How innovative digital strategies are helping luxury brands take high-end service online
Leading brands in high-end retail have used the major challenges posed by the pandemic as a catalyst for creative transformation. By harnessing the power of online platforms combined with cutting-edge customer experience (CX) strategies, luxury brands are now beginning to offer their customers a digital CX that lives up to those their bricks and mortar stores have traditionally been known for.
Published November 30, 2021
Last updated December 2, 2021
We are all living in a time of profound change, but the Covid-19 pandemic has hit retail - which suffered its worst year on record in 2020 - particularly hard. The struggle is perhaps most acute in the luxury sector, which has traditionally been very reliant on physical footfall and tourism – and somewhat cautious of selling online. Pre-pandemic, ecommerce for luxury brands only accounted for 10% - 12% of luxury sales worldwide.
However, leading brands in high-end retail have used the major challenges posed by the pandemic as a catalyst for creative transformation – and this figure is now predicted to climb to 30% by 2025.
By harnessing the power of online platforms combined with cutting-edge customer experience (CX) strategies, luxury brands are now beginning to offer their customers a digital CX that lives up to those their bricks and mortar stores have traditionally been known for.
In fact, digital channels are tipped to be the main driver of growth for luxury brands looking to add measurable value to their bottom line, with a third of executives saying it presents the biggest opportunity in 2021. So, what can luxury brands do to make sure their customer service and experience remain competitive?
The magic of messaging
Offering customer support via messaging apps is one extremely effective – and relatively simple – approach that can have a big impact. Not only is it efficient, it supports the shift from ticketed customer queries (waiting in a queue for a question to be answered) to continuous communication (having an ongoing conversation with a brand representative). This more genuine method of exchange helps consumers to create a personal, emotional bond with the brand, fostering more trusted relationships and increasing customer loyalty.
Messaging also enables brands to engage with its important millennial customer base – set to dominate the luxury industry by 2025 – on the communication channels they are already using. With next-level messaging app interfaces, brands can now converse via text, image, video, and voice message. Service agents can even level up customer contact with additional product photos, live video chats or gifs. Burberry is a good example of this, collaborating with Apple in 2019 to launch a new direct messaging system for VIP clients who could text in-store staff directly.
As digital consumption continues its dominance and growth in 2021, companies must keep developing engaging and social experiences to encourage consumers to connect. Gucci, for example, was one of the first to engage on social network Flipboard, revamping its website to make it more user friendly and suitable across multiple platforms. Meanwhile, Louis Vuitton is using social media data to predict what individual customers might most want to see when visiting its website.
The power of AI to provide standout customer service
Luxury retailers are now embracing technology in a whole host of different ways that benefit their CX. AI and machine learning are helping brands to learn as much as they can about their customers, so they can then offer them personalised touches and bespoke online experiences.
While Augmented Reality (AR) is being employed to create innovative new digital experiences. Burberry, for example, partnered with Google last year to launch a new AR shopping tool that allows consumers to experience products, seemingly embedded in the environment around them, from the comforts of their home. Meanwhile, Gucci has an AR function on its app that allows potential buyers to ‘try on’ sneakers they can then ‘wear’ in social media posts.
With 89% of mid-size to large-size companies agreeing that CX innovation is required to protect their business from competitors, these are more than just clever tricks. They add untold value to the customer experience and go some way towards recreating the artistry and attentive service found inside high-concept luxury shops. They make luxury brands stand out from the pack for discerning consumers with high expectations too. By deploying an astonishing range of digital customer service strategies, Gucci, for example, is now reaching a younger, broader clientele and was valued at $10.8 billion in 2020.
The future of luxury service
Increased investment in high-end online fashion platforms, such as Net a Porter and Farfetch, which grew 40% YoY from June 2020 to June 2021, is yet another indication that the luxury market is embracing digital like never before. With next-level customer service and experience the beating heart of most luxury brands, meeting customer expectations online will be front of mind in 2022, as will be updating offline stores to make them a more interactive, phygital experience. With CRM systems that allow service agents to swap seamlessly from one channel to another, with all the relevant information, customers can receive the same high-end service, however they engage. This unified, personal and creative customer service will ensure luxury brands stay relevant far into the future.