Seven Trends Luxury Retailers Should Get On Board With


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When luxury retail experts gather to discuss the latest industry developments, the conversation typically drifts in the direction of technology. This being the age of multichannel, technology certainly deserves a prominent place in the retail narrative, but too often the focus seems to be on how it impacts corporate infrastructure, organizations and business models.

While innovation will always be essential for achieving success, the pursuit of it sometimes comes at the expense of what matters most in retail: customers and front-line teams. Gadget-equipped stores, fancy websites and sleek social media channels will only get you to a certain point. In fact, they may not get you far unless they serve as building blocks for the structure that will perpetuate your success: a committed team and a close, lasting relationship with your customers.

At the core of current trends unfolding in luxury retail is the growing realization that changes should be made with a view to creating memorable experiences and fostering brand loyalty while also building dedicated, engaged teams. Let’s explore seven trends and see how luxury brands can use them to their advantage.

1. Showrooming
The store as a fulfillment center is a concept that may soon become a thing of the past, one reason being the level of inventory required to sustain this business model. Moving forward, I predict deliveries will be made from central warehouses. This will allow stores to transform into experiential showrooms where luxury retailers and their customers build lasting relationships.

2. Experiences And Emotions
The experiences delivered at every touchpoint – particularly in-store – will become even more important. The emotional dimension is of paramount significance for making these experiences memorable. Surprising and delighting customers will be an everyday task for the retail team, but the emotional intention will need to be consistent across all touchpoints and channels. The thing to remember here is that emotions trigger memories, which, if positive, can drive loyalty.

To make this happen, brands need to define clearly their key emotional intention, in other words, how they want their customers to feel. We recommend having a maximum of three to guide the company’s interaction with customers at every touchpoint and establish the brand’s emotional signature. That usually requires a complete mapping of the touchpoints plus a review of the job descriptions, key performance indicators (KPIs), bonus and commissions schemes, and even recruitment criteria. When Marco Bizzarri, the emblematic CEO of Gucci, took the helm in 2015, he declared that emotions would be at the heart of everything the company does. The brand performance since his arrival has proven his strategy right.

3. End Of The Transactional Model
As stores move away from being fulfillment centers, the transactional model will cease to be relevant. This means that transactional KPIs need to be revisited, and the traditional commission and bonus schemes should be completely overhauled. We are headed to a point where the role of the store team will be to establish a connection with prospects and consolidate the bond with existing customers.

4. A New Approach To CRM
Customers want to be recognized regardless of where they shop. There is a growing need for global and connected CRM, which is something more and more brands are doing. In addition, we have had customers tell us they would like to communicate with the brand via their initial advisor. This suggests that the role of the sales advisor will eventually evolve into that of a brand connector.
With less incentive weight given to the immediate in-store transaction, one could imagine a CRM system that links a customer’s future purchases to the salesperson who recruited this customer — a development opening the door to a completely different commissions system.

5. Services
A straightforward sale — that is, handing over the merchandise and collecting the money — is not enough anymore. To complete the experience, brands will increasingly need to provide value-added services to their customers. When you sell somebody a luxury watch, for example, you should offer a stream of services to go with it and make the customer’s life easier — when the watch needs to be serviced, for instance. Such an approach can foster customer loyalty.

6. Advocacy Marketing
Luxury brands will continue to advertise heavily, but what we see today is still a disconnect between the marketing message and the experience delivered. Let me elaborate. I recently saw a luxury car brand ad that struck a chord, so much so that I went to the showroom in Dubai. Filled with excitement upon my entry, I headed to the car that had caught my attention and spent a good ten minutes looking at it from every angle. And you know what? Nobody came to me! I had so many questions to ask, but the sales people all sat at their desks, busy with more important things than attending to a walk-in customer. I left the showroom disappointed, realizing that the story told in the ad had little in common with reality.

In a world dominated by digital and social media channels, this becomes dangerous because advertising is no longer about what a brand says. Customers are increasingly affecting the advertising narrative, shaping opinions with their reviews and comments. When mapping out your marketing strategy, keep in mind this formula: Satisfaction = Perception – Expectations.

7. Cross-Border
Most brands still favor an organizational structure where departments manage different channels. With global travel constantly on the rise, many customers make purchases during their trips, yet the Travel Retail channel has a feeble connection with the other channels, particularly inland stores. Luxury brands can unearth formidable opportunities by working on the customer journey across those channels, be it on the CRM or the marketing side.

The world of retail is certainly changing, and the luxury segment is doing its best to march along to the new tune. Utilizing the latest technology and the power of digital channels is all very well, but luxury brands, more so than others, need to prioritize changes that help them deliver unforgettable experiences, thus inspiring strong loyalty and advocacy.

Christophe Cais
Christophe Caїs is the founder and CEO of the Customer Experience Group (CXG). He is responsible for communicating and implementing the organization’s vision, mission and overall direction. Christophe is also the co-founder and CEO of Albatross CX, one of the agencies under the umbrella of CXG. Founded in 2006 in Shanghai, Albatross CX specializes in the collection and activation of customer and team feedback. Christophe is also a Chairman and board member of Face2Face and Activate Experience, that are both part of the Customer Experience Group.


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