Luxury Fashion Rolls Out its 2020 Data Collection

Adobe Digital Insights

After years of view­ing online and mobile sales as mass-mar­ket tac­tics, new Adobe research reveals lux­u­ry retail­ers are diver­si­fy­ing their approach. Fash­ion pow­er­hous­es like Louis Vuit­ton and Chanel con­tin­ue to make most of their sales in-store, but they are also invest­ing in omnichan­nel expe­ri­ences that bridge the online and phys­i­cal worlds, allow­ing them to per­son­al­ize cus­tomer inter­ac­tions at the indi­vid­ual lev­el across every touchpoint.

Omnichan­nel retail is essen­tial to growth, and lux­u­ry brands are embrac­ing this new real­i­ty. Indeed, 74% of con­sumers use mul­ti­ple chan­nels when shop­ping, accord­ing to Adobe Dig­i­tal Insights (ADI). And while ecom­merce still accounts for a minor­i­ty of high-end pur­chas­es, online sales are grow­ing 22 per­cent year­ly, out­pac­ing in-store sales.

A recent Bain report sug­gests this growth is in part fueled by Gen­er­a­tion Y and Z, who are now respon­si­ble for 33 per­cent of lux­u­ry pur­chas­es. ADI has found that this healthy appetite for lux­u­ry goods among young peo­ple has made mobile the top chan­nel for prod­uct dis­cov­ery and web traf­fic, account­ing for 66 per­cent of site vis­its and 46 per­cent of rev­enue.  By com­par­i­son, just 24 per­cent of vis­its came via desk­top, tough it is worth not­ing aver­age trans­ac­tion val­ues were sig­nif­i­cant­ly high­er for these customers.

To quote Philippe Mas­troy­an­nis, Senior Dig­i­tal Strat­e­gy Asso­ciate at Adobe, “The path to pur­chase is no longer lin­ear, and that means there’s no sin­gle best way to reach cus­tomers any­more. Even lux­u­ry shop­pers who pre­fer to buy their Balen­ci­a­ga sneak­ers and Mon­cler puffer coats in-store will have done their research online first, either on their mobile or using a mix of channels”.In response to these changes in con­sumer habits, and to the chang­ing face of their audi­ence, lead­ing lux­u­ry brands are invest­ing in dig­i­tal ser­vice mod­els that bet­ter serve the needs of omnichan­nel shoppers

Dig­i­tal influ­ences VIP shopping

Per­son­al­i­sa­tion helps brands to dri­ve sales. Adobe’s research found that 80 per­cent of con­sumers are more like­ly to buy from retail­ers that offer per­son­alised expe­ri­ences, and that 63 per­cent would increase their spend­ing with a brand if it puts more empha­sis on per­son­al­ized shop­ping experiences.

These find­ings should sit well with lux­u­ry brands, which have a rep­u­ta­tion for high­ly per­son­al­ized in-store offer­ings. Chanel’s pri­vate VIP shop­ping expe­ri­ences is a prime exam­ple, as is Hermès’s made-to-mea­sure ser­vice, which allows cus­tomers to have vir­tu­al­ly any item they can imag­ine cre­at­ed out of thin air. But while these expe­ri­ences still res­onate with wealthy shop­pers, per­son­al­i­sa­tion has evolved to include tai­lored dig­i­tal expe­ri­ences as more peo­ple engage with lux­u­ry brands online.

These more tai­lored expe­ri­ences are built on a deep­er lev­el of cus­tomer insight, fueled by data. With a 360-degree view of each shop­per that includes both their online and in-store his­to­ry, retail­ers can tar­get peo­ple with rel­e­vant con­tent at the oppor­tune moment, help­ing them to dri­ve addi­tion­al sales and get clos­er to their customers.

Whether it’s through in-app push-noti­fi­ca­tions or prod­uct rec­om­men­da­tions sent direct­ly to in-store asso­ciates, lux­u­ry brands are embrac­ing ana­lyt­ics as the engine of their omnichan­nel offer­ing,” says Camp­bell McDer­mid, Prac­tice Direc­tor of Dig­i­tal Strat­e­gy Group at Adobe. “Data will high­light the role of dif­fer­ent touch­points in each cus­tomers’ shop­ping jour­ney, help­ing brands to opti­mize their con­tent and expe­ri­ences for each chan­nel. Mean­while, the store will evolve to com­ple­ment the dig­i­tal shop­ping expe­ri­ence, going from a sin­gle point of sale to a true “ser­vice point”.

