The sustainability of brick-and-mortar retail hangs largely on how well luxury retailers can power through the tough times. As travel restrictions and physical store closures have catalysed integration of online and offline sales channels, luxury brands need to respond to the fast-changing business landscape by customising their tactics to digital patronage. So what more can we do in terms of in-store retail experience in 2021? It is time we got the picture of some newfound trends.
While consumers are constantly exposed to a variety of gimmicks for digital shopping, luxury retailers should bear in mind sustaining unique in-store experiences as the key to sales increments. Physical stores engender sensory-rich ambience much coveted by customers. Linda Dauriz, Tiger of Sweden CEO, mentioned in the interview with McKinsey’s Justine Jablonska that personal advice, human connection, and emotional bonding are what purchasers would be looking for from physical custom in 2021.
According to Deloitte’s survey, 63% of Generation Z respondents preferred offline shopping channels to online platforms because of more personalised customer service and interactive shopping experiences. As we have witnessed, more luxury brands have created synergies with restaurants and pop-up outlets. Louis Vuitton, for example, unveiled its picturesque Twist Cube pop-up store in the incandescent pink, attracting visitors to snap away. The fun-filled entertainment engaged participants to explore the House’s iconic collections such as Twist bag. The face-to-face dynamics impossibly delivered through virtual shopping would in return deepen the brand company’s rapport and relationship with its clientele.
A few years ago, the Phygital model was heralded as the vogue for future retailing. Stores have now evolved with more technological applications to optimise customer experiences. The Phygital model contains three elements: Immediacy, Immersion and Interaction. The research paper, « Customer Supercharging in Experience-centric Channels« , found that customers who initially shopped online but later changed and visited the physical store spent up to 60% more on average on order. As a result, Phygital retail has actually lengthened customers’ patronage spans in the stores, allowing salespersons more time to understand consumers’ needs, explain product features in details and upsell them to other products.
Let’s look at a real-life example of the Phygital model from one of the industry’s giants. Luce app, pioneered by Apple and Kering, is an electronic application that enables instant checking of in-store inventory, analysis of customers’ omnichannel purchase records and generation of product recommendations for customers, realising a seamless shopping journey with the brand. It also helps boost the interaction between sales associates and patrons, conducive to increasing final purchases. Kering’s chief client and digital officer Grégory Boutté highlighted in the interview with Vogue Business that the application had racked up average ticket value of Luce-assisted transactions by 15 to 20 per cent.
Artificial Intelligence (AI) and AR have played a bigger part during the pandemic in the fashion and beauty sectors. Digitalisation facilitates in-store shopping experiences and has grown to prevail in omnichannel consumption. Luxury brands have made use of AI and AR to track omnichannel customer behaviour and collect relevant data for strategizing and uplifting in-store VIP treatments. For instance, with an AI-powered sales forecasting tool, Kering improved omnichannel customer engagement by imparting creativity and exclusivity to their shopping experiences.
Chanel, one of the top-drawer luxury brands, collaborated with FarFetch on installing AR smart mirrors in the fitting rooms of Chanel flagships in France in 2020. This augmented retail experience starts with an app for users to choose from an array of pre-collection items and accessories, and book an appointment for try-on. Upon shoppers’ arrival, Fashion Advisors bring the selected items for them to view original runway displays and zoom in on details through the high-tech mirror. This kind of hybrid stores can flexibly adjust service delivery for potential buyers to learn the brand and products “inside out”.
As decarbonisation has taken the centre stage in the world, sustainability is another key factor that should top the agenda of luxury brands if they have set sights on a broader market. As noted in Deloitte’s Global Powers of Luxury Goods 2020 report, sustainability will bear significantly on the fashion and luxury industries’ recovery from the pandemic impact. The epidemic outbreak has more or less heightened consumers’ awareness of responsible consumption and fulfillment of social responsibilities by manufacturers. They are eager to keep track of the luxury brands’ environmental practices in manufacturing processes, and ethics in business conduct through transparent and traceable information.
Based on Edelman’s report, Brand Trust in 2020, 37% of respondents indicated that how well the brand treated the environment was an essential factor for them to buy into a new brand or become a loyal customer. With a growing number of eco-conscious buyers, luxury brands are bound to rethink their production processes and supply chains. For instance, Ralph Lauren has set targets of adopting 100% sustainably-sourced key materials by 2025. Moncler has also implemented a compulsory Supplier Code of Conduct with its suppliers and subcontractors to ensure complete transparency in material sourcing practices and production processes.
Beyond doubt the luxury sector has been hard hit by the global epidemic. It has drastically reshaped consumer behaviour, posing more challenges to the luxury sector bouncing back to the pre-pandemic level. Yet luxury brands can always turn challenges into opportunities by adapting to the paradigm shifts with new technologies and greener measures. The trends mentioned above have shed light on innovative patronage as the way to shoppers’ hearts in the new era. As the report of Global Powers of Luxury Goods 2020: The new age of fashion and luxury has struck the right note: the pandemic is an accelerator for brands to create new value creation models.
TDF Asia offers flexible visual merchandising solutions in just 5 easy steps. Learn more about how we create window displays, product displays, and fixtures for the luxury retail industry. Please don’t hesitate to contact our project management team at enquiry@tdf-asia.com or give us a call at +852 2116 9583.
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