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3 Digital E-Commerce Challenges & Solutions For Luxury Brands

One of the greatest challenges for luxury brands is creating the ability to harness new and innovative technologies without putting their heritage values and traditional businesses at stake. Luxury brands are competing against E-Commerce, fast fashion and generational lifestyle.


Right now, 63% of luxury purchases are made in-store. But according to recent researches, consumers see the future of luxury as digital, with e-commerce set to drive that trend.

Of course, there have already been many attempts by luxury brands to be collaborators with new technology. First there was the Pierre Hardy-designed Hermès strap on the Apple Watch.

Samsung then partnered with luxury jeweler and watchmaker de Grisogono to produce a limited-edition version of the Gear G2.


The challenges facing luxury brands in the digital space can be broken down into three basic varieties.

 


Brand positioning

The first of these has to do with brand positioning: how can a brand maintain globally consistent positioning while remaining available and reliable to local consumers?

Customers entering stores in a particular region will be sharing common culture and language, so it was easier in past to deal with more a homogeneous client base. But once online, the brand is serving the world, and must also contend with the complexities of differing values, cultures, and people.

Customer preferences change demographically. In brick and mortar stores it is very easy for luxury brands to keep products matching with local customer preferences. One would say that they can place all items on the website as well but the challenge then comes in positioning of the items. For example, a great challenge is making multiple items on the landing page change for differing demographics.

 

Solution
The website must now take on the responsibility of creating a globally consistent position, while simultaneously leaving space for location-specific resonances.

The best example of this is Burberry, where it made its brand an invitation to the whole world to participate in its British style by portraying its heritage on the diverse cast of models. In that way it didn’t looked like only British culture focused brand. Therefore, people from other regions feel connected with the brand.


Balanced Digital Experience

The second challenge the luxury markets are facing: 


How can a brand develop a convincing digital experience that balances and enhances the in-store experience?


Those companies facing this issue the most are the brands who are not adapting their stores and work styles according to the latest technologies.

 

Solution


The research shows that most luxury consumers do considerable online research before choosing which brand to purchase, and that trend is likely to increase.



80% of the sales are influenced by online research.


Luxury brands must view their digital presence as a probable first point of contact between themselves and an interested buyer. That contact must be unique and memorable, but it should also resonate powerfully with the in-store experience. The website should act not only as an invitation to visit the store but add value to the store.

The example of this is Lora Piana, who have created their website as an information channel and an experience rather just sales platform station. Their website highlights the brand’s heritage and values advertisement also carries a product page carrying sketches that show where and when clothes could be worn.


Digital communications


The third and final challenge in the digital space: how can luxury brands create apt and relevant digital communications to engage consumers in a meaningful manner?


One of the things which might sound not so obvious is that luxury brands customers want to be contacted by brands.



They basically are not only looking for future buys, but they want the reassurance that they have done right in selecting the brand and product. Some of the brands that are the most effective at engaging online turn out to be great in their business and in customers’ eyes.


Solution


Customer satisfaction is the key to growth of a brand. Offline and Online customers should be treated with care and such an experience should be given to them that they feel special.

Customer service is a very crucial task where you have to keep your engagement with the customer in a balanced mode. Customers want to be felt special and also they don’t like if the customer care is at their head and assisting them even when they don’t want.


Some brands did really well like Chanel did with ‘Reincarnation’, Armani with its ‘Tweet Talks’ where it act as host for conversations on relevant topics.


Conclusion:


The percentage of in-store sales are still twice that of online sale. Consumers still like to touch and feel the fabric and accessories before buying them but they like to see the items online first. However, just because a majority are not buying online doesn’t mean that the online presence of a brand isn’t of significant importance.

In today’s tech savvy world, a brand can be successful only if it is adapting the changes and implementing them.


Most of the luxury brands target older generations since they believe that their wealth and income matches their target demographic, but even consumers of this generation look forward for comfortable and novel implementations of new technologies in store.

Although older consumers of luxury brands may be currently less interested in online E-commerce shopping, they do appreciate the new and different styles of the stores as well as new applications of technology, customer service, and customization.

 

Sources:
https://laquilaactive.com/
https://knowledge.insead.edu/node/3528/pdf
https://laquilaactive.com/blogs/news/retail-apocalypse-positive-or-negative
https://springblogs.com/2019/11/13/the-digital-challenge-in-luxury-business/
https://blog.sodexoengage.com/luxury-marketing-and-the-great-digital-challenge

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