The end-goal of every good product or service is to meet a need but that need may not necessarily be physical. Luxury brands are most sought after for emotional satisfaction. They pander to the consumer’s emotion and create a feeling of prestige. In most cases, having a luxury brand gives the consumer more satisfaction than the product’s economic value. Louis Vuitton and Gucci have maintained a consistent position as the world’s most valuable luxury brands —for years with current market values of $15 billion and $10.8 billion respectively. Although both brands have different aesthetics and marketing techniques, they understand the psychology of perception and exude a larger than life persona that consumers aspire to be. A recent report found that the personal luxury goods market was worth over $308 billion in 2019. But due to the COVID-19 pandemic, the figures were predicted to have surged this year.
In a word, the customer service experience is one of a brand’s most powerful marketing tools. Henceforth, luxury fashion retailers are committed to enhancing the customer’s experience and exploring digital technology to cater to their physical and emotional needs.
Protecting customer interest
In short, the luxury retail market had been had been thriving— catering to the crème de la crème in society, long before the advent of the internet, The elites were driven by a “feel good” factor classified as “esteem needs” in Maslow’s Hierarchy of Needs and would many times spend a fortune to acquire luxury items. But times are changing.
Timothy Hancock, 33, became the country’s youngest luxury print publisher in 2017 after publishing Deluxe Version, a lifestyle magazine based in Las Vegas. Hancock gained an affluent readership starting online in 2014 using a digital magazine platform and a successful event following at high-end resorts. I believe the reason it works well is because the publication serves source for luxury shopping, travel, entertainment, and wellness for readers to become the best version of themselves. In my fashion research, I often find that consumers prefer to dial it back and find the source to guide them.
For the most part, “high-taste customers aren’t worried about price tags when shopping, they know exactly where they are. A true fashion enthusiast sees style as an expression of themselves, a gesture of their intentional flair. You can’t put a price on that kind of personal appreciation,” says Timothy Hancock.
The luxury market consumer base is shifting from Baby Boomers and Generation X to Millennials. Both Baby Boomers and Generation X have the advantage in time for wealth creation and can comfortably afford luxury brands.
Millennials, on the other hand, are younger and have not created enough wealth to comfortably afford luxury items. Nonetheless, they believe that luxury is attainable and aspire for it. They create an illusion of luxury, paying little attention to the economic value of the product. Why save up so much money for an item when they can get a knockoff at a lower price? The likes and comments they get from posting images of their luxury items on social media are all that matter.
Always one to be seeking additional information on the millennial marketplace, I decided to contact an e-commerce marketing expert to get advice. Speaking on the affinity of the millennials to technology, Kas Andz, Founder of e-commerce marketing company, Kas Andz Marketing Group (KAMG) said, “Millennials have grown up with technology as almost a parent figure to them. They learnt, laughed and loved through their screens and now with the ability to ‘to walk into a store’ while sitting in their bedroom in boxer shorts, technology has completely broken all social purchasing fabrics & rebuilt them. This is especially true in the luxury market where people are no longer ‘buying the experience’ in-store, but rather on a digital front. Ultimately meaning luxury brands now need to go the extra mile to push their desirability & feel across”
It is also important for me to express that the massive interest to belong to the luxury brand consumer base has seen a surge of counterfeits within the luxury market. In my spare time, I teach at New York’s Fashion Institute of Technology. The research library for faculty has aided me tremendously in my research. According to the Counterfeit Market and the Luxury Goods report, the luxury market accrues a $12 billion loss every year. True luxury brand consumers are not oblivious to the fakery. They are now more conscious of their buying decisions. Putting a luxury tag on a product is not convincing enough. These days, consumers want to know more about the products including its origin, authenticity, and economic value. Luxury retailers are leveraging new-age technologies like blockchain to allay the consumer’s fears and concerns. Blockchain technology offers a centralized network that allows both sellers and consumers to engage themselves about products on the market. A digital identity is assigned to each product for verification and tracking. A consumer on the network can look up a product to check its authenticity and other variables before making a buying decision. It is so amazing because as you delve into fashion blockchain, it can bring data to you dating back from the weather during the growth and harvest season.
Personalizing the customer experience
With about 80% of luxury sales happening in the digital space, technology is a huge part of luxury retail. Consumer data are significant to luxury retailers in offering the best customer experience. Luxury brands are no longer on the top of the Eiffel Tower in their interactions with the consumer—they have come down to the consumer’s level to create close relationships. They want to know the consumer down to the basics. The two world’s most valuable luxury brands Louis Vuitton and Gucci mentioned earlier are also the most popular luxury brands online. They create a balance between a great customer experience in their physical and online stores. I am an advocate for the importance of a strong sales force and good customer relations.
Several luxury brands were skeptical about moving to the digital space due to fear of losing the personal touch and connection they have with the customer in their physical environments. Machine learning allays these fears by streamlining big data with Artificial Intelligence (AI) to offer a personalized touch and experience.
Every visit a consumer makes to a luxury brand’s online store is an opportunity for the brand to know the consumer better. It’s like getting acquainted with someone—telling them about yourself including your likes and dislikes. Data Science and Decision Intelligence firms such as Data Innovation Labs (DIL) help businesses online in the collection and interpretation of big data to create custom communications in the customer’s online interactions. Its digital solution Klen that connects communities and commerce through data management can help luxury brands weather the storm during the COVID-19 pandemic by communicating the COVID-19 compliance to their customers with ease to reduce consumer fears when shopping in stores.
Read the full article at: www.forbes.com