The global pandemic has put a premium on human connection and wish fulfillment, opening the door for luxury brands to capture consumers' imaginations with stunning products and services. However, rapidly changing customer preferences threaten to capsize retailers who fail to adapt to the changing tides. No matter how alluring their products are, luxury retailers must still navigate the age-old question of how to convince shoppers to buy into what luxury is selling. And COVID-19 has only made the answers to this question more fleeting.
Amid the pandemic, shoppers have grown more accustomed to the sort of appointment shopping that luxury retailers once pioneered. Quarantine circumstances have influenced new product priorities, while shoppers have only grown more concerned with the worldwide impact of their favorite brands during this global crisis. These trends are directing the flow of luxury retail as we speak. As traditional and disruptive brands alike work to keep up, let's examine this new kind of customer and how retailers can connect with them.
New ways of shopping
Luxury's shift to digital was greatly accelerated once the pandemic hit. Just as work meetings moved from boardrooms to teleconferencing windows, luxury shopping shifted from lavish in-person experiences to offering the best possible experience online. A significant portion of those changes is likely here to stay, with ecommerce, customer engagement, and remote selling continuing to grow in importance even as the pandemic shows signs of fading.
Most retailers can empower sales consultants to interact with the customer from home, but there's more to it than the initial connection. Global brands should have associates available around the clock capable of showing clothes on camera, looking up customer information, and finalizing transactions in a frictionless fashion. Appointment-centric shopping could even end up more cost-effective for brands if they can reduce overhead and keep less inventory on hand.
With the wealth of customer data available to luxury brands, high-end retailers have a unique opportunity to take sales one step further. Using the right retail planning tools and their rich data, brands can produce superbly accurate demand forecasts through the segmentation of customers by relevant attributes. The next stage of luxury retail might rely on brands using such data to proactively curate carts for customers. A two-pronged approach of creative appointment scheduling and personalized sales interactions could make every customer feel a genuine connection—no matter the distance.
Light on their feet
The pandemic's wide-ranging effects are still unknown, but the confusion provides luxury retailers an opportunity to anticipate consumer preference shifts. For example, lipstick becomes far less important in a world where masks cover our mouths in public. Brands will need to refocus their efforts on growing product categories rather than serving every category and cache.
Categories like business professional menswear may never be the same post-pandemic, as companies allow more workers to stay home full-time. Meanwhile, athleisure and casual wear could see a long-term boom. The challenge for legendary luxury brands is how best to enter these thriving categories without risking their brand identity in the long term–customers may not respond well to the whiplash of a storied fashion house taking a hard-left toward tracksuits and fleece leggings.
Instead of getting entrenched in who they want to be, legacy brands must embrace the moment and provide the products and services that customers want now. The customer wants and priorities are drastically different from two years ago–perhaps even six months ago–and evolution is necessary to satisfy those needs. Retailers who can improve their forecasting capabilities to identify opportunities across product categories without losing their overall brand voice could come out of the pandemic with strong momentum.
What's old is new
There is no question: the modern luxury shopper expects certain sustainability initiatives from their favorite brands. More than three in five consumers said environmental impact is an important factor in purchasing decisions (McKinsey). Amid this fast-growing consumer passion for companies that address sustainability, retailers may be able to find a brand foothold by championing reusable products and superior working conditions.
One Oracle customer recently launched a global initiative to manufacture their products more responsibly and give them new life on the secondary market. By taking control of its products' resale environment, the brand ensured it would have a consistent, responsible brand identity across channels.
Shepherding the full life cycle of products also opens the door for an extended, meaningful journey with customers. Younger, aspirational customers might buy off the brand's secondary market and create a nascent loyalty account. Over time, the brand might continually connect with the customer through personalized recommendations and evolving product categories. Then, as the customer becomes more affluent, they can afford full-price options and act as a brand ambassador.
Reducing environmental impact, selling secondhand luxury items, helping customers recycle things they don't wear–all these tactics and more are becoming increasingly important for brands to consider in the hopes of connecting with the modern shopper.
Pivot to customer
The early uncertainty of the pandemic has given way to definable and actionable trends and takeaways for the short- and long-term future. Now is the time for luxury retailers to begin shifting their priorities in kind with their customers, focusing on the necessary products, services, and values of the moment.
Be sure to check out this helpful guide: 3 steps to simplifying demand forecasting for fashion retailers
via https://www.aiupnow.com
Greg Flinn, Oracle Retail-Solutions Director, Khareem Sudlow
