In retrospect, 2016 has not been a good year for the fashion industry, particularly for luxury brands. Despite an overall growth of the sector, volatility in key markets (China and the U.S. above others) and instability due to socio-political events (Trump’s election is the most recent example) (Fernandez 2016) created a climate of uncertainty and fear that harmed fashion purchases, which are often highly emotional ones (Amed et al. 2016). Furthermore, a new class of more demanding and always on-the-go consumers is emerging, making it more difficult for companies to predict purchasing behaviours. These trends are urging fashion brands to find new solutions to adapt to rapid shifts in consumer demand, accelerating the creation of more immersive customer experiences in stores (e.g., see Chaudhry et al. 2016).
Studies conducted by Brakus, Schmidt, and Zarantonello (2009) showed that the transformation of physical spaces into a multisensorial experience is fundamental in order to evoke sensations, feelings, cognitions, and behavioral responses generated by brand stimuli. However, immediacy and responsiveness are becoming paramount in an industry that is more and more dependent on instant gratifications, where the principle “See Now, Buy Now” is gaining relevance. Digitalization can help close the gap by creating those interactions between customers, brands, and their products, and ultimately building a community-based retail experience. Although the general consensus about the crucial importance of rethinking retail strategies in a digital landscape is key, many luxury fashion brands seem still too afraid to experiment, fearing the loss of control and compromise over their brand image.
Selling luxury products means selling a dream, which is certainly something that goes beyond mere functionality, rather it emphasizes status and other symbolic associations such as personal statement, identity, and ultimately creates a sense of belonging. While in-store is much easier to highlight certain unique characteristics, translating a similar experience online becomes more problematic. It is evident how e-commerce, being a space in which points of differentiation hardly emerge, threatens the luxury brands, but staying away from the digital channels would not be solution.
So, how can luxury fashion brands deliver a “white-glove” customer experience and capitalize on the opportunities offered by online channels without risking depreciating their brand equity and losing sales that are mainly happening in stores? The answer is designing a customer experience that is well integrated among all channels. As explained by Lemon and Verhoef (2016), brands need to understand the consumer decision journey and experience throughout the multiple touch points and media that shapes it, and adjust their omnichannel strategy accordingly. To do so, here are the recommended strategies:
1. Integrate Digital Channels with Brand’s Heritage: As an example, Louis Vuitton is distinguishing itself through its in-store experience by focusing on heritage, its most iconic products, a high level of customization, and a clear separation of areas within boutiques to facilitate customer interactions with products. Nevertheless, despite a strong social media presence, the French fashion house is still reluctant to fully integrate digital channels within the customer experience, fearing a loss of consumers’ trust, which is ultimately a lost opportunity. In contrast, while not maintaining the same level of detail within stores, Burberry believes in connecting the brand heritage with the growing digital mindset. The recent campaign “The Tale of Thomas Burberry” uses the events that shaped the brand’s history to excite consumers and even educate them about the products’ peculiarities. The English brand is also tracing its routes when it comes to social media through partnerships (e.g., with Snapchat to preview the Spring/Summer 2016 womenswear collection), live interactions with celebrities and top models, and differentiated tactics among different countries within the same region of the world.
2. Remove Ominichannel Inconsistencies: Luxury boutiques have to be reshaped to resemble the online experience. The number (and quality) of mobile/digital connections available in stores also has to be improved. Moreover, in key markets a more tailored use of both offline and online tactics has to be considered according to the targeted country, city, and ethnic group. Luxury fashion brands have to create an in-store experience that is consistent with that offered by all other channels, in order to deliver a superior customer experience aligned with the pace of modern consumers and brand DNA.
3. Put Collective Emotions at the Center: A coordinated use of digital and traditional channels has to be designed to be emotionally engaging. Luxury fashion brands should encourage positive feelings and moods that are commonly shared by customers, who become interconnected through the brand’s aura. The ideal approach should combine consumer and community based tactics by putting customers’ emotions at the center of the business strategy: content and experiences will then be the glue between offline and online channels pushing luxury marketers to become experiential and social media experts as well. This action plan should shift the conversation from “you” or “me” to “us”, creating a collective feeling. Brands will then become an active part of the most recent phase of the “democratization of luxury” that can be called “humanization,” in which the dialogue with clients and prospects will play a crucial role within an emotionally interconnected society. As proved by NetBase in its Brand Passion Report, Top 100 Global Brands Love List (2016), Louis Vuitton is the most loved luxury brand on social media and brand’s fans underlined the authenticity of the experiences with both products and brand as the key factor for their affection.
In the end, by delivering valuable content and emotionally engaging experiences through an omnichannel strategy, luxury fashion brands can create the advocates of a community emphasizing congruence between a brand’s values and consumers’ personality, a key driver of luxury market loyalty.
References
Amed Imran, Achim Berg, Leonie Brantberg and Saskia Hedrich (2016), “The State of Fashion,” McKinsey & Company.
Brakus, Josko J., Bernd H. Schmidt, Lia Zarantonello, (2009), “Brand Experience: What Is It? How Is It Measured? Does It Affect Loyalty?” Journal of Marketing, 73 (3), 52-68.
Chaudhry, Ali, Britt Evers, Lauren Jaffré, Ravi Krishna Sripada and Marc-Andre Lewis (2016), “The Future of Retail Customer Experience: Bridging the Gap Between Physical and Virtual Realities,” American Marketing Association.
Fernandez, Chantal (2016), “Post-Election, US Apparel Spend Is Just as Divided as the Country,” Business of Fashion.
Lemon, Katherine N. and Peter C. Verhoef (2016), “Understanding the Customer Experience Throughout The Customer Journey,” Journal of Marketing, 80 (6), 69-96.
NetBase (2016), “Brand Passion Report 2016: Top 100 Global Brands Love List.”
This post was originally published at ama.org. Giuseppe E. Franzé is a student in Markus Giesler’s Customer Experience Design MBA elective course.
