The enhanced future of luxury retail stores
The role of e-commerce should not be to replace physical stores. Virtual showrooms don’t offer the same attributes as retail stores. The number of digital touch points is increasing and e-commerce is only one aspect of the digital opportunity. Innovation through retail channels is another possibility. In retail stores, the relationship brand-customer continues and is enriched through valuable and entertaining digital content.
During my visits to a number of luxury retail stores, I’ve been dismayed by the level of customer service which was very low. Most of the in-store framework experience doesn’t help enhance the value of the brand. Only a small number of brands truly master relationship building and help retailers sell smarter and customers shop smarter. The service and experience, which are unarguably important elements to a luxury brand’s success along with merchandise, are dramatically unequal. Technology is highly underutilized. The digital revolution in luxury brick-and-mortar stores is still in its early stages and again, only few brands have seen that technology is a crucial tool to help drive brand awareness and tell stories. Those who have taken some important steps forward in client relationship building, which is the number one differentiator, are undeniably moving faster than the others. The stage for a new era of leadership with a mantra of «adapt or die» is set.
Clever enough, some luxury retailers have placed greater emphasis on the undeniable power of the in-store universe. They understood that luxury shoppers still care about service quality and retail stores they still need sales people and happy customers. They made sure that the physical touchpoint supports the brand’s codes and virtual message to offer a seamless experience. They identified the rise of next-generation ‘retailtainment’ retention technologies as a response to bricks-and-mortar retail crisis and implemented them to enhance the in-store experience through entertainment. Some leading luxury brands such as Louis Vuitton and Burberry, have invested in monumental masterpiece temples, magic retail theater, creating aesthetic spaces and museum-like experience via contemporary art objects, dramatic presentation, cutting-edge interior design that embody a particular style and tell important brand storytelling. As experience goes hand in hand with service, they have committed more resources to improve customers’ knowledge, enabled sales associates to use consumers’ digital purchasing patterns to capitalize in-store, trained them in listening and giving advice in order to optimize client experiences, offered customers to concretely experience the brand, products and services, and to build a human relationship with knowledgeable store staff. These are additional benefits to retail stores where retailer technology and consumer technology are a flawless part of the shopping experience.
Today’s customer is a connected customer and shopping is seen as a leisure activity, a very personal occasion during which brands need to make each client feels special. It calls for a personalized service and an enjoyable time. When it comes to luxury brands, the luxury store attributes, from the sales service and after-sales service, to the store architecture and the store atmosphere, are key factors in building a unique customer service.
It also means optimizing high-tech and high-touch into a very special one-to-one experience. By influencing the value chain to meet demand and create a bespoke consumer experience, disruptive innovation has changed the face of luxury retail stores and enhanced the service. It enables associates to take the appropriate action based on insights, have the greatest impact on sales, and become effective problem-solvers, more pro-active and lasting relationship builders. In-store digital point-of-sale technologies are not only creating sales opportunity but a branding opportunity, a way to deliver more valuable messaging to customers, to create differentiating and choice- shaping store experiences. Mobile and connected POS technologies are made to help luxury retailers engage their customers across every digital touchpoint.
Putting all these elements together implies for leading luxury companies to invest heavily in the use of intelligent systems that combine in-store and digital information into a holistic customer view and put further efforts to optimize overall in-store service excellence alongside with technology products.
In a rapidly evolving global market, no brand can afford to ignore that digital technologies are revolutionizing the luxury sector, tactile experiences are ultimately influencing customers’ purchasing decision. Building out these technological capabilities is critical considering that many luxury customers, such as the digitally-driven generation, expect great digital experiences. So standing still is not an option.
All luxury brands must think hard about their digital presence in-store to deliver experiences that integrate the brand’s story while giving customers an experience that forms part of their identity. Despite the challenges lying ahead on how to make store businesses relevant in a virtual era, the most agile and responsive brands introduced great in-store innovation, embracing the potential for technology to improve client experiences and setting the pace for tomorrow, e.g. high- tech fitting room with a smart mirror that let you share purchases on social media at Neiman Marcus store in Dallas (web 2.0 POS technology connecting people), or smart augmented reality mirrors displaying product information when an article is held up to the mirror at a Burberry’s flagship store in London (web 3.0 POS technology connecting devices), or a large interactive tablet that gives access to a global guide look book, brand brochures, store information and offers the latest brand videos at Thomas Pink’s store at Heathrow Airport (web 1.0 POS technology connecting information). These luxury pioneer brands, are taking the chance to stand out as being unique, creating a differentiating retail experience, becoming more extraordinary, winning heart and mindshare. At the end, the most successful brands will be those that continue to build an engaging retail store experience through a set of digital tools and that focus on a targeted and personalized customer service experience.
So let’s face it.
In luxury, technology definitely matters and positively affect both, return on investment and return on experience. It is a competitive advantage.
However, the role of technology in retail is not to replace traditional bricks-and- mortar stores but to explore new formats of immersive and multisensory shopping concepts. Luxury brands that choose to push boundaries by integrating technologies into service and store experience are likely to succeed with consumers. In a digital era, the future and ever-sophisticated luxury consumers are increasingly service-focused, digitally-savvy, socially aware and time-sensitive. They want brands to build a relevant and an engaging shopping experience. Thus, the sector has to keep on building a strong relationship with an increasing range of technologies. The year 2015 has been a smart one, e.g. connected objects and digitally enhanced products such as mirrors that include social proof data like ratings and reviews, offer shopping suggestions and tips, allow customers to access the full range of sizes, colors and features for any product ; or digital displays of customers appearing live in video ads ; or mobile devices in the role of digital shopping assistants that recognize each shopper and their purchase history to give a personalized shopping experience ; or 3D showcase for a virtual tour of unavailable products, and more. Luxury firms need to continue to differentiate themselves at the point of sale by reinventing and restructuring their service offers. Telling a story that will make a lasting impression through exceptional service in-stores is critical and technology help to tailor a highly relevant in-store service experience.
Let’s not forget that luxury is a form of art and experimentation. Thus, when it comes to millennials, an increasingly important demographic for luxury brands, luxury retail stores are more and more experiential. In the digital millennium, when shopping offline, affluent consumers expect the opportunity to live easy and engaging interactions through inspirational, innovative and physical spheres.
Therefore, luxury market needs to always be on the cutting edge of what a retail experience should feel like. It can start with an immersive virtual storefront display, a huge touchscreen window presenting the whole brand collection and that’s ready to take orders if the store is closed, smart mirrors that enable customers to feel the softness of the leather of a handbag or get more social information, tablet applications inside the boutique that offer real-time in-store inventory, a limited-time interactive brand’s story exhibition in the store to spark aspiration, or an augmented reality game to reveal hidden contents, the winner is likely to receive a branded gift when leaving the store.
We are moving fast in a technology-enabled world that brings the digital offline, luxury and technology products together, showing an innovative blend of functionality and craftsmanship. Leveraging technology at point of sale is key in reinventing the connection and in shaping the future of luxury physical stores as the customer-facing providers of spectacular entertainment destination. The digitalization and socialization of luxury brands stores are steadily creating opportunities for reaching new frontiers and producing brand new experiences in consumer journeys.
The most importantly for retailers is to be customer-focused and determined to build better, longer lasting relationships with customers. The metric that matter most and will set luxury brands apart is experience. Technology is the tool that will help bridge the gap between personalized service and best experience. Human imagination is the only limit.
This is where the future of retail store is heading.