Think Tank: Why Tech Offerings for Luxury Brands Are a Problem — and How to Fix It
As recently as 2015, 40 percent of luxury brands didn’t sell their goods online. Two years later that number is dropping at a precipitous rate as even the staunchest holdouts begin to see the opportunity they’ve been missing for upward of a decade.
Now, as that 40 percent of the high-end market starts to play catch up, the luxury e-commerce space is approaching an inflection point. These digital newcomers will need to build an online sales presence from scratch, and they’ll have a lot more to think about than just taking payments and displaying product photography. They have years of history and heritage to preserve and promote, an exacting client base that’s used to being catered to, and not least of all, a price point that demands an elevated user experience.
But, with challenges come opportunities. These brands are entering into an unimaginative luxury marketplace that is largely failing to offer customers an e-commerce experience as unique and special as the products they’re offering. That means there are rewards for the taking if these newcomers are brave enough to break the mold and begin to innovate on the luxury e-commerce experience.
So how can these new entries begin to infuse fresh ideas and approaches into what has become a sea of sameness? And how can the digital old guard better leverage technology to make shopping online as elegant and individualized as shopping in a luxury retail store?
To convince consumers to spend luxury prices for items they likely haven’t touched or seen in real life, all of these brands need to blend content, data-driven personalization and perfectly seamless transactions. Their customers need to feel pampered and special. It has to be better than any other e-commerce experience.
To get there, they’ll need to shift away from the same tired tricks — using buzz generating fashion ”events” and gimmicky collections to grab attention for themselves, over-reliance on collaborations, celebrities, socialites and bloggers, and instead invest in the less glamorous endeavor of building powerful, flexible, data-driven technology platforms they can use to focus on the customer and bring them an experience far beyond your run-of-the-mill e-commerce transaction.
In recent years, luxury brands have been asking the wrong questions. It’s not about how to make people pay attention to you, it’s about drilling down and asking what kinds of experiences luxury consumers want. How do they want to shop for things? What can we bring them through a mix of digital and physical encounters that will make them truly happy and inspired?
Getting to those answers isn’t as simple as just asking the customer what could make their experience better. After all, it’s not up to the consumer to innovate for a brand. In the famous words of Henry Ford, “If I had asked people what they wanted, they would have said faster horses.”
It’s up to the brand to collect the right data, and interpret what it’s telling them in new and innovative ways. And if the results don’t align with the uniform experience most luxury brands are offering online, they need to be brave enough to take down their old systems and do the hard work of coming up with a better way on their own.
It also means knocking down silos within a business, and building truly cohesive teams that work in service to the consumer. The retail teams, both digital and physical, need to know exactly what the social and marketing teams are doing in real-time. Luxury brands are built on story and heart just as much as they do a superior product. In the digital era, every part of a company needs to be able to carry forward that story as it’s being told in public, in real-time, whether it’s a new product that’s being showcased on social media, or a lofty, emotional new ad campaign. This is the only way to meet the expectations of the customer that’s reacting to it.
Brands need a unified mind-set to pull this off, and a suite of modern systems to drive them forward. Relying on outdated data or communicating through legacy systems is no way to operate when the competition is coming online for the first time with the most up-to-date tools available. One out-of-date system can torpedo even the best-intentioned omnichannel strategy, and ruin a brand’s chances at presenting a seamless, unified experience to consumers. From top to bottom — IT to marketing to retail to training and customer service — data and information must flow smoothly, and so must the mentality that we’re all in it together, with one consumer-oriented goal.
Passion and craft are what made the best luxury brands successful, and keeps them going, sometimes hundreds of years after they started. Luxury goods are what you get when people work that much harder to create something. They’re the product of exacting standards, true care, hard work and the desire to create something that surpasses every other version. There’s no reason luxury houses can’t apply those same, long-standing principles to the technology that now must drive their brands. They just need to be brave enough to stand up and do so.
Tony King is founder and chief executive officer at King & Partners.
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