McKinsey research has shown that online luxury sales will triple in the next seven years – currently online sales make up just 25% of luxury sales in total, which is predicted to rise to 80% in 2025.
Luxury retailers who wish to keep up with the trend towards online sales will have to translate the premium in-store experience into the digital space.
Companies such as NET-A-PORTER and Farfetch were amongst the first in luxury retail to use data to create differentiated experiences for their customers, however, other brands, including Burberry are now using the same techniques to create exclusivity, to target millennials and to create year-on-year growth (44.5% according to Burberry).
Many of the tricks and strategies that work for selling fast fashion online will not have the same effect in the luxury market. For example, price-related strategies may actually decrease sales for high-end products.
Therefore, luxury retailers must understand that the length of consideration for a luxury product is much longer, however there are some tactics that can be used to promote online sales in the luxury market…
A ‘trending feed’ can inspire visitors and whilst also displaying the most popular products.
Luxury brands should enable guests to select their location – Paris, London, New York (or wherever the company has its flagship stores) – so that the site can show the products that are most relevant to that location. This is particularly relevant during Fashion Week.
In luxury retail just two purchases can create a sense of brand loyalty, and so getting customers to make the all-important second purchase is vital. So look for signs that a visitor is about to abandon, and send a well-timed offer in order to keep them as a customer.
One signal that a customer is about to abandon the site is if they highlight a product name – as this will usually mean that they have copied and pasted it into a search engine in order to find a better deal. In this case, showing a pop-up offer could encourage the customer to make the purchase from the original site…
Use AI to collect customer data that can be used to show them the most relevant products.
Showing these selected items in a social media-style view is most effective, as customers enjoy the emotional experience of platforms such as Instagram, which should be combined with efficient and easy-to-use eCommerce functions on the site.
Brands do well to collect email addresses at certain points in the customer journey (namely, at the point of purchase) when an item is out of stock, when adding items to a wishlist, for brand news and upon abandonment (for first-time visitors).
Giving online customers the VIP treatment is an important element of keeping a luxury feel in a digital space. Offer exclusive invitations to store events or private sales in order to create brand loyalty and to blend the in-store and online experiences…