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As wealthier consumers increasingly opt for online shopping experiences over traditional brick-and-mortar stores, luxury brands are forced to adapt and embrace digital transformation. Traditionally, exclusivity has been a hallmark of luxury brands like Tiffany Co., Gucci, and LVMH. Their names evoke craftsmanship as well as status symbols that come with the privilege of white glove service difficult to replicate online.
However, for these prestigious labels, the rise of wealthier online shoppers is challenging their traditional business model. According to Adobe Digital Price Index data from last year, states with high per capita incomes including D.C., New Jersey, Massachusetts, Connecticut and Maryland are also among those where consumers engage most in online shopping activities. Over the past five years, luxury brands have witnessed significant growth in e-commerce sales compared to the global market, which is poised for further acceleration. McKinsey Company forecasts that by 2025, ecommerce will account for 19 of total sales up from just 8 in 2016.
In light of these trs and with no choice but to adapt, luxury brands are exploring various strategies to remn relevant in the digital landscape. Here’s a look at how some top players such as LVMH, Gucci, Chanel, Tiffany Co., and Neiman Marcus have embarked on their digital transformation journeys.
LVMH, one of the world's leading luxury conglomerates encompassing brands like Louis Vuitton, Dior, Dom Perignon, and Sephora, recently launched an accelerator program for international start-ups. This initiative targets companies focusing on areas such as chatbot customer service, predictive technology based on visual recognition, biometric wristwear innovations, and robotic clothing customization tlored to individual consumers.
Participating startups are provided with workshops designed to address the unique challenges of luxury retl. In exchange, LVMH benefits from technological solutions that can enhance their business processes and stay competitive in an evolving market landscape.
Imagination is a cornerstone element of luxury brand allure. Gucci’s spring campgn exemplifies this by transforming consumers’ traditional experience into an immersive journey through virtual reality VR and augmented reality AR. The centerpiece, titled Gucci Hallucination, draws inspiration from the work of Spanish artist Ignasi Monreal.
In-store VRAR installations offer interactive experiences that allow shoppers to be part of the campgn. Additionally, online platforms feature video content where consumers can explore items at their leisure, blurring the lines between digital and physical worlds.
With a commitment to enhancing customer engagement across all channels, Chanel has been investing heavily in omnichannel strategies. This includes leveraging digital tools such as powered platforms that customers' sizes based on previous searches.
Moreover, personalized direct ml and eml communications keep customers informed about the arrival of items they've shown interest in at their local stores. The brand further elevates the shopping experience with advanced technology like Memory Mirror, which captures 360-degree videos of shoppers trying on clothes.
Innovations such as the Snap. Find. Shop feature allow customers to capture an item they fancy and discover similar products through image recognition in their mobile apps. This capability redefines luxury shopping, offering convenience that was once exclusive to physical stores.
Receiving accolades like the 2017 IRT Retler Innovation Award for Customer Engagement, Neiman Marcus is at the forefront of creating seamless omnichannel experiences. Their website s customer sizes and preferences based on past searches, providing a personalized shopping experience.
Additionally, Neiman Marcus offers services such as Memory Mirror, allowing customers to review video footage of themselves trying on clothes in-store through an app, enhancing convenience even while shopping remotely.
These luxury brands exemplify the ongoing digital transformation that's reshaping their traditional businessand expanding customer reach beyond physical store locations. By embracing technology and innovation, they ensure relevance in today’s rapidly evolving market landscape.
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