‘Luxury’ by definition means to be obtained rarely; it is something personal, special and unique. So is there is a place in the crowded and accessible digital world for luxury retailers, where consumers are offered what they want, when they want?
‘Being digital’ is becoming unavoidable for brands and the pressure is continually growing to embrace the revolution! In 2014, online sales accounted for 6% of total luxury sales. If digital is to include looking on the internet before you go and buy in store, then it is believed digital actually accounts for as much as 25% of retail revenues! It is therefore an impossible area for luxury brands to neglect, but the challenge is maintaining the balance of a digital yet luxury brand.
Can a website truly convey the experience of luxury? Luxury is sensory. It is more than just sight; it is also about touch, feel and smell. One man that truly understands the connection between the luxury and digital worlds is Federico Marchetti, founder of Yoox and the driving force behind the tie-up between the Richemont-owned ecommerce platform Net-a-Porter and Italy’s Yoox. The Italian entrepreneur structured the business model at Yoox to allow luxury brands to sell overstock items whilst keeping the feel of exclusivity. This can often be lost online in the fast-paced and impersonal online world.
The Financial Times highlighted key areas of digital that luxury brands are neglecting:
Luxury needs to adapt.
One company that has truly embraced digital and placed it at the core of their strategy is Burberry. Burberry had been underperforming against other luxury brands, and following the appointment of Angela Ahrendts as CEO, they implemented ambitious plans to revitalise the brand through the power of digital. Burberry turned their attention to millennials, and as one of the first luxury brands to use Facebook, Twitter and YouTube, Burberry began to use social media in innovative ways to create an unrivalled online customer experience. Through their use of live streaming of events, personalised approach across social media, and interactive and engaging website providing customised opportunities, Burberry has increased their brand awareness and popularity amongst younger consumers.
Burberry’s ultimate goal was to bring consumers closer to the brand, and it has been their innovative use of digital that has allowed them to undeniably achieve this!
“I grew up in a physical world, and I speak English. The next generation is growing up in a digital world, and they speak social”, Angela Ahrendts, Former CEO Burberry