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GUEST COMMENT How to get online experience right in luxury retail, post-Covid

Image courtesy of London Dynamics

Positioned at the most desirable retail real estate locations across the globe, luxury brands’ flagship stores offer customers a sense of exclusivity. Historically, this has been a huge part of their continued success.

However, a lack of tourism and footfall brought about by the Covid-19 pandemic has turned these high-end stores into white elephants for the better part of a year now.

In 2020, high-end shoppers made the move online, leading to a shift in the way luxury items were bought and sold. The trouble is that some high-end retailers have failed to invest in their online estate in the same way as their physical stores. 

In order to justify the significant investment in luxury retailers’ flagship stores, presenting customers with a standout online experience could have previously be seen as self-defeating. 

The Covid-19 pandemic has put an end to that line of thought and has highlighted the importance of an enhanced online presence, to promote products and convert sales.

Understanding the Consumer Mindset

To understand how attitudes have shifted since the pandemic began, London Dynamics commissioned an independent survey of 1,000 luxury shoppers to understand how luxury shopping habits have changed.

According to the poll, 66% of people are more comfortable purchasing high-end items online than before the pandemic. Yet, the overwhelming majority (90%) believe luxury brands fall behind their High Street counterparts for the online experience they give shoppers. 

Evidently, while customers have moved with the times, some luxury retailers haven’t quite followed the digital transformation. This change in consumer behaviour is now irreversible and retailers can no longer afford to ignore the need for an exclusive online experience. 

Almost three quarters (72%) said the online experience falls behind the prestige of physical stores. At face value this would appear to confirm the fears of luxury brands and retailers. But rather than view this as a problem, this should instead be viewed as an opportunity. 

The solution is to build a digital experience that offers a sense of exclusivity, that ‘wows’ customers and encourages them to buy high-end products online. 

More Visibility, More Conversions

In some cases, consumers are reluctant to purchase luxury goods online without physically seeing them, as they don’t feel there is enough information available to qualify their decision. For high-end products, static-only website images and minimal product information are unlikely to drive conversions. 

The quality of imagery and product information, therefore, can be the difference between shoppers making a purchase and not. 

One such application that is helping retailers present products to customers, showcasing them in real-time and empowering consumers to make decisive purchases, is Augmented Reality (AR).

Though not a new technology, AR has now become a fundamental part of the online strategy for forward-thinking retailers. As IBM’s Institute for Business Value said: “To ignore the implications of AR would be akin to ignoring the advent of online shopping.”

Research shows that AR increases online conversions by 250%, while delivering more than twice the levels of engagement. Therefore, the business case to integrate such technologies is clear. 

But with retail technology such a hotbed of innovation, the sheer pace of change can leave brands and retailers feeling dazed and confused.

Seamless Integration

Retailers may be reluctant to layer on new digital solutions, particularly if it means compromising their carefully crafted CRM infrastructure. However, solutions that integrate seamlessly within existing architecture mean that retailers can easily build powerful new functionality that simply aligns their online and offline strategy.

It is here that Augmented Reality has answered consumer demands. Pioneering AR technology, which allows shoppers to experience products in their own space, in real-time, quite literally has the power to change the way people shop. 

A further fear is that customers simply won’t use AR, either believing it to be too complex or, at worst, cumbersome. Users who have experienced switching apps to access a brand’s AR solution could be forgiven for thinking that way, but lightweight architecture that synchs to a retailer’s website without the need of an app. Therefore, products load instantaneously, ensuring the customer experience remains seamless. 

Continual Innovation

Retailers have already shown what can be achieved in the eCommerce sphere with a laser focus on specific challenges. Take, for instance, order fulfilment and product delivery, both have made unprecedented strides in recent years. That same level of innovation can be brought to customer experience, to improve conversion rates, in a seamless, scalable manner.

The luxury sector must now bring the same customer exclusivity to their online estate as available in their flagship stores, if they are to win the hearts and minds of shoppers who now look differently at buying luxury products. 

The pandemic put a pause on buying products in-store, enjoying international travel and spending on social activities. Therefore, it is fair to say that luxury consumers have a demand to spend in 2021 and an enhanced expectation of online shopping. 


Michael Valdsgaard, Execuutive Chairman and CEO at London Dynamics

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