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The luxury strategy: how to maintain brand value while driving online sales

The Drum 12 Jan 2021 09:00
By Alice Paul-12 January 2021 09:00am

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Since 2020, the ongoing pandemic has only exacerbated the need to move online

It is nothing new to note that companies and brands are developing an increasing awareness around the importance of having an online presence. Since 2020, the ongoing pandemic has only exacerbated the need to move online. E-commerce has become a saving grace for businesses all over the world, enabling them to continue trading as other routes to market are cut off.

One sector that has traditionally battled the move to online sales is luxury. The internet’s ubiquitous convenience, coupled with the inability to create the ‘desired’ sales environment, has typically been viewed as incompatible with a luxury brand’s identity. Founded on the principles of inaccessibility and exclusivity, many luxury brands could not envisage adopting the internet without compromising on brand value. It took Prada until 2007 to launch a website, and Chanel still functions as more of a lookbook – you can’t buy anything online except cosmetics, fragrance and sunglasses.

The assumption that affluent shoppers would always favour an intimate and tactile offline shopping experience is being challenged by a wave of luxury retailers that have gained momentum over the last 10 years. E-commerce sites such as Net-A-Porter and Farfetch have successfully demonstrated that luxury consumers are willing to shop for high-end goods online at a price equal to those in-store.

Pandemic v luxury

Brands such as Bottega Venetta and Fendi hosted virtual events for entertainment, while others used their digital voice to support those most in need. A bespoke shopping consultation is arranged via Whatsapp, video call or email, and afterwards the carefully curated selection of items is delivered to the consumer’s doorste

How can luxury brands digitally re-create ‘the luxury experience’ in 2021 and beyond?

So, what can we learn from the brands that are doing this well? Here are some factors that should be considered.

Luxury brands must ensure that the superior level of consumer service experienced in-store is mirrored in their digital strategy. In November 2020, Bicester Village launched a virtual personal shopping service so that consumers could browse its 79 boutiques from the comfort of their own homes.

2. Create one-to-one connections through personalised communication

While LVMH CFO, Jean-Jacques Guiony admitted 24 Sèvres has a long way to go to compete with rival ecommerce sites, he also stated that online sales during the pandemic had improved enough to compensate for store closures. Even Chanel, who has tended to avoid eCommerce acknowledged in an interview the benefit of 1:1 communication via digital channels during the pandemic.

When live and in-person events are unable to take place, creating communities through storytelling is crucial for brands to target and retain their consumers. This will create long-term relationships that can be enhanced going forward. For example, in March 2020 Bottega Veneta launched a virtual residency ‘to keep us inspired and entertained during isolation’. Each week it celebrated creativity through streaming talents such as musicians, writers and performers via 10 online platforms. Similarly, the following summer, Fendi delivered Fendi Renaissance. This was a one-off live streamed event of Vivaldi’s Estate from the Four Seasons, performed by an orchestra on top of the breathtaking Palazzo della Civiltà Italiana in Rome.

According to a new report by Accenture Interactive, 61% of consumers said they’d be more willing to buy from a brand that uses immersive technology such as AR. AR expands the reach of brands to those who are unable to visit a store and lets them try on items at home.

There is still some way to go

And so far, Chanel has been proven right. Online sales have not yet been able to drive the same level of upsell opportunities as stores. Research from the Luxury Institute shows that 68% of consumers still prefer making purchases in store, largely because they are reluctant to part with large sums of money over the internet.

One thing is for sure, the need for luxury to take advantage of e-commerce and digital channels will only increase, and brands that successfully recreate ‘the luxury experience’ online will win the digital shelf.

Alice Paul is a digital marketing and e-commerce consultant at Capgemini Invent.

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Tags

Bicester VillageFarfetchBottega VenettaGucciCommunityHelen Brocklebank
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