth of mouth” and the rise of social media influencers gain even more important when it comes to generating marketing strategies for the new generation of consumers. According to the Global Powers of Luxury Goods 2018 Report, published recently by Deloitte, Millennials and the Gen Z consumers are driving the growth of the luxury goods industry, shaping to be more than 40% of the market by 2025.

Unlike older generations, millennials and centennials are expecting to find their brands online, they want to interact on social media, they want to see the products “in action”, and when it comes to the purchasing decision, influencers play a major role. They have become a direct connection between a brand and the consumer, not only will they give reviews about a sponsored product, but they will portray the lifestyle and the life experiences that come with it.

All the big names in the industry are understanding and adapting to these changes, as the focus of their efforts has to move from objects to experiences, what makes their brands unique and how to connect emotionally with the consumers of the new generations.