Luxury Brands Must Put Customers First: Luxury Daily reports on Gartner L2 Fashion Panel
Luxury Daily recently published coverage of our Gartner L2 Fashion Panel, hosted by Fluid Inc, Astound Commerce and CoreMedia (Oct 30). Industry experts from some of the worlds biggest luxury brands shared their insights on how to succeed in e-commerce. The following article was written by Sarah Jones:
NEW YORK – While innovations such as augmented reality may be appealing, luxury brands should focus on getting the basics of technology right before tackling the flashier digital features. At a panel hosted by Gartner L2, Astound Commerce, Fluid, and CoreMedia on Oct. 30, speakers discussed some of the challenges and opportunities facing fashion and beauty brands as they strive to invest in omnichannel retail, from breaking down organizational silos to tackling the changing face of consumer engagement. While brands may have to pick and choose what they can do based on budget, staffing or positioning constraints, the customer should be at the heart of these decisions. “For us, it’s really been about ensuring that both the technology that we integrate and the approach that we have remains consistent with our DNA and history,” said Jessica Martino, vice president of digital, client development and client services at Louis Vuitton. Weighing investment During the panel, moderator Lauren Price, director of client strategy for luxury and specialty retail at Gartner L2, noted that fashion brands are accelerating their efforts in direct-to-consumer retail, both through e-commerce and bricks-and-mortar boutiques. In the researcher’s latest Digital IQ Index for the fashion category, it found that LVMH, Kering, and Richemont have all grown their revenues generated from their own channels over the last decade. This approach comes with challenges, however. Alex Richardson, director at Jack Rogers, said brands are now forced to perform a balancing act between furthering their own retail operations and driving wholesale revenues. The difference between the wholesale and brand client may help make this distinction for brands. Scott Lux, vice president of digital for Intermix, spoke of his previous experience at John Varvatos when clients would come to its retail stores or Web site for edgier pieces while turning to wholesale for more commercial designs.
Brands should also know where their customers are and invest accordingly. Mr. Lux noted that a significant number of transactions still happen on the desktop and that iPads are seeing a resurgence. Another area where brands need to keep up is in fulfillment. Amazon has pushed all areas of retail to adopt speedier shipping. For Louis Vuitton, this has meant flexibility, giving consumers options such as click-and-collect to let them tailor their delivery. Marketing media While retail channels are being disrupted, so is marketing. Mr. Balasz said that the beauty industry went through a disruption a decade ago, leading to a shift from traditional advertising to social media. Brands today are expected to act as publishing companies, and that can be challenging and costly to keep up.
As the retailer-brand relationship evolves thanks to direct-to-consumer channels, labels should consider collaborating with their wholesale partners for more than selling. Retailers and the fashion brands they carry are missing out on a key opportunity to collaborate on social media, according to a report from L2. While retailers are in the habit of posting content featuring merchandise, they often fail to mention the labels featured, a tactic that could drive sales for the store as well as awareness for the brand among a potentially larger audience. L2 sees an “untapped potential” for fashion labels to seek more social media placement from the retailers that they sell through, striking up a mutually beneficial relationship (see story). But even with the rise of social media, for luxury brands, much of the engagement with clients continues to happen one-to-one. For instance, Louis Vuitton does not have a point-based loyalty system, it instead focuses on clienteling. Intermix similarly leverages the in-store experience to drive retention. “The challenge with loyalty is once you put it out there, you can’t go back,” Mr. Lux said. “So you have to be very mindful of what loyalty means for your brand.”