As we head into 2023, luxury retail and high-end accessories brands continue to grapple with a changing economy, evolving digital transformations, and the increasing purchasing power of Gen-Z and Millenials. While strategic planning, creating clarity and tuning out all the noise is critical.
Ometria experts Isabella Mckeon, VP Sales and Katie Hickey, Sr. Marketing Manager recently led a conversation at the Accessories Council Business Workshop event in New York City on how to address foundational aspects of digital commerce, personalized marketing and consumer behaviors in 2023.
Below are the highlights of this insightful chat, including the recommended focus areas that will help you maximize success in 2023.
Luxury brands have a unique and exciting opportunity for digital innovation
In an industry that was largely offline nurturing and prioritizing 1:1 experiences in-store, Luxury brands have emerged as trendsetters in digital innovation in recent years. Being forced online due to the COVID-19 pandemic, recent technological innovations have evolved in such a way that allows brands to match online experiences to coveted in-store experiences.
The Luxury Fashion industry is perfectly positioned to thrive in this new era; in many ways, it is the moment they have been waiting for.
Focus area #1: Be transparent and personal
Whether your brand is new to digital or reinvesting, don’t forget these foundational components of a strong digital marketing presence:
- Make eCommerce easier.
For example, create a seamless digital experience by displaying prices clearly across channels. While this isn’t the typical in-store experience for luxury brands, being coy about prices online will only render as a barrier to buying.
- Incorporate personalization in a customer’s journey from prospect to loyalist.
According to a study by McKinsey, 72% of customers said they expect the businesses they buy from to recognize them as individuals and know their interests. When asked to define personalization, consumers associated it with positive experiences and being made to feel special; which in many ways also defines luxury.
- Create valuable segments using comprehensive customer profiles.
You are likely sitting on a ton of really valuable data about your customers; the key is centralizing, utilizing and segmenting that information properly to create as many personalized experiences as possible.
- Target communications based on implicit actions and explicit preferences.
Investing in the right Marketing Automation platform will help you quickly & effectively boost personalization impact with little effort.
Focus area #2: Enhance your digital strategy
How can a brand develop a convincing digital experience that balances and enhances the in-store experience? The answer lies in embracing the newest trends in digital technology:
- Incorporate the same services you would in-store.
Have sales associates available to chat with customers online or offer in-store try-on/pick up. Neiman Marcus has introduced a new concept called NM Connect, enabling their associates to engage with and support customers anytime, anywhere.
- Innovate with technology to deliver new experiences.
Luxury brands are embracing technologies like Augmented Reality and Video Games to uplevel customer experiences. Allow customers to “virtually try on” products and unlock experiences in the virtual world using these cutting-edge tactics.
Focus area #3: Cater to Gen Z and Millennials
Gen Z and Millennials are set to drive 180% of the growth in the market from 2019 to 2025. There are many compelling stats that speak for themselves in terms of why Luxury marketers should focus efforts on this segment:
- When brands innovate, consumer spending and loyalty improve.
The vast majority of Luxury shoppers (78%) see a Luxury brand’s commitment to innovation and new technologies as a decisive reason for purchasing an item. Three of five high-end shoppers want to use a mobile app, and (57%) are looking for flexible payment options.
- Lead with core values.
Gen Z and MIllennials put an increased emphasis on a brand’s identity, sustainability and stance on social issues. 79% say they are more loyal to purpose-driven brands, with 84% of consumers indicating environmental, social, and governance issues (ESG) as a priority in their purchase habits. Luxury brands must do more to increase the transparency of their supply chains, working practices, and sustainability efforts.
- Invest in influencer-led marketing programs.
Lockdown has made us more appreciative of human connection and community. Consumers searching for human connection across digital will make the role of the influencer more important, as they assist in developing more emotional and value-led connections to brands. A recent study with Walpole and Hearst found that consumers are 3x more likely to follow an influencer than a brand.
Ometria has retail strategists working with brands every day to implement these recommendations. Speak to our team about how we can help your brand uplevel your digital strategy.