September 22, 2020

The Covid-19 accelerates the digitization of luxury brands | Fortune



The confinement has caused many customers who only bought in physical stores to also enter the online world. In China, coronavirus has introduced new segments and markets to electronic commerce, says the professor and director of the IE University Superior Luxury Program, Susana Campuzano. The age group that has grown the most is the one that goes from 31 to 46, but the cities where there is a significant volume of this type of purchases have also increased. “There are a greater number of transactions although with a lower average ticket,” continues the IE professor.

Until now, 19% of sales in the world of luxury were online, but mainly through multi-brand websites. For Campuzano, the unfinished business of the high-end industry is to develop their own e-commerce platforms, but he predicts that they will grow in the post-Covid-19 era. “This is not a crisis that will last only three months, but there may be second waves or other pandemics in the future. We have to consider a new way of living by making the online part much more powerful, “he adds.

At first, when the crisis erupted, luxury brands had a position of caring, both employees and customers and suppliers, explains Campuzano. “It was not the time for marketing or sales,” he supports. He talks about actions such as the 40 million masks that LVMH donated or the disinfectant gels they manufacture at their facilities. Kering also launched several donation and fundraising campaigns to drive research into the coronavirus vaccine. In the United States, Ralph Lauren became one of the fashion brands that spearheaded this wave of solidarity with a contribution of $ 10 million.

The objective of these brands is no longer share of mind (popularity), since they are already sufficiently present in the consumer’s mind because they are very notorious, but the share of love (loved), Campuzano exposes. “Being in people’s lives and winning their hearts in moments as tragic as theseThey want customers to see that the brand is helping them ”, explains the expert.

Once this aspect has been worked on and with the stores still restricted, the main challenge is, according to the general manager in Spain of Labelium, Borja Pesquera, transferring the shopping experience from the physical to the digital world. An aspect to which luxury brands have always been more resistant, explains ISEM professor Isabel García Hiljding, because they either did not know or did not want to transfer this experience to web platforms. However, the current context has caused firms to rethink their own business models. “Until now it was based much more on boutiques or flagships, but now they have to think about how to turn web pages into their flagships“Continues the expert.

A challenge in which content is the best weapon, as it contributes to staying connected with consumers despite the distance. Offering caring and interesting messages is now more important than ever. One of the best examples of this, Campuzano explains, is the letter that Loewe creative director Jonathan Anderson sent to present the firm’s latest collection. “I am aware that this is not precisely the best time to launch a collection. However, behind this project there is a whole team of Loewe artisans who have been working with love for a long time ”, it was possible to read in the letter, in which the designer also defended that the colors and vitality of the garments could contribute to improving the encouragement in such difficult times. “It is important that the content is relevant, respectful and that it takes into account the moment we live in,” summarizes the IE teacher.

It is precisely here, in the creation of content, where the high-end has a lot to offer compared to other industries. “Luxury has an incredible heritage, culture and roots. They are the marks that have formed civilization as we know it now ”, emphasizes Campuzano. Digital platforms provide firms with an opportunity to count all processes, the origin of their products, how they are made … “New technologies allow us to see luxury from the inside as we have never seen before”, concludes the IE professor, who believes that virtual reality and personalization will have a lot to say in this field.

Pesquera also believes this, who emphasizes that, in addition to establishing a strategy from the point of view of communication, they must be taken into account items directly related to the purchase. This is the case with technological tools, but also with a clear commitment to omnichannel. The expert stresses that consumers do not differentiate between the digital and the physical world, so the system click & collect, with which customers make their purchases through the web, and collect them in the store itself, will have a greater projection in the future.

But the experience should not end by pressing the pay button. Take care of packaging and ensuring that qualities are preserved during shipping is another focus on focus. Pesquera explains that most companies outsource these services to build a sufficiently broad network that guarantees delivery in the stipulated time. However, it is advisable to pay close attention to the company chosen to perform this function. “It is not just a matter of how the garments arrive, but also what kind of messaging is used. Will the same delivery person who delivers the t-shirt of a fast fashion?”Asks García Hiljding.

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