In November and December, U.S. retail industry sales rose 3.8 percent compared to the year before.
Economists seemed surprised by retail results defying expectations throughout much of 2023. Unfortunately, 2024 didn’t start quite as well. Since then, retail sales have shrunk by 0.8 percent (worse than market forecasts of a 0.1 percent decline). U.S. retail sales are facing their biggest decrease since March 2023, and while growth looks more promising after results picked up in February, giants like Macy’s are closing dozens of stores to focus on their luxury brands. Brands right now are looking to prioritise the products that bring in their highest sales — hence Macy’s decision to introduce 30 new Bluemercury stores despite closing 150 department stores. The luxury market has vast potential, but it’s not a guaranteed win. Therefore, next steps need to be carefully considered.
So, how do you win in the luxury market?
The art behind luxury fashion
When you search for an item like “black jeans” on websites like Net-a-Porter, they all seem to blend together. But behind the scenes, each brand has its own unique story — from how they make their clothes to the materials they use. Luxury shoppers aren’t just buying a piece of clothing; they’re investing in the creativity and skill of their favourite designers.
Take, for instance, Alexander McQueen and its new creative director, Seán McGirr. The public eagerly awaited the debut show from McGirr to launch his creative vision for the brand. Headline stories covered his vision, background, and reviews of the debut, and yet the Alexander McQueen website barely covers his takeover, let alone the art and decision making behind his latest collections. Why not celebrate McGirr’s vision and find ways for consumers to build affinity to him and his artistry? Luxury consumers are so much more than “consumers” — they’re often fans, experts, knowledgeable, curious. Don’t downplay the importance of storytelling and craftsmanship by assuming a logo will sell your items.
Distribution strategies
We’ve recently seen a growing trend among luxury brands to control distribution, limiting the channels through which their products are sold. This strategy not only allows them to control important aspects of their operations and limit wholesale, it also allows them to focus on and invest in unique experiences available only in-store. The LVMH group, for example, has complete control over maintaining consistency in product, service and brand image due to its distribution strategy. Consumers are offered a seamless experience across every touchpoint.
Reimagine e-commerce
The other side of the coin, e-commerce, isn’t experiencing the same revival. Even if they provide amazing in-store experiences, most luxury fashion brands aren’t hitting the mark when it comes to online shopping. We don’t see the same level of sophistication, imagination and storytelling as shopping in a store — and that’s a missed opportunity.
The source of the problem is putting too much attention on “shopability” over experience. Yes, familiar, easy-to-use interfaces are important. But scroll through the product lists and checkout pages of luxury websites and you’ll see that they pretty much all look the same. Some sites are somewhat customised with products you might like, but very few are leading the way with highly personalised, luxury e-commerce experiences.
Luxury consumers shop for high-quality, beautifully designed investment pieces that stand the test of time, not what’s “in fashion” from one week to the next. Luxury shoppers expect a different, more special experience than they get from fast-fashion sites. Personalisation and storytelling are two proven ways to make the online shopping experience more interesting and memorable.
In short
Celebrate the craftsmanship and art behind your collections. Give your audiences more reasons to buy into your brand. Focus on personalised, imaginative customer experiences in-store and online. Don’t let the emphasis on usability kill inspiration and creativity.
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