5 digital luxury retail trends you need to know

Raj Sangha
by Raj Sangha

Digital innovation has had an overwhelming impact on the retail industry, and the luxury sector is no exception. And while many luxury brands have had omnichannel initiatives on their roadmaps, up until recently they have been able to drive at a much slower pace than their peers.

The commercial success of a luxury retail brand is deeply rooted in its ability to provide engaging, highly tailored in-person customer experiences – this is why many luxury brands have been able to evade or avoid investing heavily in omnichannel retail strategy. 

Before COVID-19, physical stores were generating 90% of profits for luxury retailers, according to Deloitte, but now brands have been forced to identify new ways to serve their customers and drive sales.

The business case for virtual waitlist and appointment scheduling software in the luxury sector

In the last 12 months we’ve seen the luxury retail market adopt a whole new range of digital initiatives – here are some of the luxury retail industry trends that will drive the sector forward in the months ahead:

1) Omnichannel customer journeys

Luxury brands are renowned for offering a highly personalized level of service in their stores, so when it comes to online shopping, customers expect the same level of service. And while many luxury brands have advanced e-commerce offerings, most retail leaders would agree that more can be done.

As a direct result of COVID-19, we’ve seen leading luxury retailers quickly incorporate initiatives like buy online pickup in-store (BOPIS) / click and collect, click and return, the ability to search for inventory by store, as well as click and try, seek and send, in-store wifi and tech concierge services. We’re also seeing an increase in localized pop-ups – brands are using them to generate or revive consumer interest and drive online sales.

Going forward, we will see many brands take these newly created online shopping experiences to a new level altogether by investing in AI-driven personalization methods and hyper-targeting.

2) Retail Choreography tools are taking off

The need for in-store social distancing has driven a demand for software tools that aid in creating an easy, efficient and safe customer journey.

Appointment scheduling software and virtual queuing software, for instance, allow retailers to let their customers schedule appointments for in-store services (personal shopping, product consultations, technical support) and join virtual queues from their mobile phones when a store has reached capacity or when the customer services team are busy. This software also supports journeys for BOPIS or curbside pickup as well as online journeys such as virtual appointments, webinars, video streaming, product launches and events.

This is what we refer to as Retail Choreography tools, which allows retailers to construct powerful and captivating omni-channel retail offerings with the ability to adapt and grow at the pace they need through better planning and controlling or “Choreographing” their customer experience, store associate operations and data capture across all retail touchpoints.

Find out more about Retail Choreography

3) Virtual assistants, showrooming and webrooming

We touched on this already, but it’s worth highlighting how important virtual service options have become. With customers unable or unwilling to visit stores, luxury brands have invested heavily in virtual services, including one-to-one video calls, and video streaming initiatives such as webrooming and showrooming.

This provides customers with the same high-quality level of support they expect when buying a high priced item in a store, or when shopping with a luxury retailer in general.

We’ve also seen online luxury retail events become commonplace, most notably virtual fashion weeks such as 2020’s London Fashion Show, Paris Fashion Week and Milan Digital Fashion Week.

These measures might be temporary, but the digital demand will only escalate in years to come as brands realize the potential these services have to reach customers on a global scale and provide a convenient and tailored luxury retail experience.

Learn more about how virtual appointments can help drive sales

4) Social media influencers, unboxings and social consciousness

Up until recently, the luxury retail market has largely relied on traditional forms of advertising, such as cinema ads or print, but with its customer base shifting to Millennial and GenZ demographics, and with the recent rise in demand for omnichannel shopping experiences, brands are moving their advertising budget into the social space.

One of the most popular social media marketing approaches luxury retail brands are using is influencer marketing. Unboxings are particularly popular right now – where influencers video their experience unboxing an online delivery.

Many leading luxury brands are using social media to communicate new sustainability and environmental campaigns to younger audiences, which has only escalated in demand during the pandemic. According to a 2020 survey by IBM, 57% of consumers are willing to change their purchasing habits to help reduce environmental impact.

Deloitte describes this as: “To be woke, luxury brands must be aware, culturally diverse, non-racist, sustainable, socially authentic, politically correct, and behave ethically, by adopting fair business practices.”

That’s why many brands are being particularly careful with their packaging right now, as it’s unwise to communicate messages about sustainability and environmental impact whilst sending online orders in layers and layers of cardboard and plastic, particularly with the current unboxing trend.

5) Virtual Reality (VR) tech has become widespread

Many luxury brands are using VR technology to engage consumers, which has worked incredibly well during the lockdown period.

A good example of a luxury retail business investing in VR is Gucci, which has partnered with avatar platform Genies, to provide consumers with the opportunity to dress digital figurines in Gucci’s clothing or products and send them to friends via WhatsApp, Instagram and Facebook Messenger.

Another brilliant campaign came from Burberry, which allowed consumers’ to have an enhanced online retail experience when shopping for its products through Google Search by enabling them to experience Burberry’s products embedded in the environment around them.

When searching for Burberry items on Google Search on their phones, consumers were shown an AR version of the product at scale against other real-life objects. For example, a user could place a TB bag next to an existing outfit to gain a better understanding of the product before purchasing and simulating the in-store experience.

Read: 4 ways luxury brands can create contactless VIP experiences with queuing software and booking software



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