For McDer­mid, data cap­ture in store will lead to more inti­mate con­nec­tions between shop­pers and sales asso­ciates. He uses the exam­ple of brands that have con­nect­ed their inven­to­ry data to a cen­tral­ized plat­form, which means asso­ciates can stop spend­ing their time on inven­to­ry con­trol and instead become in-store influ­encers that are ful­ly focused on cus­tomers. “It’s sim­i­lar to when air­lines intro­duced online check-in,” he says, “Air­port staff were freed up to become true cus­tomer ser­vice agents that deliv­er high val­ue ser­vices and per­son­al­ized experiences.”

This sea­son, per­son­al­i­sa­tion plat­forms are in

The next step for retail­ers is to con­sol­i­date the data they col­lect from dif­fer­ent chan­nels to inform their per­son­al­i­sa­tion strate­gies. This is par­tic­u­lar­ly impor­tant for lux­u­ry brands, which most­ly sell to first-time buy­ers and need all the infor­ma­tion at their dis­pos­al to tai­lor each shopper’s experience.

Con­sid­er the case of a cus­tomer who vis­its a Chanel store, asks when the new win­ter coats are com­ing out, and leaves. Unless that query is fed into Chanel’s ana­lyt­ics or CRM sys­tems, it will die with the asso­ciate who served them instead of being used to tar­get the indi­vid­ual with a rel­e­vant offer once the coat becomes available.

Retail­ers can get paral­y­sis try­ing to fig­ure out how best to serve indi­vid­ual cus­tomers, espe­cial­ly if they can’t match up their data across touch­points,” says Mas­troy­an­nis. “They need to be able to respond to sig­nals in real-time, and that takes a uni­fied plat­form approach”.

The ris­ing pop­u­lar­i­ty of RFID (Radio fre­quen­cy ID) adds a new dimen­sion to the way lux­u­ry brands build cus­tomer pro­files. RFID allows retail­ers to see how long each cus­tomer spends in their stores, which prod­ucts they browsed, and which pay­ment meth­ods they pre­fer. These data points are extreme­ly valu­able in build­ing a com­plete view of each shop­per, not just to make sales in the short term but also to engage them with rel­e­vant con­tent and expe­ri­ences over time.

Stay­ing on trend

The wider retail sec­tor has run into some dif­fi­cul­ty, but larg­er lux­u­ry brands have been thriv­ing. LVMH recent­ly announced year on year growth of 11 per­cent and a $16.2 bil­lion acqui­si­tion of Tiffany & Co., solid­i­fy­ing its posi­tion as the world’s largest lux­u­ry group. In addi­tion to buy­ing up small­er lux­u­ry hous­es, the likes of LVMH and Ker­ing have also set them­selves apart by invest­ing in their ecom­merce expe­ri­ence, accord­ing to the Econ­o­mist. By embrac­ing dig­i­tal while remain­ing true to their lux­u­ry ethos, Europe’s lux­u­ry pow­er­hous­es have built a strong foun­da­tion for future suc­cess, even as online sales grow in popularity.

For its part, Louis Vuit­ton was named along­side Mon­cler and Nike as a leader in cross-chan­nel retail. Accord­ing to High Sno­bi­ety, the retailer’s mobile app stood out in a recent study for pro­vid­ing asso­ciates with a 360 degree of each shop­per, both in its owned loca­tions and in depart­ment stores. This is in stark con­trast to the bare bones expe­ri­ence offered by most of the 200 apps exam­ined, more than three quar­ters of which did not even have a store locator.

