What makes luxury retail a challenging business?

Etp-blog-What-makes-luxury-retail-a-challenging-business

Luxury products have always been one of the most admired and sought after products. So much so, that consumers of such products take pride in their possessions and are often considered to be of a higher class. They and their products are the ‘talk of the town’ most of the times in social gatherings and people like to be associated with such class conscious, brand loving and luxury seeking consumers. Luxury products therefore had few options and demanded a high cost of purchase deliberately tailored to a select set of consumers.

But now times have changed thanks to rapidly changing consumer mindsets and the very idea of “luxury” is evolving. The old-fashioned ideas that defined luxury as aspiration, high status, exclusive, wealthy, don’t really paint the exact picture of what customers perceive about luxury products. One of the drastic changes over the recent years is that the new age luxury isn’t for showoff.  Similarly other values that luxury brands exclusively attributed to, such as better quality and style, precise workmanship and great designs, are not exclusive any more to luxury.

Consumers’ tastes are evolving. There is an indisputable appeal for new products and services along with more choice of options yet having the flavor of uniqueness and exclusivity. This has given rise a various breeds of brands such as specialised ones and those that are highly customised to customer demands, thus increasing competition.

Further, along with changing tastes, customer shopping patterns and buying behaviour have undergone a tremendous transformation. Traditionally, luxury shoppers heavily relied on physical retail to fulfil their desire for luxury goods. But now, multiple channels have come into the game and customers willingly switch between channels to get what they want. Seamless demand fulfilment across channels necessitates the reduction of various issues such as decrease in quality or other losses that are caused during the course of the supply chain. While older shoppers are still playing a significant role in the luxury market spends, millennial’s and Gen Zs are predicted to account for the larger growth in the coming years. Moreover, their new spending habits which are faster, more frequent, brand-conscious and trend-driven while being highly influenced by digital platforms.

All these are the modern day challenges that luxury retail businesses, especially the ones still depending heavily on the heritage and traditional processes are facing and there is one way out. They need to transform their retail businesses to omni-channel and employ the right omni-channel retail software to exceed their customer expectations and fulfil their business goals.

Reinventing the retail shopping journey!

etp-blog-reinventing-the-shopper-journey

Retail shopping experience right from research to purchase to post sales service has seen a paradigm shift over the last few years. One of the primary reasons for this shift is a significant change in the consumer behavior. This change has had a global impact across industries including retail and it continues to drive innovations and advancements which will shape the world through 2030. Further, economic and technological shifts have reinvented the shopper journey holistically. Previously, shopping revolved around the purchase and was highly transaction focused. However today, shopping is an entire journey. It is a relationship building process for the retail brand with their consumers.

The modern day’s shopper journey can be broken down broadly into 3 stages: pre-purchase stage, purchase and the post-purchase stage. Today, the brand experience has to be infused into all of these stages seamlessly.

Taking a look at the pre-purchase stage, this stage is all about the brand connecting and framing a relationship with the shopper, by being able to answer the shopper’s questions about products they are exploring and helping them realize how their purchase can fit within their values and lifestyle. This stage is where customers research about brands and their products/service offerings, and based on their evaluations considering various factors would decide to make a purchase for a particular product, from brand. Hence this stage is a huge opportunity for retail companies to influence consumers and thus lay the foundation of a solid relationship while ensuring their patronage.

Meanwhile, in the purchase stage, being central to the shopping journey as the transactions happen here, there has been a reinvention in the overall perception of the transaction. Price still remains extremely important; however, today’s customer is not only paying for the product but also the convenience that is associated with the purchase. This convenience will also be integrated into the shoppers’ perception of value. Moreover, making things quicker is not only about speeding up the payment process, but other factors such as curating goods and services and information faster, also contribute to it. These will influence the purchase experience of the shopper and retail brands should ensure that this experience is positive, personalized and perfect to establish loyalty.

In the final stage which is the post-purchase stage, it is important for retail brands to extend their post-sale services to shoppers and continue efforts to cement brand-customer relationships as well as enrich loyalty. As such, the shopper’s journey with a particular brand may end at the purchase stage itself and this would be a huge loss as retail companies will miss out on repeat business from loyal customers. Thus the brand value should be extended to the shoppers in the post purchase stage as it enables connecting the brand with the consumer’s lifestyle thus making the brand experience relevant.