THE FUTURE OF ONLINE LUXURY RETAIL
Luxury products are no longer reserved exclusively for upmarket retail stores. The future of retail is digital and McKinsey & Company predicts that one-fifth of all personal luxury purchases will take place online by 2025; estimating that 80% of luxury sales are already influenced by digital touchpoints.
“We are witnessing a transformation in the luxury market, creating opportunities for those prepared to adapt,” a recent Seymour Sloan white paper stated. The future of online luxury retail is perhaps already here and is quickly making way for advancements in technology, intuitive algorithms, personalized interactions, and mobile-friendly shopping experiences.
As e-commerce gains traction in the luxury sector—as a direct result of consumer demand—luxury brands are experimenting with new tactics to attract, engage, and retain luxury consumers online.
“To stay relevant, luxury brands will indeed need to create deeper and more meaningful engagement with their modern affluent consumers, deliver a new range of personalised experiences and innovate both their business models and value propositions to fit modern digital-infused lifestyles,” explained Luxe Digital.
This need is driving advancements in online luxury retail, as brands look to automation, interaction, and influencer collaborations in an effort to quickly expand their digital footprint.
Customers are becoming more and more involved in the purchasing process, prompting luxury brands to adapt and rethink their marketing strategies. “Luxury consumers, highly engaged on social media, are evolving from paying observers of the show into actors on the stage,” said authors Antonio Achille, Sophie Marchessou, and Nathalie Remy in a report titled, Luxury in the age of digital Darwinism.
This shift is not merely driving change in the way consumers interact with luxury brands online, but also influencing the direction and design of online luxury retail products and services. As Sarah Willersdorf, Partner & Managing Director at BCG shared with Matter of Form: “Millennials are looking for innovation in design, along with unique collections that reflect their individuality and values.”
Our fast-paced world also necessitates convenience and ease of
purchasing, and online luxury retail is progressing to accommodate this. Tagging products on influencer photographs, enabling direct-to-cart shopping from social media posts and developing mobile-friendly ordering apps and digital shopping experiences are now par for the course.
But, automation cannot come at the expense of personalization. Online luxury retail, albeit digital, needs to retain the values of the luxury market while catering to the needs of new-age consumers who seek purpose-driven branding, engagement, and individualized service.
To accomplish this, luxury brands are introducing personalized recommendations in an attempt to create a feeling of uniqueness in our digital world. The collaboration between Gucci and Farfetch, known as “The Store of The Future,” is one such example. Merging the online and offline retail experiences and utilizing customer behavioral data to guide the consumer online in a similar manner that an in-store retail assistant would, Gucci and Fafetch are creating the new standard in online luxury retail.
Other developments in the sector include artificial intelligence, voice search designed to mimic personalized conversation, and interactive tools that enable customers to create their own style, select their own preferences, and “try” on products digitally. Luxury brands are embracing these techniques to enable customers to view products, such as jewelry, as it would look “on”, envision decor “in” their living room, and even “test” makeup colors on their skin tone.
That which has been done in-store is quickly being adapted to accommodate the online shopping experience, in the most authentic manner possible.
As we look ahead, it is safe to say that the future of online luxury retail lies in continuing to embrace the shift towards digital consumerism. Luxury brands must devote time and skills into uncovering new, captivating ways to cater to digital audiences, without compromising on quality, personalization, and exclusivity.