When it comes to luxury brands, delivering an impeccable customer experience is one of the most important things to consider. Business leaders know that providing a delightful luxury customer experience is crucial to a brand's competitive advantage. The future growth and success of a brand depend on reshaping the customer experience by offering more personalized and customized products and services.
At present, the ability to accommodate evolving customer tastes is pivotal to sustain market share. This could be a strategic imperative to identify growth opportunities to strengthen competitive advantages. Although most brands know this, many fail to recognize that adding to the long list of initiatives is not the best way to make it happen. There is a continual need for brands to stay updated with customer expectations.
Creating and scaling an excellent luxury customer experience is one of the critical ingredients of a successful business. But what does it mean to develop and scale customer experience? And how can a brand implement it successfully? Scaling is to create and have ownership over the customer experiences for any particular type or group of customers. When appropriately implemented, scaling and balancing customer experience for your brand can save you time and effort while redefining customer satisfaction.
Did you know that customer experience has become the crucial differentiator for today’s top brands?
All the luxury brands are rushing forward to advance their customer experience as they have realized it is the single most critical factor for business success. This doesn’t have to be the case. Using key steps, business leaders can significantly improve experiences for customers and thrive in these challenging times.
What Really Shapes the Luxury Customer Experience?
2020 was a year of profound shifts in the way we live and what we value. Online shopping has been redefined for luxury goods, increasing the global traffic up to 6% between January and March 2020. Social impact is soaring high, and brands are expected to showcase a true commitment to diversity, inclusion, and sustainability. The younger generations are more conscious of the social and environmental impact of their buying decisions. They are more likely to go for a brand that reflects their values. Nielson’s study shows that 74% of the Millennial consumers are willing to invest more in a sustainable or socially conscious brand.
Did you know that online sales are expected to reach 19% by 2025, which is about €74 billion?
Accompanied by the latest technologies like Artificial Intelligence, the internet of things, big data, and machine learning, the modern luxury segment is transforming. It is triggering changes while reshaping the way that consumers engage with the brand. Thus, brands are expected to embrace digitization that is a crucial source of reshaping the luxury customer experience. Because tomorrow's customers will want to live the experience – not just spend on luxury products or services.
In A Shifting Landscape, Scaling Brand and Luxury Customer Experience is Important
To keep up with the elite consumers’ growing affinity, brands must understand their digital opportunity and the foundational aspects of digital go-to-market success.
Leverage Personalization to Delight Customers
For the luxury industry, personalization has always been the top priority for creating customer loyalty. Initially, personalization through store outlets and service facilities was some of the ways. But the explosion of the digital phenomenon over the past few years has created empowered customers. They now weave both their digital and physical worlds so intricately that they can’t realize why brands aren’t doing the same.
Customer desires are continually evolving in numerous ways, and it requires brands to find unique and creative ways to stay competitive with their products or service offerings. Business leaders can utilize customization and personalization options to create new offerings for current customers and ultimately persuade new customers.
Take Steinway & Sons, for example. The German American piano company Steinway & Sons, is a top choice for 98% of concert pianists because of its exceptional quality. To improve their digital customer experience, Steinway & Sons reinvented their CX strategies by aligning their internal operations and technology road mapping. This helped them to meet the expectations of their digitally savvy clientele.
The crucial competitive differentiator in the luxury segment is to cater to the individual. This is what defines luxury, and it is a challenge for any brand looking forward to providing a luxury customer experience. The keys to serving an impeccable experience are customer segmentation, research, observation, and communication.
Gear Up for the Next Wave of Luxury E-Commerce
According to a report by Bain & Company, e-commerce will make up around 30% of the global luxury market by 2025. Over the past years, the luxury market has undergone several transformations while expanding the customer base further than we could have imagined. Of course, that number has decreased by 7% to 44% in 2020, as the pandemic spurred our life.
But before our world got upside down, luxury market pioneers had won over a generation of customers obsessed with exclusivity and newness. Success usually came from immersive retail experiences and relentless streams of novelty for many. But that has changed dramatically by the digital age that has allowed people to engage with their beloved brands whenever they want.
It started with launching an online luxury retailer Net-a-Porter in June 2000. The same year, Yoox, an online outlet store, began its journey as well. By 2010, Net-a-Porter became the most trusted digital seller of luxury goods. After decades of innovation and significant changes, the luxury market is now brimming with the second wave of growing brands who have already made their e-commerce channels a bigger priority. Embracing e-commerce can bring a crucial revenue source and an opportunity to receive an entirely new set of customers.
Building A Community Through Immersive Storytelling to Create A Long-term Momentum
This was amplified during the pandemic where luxury brands reached out to their customers and tried to create a community. For example, a Spanish luxury fashion house, Loewe, launched a special project called 'LOEWE EN CASA' (LOEWE at home), which is a series of Instagram Live events and workshops to find that work-from-home harmony.
US-based contemporary fine art space, David Zwirner incorporated automation and personalization to reshape the customer journey. David Zwirner made it possible to continue their business model through the COVID pandemic with virtual viewing rooms consisting of some of the world’s most famous artists.
Embrace the Rapid Change to Unlock Business Value
With all the changes afoot happening so fast and high competition in the industry, luxury brands are running out of time to develop winning strategies for luxury customer experience. The idea is to innovate and adapt while still creating relentless advances for customers to discover.
However, in the midst of a crisis, several new opportunities may arise. For a deeper dive into what it means to be a future-fit luxury brand leader of a post-pandemic world, please connect for 1:1 here.