The new fab­ric of success

Dig­i­tal sales will only play a more promi­nent role for lux­u­ry brands as spend­ing pow­er ris­es among their core demo­graph­ic of young shop­pers. Not only do mil­len­ni­als and Gen Z make one third of lux­u­ry pur­chas­es, they also account for 47 per­cent of the lux­u­ry mar­ket as a whole. Cru­cial­ly, they will expect brands to deliv­er a dig­i­tal offer­ing that is as help­ful and per­son­al­ized as the best in-store experiences.

Unique brick and mor­tar stores will always be a major dif­fer­en­tia­tor for high-end retail­ers, but even these are evolv­ing for an omnichan­nel audi­ence. Burber­ry, a name syn­ony­mous with dig­i­tal inno­va­tion in the fash­ion world, is now explor­ing new forms of brand­ed con­tent. The retail­er recent­ly cre­at­ed a video game called B Bounce for vis­i­tors to its Regent’s Street Store in Lon­don, which serves as both a clever brand-build­ing plat­form and a way to pro­mote Burberry’s lat­est puffer coat.

Join­ing Burber­ry in the gam­ing are­na is Guc­ci, which released a pair of 8‑bit arcade games via its mobile app ear­li­er this year to tell the sto­ry of its com­pa­ny and the inspi­ra­tion behind its designs. The high-fash­ion arcade is inspired by the 70s and 80s style that con­tin­ues to influ­ence Gucci’s style today. For both brands, gam­ing presents a nov­el way to delight cus­tomers with per­son­al­ized con­tent while serv­ing a clear mar­ket­ing agenda.

This type of exper­i­men­ta­tion will soon become the norm for lead­ing labels. Some brands are releas­ing dig­i­tal fash­ion col­lec­tions, tap­ping into the world of avatars and vir­tu­al fash­ion. While this remains a niche mar­ket with many bar­ri­ers to entry, it is also an indi­ca­tion that our real-life and online per­sonas are merg­ing, and that presents an open­ing for brands who can cap­i­tal­ize on the trend. Glu Mobile’s Covert Fash­ion games, which allows play­ers to dress up mod­els in dig­i­tal­ly ren­dered cloth­ing from the likes of Rober­to Cav­al­li and Bal­main, made sales of $53.4 mil­lion in 2018.

The fash­ion and lux­u­ry sec­tor will grow five to ten per­cent annu­al­ly over the next three years, by some esti­mates, hint­ing at major oppor­tu­ni­ties ahead for high-end brands to tap into a grow­ing audi­ence. With mar­ket lead­ers con­tin­u­ing to mod­ern­ize at pace and small­er fash­ion hous­es nip­ping at their heels, one thing is clear: lux­u­ry fash­ion has offi­cial­ly entered its omnichan­nel era.


Adobe Digital Insights
Digital Europe

Posted on 12-18-2019


Comments

  • By Winni - 12:18 PM on December 19, 2019   Reply

    Hel­lo dear Adobe team. Thank you very much for the super excit­ing blog posts in the dif­fer­ent top­ics. I am real­ly inter­est­ed in dig­i­tal­iza­tion. What I would nev­er have thought is that pre­mi­um brands now seem to diver­si­fy their mar­ket­ing approach. Your sta­tis­tics are very inter­est­ing in how far omnichan­nel is so impor­tant for growth. I find the state­ment by Philippe Mas­troy­an­nis par­tic­u­lar­ly excit­ing. Accord­ing to him, there is not the only gold­en road, but many roads lead to Rome or turnover. And of course this also means that mar­ket­ing invest­ment for lux­u­ry brands is reach­ing a new dimen­sion. After all, who­ev­er does omnichan­nel mar­ket­ing has to pay a cer­tain lev­el of adver­tis­ing mate­r­i­al and dis­tri­b­u­tion fees in all mar­ket­ing chan­nels. This will nat­u­ral­ly lead to pre­mi­um brands becom­ing even more expen­sive in the future. For me this means that I have to think about a lux­u­ry brand if I want to eat it myself or if I want to eat it myself. I look for­ward to many more excit­ing con­tri­bu­tions from your Adobe team. See you soon. Best regards. Winni.

  • By Matt - 12:36 PM on August 31, 2020   Reply

    Thanks for shar­ing the infos, lets see how the data in the end of this covid year will look like.
    Cheers Matt

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