In the 21st century the question ‘to be, or not to be online’ as a company is not such a hard question anymore, since nearly half of the population accounts for constant internet users. According to Worldometers, out of 7 billion inhabitants worldwide, approx. 3 billion of them have access to the internet. Thus, companies would miss out a big opportunity, if absent online! For sure luxury brands have to protect their heritage, stay superlative and exclusive, offer a human touch and finally attract our human’s five senses. But why should luxury not develop a luxury 3.0?
There are still some pros and cons for the luxury industry which have to be taken into account when entering the playground of E-commerce.
Heritage Contra New Generation
Adapt to new generation or not?
Luxury exists mainly because of its heritage. It transmits nostalgic values which let consumer reminisce in time. It is scientifically proven that people remember more likely positive memories than the negative once. Thus, the past seems always better than the present. Luxury brands, for instance Hermès and Dior, did well on counting on this aspect to create an emotional connection with their clients.
Now, being online does not mean losing all those values. On the example of Chanel’s viral spots with titles such as ‘Chanel, once upon a time,‘ one can see that the story behind the brand gets even more fostered.
But here it raises the question if a brand can keep its traditional values while following the trend of digitalization. Following too much trends such as the current internet boom, means losing some of its old roots.
But at this point, it has to be said that brands not following a digital strategy will lose out on an important raising target group such as the generation Post 90s coming from China. Digital Natives are becoming more and more major clients of luxury brands.
Superlative Contra Comparability
Does the perception of products and prices change?
Each luxury brand has its own identity and do not compare themselves to their so-called competitors. Thus, their superlative was previously secured by hiding prices, creating different in-store atmospheres, and avoiding any possibility of comparing two brands with each other.
As can be seen in the image above, brands such as Louis Vuitton, Giorgio Armani S.p.A., La Perla, Dsquared2, Dolce & Gabbana follow a similar layout of having first their names at the top followed by the menu navigation. The colors used from the major part of the website are black and white. This is due to the fact that websites not following those 'main rules' of structure are perceived as not user-friendly. Brands such as Chanel or Hermès experiment already with new navigations elements.
But the risk is to become comparable since prices are difficult to hide and the layout gets more and more similar, to maintain a good standard, an easy user-experience and what not.
A way to avoid such comparability is to use the Omni approach, where with new technologies such as the Beacon Technology or adaptive storefronts, individual communication between brand and consumer can be created and maintained at a top level. This enables brands to go beyond the standard website design and create new ways of being superlative and different. With Omni-channel marketing and retailing (online+offline) infused together, more possibilities are available to be different, be creative and very attractive for the users to get the utmost rich experience.
Exclusive Contra Access
Do brands lose their rarity factor?
Luxury brands have to take care of their expansion policy in the 21st century because the difficulty is to stay exclusive and unique rather than sell volumes. As one could see on the example of Louis Vuitton, growth is not always expected by luxury brands, as over-distribution can cause democratization of their products. For instance, Ferrari limits its production to avoid losing their uniqueness.
Hence, on one hand, selling online is positive for areas where no flagship stores are available. But on the other hand, over-distribution can harm the rarity factor.
But at the end, the luxury industry lives by the perception of the society as a whole. Thus, if a brand seems to be too exclusive it can receive an image of being 'snobbish'. If people cannot desire a brand at all, people start to turn their back on that specific brand. Internet interaction enables everyone to have their ‘piece’ of the brand. Fosters, therefore, as well their image for those audience who cannot buy a luxury good but still dream of it.
Personal Contra Social Media
Losing human touch?
Luxury goes hand in hand with a human touch. Therefore, personal contact to sales staff is significant. Human body language and gestures provide a different communication than the virtual world of online channels.
To maintain this 'personal contact', it is possible to create a personalized account. When entering this account, a personal shopper is ready to answer any questions of the curious potential customers, at any time. This provides not only a 24-hour service but even collect data to understand the client in a better way.
Even if a personal contact is always more intense, the problem of sales staff switching to another brand is eliminated. Hence, customers cannot be 'upset' anymore if their personal salesperson changed workplace. Online the collected data will be at all times available, every person can continue serving the client with the same high standard without interruptions, still targeting their care - customer-by-customer.
Five Senses Contra Digital
Are the new challenges - delivery and return?
Luxury goods convince, thanks to their high quality and perception. The smell of perfumes and the touch of the soft leather cannot be transmitted online. Thus, activating the human’s five senses through the digital channel is a major challenge. Since customers perceive the product the first time when it is delivered, the delivery is another important aspect to take care of, highly.
Issues on delivery and return are difficult for both luxury and mass market companies. However, when it comes to luxury, such issues could harm a company’s reputation and really loose them customer loyalty, totally and forever!
Many customers find that the main disadvantage of buying a product online is the delivery service that the e-shops provide (apart from the language, broken links etc.). A usual phenomenon is that after the purchase, clients have to wait till their product is delivered. Hence, the high expectations that a customer might have, covert to disappointments and low enthusiasm, when the product finally arrives at the customer's doorsteps. Delays on delivery and returns create troubles that did not exist in the single-channel retailing.
Thus, summing up, being online or not is not the question anymore - but, how to create the best approach to provide the consumer a new remarkable shopping experience is the question which the brands have to ask themselves! Main challenges for brands are to keep their heritage values, avoid to become comparative, stay exclusive, maintain the human-touch and finally, the most difficult part to solve, to find the right solution when it comes to delivery and returns.
Omni-channel is, today, the first and the most feasible step not only for the brand itself (brining the offline brain and the online creatives together to create a rich experience), but also, to give the customer really the 'taste' of the brand and its full support and care for the people, without any margin of error.
We'd love to shed more light on the aspect of Omni-channel retailing and infinite touch-points a brand can infuse in its creative online + offline arenas. To arrange a workshop presentation on the same, CONTACT US