Importance of Individualized Experiences for Luxury Brands

Nov 16, 2017 | Personalized Marketing

Luxury brands fully embracing digital

Burberry recently announced its plan to move more upmarket to be ‘firmly in luxury’, looking to join iconic brands such as Gucci, Louis Vuitton, Prada and Bulgari. The global market for personal luxury goods (expensive fashion, handbags, and jewelry), has grown tremendously over the past 20 years, from less than $100bn annually to $258bn last year. That growth was fuelled by globalisation, a swelling of affluent consumers and most recently the luxury spending spree of the Chinese.

Luxury Brands Fully Embracing Digital

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Burberry announced that it would be increasing investment into ‘glitzier stores and better technology’. Whilst Burberry was an earlier adopter of digital marketing and benefited particularly from its social media efforts, the luxury sector has been slow to migrate investment. In part this inertia reflected that the industry was enjoying rapid growth fuelled by the booming Chinese market. Where’s the rush to adopt sophisticated digital strategies when the going is easy, especially if digital sales represent only 8% of total personal luxury-goods sales online, versus 16% for the rest of retail.

Affluent consumers are digital

However growth has slowed with Chinese exuberance curtailed and no alternative growth spur to plug the gap. Meantime, affluent consumers have become increasingly comfortable and confident with a digital first approach to shopping, especially via mobile. Despite the lingering perception amongst some marketers that digital marketing is incompatible with luxury, a PwC study found 98% of HNWIs (High Net Worth Individuals) access the internet daily and that the world’s wealthy expect online and digital functionality in many aspects of their lives.

Net-a-Porter and Matchesfashion demonstrated the opportunity

Millennials have also become an increasingly important demographic for luxury brands, browsing social media and fashion blogs to stay informed on the latest fashion styles and trends, before looking to purchase online. Digital specialists like Yoox Net-a-Porter and Matchesfashion have also demonstrated the opportunity for very rapid growth online, and put to rest any doubts about the compatibility between luxury products and online selling.


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Inspiring customer experiences and maintaining brand relevance

So the spotlight is on digital, especially how to create inspiring customer experiences and maintain brand relevance. Luxury brands are responding to major shifts in shopper behaviour and expectations. Whilst social media plays a key role in engaging and informing on latest styles and trends, the brand owns the crucial final mile of the buying journey, eCommerce. Here, creating a virtual shopping experience that is as luxurious and memorable as the physical alternative is becoming a must for success when there’s such a spectrum of choice available to luxury consumers. Yes they want intuitive search, easy product discovery, plus the ability to check out and get their favourite product fast. But shoppers also want to feel pampered, and to have a sense of occasion. Content is integral to creating that experience.

Farfetch shows the way with content

Farfetch, a standout performer in eCommerce within the luxury sector, demonstrated their commitment to enriching the shopping experience with content when they acquired from content powerhouse Conde Nast in the summer of 2017. Jose Neves, founder and chief executive of Farfetch explained “We have long felt that inspirational content is a natural part of any luxury shopping experience. It’s a progression of the same strategy; a strategy that aims to connect the best content in the world with the best commerce in the world.”


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The race is on for luxury brands to take their best content and effectively integrate it into the shopping experience, both to improve conversion and build an experience that shoppers want to keep coming back to.

AI & machine learning for individualized experiences

Shoppers are not only expecting better experiences from brands, they want experiences that are specifically relevant to them. They’ve been filtering out anything irrelevant for some time, but are now inclined to go further and actively penalise brands that treat them as just another anonymous customer. So the urgency to individualize experiences is growing fast.

Whether the experience needs to be truly one-to-one or highly relevant, depends on factors such as the context, shopper expectations and the brands objectives. But brands now have access to a rapidly expanding mass of customer data from online behaviour, transaction history and more. Using AI and machine learning, that data can be effectively analysed to understand each shoppers profile, preferences and intentions. Leveraging that customer intelligence, married to technology that searches and selects the right content, brands can deliver individualized experiences in real time that inform and inspire the shoppers.

Embracing eCommerce and social media isn’t enough

Like many other sectors, luxury brands are going through a period of rapid change, with fierce competition, digital disruption and major shifts in shopper behaviour and expectations. In the digital arena, it’s not enough to simply embrace eCommerce and social media. To remain relevant brands have to create inspirational and individualized digital experiences for their customers.

About Knexus

Knexus visual commerce platform automatically adds personalized & shoppable influencer, user-generated (UGC) & brand content into shopper’s buying journeys, inspiring confidence to buy. Book a demo.

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